Monthly Archives: March 2009

09MOSCOW802, INFORMING BELARUS, KAZAKHSTAN, AND UKRAINE OF U.S.

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Reference ID Created Released Classification Origin
09MOSCOW802 2009-03-31 13:27 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO5119
OO RUEHSK
DE RUEHMO #0802 0901327
ZNR UUUUU ZZH
O 311327Z MAR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2629
INFO RUEHTA/AMEMBASSY ASTANA IMMEDIATE 0249
RUEHKV/AMEMBASSY KYIV IMMEDIATE 0331
RUEHSK/AMEMBASSY MINSK IMMEDIATE
RUEHGV/USMISSION GENEVA IMMEDIATE 5291
RUEAIIA/CIA WASHDC IMMEDIATE
RUEKJCS/JOINT STAFF WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE
RHMFIUU/DTRA ALEX WASHINGTON DC IMMEDIATE
RUEKJCS/SECDEF WASHDC IMMEDIATE
RHMFIUU/DEPT OF ENERGY WASHINGTON DC IMMEDIATE

UNCLAS MOSCOW 000802 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PARM KACT START US UP BO KZ RS
SUBJECT: INFORMING BELARUS, KAZAKHSTAN, AND UKRAINE OF U.S. 
INTENTIONS TO PURSUE BILATERAL START FOLLOW-ON AGREEMENT: 
RUSSIAN RESPONSE 
 
REF: STATE 30048 
 
We delivered reftel demarche to Vladimir Yermakov, MFA 
Director for Strategic Capabilities Policy on March 31. 
Yermakov expressed appreciation for the notification, 
commenting that there had been a preliminary discussion with 
the Belarus, Kazakhstan and Ukrainian delegations at the last 
session of the Joint Compliance and Inspection Commission 
(JCIC) meeting that the follow-on to the START Treaty would 
be a bilateral agreement between the U.S. and Russia.  He 
said Moscow had intended to follow up with the three 
countries, but it had not happened. In any event, Russia and 
the U.S. agreed that the follow-on treaty should be a 
bilateral one.  He expected there would be further discussion 
at the next JCIC and said Russia would like to consult with 
the U.S. on a joint position prior to that meeting. 
BEYRLE

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09MOSCOW797, RUSSIA MARKS 10TH ANNIVERSARY OF NATO ACTIONS IN

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Reference ID Created Released Classification Origin
09MOSCOW797 2009-03-31 07:34 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO4697
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHMO #0797/01 0900734
ZNR UUUUU ZZH
R 310734Z MAR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 2623
INFO RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHZG/NATO EU COLLECTIVE

UNCLAS SECTION 01 OF 02 MOSCOW 000797 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV YI BK SR KV RS
SUBJECT: RUSSIA MARKS 10TH ANNIVERSARY OF NATO ACTIONS IN 
FRY 
 
REF: BELGRADE 246 
 
Summary 
------- 
 
1.  (SBU) On March 24, Russia marked the tenth anniversary of 
NATO's 1999 NATO bombardment of FRY with an official 
statement, a State Duma special resolution, political 
rallies, and extensive media coverage.  The MFA called for an 
assessment of NATO's actions and called for the adoption of 
Medvedev's European Security Treaty proposal.  The Duma's 
special resolution denounced the 1999 air campaign and March 
17, 2004 destruction of Serbian sites in Kosovo.  The Duma's 
International relations chair called the actions of the 
"West" hypocritical and expressed the hope the International 
Court of Justice would overturn Kosovo's declaration of 
independence.  In highlighting the anniversary, Russian 
officials and politicians addressed a domestic audience 
seeking to repudiate the "failures" of the Yeltsin 
administration with a demonstration of Russia's ability to 
counter NATO, and addressed the international community by 
arguing that NATO's actions in 1999 formed part of the basis 
for Medvedev's European Security Treaty and laid the ground 
work for Georgia's actions in South Ossetia.  End Summary. 
 
Official Statements 
------------------- 
 
2.  (U) MFA Spokesman Andrei Nesterenko released a statement 
on March 24, calling for a "sober assessment" of NATO's 
actions in 1999.  The statement also alleged that "Calls to 
let sleeping dogs lie that one hears in the West today are 
caused by one thing only - an urge to shamefacedly hide the 
blatant violation of the norms of international law that has 
become obvious, counting on military force and encouraging 
separatism."  He argued that Medvedev's European Security 
Treaty proposal would "fix" the principles of relations 
between states in the region. 
 
3.  (U) The State Duma adopted a special resolution on March 
20, denouncing both NATO's 1999 air campaign and the March 
17, 2004 events in Kosovo that led to the alleged destruction 
of Serbian churches and monasteries, and calling for Kosovo 
and Metohia to remain part of Serbia until the parties 
negotiated a settlement.  In a statement to the press, 
Konstantin Kosachev, Chairman of the Duma Committee on 
International Affairs, said that "Kosovo separatism had 
already proved to be a headache for those external sponsors." 
 Arguing that the recognition of Kosovar independence 
undermined the values the "West" allegedly defends, he 
expressed the hope that the International Court of Justice 
would overturn Kosovo's unilateral declaration.  Russian 
media also carried a March 24 interview with Russian 
Ambassador to Serbia Alexander Koluzin, in which he labeled 
NATO actions in 1999 as "aggression" and "one of the most 
tragic pages in the history book of Europe of the late 
twentieth century." 
 
Political Rallies 
----------------- 
 
4.  (U) On March 24, the ultranationalist Liberal Democratic 
Party of Russia (LDPR) held a rally at the Serbian Embassy in 
Moscow "to express solidarity with the Serbian people."  LDPR 
leader Vladimir Zhirinovskiy called the NATO actions "a 
heinous act" and slammed Russia's 1999 Yeltsin government for 
not stopping it.  Zhirinovskiy added that the current Russian 
government should help Kosovo return to Serbia, and after the 
rally the Serbian Embassy invited him to visit. 
 
5.  (U) Also on March 24, Communist Party (KPRF) leader 
Gennadiy Zyuganov called the 1999 NATO actions "the next 
stage of American globalization."  He compared U.S. actions 
to Hitler's during World War II, saying "Hitler was unable to 
subdue the Serbs . . . now the Americans tried to repeat it." 
 Echoing Zhironovskiy, Zyuganov explained that the 
"aggression" was possible because "Russia kept silent." 
 
6.  (U) Forty activists of the youth group Nashi also held a 
small ceremony in front of the Serbian Embassy.  The group 
lit candles to form the number 89, in memory of the 
eighty-nine children killed during the NATO bombing campaign, 
and held a moment of silence. 
 
In the Press 
------------ 
 
7.  (SBU) Russian airwaves, in particular, carried extensive 
 
MOSCOW 00000797  002 OF 002 
 
 
coverage and editorials on the tenth anniversary, tying it to 
the August conflict with Georgia by arguing that President 
Saakashvili used it to "unilaterally" settle the dispute. 
Duma Deputy and CIS Institute Director Konstantin Zatulin's 
editorial on the internet-based Regnum called the 1999 
airstrikes "a war against Russia, and its attempts to rebuild 
and revitalize its national dignity."  He heaped blame upon 
the Yeltsin-era government for failing to stand up to the U.S. 
 
8.  (SBU) In his state
ments to the press, former Russian PM 
Yevgeniy Primakov, argued in favor of Kosovo's partition 
("give the north of Kosovo to the Serbs") and of reuniting 
the Republika Srpska with Serbia.  While Primakov's 
statements are not new and are not GOR policy, they do strike 
a chord here.  At a recent dinner with the Ambassador, State 
Duma Deputy Andrey Kokoshin and retired general and Chairman 
of the All Russia Organization of Veterans Mikhail Moiseyev 
both praised Primakov for "showing spine" (reftel). 
 
Comment 
------- 
 
9.  (SBU) The GOR's pronouncements and comments from 
prominent Russian figures on the 1999 bombings were neither 
surprising nor did they differ from previous statements; 
however, they came in a crescendo, with the goal of 
supporting several Russian contentions:  the European 
security architecture was broken and the region must pursue 
Medvedev's European Security proposal; Kosovo's independence 
was a dangerous precedent that lead to South Ossetia and 
Abkhazia; and Russia was resurgent and must be dealt with as 
an equal.  For Russian nationalists, the anniversary was 
useful political red meat around which their political bases 
rallied. 
BEYRLE

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09MOSCOW789, UNITED RUSSIA IN DISARRAY AS OPPOSITION REGISTERS

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Reference ID Created Released Classification Origin
09MOSCOW789 2009-03-30 15:37 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO4094
PP RUEHDBU
DE RUEHMO #0789/01 0891537
ZNY CCCCC ZZH
P 301537Z MAR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 2613
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 000789 
 
SIPDIS 
 
E.O. 12958: DECL: 03/29/2019 
TAGS: PGOV PREL KDEM PHUM RS
SUBJECT: UNITED RUSSIA IN DISARRAY AS OPPOSITION REGISTERS 
FOR SOCHI MAYORAL RACE 
 
Classified By: Political MC Alice G. Wells for reasons 1.4 (b) and (d). 
 
1. (C) Summary: Contrary to expectations, Solidarity 
opposition leader Boris Nemtsov successfully registered March 
28 for Sochi's April 26 mayoral election.  The most 
significant of the remaining hopefuls (from the original 24 
registrants) are acting mayor and United Russia candidate 
Anatoliy Pakhomov; billionaire oligarch Aleksandr Lebedev; 
and local United Russia politician Vladislav Funtyakov. 
Running as an independent, Funtyakov is duplicating the 
tactic that led to embarrassing losses for United Russia in 
March mayoral races in Smolensk and Murmansk; he therefore 
poses perhaps the greatest threat to upset Pakhomov in a 
general or run-off election.  With Putin lecturing local 
officials to ensure the selection of a "respectable and 
professional" candidate, opposition candidates face an uphill 
battle.  Indeed, opposition candidates have already endured 
numerous provocations, including assaults and fraud 
allegations, and United Russia has admitted that it will 
limit opposition media access while aggressively promoting 
its candidate.  In a surprising turn, Yabloko has agreed to 
back Nemtsov, reversing its policy of refusing to work with 
Solidarity.  End Summary. 
 
In "Circus" Election, Nemtsov First to Register 
--------------------------------------------- -- 
 
2. (SBU) With a packed field of 24 people vying to lead the 
host city of the 2014 Winter Olympics, the Sochi electoral 
commission reported March 28 that Solidarity opposition 
leader Boris Nemtsov successfully registered to run in the 
April 26 mayoral election.  The Sochi commission also 
disqualified four hopefuls (including an aviation executive 
and the head of Sochi's arm-wrestling federation) and has 
until April 3 to decide on the rest.  Registered candidates 
can formally campaign beginning April 5. 
 
3. (SBU) Other prospective candidates include Sochi's acting 
mayor (and United Russia candidate) Anatoliy Pakhomov, prima 
ballerina and gossip-column fixture Anastasiya Volochkova, 
and Sochi City Council Deputy Chairman Vladislav Funtyakov -- 
and those are just the United Russia members.  Billionaire 
oligarch Aleksandr Lebedev, former Democratic Party head (and 
Russia's Masonic Grand Master) Andrei Bogdanov, local 
pensioners, porn star Yelena Berkova, and others rounded out 
a lineup that Russian media have variously called a "circus" 
and a "farce."  (Note: LDPR named Aleksey Kolesnikov as its 
candidate instead of State Duma Deputy Andrei Lugovoy, wanted 
in the UK for suspected involvement in the radiation 
poisoning of Aleksandr Litvinenko.)  The crowded field 
resulted from an electoral law that required only a USD 8,400 
electoral pledge in lieu of political party backing or 
signatures. 
 
Putin's Warning Applies Pressure To Back Pakhomov 
--------------------------------------------- ---- 
 
4. (C) Still smarting from March mayoral defeats in Smolensk 
and Murmansk, United Russia intends to contest the Sochi race 
vigorously.  However, Aleksandr Machevskiy (press secretary 
for First Deputy Prime Minister Igor Shuvalov) admitted to us 
March 19 that "there is nobody in Sochi to keep everything in 
line" and that Moscow would need to intervene directly. 
MGIMO political scientist and United Russia strategist Andrei 
Silantyev outlined his party's plan to us March 25.  First, 
he said, Moscow would deny the opposition national broadcast 
media access and make them work to receive even local 
coverage.  In the most widely reported example, the state-run 
NTV channel scuttled a report on the election at the last 
minute.  Aleksey Kondulukov, a senior NTV journalist, told us 
March 26 that his channel's "Glavnoy Geroy" program had 
interviewed four candidates (including Nemtsov) for the 
program before NTV management told producers to stop working 
on the report, and directed reporters to "ignore the Sochi 
elections completely."  A celebrity ice-skating program aired 
instead of the program.  Without regular broadcast media 
access, Nemtsov has appeared only very briefly on television 
in Sochi and has relied on visits to markets and public 
events to advertise his candidacy.  Sochi City Council member 
(and Just Russia mayoral hopeful) Viktor Kurpitko told us 
March 17 that Nemtsov likely would receive only negative 
television coverage, such as the televised town hall meeting 
on the local Vesti channel in which Nemtsov was seated next 
to Garry Kasparov.  On that program, Kasparov urged citizens 
to vote for Nemtsov as a protest against Putin, which 
Kurpitko believed would backfire with an electorate still 
strongly pro-Putin. 
 
5. (C) United Russia's second step to win the election, 
 
MOSCOW 00000789  002 OF 003 
 
 
according to Silantyev, is to pump up acting mayor Pakhomov's 
reputation as a good manager, which Silantyev acknowledged 
would be tough given "the mess" in Sochi.  During a March 23 
visit to Sochi by PM Putin and President Medvedev, Putin 
imp
lored local officials to make sure that "the most 
responsible and professional" candidate wins; for those who 
may not have gotten the message, the text appeared quickly on 
the PM's and United Russia's websites.  The next day, United 
Russia announced Pakhomov as its candidate, and in the 
following days Pakhomov barnstormed across Sochi to speak to 
voters.  At a meat processing plant, Pakhomov promised to 
protect the plant from competitors in Rostov and other 
cities.  "We need not just a meat plant, but the good mood of 
its employees," Pakhomov explained, "which must be satisfied 
with salaries."  According to Solidarity's Ilya Yashin, 
authorities have prevented Nemtsov from meeting with factory 
workers or attending large public meetings. 
 
Provocations Frequent Against Opposition 
---------------------------------------- 
 
6. (C) Opposition candidates also have reported being the 
victims of intimidation and provocations, including physical 
attacks, in the run-up to the election.  On March 23, a 
transvestite splashed ammonia-laced cola on Nemtsov's face, 
requiring him to seek treatment at a hospital.  (Note: 
Campaign organizer Ilya Yashin posted photographic evidence 
on his blog purportedly linking the attack to the pro-Kremlin 
Nashi youth group.  Nashi in turn threatened to file a libel 
lawsuit against Nemtsov seeking USD 30,000.)  Solidarity's 
Yashin told us that other provocations in Sochi have included 
gatherings of suspected Nashi or Young Guard pro-Kremlin 
activists hectoring Nemtsov and Yashin, as well as officials 
barring Nemtsov from attending open public meetings in Sochi. 
 
7. (SBU) On March 27, in what Nemtsov called "a Kremlin 
provocation," the Sochi electoral commission reported that 
Nemtsov had received an illegal USD 5,000 campaign donation 
from a bank account in the U.S.  Nemtsov's campaign returned 
the donation, which the Moscow Times reported March 30 had 
come from a businessman living near Brighton Beach in 
Brooklyn.  Electoral officials also accused billionaire 
Aleksandr Lebedev of receiving illegal donations March 24 in 
the form of three 1,000 ruble (about USD 28) donations from 
minors. 
 
United Russia Discipline Frays While Opposition Galvanizes 
--------------------------------------------- ------------- 
 
8. (C) Just as in March mayoral elections in Smolensk and 
Murmansk in which rogue United Russia members won without 
their party's imprimatur, the ruling party has been unable to 
maintain party discipline in the unruly Sochi election. 
Although United Russia formally backed acting mayor Pakhomov, 
popular City Council Deputy Chairman Funtyakov and ballerina 
Anastasiya Volochkova - both of United Russia - also 
submitted registration paperwork.  Demonstrating how much 
cachet the United Russia brand has lost, Funtyakov even 
suspended his party membership just as the eventual victors 
did in Smolensk and Murmansk.  Further complicating matters 
for Pakhomov and United Russia, Funtyakov is recognized as a 
more charismatic politician than Pakhomov.  City councilman 
Kurpitko told us that Pakhomov is seen as a "technical mayor" 
who was not elected to his current job and does not enjoy 
wide popularity.  Kurpitko commented that Pakhomov had 
expressed reservations to him that running as a United Russia 
candidate would be a short-term liability; however, Putin and 
Medvedev's March 23 visit no doubt reinvigorated Pakhomov's 
party loyalty.  Rumors have swirled that Pakhomov agreed to 
run with United Russia so long as no other party member ran 
against him, which may have led to the reported March 29 
public altercation in which Pakhomov cursed at Funtyakov for 
running against him after promising not to. 
 
9. (C) While United Russia struggles to keep its members in 
line, the democratic opposition has found an unlikely ally in 
the Yabloko Party.  Nezavisimaya Gazeta reported March 30 
that Yabloko's leadership decided March 28 to support 
Nemtsov's mayoral bid, which according to party press 
secretary Igor Yakovlev is contingent on Nemtsov signing a 
joint statement that "coordinates actions in the public 
debate."  Yabloko's decision marks a stark contrast from 
comments made to us recently by party leaders, such as when 
Yabloko head Sergey Mitrokhin called Solidarity "a waste of 
time" and former party head Grigoriy Yavlinskiy summarized 
the movement as "stupidity."  Yabloko's previous insistence 
that it remained "the last voice of democracy in Russia" (in 
Mitrokhin's words) likely represented a belief that 
Solidarity would never appear on a ballot.  The impact of 
 
MOSCOW 00000789  003 OF 003 
 
 
this first olive branch between Solidarity and Yabloko 
leaders will be very limited given Yabloko's meager rolls in 
Sochi, but it represents an unusual step in uniting a usually 
uncooperative opposition. 
 
Voters Frustrated By Crisis, Limited Olympic Benefits 
--------------------------------------------- -------- 
 
10. (C) Two Sochi city council members told us that the 
economic crisis and a perceived lack of benefits from the 
2014 Olympics will lead to protest votes on April 26, but 
both predicted Pakhomov would win nonetheless due to his 
extensive "administrative resources."  Just Russia's Viktor 
Kurpitko told us that Sochi residents feel a deep-seated 
"historical rivalry, if not resentment" toward the Kuban 
region and Governor Tkachov.  The governor, Kurpitko 
explained, is perceived as soaking resources away from Sochi, 
with Sochi contributing more to the regional budget than it 
is getting.  In addition, city councilwoman Olga Markovskaya 
told us, the Sochi business community perceived the Olympics 
as being run by Moscow and the oligarchs, with few benefits 
accruing to local businesses.  Markovskaya added that Moscow 
construction companies involved in the Olympics have not been 
mindful of local ecology, and in the end the Olympics may 
hurt Sochi's all-important tourism industry.  Both Kurpitko 
and Markovskaya said they believed Nemtsov, running on an 
anti-Olympic agenda that proposes to spread the Games' events 
throughout Russia, would give United Russia a challenge at 
the polls. 
 
Comment 
------- 
 
11. (C) Sochi's prestige and visibility, as a future Olympic 
city and as Putin's favored holiday destination, ensure that 
Moscow will pay close attention to this election.  Putting 
Nemtsov on the ballot was a bold move, but perhaps also a 
savvy one if Nemtsov ultimately splits protest votes with 
Funtyakov.  United Russia's biggest threat remains, however, 
the same internal rifts that led to embarrassing mayoral 
losses in Smolensk and Murmansk.  The popular Funtyakov, 
running as an independent and on a platform of change, is 
best poised to play the spoiler and therefore most likely to 
be United Russia's biggest target in the coming campaign -- 
if the electoral commission even allows him to register. 
With United Russia backed into a corner and unwilling to lose 
such a high-profile and lucra
tive mayoralty, it remains to be 
seen now how far the party of power will go to win the race. 
We will visit Sochi before the election to report on the 
campaign and related developments. 
BEYRLE

Wikileaks

09MOSCOW784, EXTRANCHECK: POST-SHIPMENT VERIFICATION: PRIST, MOSCOW,

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Reference ID Created Released Classification Origin
09MOSCOW784 2009-03-30 08:25 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXYZ0001
PP RUEHWEB

DE RUEHMO #0784 0890825
ZNR UUUUU ZZH
P 300825Z MAR 09
FM AMEMBASSY MOSCOW
TO RUCPDOC/USDOC WASHDC PRIORITY
INFO RUEHC/SECSTATE WASHDC 2608
RHMFIUU/US CUSTOMS AND BORDER PROTECTION WASHINGTON DC

UNCLAS MOSCOW 000784 
 
SIPDIS 
 
USDOC FOR 532/OEA/MHAMES/LRITTER 
USDOC FOR 3150/USFCS/OIO/CEENIS/MCOSTA 
USDOC FOR 532/OEE/MO'BRIEN 
USDOC FOR 532/BIS/OEA/TWILLIS/EHOLLAND/ANALYST 
 
E.O. 12958: N/A 
TAGS: BEXP ETRD ETTC RS
SUBJECT: EXTRANCHECK: POST-SHIPMENT VERIFICATION: PRIST, MOSCOW, 
RUSSIA. 
 
REFTELS: USDOC 0268 
 
1. Unauthorized disclosure of the information provided below is 
prohibited by Section 12C of the Export Administration Act. 
 
2. Reftel requested a post-shipment verification to determine the 
legitimacy and reliability of the end-user, Prist, Moscow, Russia. 
The company is listed on BIS license applications: NLR as the 
ultimate consignee of one c/w microwave counter with remote sensors 
and general purpose electronic equipment. These items are controlled 
for national security and anti-terrorism reasons under ECCN 3A002. 
The licensee is Matrix, Inc., 109 Bonaventura Drive, San Jose, CA 
95134. 
 
3. On March 25, 2009, Export Control Attach Peter Liston and LES 
Natalya Shipitsina conducted the requested post-shipment 
verification at the offices of Prist, 8/9, Ordjonikidze Street, 
Moscow, Russia. The export control team met with Alexander 
Dedyukhin, General Director and Victoria Dedyukhina, Chief of the 
Import Department. 
 
4. Prist is a closed joint stock company founded in 1994, 
specializing in test and measurement instruments.  Prist employs 72 
people at its Moscow facility.  Prist is one of the top 5 companies 
in its field in Russia and regularly attends trade shows to gain 
exposure and broaden its customer base.  Prist is in partnership 
with several U.S. companies in its field, including Fluke, Le Croy, 
Agilent Technology and Matrix.  Prist has brochures from all of 
these companies on display in its office. 
 
5. Alexander Dedyukhin, General Director for Prist told the export 
control team that Prist has purchased 4 to 5 microwave counters 
(Dedyukhin calls them frequency counters) from Matrix over the 
years, but he claims that the reftel commodity was not purchased by 
Prist.  A few days prior to this meeting, LES Shipitsina provided 
Prist with the reftel Matrix sales order (S.O.) no. SO08090053, when 
setting up the end use check.  Prist contacted Matrix to inquire 
about the S.O. and was told that that particular S.O., no. 
SO08090053, was not a Prist order at all.  Matrix informed Prist 
that the S.O. in reftel was actually for Northrop Grumman in the 
United States.  Dedyukhin provided the export control team with the 
email correspondence between Prist and Matrix regarding the reftel 
sales order that went to Northrop Grumman for the ECO files. 
 
6. Alexander Dedyukhin, General Director of Prist gave the export 
control team a tour of the Prist facilities where the export control 
team did see Matrix microwave counters and other U.S. origin 
technology being used in their testing and research lab. The export 
control team found no indications of impropriety at Prist, and 
DedyukhinQs answers were not evasive. 
 
7. Recommendations: Post recommends Prist, Moscow, Russia, as a 
reliable recipient of sensitive U.S. origin commodities. 
(FCS MOSCOW/JMARKS/PLISTON) 
BEYRLE

Wikileaks

09MOSCOW778, EU MOREL, HABER DISCUSS GEORGIA

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Reference ID Created Released Classification Origin
09MOSCOW778 2009-03-27 15:27 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Moscow

VZCZCXRO2414
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHMO #0778 0861527
ZNY CCCCC ZZH
P 271527Z MAR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 2603
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 000778 
 
NOFORN 
SIPDIS 
 
E.O. 12958: DECL: 03/27/2019 
TAGS: PREL PGOV RS GG
SUBJECT: EU MOREL, HABER DISCUSS GEORGIA 
 
Classified By: Pol M/C Alice G. Wells for reasons 1.4(b) and (d) 
 
1.  (C/NF) Summary: In separate meetings in Moscow March 26, 
EU special envoy Pierre Morel met with DFM Karasin, while 
head of the EU Observer Mission Hans-Joerg Haber met with 
General Proshkin of the General Staff to discuss the Geneva 
Process, EU Monitoring Mission, and other Georgia-related 
issues.  While Karasin agreed to discuss the date of the next 
Geneva Process meeting following the May 15 release of the 
UNSG report on UNSCR 1866, and to hold a first meeting of the 
Joint Incident Prevention and Response Mechanism on April 
14-15, there was no fundamental shift in Russian positions. 
Proshkin charged that a "demilitarization as much as 
possible" of the Georgian side of the conflict zone was a 
prerequisite for discussion of an EUMM-Russia communication 
mechanism.  End Summary. 
 
-------------------- 
Geneva Process, EUMM 
-------------------- 
 
2.  (C/NF) According to Acting EC Political Counselor Kevin 
Tait, in his meeting with Deputy FM Karasin, EU special envoy 
for crises in Georgia Pierre Morel pushed without success for 
agreement to hold the next Geneva Process meeting before the 
end of April.  Karasin was only willing to advance the date 
from Russia's earlier preference of late June up to late May, 
to be finalized after the UN Secretary General issued a 
report (due May 15) on the implementation of Security Council 
Resolution 1866 and the situation on the ground. 
 
3.  (C/NF) The GOR also provided Morel with the names of the 
Russian liaison officers who will work together with the EU 
Monitoring Mission (EUMM).  The sides tentatively agreed to a 
first meeting of the Joint Incident Prevention and Response 
Mechanism (JIPRM) on April 14-15 to exchange information. 
Touting the JIPRM as the "first practical document" of the 
Geneva Process, the MFA in its statement about Morel's visit 
noted that the Mechanism foresaw regular meetings and the 
operation of a "hotline." 
 
-------------------------------------------- 
Russia demands demilitarized zone in Georgia 
-------------------------------------------- 
 
4.  (C/NF) In order to improve EU-Russia communications, head 
of the EU Observer Mission in Georgia Hans-Joerg Haber in his 
meeting requested that General Proshkin of the General Staff 
authorize weekly meetings between the EUMM and Russian force 
leaders in the breakaway regions, similar to the EUMM-Georgia 
MOD MOU of January 26, 2009.  Haber also pushed for Russian 
notification to the EUMM of military exercises and 
overflights of the border zones. 
 
5.  (C/NF) Haber also reiterated demands that the Russians 
withdraw from Perevi, and allow Georgia to reoccupy the city 
"with minimal force presence." 
 
6.  (C/NF) According to Tait, General Proshkin did not agree 
to notify the EUMM of Russian military exercises, calling 
them "normal activity" and "preparation for any contingency." 
 Accusing the EU of misrepresenting the size of the Georgian 
military presence in the region, Proshkin charged that a 
"demilitarization as much as possible" of the Georgian side 
of the conflict zone was a prerequisite for discussion of an 
EUMM-Russia communication mechanism. 
 
7.  (C/NF) Proshkin criticized the Georgia MOD-EUMM MOU from 
January for lifting limits on troop sizes during times of 
emergency, and for requiring renewal every three months. 
(Note: renewal is automatic.  End note.) 
 
------- 
Comment 
------- 
 
8.  (C/NF) EC mission officers saw no fundamental shift in 
Russia's positions, although some slight progress in moving 
forward on the JIPRM. 
BEYRLE

Wikileaks

09MOSCOW775, POLITICAL INTRIGUE SHAPES TOMSK MAYORAL ELECTION

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Reference ID Created Released Classification Origin
09MOSCOW775 2009-03-27 14:16 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO2284
PP RUEHDBU
DE RUEHMO #0775/01 0861416
ZNY CCCCC ZZH
P 271416Z MAR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 2594
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 000775 
 
SIPDIS 
 
E.O. 12958: DECL: 03/27/2019 
TAGS: ECON PGOV PHUM PINR RS SOCI
SUBJECT: POLITICAL INTRIGUE SHAPES TOMSK MAYORAL ELECTION 
 
REF: MOSCOW 00766 
 
Classified By: Minister Counselor Alice Wells.  Reason:  1.4 (d). 
 
1. (C) Summary. The mayoral campaign in Tomsk, in which 
ruling party candidate Nikolay Nikolaychuk narrowly defeated 
the independent Aleksandr Deyev in a run-off election on 
March 15, crystallized the relative weakening position of the 
party of power, United Russia, in the face of economic 
difficulties. The governor's ability to secure a victory for 
his candidate (through black PR, the use of administrative 
resources, and the falsification of election results) showed 
the still insurmountable power that the vertical of power 
enjoys. However, Deyev's candidacy -- financed by unknown 
supporters with deep pockets -- suggests deepening divisions 
within the elite, with a dissatisfied minority able to 
leverage popular discontent as a potent weapon. The election 
highlighted more broadly the contradictions in a system in 
which Moscow calls the shots and expects regional elites to 
"make it happen" on the ground -- an increasingly difficult 
task in a period of tightening budgets and economic slowdown. 
End summary. 
 
An Unexpected Runoff 
-------------------- 
 
2. (SBU) Nikolaychuk, the acting mayor of Tomsk after the 
incarceration of the elected city leader in 2006, failed to 
achieve a simple majority in the March 1 local elections, 
forcing a run-off with the second-place finisher Aleksandr 
Deyev on March 15. Deyev, a perennial critic and opposition 
player, enjoyed a reputation as a handsome and active 
politician, prone to populist rhetoric but well known to the 
city as the owner of the only independent newspaper -- the 
weekly Tomskaya Nedelya.  Officially a member of the 
Kremlin-linked "Just Russia" party, Deyev ran as an 
independent, garnering far greater support than that party's 
pick or the weaker candidates from the KPRF and LDPR. For his 
part, Nikolaychuk had a reputation as a capable, if 
colorless, administrator who enjoyed the support of the 
United Russia apparatus in Tomsk and Moscow. 
 
3. (SBU) The original vote gave Nikolaychuk only 40.6 percent 
of the unexpectedly low turnout (forecasts had predicted more 
than half of city voters would participate, only 37 percent 
went to the polls), while Deyev received a respectable 35 
percent.  Two weeks later, Nikolaychuk defeated his rival by 
4 percentage points (about 6,000 votes) -- winning the 
support of 50.6 percent of the vote. Six percent more voters 
turned out for the runoff; a difference that our contacts 
attributed to either heightened popular interest or increased 
pressure to "get out the vote." 
 
3. (C) Contacts in Tomsk agreed that Deyev's strong showing 
owed less to his political stature than to a growing sense of 
dissatisfaction in society to government policies, but they 
differed widely on the causes of that dissatisfaction. 
Aleksandr Krasnoperov, a journalist at Tomskie Novosti, 
argued that Deyev's support came from two sources: liberal, 
well-educated intellectuals (a bumper crop of which are found 
in Tomsk's many universities) and, more broadly, 
"paternalists" -- those who expect the state to take care of 
them and oppose reforms that they see as weakening the social 
net. Nikolay Savangin, formerly of the liberal business party 
"SPS" and now the head of the regional office of "Pravoe 
Delo," gave greater weight to political motivations, 
commenting that many in Tomsk are tired of being treated like 
sheep in the political process and rebelled against the 
administration's heavy hand. 
 
4. (C) Even United Russia blowhards like regional Duma member 
Aleksandr Kupriyanets admitted that the turnout for Deyev 
signaled problems for the administration, although the 
"official" line in Tomsk follows that from Moscow -- the 
crisis (foisted on Russia from abroad) has created some 
dissatisfaction on economic grounds. In a forthright 
assessment of the election, Governor Kress publicly admitted 
that strong showing for Deyev "was a vote against the acting 
power" and he blamed bureaucratic high-handedness for 
alienating the populace. He focused on the economic 
grumbling, promising to change the housing law so that no 
changes could be made to the tariffs on services without 
public hearings. As such, his promise for greater 
transparency on central economic issues echoed the populist 
line that Deyev had promulgated during the campaign. 
Vice-Mayor Aleksey Sevostianov told Embassy that economic 
problems, not political issues, drove the opposition campaign 
and had given a wake-up call to the city government. He 
nonetheless praised the mayoral election as evidence of 
Tomsk's democratic development, citing the close vote and 
spirited campaigning as a sign of a maturing political system. 
 
 
MOSCOW 00000775  002 OF 003 
 
 
Dirty Pool 
---------- 
 
4. (C) Outside of administration officials in the regional 
and city offices, Tomsk political observers ascribed 
Nikolaychuk's victory to t
he triumph of political pressure 
and manipulation by the governor's office. The tools of 
political power -- the election commission, influence over 
most of the media (Tomsk boasts a local, independent 
television channel that offers an alternative view on 
regional politics), and the bully pulpit of the governor's 
office -- all were used to promote Nikolaychuk. 
 
5. (C) During a roundtable discussion with Embassy with local 
members of Solidarity (the recently formed opposition 
movement headed by Garry Kasparov and Boris Nemtsov), Yabloko 
member Nadiya Ismagiova and Tomskaya Nedelya political editor 
Andrey Sokolov, and others described a litany of electoral 
infractions (both minor and venal) carried out in the name of 
the Nikolaychuk campaign. Perhaps most egregious was the 
Governor's behavior: in a television interview Kress stated 
that he simply would not work with Deyev under any 
circumstances and he reiterated false rumors that Deyev had 
been convicted and served time for corruption. (The Deputy of 
the Governor's Department for International and Regional 
Affairs Aleksey Stukanov privately told us that Kress 
realized that his bold refusal to work with Deyev, even if he 
were supported by the electorate, was a mistake and his 
comments may have actually strengthened opposition to the 
administration team.) The Central Election Commission 
dismissed complaints by the Deyev campaign about the 
Governor's actions, saying that he was only fulfilling his 
obligation to "inform the population about the course of 
elections." 
 
6. (C) The full weight of the regional government's 
administrative levers were brought to bear on the Deyev 
campaign. MVD officials came to the office of Deyev's 
Tomskaya Nedelya with accusations that they were publishing 
"extremist" material and demanded to see what the paper 
planned to publish before the election. Deyev supporter and 
member of the City Duma Vasiliy Eremin complained that even 
the independent TV2 channel had pulled its punches during the 
run-off election, most likely because of official pressure. 
Eremin further lamented that the student regions voted 
primarily for Nikolaychuk out of fear of losing the stipends 
or housing.  When all else failed, the administration 
resorted to vote falsification. The election commission 
played familiar games with absentee ballots (almost 5,000 
voters requested this method, compared to only 1,800 in the 
2004 race) and the registration of homeless people, according 
to Deyev supporters. Perhaps more intriguing, the election 
commission could not explain the unexpected influx of 7,000 
votes late in the day, according to the Federal Press 
website, suggesting ballot box stuffing on Nikolaychuk's 
behalf. 
 
Aftermath 
--------- 
 
7. (C) The Deyev team continues to rail against the conduct 
of the elections, with Deyev himself suing for an apology 
from Kress for his public falsehoods about the candidate's 
character. Solidarity and other Deyev supporters held a 
silent "picket" on March 23 in which they held protest 
placards and passed petitions calling for President Medvedev 
to remove Kress from office. Estimates varied widely on the 
number of participants (from 300 to 1,500) but certainly not 
enough to shake the political order. Although the opposition 
planned for a more ambitious "meeting" (in which participants 
could take the podium and make speeches), the administration 
was confident enough to move forward with Nikolaychuk's 
inauguration on March 25. 
 
8. (C) Although is appears doubtful that there's enough 
public anger to support the opposition's efforts to have the 
election results annulled, the mayoral campaign has given new 
impetus to the democratic movement. The opposition's activism 
compares favorably with the local branches of the Communist 
party and the new Kremlin-linked liberal party "Pravoe Delo" 
decision to back neither candidate in the runoff. Pravoe 
Delo's Savangin admitted that his party disagreed with the 
administration's conduct of the election, but was unwilling 
to risk the government's wrath by sticking its neck out for 
Deyev. 
 
Behind the Scenes: Intra-Elite Conflict 
--------------------------------------- 
 
9. (C) None of our contacts in Tomsk, from either the 
administration or opposition, could explain how Deyev 
financed his campaign, although there was considerable 
 
MOSCOW 00000775  003 OF 003 
 
 
speculation about the "real" backing for his mayoral bid. 
Krasnoperov alleged that local businessmen, tired of being 
prejudiced by the system, supported Deyev in his bid for the 
mayor's office. He estimated that those supporters had enough 
clout to get Deyev on the ballot and to keep the governor's 
office from interfering in his yearlong campaign. In this 
context, Krasnoperov saw the Tomsk election as similar to 
those in Murmansk, Smolensk, and other cities where divisions 
within the elite led to unexpected competitive races. 
(Septel)  Eremin hypothesized that powerful players within 
United Russia may have conspired to support Deyev as a means 
to embarrass Governor Kress, with the hope that the spectacle 
of a "failed" mayoral election could lead Moscow to oust the 
17-year veteran. Alternatively, Deyev's candidacy may have 
been the brainchild of United Russian political 
"technologists" who sought so manipulate the election against 
traditionally strong Communist and nationalist candidates in 
regional politics. However, the economic crisis caused the 
game to spin out of control as Deyev tapped unforeseen public 
dissatisfaction to challenge the "official" candidate. 
 
10. (C) Announcements from both the governor's and mayor's 
offices about firings and new staff give some credence to 
speculation about intra-elite conflict as a hidden, yet 
central component of the mayoral race. At the post election 
press conference, Kress announced the resignation of United 
Russia's regional head Vladimir Vaks and rumors are rife that 
Tomsk's gray cardinal (and Kress rival) Makxim Korobov, who 
headed the party's mayoral campaign, will soon follow. 
Sevostianov said that the mayor planned to make some changes 
as well, removing (in Sevostianov's words) those exposed in 
Tomskaya Nedelya as corrupt -- blaming their misuse of office 
as undermining support for the administration. Local press 
noted that Mayor Nikolaychuk publicly admitted that he was 
coordinating his staff changes with the governor, suggesting 
a unity of purpose in the cadre selections. 
 
11. (C) Moscow's invisible (and sometimes far too visible) 
hand pulls many of the levers in Tomsk politics. Fear that 
the Kremlin would drop him as governor if Moscow's candidate 
for mayor failed to win drove Kress's heavy-handed reaction 
to the Deyev challenge. Regional leaders feel the weight of 
the center's pull more clearly than in the past, when 
defending regional interests often trumped the Kremlin's 
call. (According to Eremin, Nikolaychuk's pre
decessor 
Aleksandr Makarov was arrested for corruption after he 
conspired with United Russia leader Volodin to take over as 
the Speaker of the regional Duma -- a position still held by 
powerful local player Boris Maltsev.) The mayoral election, 
however, could precipitate a shift away from the lockstep 
march with Moscow. Kress's announcement that regional 
discussions would precede any new changes to housing services 
tariffs signals a new willingness to advance local interests 
when implementing policies -- although we will be interested 
to see how the Federal officials react to Kress's new plans. 
BEYRLE

Wikileaks

09MOSCOW774, AMBASSADOR KENNEDY VISITS MOSCOW IN ADVANCE OF

WikiLeaks Link

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Reference ID Created Released Classification Origin
09MOSCOW774 2009-03-27 14:15 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXYZ0005
RR RUEHWEB

DE RUEHMO #0774/01 0861415
ZNR UUUUU ZZH (CCY AD4877F5 MSI0728-695)
R 271415Z MAR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 2591
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

UNCLAS MOSCOW 000774 
 
SENSITIVE 
SIPDIS 
 
C O R R E C T E D COPY CAPTION 
E.O. 12958: N/A 
TAGS: PGOV PHUM PINR PREL SOCI KIRF RS
SUBJECT: AMBASSADOR KENNEDY VISITS MOSCOW IN ADVANCE OF 
2009 PRAGUE CONFERENCE 
 
1. (SBU)  Summary.  Special Envoy for Holocaust Issues 
Ambassador J. Christian Kennedy visited Moscow from March 22 
to 25 to meet with Russian counterparts in advance of the 
June 2009 Prague Conference on Holocaust Era Assets. 
Ambassador Kennedy liaised with GOR representatives, NGO 
activists, Jewish community leaders, and art experts to pave 
the way for the conference, encouraging a recommitment to the 
Washington Principles on Nazi-Confiscated Art (outlined in 
the 1998 Washington Conference).  Discussions revealed that 
while GOR interlocutors expressed goodwill and interest in 
cooperation, public sensitivity about World War II 
remuneration remained high.  Jewish leaders expressed the 
need to navigate carefully any proposed property restitution 
to avoid an increase in anti-Semitism.  Ambassador Kennedy 
also visited the Schneersohn Collection and discussed the 
importance to the Chabad community.  End Summary. 
 
Shvydkoy Cooperative Ahead of Prague Conference 
--------------------------------------------- -- 
 
2. (SBU)  Ambassador Kennedy met with Special Consultant to 
the Russian President on Communications and Mass Media 
Mikhail Shvydkoy on March 23 to exchange viewpoints before 
formal negotiations at the Prague Conference in June 2009. 
Former Russian Minister of Culture Shvydkoy agreed with 
Ambassador Kennedy that historical revisionism was extremely 
detrimental to Holocaust education, proposing this subject as 
the focus point for discussions in Prague.  He suggested that 
property restitution issues would not be appropriate for the 
conference, preferring constructive talks on improving 
universal "spiritual values" related to the sufferings of the 
Holocaust.  Moreover, Shvydkoy stressed that any public acts 
of restitution -- including the return of art and books taken 
by Soviet forces from the Nazi regime -- would cause a 
"public scandal" and must be avoided at all costs.  He 
explained that all things connected to World War II in Russia 
remained "very sensitive," and common sense dictated a very 
deliberate approach to such issues.  He noted that 
discussions on property restitution should not progress until 
parties created and shared detailed inventories of the 
disputed items, but conceded that progress could be made on 
the Schneersohn Collection in the future. 
 
Schneersohn Collection, Document Sharing 
---------------------------------------- 
 
3. (SBU)  Ambassador Kennedy met with Russian State Library 
(RSL) Deputy Director General Nina Khakhaleva on March 24 to 
discuss opportunities for cooperation on shared Holocaust-era 
archives, specifically regarding Nazi police and deportation 
records, slave-enforced labor, and displaced persons.  While 
acknowledging its importance, Khakhaleva noted the difficulty 
and cost of document sharing, commenting on RSL's current 
painful transition from a paper-based catalog system to an 
electronic system.  She also added that the Russian 
Historical Military Archives received all files obtained 
during campaigns against the Nazis, saying that the RSL was 
not in a position to share this information.  Ambassador 
Kennedy informed Khakhaleva that the United States would 
rotate into the presidency of the International Tracking 
Service (ITS) in May 2009, and hoped to advance the proposal 
of the creation of a network allowing scholars to search all 
related archives.  Khakhaleva responded with interest, asking 
Ambassador Kennedy for a concrete proposal on how the Russian 
government could cooperate with the ITS. 
 
4. (SBU)  Khakhaleva escorted Ambassador Kennedy to meet RSL 
Oriental Center Director Sergey Kukushkin for a viewing of 
the Schneersohn Collection.  On Ambassador Kennedy's inquiry 
about the Collection, Khakhaleva commented that the 
Schneersohn Collection had no relation to the Holocaust, but 
agreed that the Chabad community held these works in high 
regard.  Ambassador Kennedy stressed the importance of 
safeguarding the collection.  Khakhaleva told Ambassador 
Kennedy that the RSL did not rule out the possibility of 
digitizing them in the future, and would allow anyone 
(including Chabad) to visit the Collection during business 
hours.  Kukushkin showed Ambassador Kennedy samples from the 
Collection and elaborated on the Oriental Center's catalog 
system, which listed the Collection's oldest book as being 
written in the 16th century. 
 
Jewish Community Leaders Sensitive to Property Issues 
--------------------------------------------- -------- 
 
5. (SBU)  Jewish community leaders offered different views on 
prospects for the return of property, Judaica, and archives 
to communities throughout Russia.  Federation of Jewish 
Communities of Russia (FEOR) Director Aleksandr Boroda told 
Ambassador Kennedy on March 23 that the GOR viewed the 
transport of any Holocaust-era archives outside the country 
 
as unacceptable, but did see some progres
s domestically.  He 
believed that the most likely path for obtaining Jewish 
community records would be through long-term loans from the 
GOR, which would provide de facto full use of the documents 
in lieu of ownership.  As with any issue involving the Jewish 
community, he noted the need to avoid the public eye as any 
favoritism shown towards Russian Jewry could stir 
anti-Semitism. 
 
6. (SBU)  With regards to the return of precious Judaica, 
Boroda said that the GOR required beneficiary communities to 
have a suitable museum or storage facility to preserve any 
state valuables.  Russian Jewish Congress (RJC) Director 
Yuriy Kanner told Ambassador Kennedy on March 25 that he 
believed the Moscow Jewish community could easily produce the 
necessary funds for such a facility, but long-term financial 
questions could only be solved through the creation of a 
foundation.  Concerning property, Boroda mentioned that the 
GOR had a program to return synagogues to the Jewish 
community, but there was no money in the budget for the 
program.  Additionally, communities that received religious 
buildings from the government did not have sufficient funding 
for their maintenance. 
 
Ambassador Allowed to See Disputed Art 
-------------------------------------- 
 
7. (SBU)  Ambassador Kennedy visited the Pushkin State Museum 
of Fine Art on March 24 to verify the condition of two works 
of art claimed by AmCit families.  The meeting, initially 
refused by the museum and the Ministry of Culture, was 
arranged shortly after Ambassador Kennedy's discussions with 
Shvydkoy, suggesting the latter's interest in facilitating 
better relations.  Deputy Director and Curator for the 
Pushkin Museum, Tatiana Potapova, blocked off a section of 
the museum for a private viewing, during which she and other 
museum experts conversed with Ambassador Kennedy about the 
style and condition of the works. 
 
8. (SBU)  Ambassador Kennedy also met with Russian art dealer 
and expert Andrei Ruzhnikov at his gallery below the Moscow 
Ritz-Carlton.  Ruzhnikov boasted of his extensive knowledge 
of the Russian art market, and provided several anecdotes 
about his connections with high-powered and corrupt Russian 
officials to validate his claims.  After a private tour of 
his high-security showroom that included an original Renoir 
painting and extensive collections of tsarist-era enamel art, 
he claimed no knowledge of rumors that art looted from Nazi 
camps at the end of World War II existed in Russia, saying 
that he "would have heard about them" by now. 
 
Anti-Semitism: Not Official Policy, but Has Deep Roots 
--------------------------------------------- --------- 
 
9. (SBU)  Ambassador Kennedy met with SOVA Center Deputy 
Director Galina Kozhevnikova on March 24 to discuss the 
current state of xenophobia in Russia, including an 
assessment of Russian anti-Semitism.  Kozhevnikova explained 
that while no official policy of anti-Semitism exists in 
Russia (FEOR's Boroda agreed), most extremist-nationalist 
groups based their ideology on anti-Semitism even though they 
actively avoided using anti-Semitic slogans.  She noted that 
Jews in Russia held fewer leadership roles in government and 
the financial market than in the past, pushing negative 
perceptions of Jews onto the backburner of phobias.  Some 
nationalist groups like the Movement Against Illegal 
Immigration (DPNI) and Slavic Union began using anti-Semitic 
propaganda more often in 2006, but with little public 
resonance.  She added that the GOR actively prosecuted 
anti-Semitic activities (Note: she said it was easy for law 
enforcement to recognize anti-Semitic acts), deterring groups 
from espousing such comments.  Both Boroda and Kozhevnikova 
differentiated between violent xenophobes, who have committed 
crimes against Jews in Russia, and "household anti-Semites" 
who regularly discriminate against Jews. 
 
10. (SBU)  On the subject of Holocaust education in Russia, 
Kozhevnikova told Ambassador Kennedy that teachers spent 
very little time, if any, covering the Holocaust in secondary 
schools.  Moscow Bureau for Human Rights Director Aleksandr 
Brod told Ambassador Kennedy on March 25 that the GOR avoided 
focusing on the Jewish Holocaust as a specific subject in the 
educational system, saying any preferential attention given 
to one genocide would unfairly lessen the suffering of the 
other groups liquidated during the Stalin era.  While the GOR 
prohibited officials from making anti-Semitic statements, 
several authors published anti-Semitic books every year, 
selling over 500,000 copies at book fairs in Russia annually. 
 Many of these books, according to Brod, are blessed by local 
Russian Orthodox Church (ROC) priests.  Boroda added that the 
resurgence of the ROC has generated an increase of 
 
anti-Semitism, especially in the number of print publications 
lambasting Jewish culture, but expected that the demographic 
crisis would turn more Russians against Muslims in the future. 
 
Comment 
------- 
 
11. (SBU)  Shvydkoy's interest in a "unified" position at the 
Prague Conference suggests that there is room for negotiation 
on key Holocaust-era issues.  Domestic sensitivity to issues 
related to the Great Patriotic War, however, limits GOR 
flexibility just as the fear of increasing anti-Semitism 
limits Jewish community efforts. 
 
12. (U)  Ambassador Kennedy did not have an opportunity to 
clear this message. 
BEYRLE

Wikileaks

09MOSCOW766, SMOLENSK: CONTESTED MAYOR ELECTION, LIMITED

WikiLeaks Link

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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. #09MOSCOW766.
Reference ID Created Released Classification Origin
09MOSCOW766 2009-03-27 10:40 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO1981
RR RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHMO #0766/01 0861040
ZNY CCCCC ZZH
R 271040Z MAR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 2584
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 000766 
 
SIPDIS 
 
E.O. 12958: DECL: 03/19/2019 
TAGS: PGOV ECON RS
SUBJECT: SMOLENSK: CONTESTED MAYOR ELECTION, LIMITED 
ECONOMIC DEVELOPMENT 
 
REF: A. 08 MOSCOW 3575 
     B. 08 MOSCOW 436 
     C. 08 MOSCOW 411 
 
Classified By: Political MC Alice G. Wells for reasons 1.4 (b) and (d). 
 
Summary 
------- 
 
1.  (C)  In a March 18-19 visit to the city of Smolensk, 
journalists, political parties, business people, and local 
officials told us the economic crisis has had limited effect 
on the region, but it had hindered future growth and hurt 
small businesses.  Few companies have declared bankruptcy, 
but some have cut back hours and staff.  Opposition parties 
hailed the March 1 election of an independent United Russia 
member in lieu of the party's designated candidate, calling 
it a "vote of protest" against the policies and alleged 
corruption of United Russia.  However, they also complained 
of poor access to the media and United Russia's use of 
"administrative resources" to secure the election victory. 
The new mayor is expected to rein in corruption and better 
deliver services despite declining tax revenues.  The 
recently appointed Human Rights Ombudsman told us that 
corruption will not end until the executive branch is checked 
by an independent legislature and judiciary.  The mayoral 
election results may match a growing trend of electoral 
competition within United Russia, and of dissatisfaction with 
the local apparatchiks.  End Summary. 
 
Economic Crisis:  Not here 
-------------------------- 
 
2.  (SBU) During a March 18-19 visit, political party 
leaders, business people, and journalists in Smolensk 
lamented the lost opportunity to attract investment to the 
region during the oil-fueled boom times of the last few 
years.  Due to the lack of investment, Smolensk's economy has 
only contracted slightly, with the crisis accelerating a 
decline in tax revenues and squeezing small business 
operations, with entrepreneurs ruling out expansion in the 
near term.  President of the Smolensk Chamber of Commerce and 
Industry Vladimir Arkhipenkov told us that with banks 
charging small businesses in excess of twenty percent for 
loans, business owners have resorted to cutting staff, 
cutting back on salaries, and putting expansion plans on 
hold.  However, Arkhipenkov was quick to note that, as yet, 
few companies had declared bankruptcy. 
 
3.  (SBU) The regional administration took exception to any 
description of an economic crisis in the region, calling the 
programs of the Prime Minister and President sufficient to 
address the crisis.  While Smolensk's Deputy Chief of the 
International Relations and Cooperation Department Oleg 
Ivanov conceded that large-scale investment in the next 
couple of years was unlikely, he stated that the 
administration was hoping to develop plans that can be used 
when capital frees up, including the development of a tourism 
industry that would attract Poles, Belarusians, and Western 
Europeans to Smolensk for fishing, hunting, culture, and 
history.  However, this approach appears to ignore the lack 
of existing tourist infrastructure and a poor track record of 
attracting visitors to the region.  The local newspaper, 
Worker's Way, in an article April 19 put the number of 
"foreign" tourists at just over one thousand for 2008 (the 
number of Belarusian visitors was not calculated as they were 
not considered foreign), a number that is unlikely to attract 
large investment. 
 
Democracy within United Russia 
------------------------------ 
 
4.  (SBU) Smolensk came to national attention for the conduct 
and results of its March 1 elections.  Of the twelve 
candidates vying for the position of mayor, five were from 
the United Russia party.  The winner, Eduard Kachanovskiy, 
was a member of United Russia, but he was not the party's 
preferred candidate on the ballot.  His principal opponents 
in the race were former mayor Vladislav Khaletskiy and 
Valeriy Razulaev, also United Russia members.  Viktor 
Pupchenkov head of the party's regional executive committee, 
said that the party had put forward Razulaev in place of the 
former mayor because it wanted a new face that would draw 
more young people into the party.  That said, Pupchenkov was 
quick to point out that while the local party was not happy 
with the results, which in his view resulted in the election 
of a less qualified candidate, the party would work with the 
new mayor.  "He may not be our choice, but he is a member of 
our broader party," Pupchenkov said.  However, the opposition 
and journalists assessed that the lack of a deputy mayor or 
any appointments to the mayor's staff was symbolic of 
 
MOSCOW 00000766  002 OF 003 
 
 
infighting within United Russia; a fight that Pupchenkov 
dismissed as normal after a transition.  He also argued that 
the mayor should seriously consider retaining some of the 
prior mayor's staff due to their experience. 
 
5.  (SBU) Opposition parties, including the Communist Party, 
Just Russia, and Right Cause argued to us that their 
candidates had little chance of winning at the polls, due to 
United Russia candidates' access to "administrative &#x000A
;resources."  But despite their complaints on the fairness of 
the campaigning process, the opposition parties were 
optimistic on the outcome and future election prospects. 
Communist Party First Secretary Valeriy Kuznetsov told us 
that the election of Kachanovskiy was "a vote of protest" by 
those tired of corruption and the lack of services.  Just 
Russia's Viktor Yesin echoed this comment, adding that the 
new mayor was widely respected for being intelligent and able 
to get things done.  Yesin was optimistic that for Smolensk, 
at least, the arena for true political competition had 
opened.  He expressed hope that future regional and local 
Duma elections would see a willingness by the electorate to 
ignore the dictates of Moscow and United Russia, and instead 
pick the best candidate. 
 
6.  (SBU) Mikhail Khvostantsev of Right Cause assessed that 
on election day, voters made a choice between the far left, 
far right, or the United Russia-dominated center.  If United 
Russia can no longer expect automatic support for its 
preferred candidates, democracy could improve, including the 
situation for Right Cause.  That said, all of the opposition 
parties bemoaned United Russia's ability to dominate the 
media, with the Communists appealing for the results to be 
annulled -- while passionate on this point, Kuznetsov said 
the party would not take the issue to the courts.  The 
opposition pointed to the popularity of PM Putin and the 
association of United Russia with his name as part of the 
reason United Russia associated candidates dominated in the 
elections.  While visiting the two United Russia offices in 
Smolensk, one could not escape noticing that the offices' 
signs had two lines of text with the largest type reserved 
for "The Party of Putin." 
 
Corruption and Frustration 
-------------------------- 
 
7.  (SBU) The new mayor faces a series of problems in 
providing services, and he will be constrained by falling tax 
revenues and a corruption-laden privatization program, a 
legacy of the former mayor.  Journalist Sergei Kovalev 
alleged that corruption now touched garbage collection 
services, repair and revitalization of communal housing 
units, road repair, and other public works projects. 
Opposition party leaders and journalists hope the mayor can 
find a way to work through the corruption and get things 
done.  However, Yesin surmised that with the fall in local 
tax revenues and the slow deterioration of local industry, 
due to lack of investment in former state-run enterprises, 
the only solution was the appointment of an "Abramovich or 
Bill Gates" as governor -- someone with personal resources 
who could buy the region out if its decline.  Shy of that, he 
and other prominent citizens believed that Smolensk will 
continue to be rooted in its past with architecture and 
infrastructure to match. 
 
8.  (SBU) Newly appointed Ombudsman for Human Rights 
Aleksandr Kapustin shared with us that the lack of services 
was hurting pensioners and the poor the most.  The majority 
of the complaints he addressed were the lack of services to 
communal housing units and the poor communication between the 
people and the authorities.  He also expressed frustration 
with the overall direction of Russia.  As long as the concept 
of three separate but equal branches of government did not 
work in Russia, "there will be no true democracy in the 
country," and "it is not possible to successfully fight 
corruption." 
 
Comment 
------- 
 
9.  (C) Smolensk remains a rather conservative region within 
the Russian Federation and unlikely to lead the way in social 
and political change.  However, the results of the mayoral 
election and the outspoken complaints on corruption may match 
a broader trend, as evidenced by recent elections in Tver and 
Murmansk.  It remains to be seen if United Russia and the 
Russian leadership will continue to allow competition within 
the party at the local level.  If the party squelches this 
rather limited outlet for dissent and political competition, 
some ambitious local politicians may seek alternative paths 
to political posts and would be welcomed by opposition 
political parties, which are also vying for the center of the 
 
MOSCOW 00000766  003 OF 003 
 
 
Russian electorate. 
BEYRLE

Wikileaks

09MOSCOW759, BELARUSIAN SWT 2008 VALIDATION STUDY

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Reference ID Created Released Classification Origin
09MOSCOW759 2009-03-27 05:50 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXRO1482
RR RUEHDBU RUEHLN RUEHSK RUEHVK RUEHYG
DE RUEHMO #0759/01 0860550
ZNR UUUUU ZZH
R 270550Z MAR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 2576
RUEHSK/AMEMBASSY MINSK
INFO RUCNCIS/CIS COLLECTIVE
RUEHWR/AMEMBASSY WARSAW 2386
RUEHKW/AMCONSUL KRAKOW 0014
RUEHRA/AMEMBASSY RIGA 5417
RUEHTL/AMEMBASSY TALLINN 2758
RUEHVL/AMEMBASSY VILNIUS 3165

UNCLAS SECTION 01 OF 03 MOSCOW 000759 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KFRD CVIS CPAS CMGT ASEC PGOV BO RS
SUBJECT:  BELARUSIAN SWT 2008 VALIDATION STUDY 
 
REF:   08 VILNIUS 0125 
 
MOSCOW 00000759  001.2 OF 003 
 
 
1. (SBU) Summary:  According to a recent validation study of 2008 
Belarusian Summer Work and Travel (SWT) participants, 15 percent of 
 
students did not depart the United States at the conclusion of the 
program.  This figure equals the percentage of students who did not 
 
return after the 2007 program (reftel).  Post found clear trends 
among the non-return data which point to higher risk of non-return 
in 
certain age groups, second-time SWT participants, universities from 
 
outside of Minsk, and a few travel agencies.  Post will incorporate 
 
this data into adjudications of 2009 Belarusian SWT applicants.  In 
 
2009 2,500 Belarusian students are expected to apply for the SWT 
program.  End Summary. 
 
Fewer Applicants Than 2007 
-------------------------- 
 
2. (SBU) Since March 2008 when the Government of Belarus mandated 
the 
departure of most American staff at Embassy Minsk, Moscow has 
accepted Belarusian SWT applicants.  In 2008, Moscow consular 
officers interviewed approximately 1,792 Belarusian students who 
worked with seven SWT providers in Belarus.  Of the 1,792 students 
interviewed, 1,250 were issued visas, a 70 percent approval rate. 
For the same program in 2007, Embassy Minsk interviewed 2,450 
students and issued 1,335, a 54 percent approval rate.  Embassy 
Moscow attributes the decline in overall 2008 SWT Belarusian 
participants to the expense of traveling to Moscow for visa 
processing.  Many participants apparently opted out of the program 
because of the added expense.  (Note:  This cable does not include 
the 521 J-1 SWT applicants interviewed in Minsk before the staff 
reduction took effect.  Of the 521 applicants interviewed 169 were 
issued, a 32 percent approval rate.  None of these applicants were 
included in the validation study.  End Note.) 
 
Survey Methodology 
------------------ 
 
3. (U) Working with the Fraud Prevention Units (FPU) in Moscow and 
Minsk, and Moscow?s DHS - CIS Office, all Belarusian SWT applicants 
 
issued visas were checked through the DHS Arrival and Departure 
Information System (ADIS).  Those with confirmed departures were 
considered to have completed their summer program and were not 
further examined.   Those with no departure records, with pending 
Adjustment of Status, or who had adjusted to B1 status with 
departure 
date before March 1, 2009 were contacted by FPU Minsk, who verified 
 
the applicant's status in the United States. 
 
4. (SBU) The results showed that 1,062 students (or 85 percent) had 
 
confirmed departures from the United States.  Of the remaining 188 
students, 130 (or 10.4 percent) had no departure records, and the 
remaining 58 (or 4.6 percent) had either adjusted status or had an 
adjustment of status pending with DHS.  Of those who had an approved 
 
Adjustment of Status the breakdown is as follows: 
 
 9   Extension of J1 status 
 8   B1 
16   F1 
 3   H2B 
 
Of the 16 students on F-1 status, a SEVIS check revealed that 15 of 
 
the 16 students fifteen were registered "in status" at their chosen 
 
academic institution.  Of the students called by FPU Minsk in the 
validation study, four were not listed at their reported university 
 
and may have used fraudulent university documents to facilitate 
their 
travel to the United States. 
 
Overstay Demographics 
--------------------- 
 
5. (SBU) The non-return rates for male and female students were 
 
MOSCOW 00000759  002.2 OF 003 
 
 
almost equal (14 percent and 15 percent, respectively). 
 
Continuing a long-standing trend, older applicants (and, thus, 
further along in their university education) were more likely not to 
 
return to Belarus. 
 
Year of Birth         Non-Return Rate (percent) 
-------------         ------------------------- 
1982-84               24 (Issued 8 ? Non Return 2) 
1985                  32 (Issued 29 ? Non Return 9) 
1986                  23 (Issued 183 ? Non Return 43) 
1987                  14 (Issued 480 ? Non Return 69) 
1988                  13 (Issued 427 ? Non Return 56) 
1989-90                8 (Issued 124 ? Non Return 10) 
 
6. (SBU) In addition, applicants with prior J-1 visas were 
one-and-a- 
half times more likely not to return than first time SWT applicants. 
 
According to survey results, 27 percent of prior J-1 SWT 
participants 
failed to depart the United States as compared to 12.8 percent for 
first- time participants.  Applicants with prior J-1 visas were also 
 
more likely to legally adjust status than first timers.  Applicants 
 
with prior J-1 visas
 composed 15 percent of issuances but consisted 
 
of over one third (34 percent) of all pending / approved Adjustments 
 
of status. 
 
Belarusian SWT Agencies 
----------------------- 
 
7. (SBU) In 2008, there were seven SWT agencies that serviced the 
Belarusian market.   The following table breaks down non-return 
rates 
by agency for the past two SWT seasons: 
 
Agency    2008 Non Return Rate(percent) 2007 Non Return 
Rate(percent) 
------    ---------------------------- 
---------------------------- 
Discovery           0                            Not Active 
EVI Group          10                            20 
Latvian Center     12                          11 (DBA IEC in 2009) 
Rayet Plus         33                            25 
Star Travel        13                            22 
Universe           24                            11 
YTC                16                          14 (DBA IEC in 2007) 
 
(Note:  In between the 2007-2008 SWT seasons one agency, 
International Exchange Center (IEC), changed their name to Youth 
Travel Center (YTC).  A second agency, Latvian Exchange Center (LEC) 
 
seized upon the opportunity and renamed themselves International 
Exchange Center (IEC) and will use that name in the 2009 season. 
End 
Note.) 
 
Belarusian Universities 
----------------------- 
 
8. (SBU) In 2008, SWT participants from the more prestigious 
universities in Minsk (e.g., Belarus State University, Minsk State 
Linguistic University, and Belarus State Economic University) 
continued to have a lower non-return rate than universities outside 
 
of the capital.  This supports the assumption that students from 
Minsk feel that they have better economic prospects and are more 
inclined to return to Belarus at the end of the SWT program than 
students from other regions of the country. 
 
Selected Universities                      Non Return Rate 
(percent) 
---------------------                      ------------------------ 
Belarus State University (Minsk, Minsk region)              11 
Minsk State Linguistic University (Minsk, Minsk region)     15 
Belarus State Economic University (Minsk, Minsk region)     15 
 
Gomel State University (Gomel, Gomel region)                23 
Mozyr State Pedagogical University (Mozyr, Gomel region)    50 
Baranovichi State University (Baranovichi, Brest region)    67 
 
 
MOSCOW 00000759  003.2 OF 003 
 
 
 
Many of the students attending university in Minsk are actually from 
 
the regions but through talent and/or connections attend university 
 
in the capital. 
 
Comment:  Looking Ahead to SWT 2009 
----------------------------------- 
 
9. (SBU) Again in 2009, Embassy Moscow will accept applications from 
 
Belarusian SWT participants.  To date we have received 873 
applications.  We anticipate the total number of applicants for 2009 
 
to be approximately 2,500.  Belarusian SWT applicants are 
particularly challenging to adjudicate because they traditionally 
have excellent English skills, good grades at university, prior 
international travel to neighboring EU countries, and parents with 
professional jobs.  In order to refine the adjudication standards of 
 
Belarusian applicants, Post this year requires all applicants to 
have 
their year of study in a specific data field in the NIV DS-156 
application.  Also, Consular officers are making more detailed 
interview notes mentioning details like applicant's prior 
international travel and home town.  Armed with this data, Post will 
 
be able to further refine the profile of a non-return SWT applicant. 
 
End comment. 
 
 
BEYRLE

Wikileaks

09MOSCOW756, ROSTECHNOLOGII DIRECTOR CHEMEZOV SEEKS MORE STATE

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Reference ID Created Released Classification Origin
09MOSCOW756 2009-03-26 15:51 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO0952
PP RUEHDBU
DE RUEHMO #0756/01 0851551
ZNY CCCCC ZZH
P 261551Z MAR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 2571
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 000756 
 
SIPDIS 
 
STATE FOR EUR/RUS; NSC FOR ELLISON 
 
E.O. 12958: DECL: 03/24/2119 
TAGS: EAIR ECON EINV PARM RS
SUBJECT: ROSTECHNOLOGII DIRECTOR CHEMEZOV SEEKS MORE STATE 
SUPPORT; SUPPORTS GM AND BOEING INVESTMENTS 
 
Classified By: AMBASSADOR JOHN BEYRLE, REASONS 1.4 (B,D) 
 
------ 
SUMMARY 
------- 
 
1.  (C)  In a March 20 meeting with the Ambassador, Director 
General of Rostechnologii, Sergei Chemezov, stated that many 
of the conglomerate's constituent corporations would likely 
close owing to the economic crisis.  Thirty percent of 
Rostechnologii's defense plants were on the verge of 
bankruptcy, and half of them would eventually shut down. On 
the other hand, Rostechnologii would receive sufficient 
government support (mostly in state guarantees and interest 
rate compensation on bank loans) to sustain its major 
enterprises, such as the car manufacturer, Avtovaz.  Chemezov 
said Rostechnologii's joint venture with Boeing is scheduled 
to open in June or July, and in that regard noted that 
Rostechnologii's aviation arm, Rosavia, was planning to put 
out a tender for the purchase of up to 100 Boeing or Airbus 
aircraft.  Finally, he noted that production at GM's joint 
venture with Avtovaz would be halved this year owing to the 
decline in Russian auto sales. End Summary. 
 
----------------------------------- 
Economic Crisis: Winners and Losers 
----------------------------------- 
 
2.  (C) Chemezov said that when the military-industrial 
conglomerate Rostechnologii was formed in 2007, it not only 
absorbed the assets of the state arms exporter, 
Rosobnoronexport, but acquired 450 additional entities, 
including 180 state corporations, mostly in the defense, 
machine building, aviation, auto manufacturing and metallurgy 
sectors.  (Note: Rostechnologii owns stakes in VSMPO Avisma, 
a supplier of titanium to Boeing, and Avotvaz, Russia's 
biggest car manufacturer, which has a joint venture with GM 
in Togliatti. It is also the majority shareholder in Rosavia, 
a collection of several bankrupt regional carriers. End 
Note.) 
 
3.  (C) Chemezov said Rostechnologii needed to conduct an 
auditing  of the acquired assets in order to establish their 
real value and prepare many of them for public auction; a 
process that could take up to two years.  In order to speed 
up the auditing process, Chemezov was seeking legislation 
from the Duma allowing Rostechnologii to assume immediate 
management of the 100 percent owned state corporations 
(unitarniye predpriyaiya) that had been handed over to it. 
The state corporations were presently under the control of 
the government State Property Agency. 
 
4.  (C) Chemezov said that many of Rostechnologii's 
constituent enterprises would have to be closed,"causing 
pain" for many workers.  Driving this process was not just 
the downturn, but $800 million in debt Rostechnologii had 
inherited when it assumed control of these enterprises, and 
which was continuing to mount as many of these firms lost 
value.    Enterprises in the single company towns, i.e., 
Avtovaz, would continue to operate and receive state funding. 
 However, smaller enterprises that did not contribute 
significantly to Rostechnologii's major product lines would 
have to close. 
 
5.  (C) Chemezov hoped that the crisis would bottom-out by 
the end of the year, but predicted that economic recovery, 
particularly in the manufacturing sector, would take at least 
three or four years.  This would put enormous pressure on the 
compnay's weaker components. 
 
------------------ 
Defense Industries 
------------------ 
 
6.  (C) Among those weaker components were defense related 
firms, according to Chemezov.  Rostechnologii included 19 
holding companies in defense related industries, including 
radio-electronics, aviation equipment; and manufacturing of 
motors, ammunition and conventional weapons.  Thirty percent 
of the defense plants were on the verge of bankruptcy, he 
said, and about half of those plants would eventually be 
closed. 
 
--------------- 
State Financing 
--------------- 
 
 
MOSCOW 00000756  002 OF 003 
 
 
7.  (C) Chemezov said he was confident that Rostechnologii 
would obtain a large part of the state funding it had 
requested.  He said that he had been working directly with 
Deputy Prime Minister Shuvalov, who would make the final 
decision on how much and where the cuts to Rostechnologii's 
budget would be made. (Note:  Rostechnologii is one of only 
seven state-owned corporations that receive money directly 
from the federal budget.  Rostechnologii received $5 billion 
last fall and is now reportedly seeking another $7.22 billion 
in GOR capital contributions and state guarantees. End note.) 
 
 
8.  (C) Chemezov said the bulk of government support would be 
in the form of guarantees for bank credits and interest rate 
compensation.  He complained about the high interest rates 
for commercial bank credits, which he said the Fina
nce 
Minister had attributed to inflation.  "Compensating us for 
high interest rates is also inflationary," he grumbled. "It's 
as if the money is going from one pocket into another." 
 
----------------------- 
Cooperation with Boeing 
----------------------- 
 
9.  (C) Chemezov said that the Boeing-VSMPO JV "Ural Boeing 
Manufacturing Plant" (which will produce parts for the Boeing 
787/Dreamliner) was scheduled to open in June or July.  Local 
production would not only lower transport and packing costs 
for Boeing, but produce jobs for Russians and profits for 
Rostechnologii, he noted.  He commented that commercial 
successes such as the Boeing-VSMPO partnership could do much 
to offset the occasional political fluctuations in the 
bilateral relationship. 
 
10.  (C) Chemezov said he would be meeting with Boeing 
executives Scott Carson and Sergey Kravchenko in early April 
to discuss the timing of the JV opening (which he suggested 
could be coordinated with possible POTUS visit).  He invited 
the Ambassador to attend a meeting he was organizing for the 
Boeing execs with Deputy Prime Minster Shuvalov. 
 
11.  (C) Chemezov added that Rostechnologii's aviation arm, 
Rosavia, was interested in purchasing a large volume of 
foreign aircraft (either Boeing or Airbus) to modernize its 
fleet and make it fuel efficient.  Rosavia was preparing a 
tender for the purchase of about 100 aircraft which would be 
presented to both Boeing and Airbus. Chemezov said that 
Rosavia was about to send a delegation to the U.S to discuss 
possible purchase of Boeing aircraft.  A selling point for 
Boeing was the fact that spare parts could be produced in 
Russia.  Chemezov added, however,that the Airbus 320 had a 
more modern design than the Boeing 737. On the other hand, 
the larger Boeing 767 was more suitable for long-haul 
passenger flights, and would be ideal for Rosavia's cross 
country flights to Vladivostok and Khabarovsk.  (Chemezov's 
staff later told us that Rosavia might consider a purchasing 
a combination of Boeing 737 and 767 jets if Boeing wins the 
tender). 
 
12.  (C) In the future, Chemezov said Rosavia would most 
likely procure locally produced aircraft, but the Russian 
manufacturer United Aircraft was not yet geared up for 
production.  In the meantime, Rosavia would be exempt from 
customs duties on imported aircraft.  Eventually, he said air 
passenger traffic would be divided between Rosavia (taking 
over all of the domestic routes) and Aeroflot (holding on to 
the international flights).  Chemezov said the government was 
prepared to subsidize air travel between western Russia and 
the Russian far east. 
 
-------------- 
Avtovaz and GM 
-------------- 
 
13.  (C) Chemezov said production of the Lada and GM Niva 
models at GM's joint venture with Avtovaz would be cut by one 
half this year.  To cover losses (owing to the fall in 
Russian car sales from 2.8 million to 1.8 million in the 
course of a year), the firm would sell some of its finished 
product abroad for foreign exchange.  He explained that 
Russian consumers no longer wanted to spend on expensive 
consumer goods and were "saving for a rainy day".  For that 
reason, he said, Avtovaz was designing an inexpensive "car 
for the people" which would be sold at a price "accessible to 
all".   Avtovaz was also investing a new conveyer belt to 
manufacture a "slightly higher class Lada". 
 
 
MOSCOW 00000756  003 OF 003 
 
 
------- 
Comment 
------- 
 
14. (C) Although closely identified with one of the Kremlin's 
shadowy siloviki clans, Chemezov was candid about 
Rostechnologii's financial plight, production problems and 
potential cuts, particularly in the defense industry.  He 
also seemed genuinely supportive of Rostechnologii's business 
ties with GM, Boeing and another Western firms, and 
acknowledged the need for foreign investment to modernize 
those elements of the conglomerate that will survive the 
crisis.  End Comment. 
 
BEYRLE

Wikileaks