Monthly Archives: April 2009

09MOSCOW1125, RUSSIAN MFA SAYS RASUL KUDAEV’S HEALTH IS

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Reference ID Created Released Classification Origin
09MOSCOW1125 2009-04-30 14:43 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO3478
OO RUEHDBU
DE RUEHMO #1125 1201443
ZNY CCCCC ZZH
O 301443Z APR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3124
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHMFISS/FBI WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 001125 
 
SIPDIS 
 
E.O. 12958: DECL: 04/30/2019 
TAGS: PREL PGOV PHUM PINR PTER KJUS RS
SUBJECT: RUSSIAN MFA SAYS RASUL KUDAEV'S HEALTH IS 
SATISFACTORY 
 
REF: A. MOSCOW 154 
     B. STATE 4880 
 
Classified By: Political Minister Counselor Alice G. Wells; reason 1.4 
(b) and (d) 
 
1.  (SBU) On April 23 Post received the following response 
from the Russian MFA pursuant to our January 23, 2009 
demarche concerning the treatment of former Guantanamo 
detainee Rasul Kudaev, currently in pre-trial detention in 
Nalchik, the capital of the Republic of Kabardino-Balkaria 
(reftels). 
 
ENGLISH TRANSLATION (PROVIDED BY RUSSIAN MFA) OF TEXT OF 
STATEMENT ON TREATMENT OF RASUL KUDAEV: 
 
Regarding the inquiry of the U.S. Embassy to Russia dated 
January 23, 2009, concerning the possibility of conducting 
"an independent medical examination" of the Russian citizen 
Rasul Kudayev held in custody in connection with the review 
of the Supreme court of the Kabardino-Balkaria Republic on 
the criminal case with regard to him and other persons about 
the commission of a number of serious and very serious crimes 
including those of a terrorist character, please be advised 
of the following: 
 
According to the Ministry of Justice of the Russian 
Federation and the General Prosecutor's Office of the Russian 
Federation, R. V. Kudayev is held in Pre-Trial Detention 
Center "SIZO No. 1 FBU IZ-7/1 UFSIN of Russia" in the 
Kabardino-Balkaria Republic. 
 
Over the entire period of detention in the pre-trial 
detention center, R.V. Kudayev has been under the 
surveillance of qualified physicians -- specialists of the 
Republican Clinical Hospital and the Medical Section of the 
Department of the Federal Prison Administration (UFSIN) for 
the Kabardino-Balkaria Republic, undergoes medical 
examination in out-patient and in-patient facilities, and 
courses of the necessary treatment.  The last laboratory 
examination of R. V. Kudayev was carried out in February 2009 
and the ultrasonic examination of the organs of the abdominal 
cavity -- in December 2008 and January 2009. 
 
At present, the health condition of R.V. Kudayev is assessed 
as satisfactory. In connection with the diseases that he has, 
he receives the necessary treatment in full scale, has no 
complaints about medical assistance, and does not need any 
additional examinations involving other physicians and 
specialists. 
 
In 2008, the European Committee for the Prevention of Torture 
and Inhuman or Degrading Treatment conducted an examination 
of the place of R.V. Kudayev's custodial detention.  No 
complaints about cruel treatment were received from him.  In 
addition, during the transfer of R.V. Kudayev, the Russian 
side gave guarantees that U.S. law enforcement agencies would 
be granted access to him. 
 
In this connection, please clarify what is meant by the U.S. 
side under "an independent medical examination." 
 
Upon clarification by the U.S. side of its understanding of 
"an independent medical examination" and the prospective 
procedure for carrying it out, the Russian side will be ready 
to consider such a request within the shortest timeframe 
possible.  However, it should be noted that, in compliance 
with the Russian legislation, any deviation from the 
established procedure for medical examination of the 
defendant is possible only with his consent and a positive 
decision of the respective judicial authority.  In his case, 
the Supreme Court of the Kabardino-Balkaria Republic. 
 
2.  (C) During our January 2009 demarche (ref. A), when asked 
by Artem Kudoyarov, Deputy Director in the MFA's North 
America Department what we meant by an "independent" doctor, 
we responded one not associated with the prison and chosen by 
Kudaev's family.  Medical examinations of Kudaev subsequent 
to our demarche have not been conducted by independent 
physicians.  We will continue to monitor this Kudaev's 
medical condition through our human rights contacts and 
report any changes in either it or the medical care he 
receives. 
BEYRLE

Wikileaks

09MOSCOW1124, COMMUNISTS IN OREL EMPOWERED AMIDST TWIN

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Reference ID Created Released Classification Origin
09MOSCOW1124 2009-04-30 14:31 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXYZ0006
RR RUEHWEB

DE RUEHMO #1124/01 1201431
ZNR UUUUU ZZH
R 301431Z APR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 3121
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC

UNCLAS MOSCOW 001124 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV KDEM PHUM PINR KCOR ECON RS
SUBJECT: COMMUNISTS IN OREL EMPOWERED AMIDST TWIN 
LEADERSHIP SCANDALS 
 
1. (SBU)  This message is sensitive but unclassified; please 
protect accordingly. 
 
2. (SBU)  Summary:  The Communist Party (KPRF) in Orel is 
gaining support at the expense of United Russia due to the 
overwhelming level of government corruption there, and the 
economic crisis in general.  Locals perceive the Communists 
as having made in-roads by blowing the whistle on malfeasance 
and by garnering support for an alternative anti-crisis plan. 
 Two major leadership scandals, involving both Orel's former 
governor and current mayor, illustrate the deep level of 
corruption in the region and throughout Russia.  End Summary. 
 
3. (SBU)  During an April 21-24 visit to Orel Oblast, five 
hours south of Moscow by train and home of the Russian writer 
Turgenev, discussions with prominent individuals always 
included a mention of the over 150 corruption-related 
criminal cases being officially investigated in Orel.  Two 
major leadership scandals, involving long-time Governor Yegor 
Stroyev and Mayor Alexander Kasyanov, are most indicative of 
the situation.  On February 16, following growing Kremlin 
concern of social unrest during the economic crisis, 
President Medvedev sacked Stroyev, along with three other 
prominent regional governors in Pskov, Voronezh, and the 
Nenetsky Autonomous District, citing the need to reevaluate 
"efficiency of governance."  On March 18, police arrested 
Kasyanov on charges of tax evasion to the tune of 137 million 
rubles (approximately USD four million).  These scandals, 
combined with the worsening economic crisis, have enabled the 
Communists to win over some support from the United Russia 
party. 
 
Stroyev:  Blossoming Career or Honorary Exile? 
--------------------------------------------- - 
 
4. (SBU)  Stroyev's situation and subsequent related events 
point to a deep level of political intrigue on a regional 
level.  Medvedev sacked Stroyev after his two deputies had 
been charged with fraud (one is currently in Israel awaiting 
possible extradition).  Two days later, Stroyev's former 
son-in-law, Alexander Rogachev, a retired general of the 
Russian Federal Security Service and a successful Orel 
businessman, was shot dead in Moscow.  Stroyev's daughter, 
Marina Rogacheva, immediately resigned her seat in the 
Federation Council so her father could fill in and retain a 
government position.  United Russia member Alexander Kozlov 
was appointed to replace Stroyev as Orel Regional Governor 
and, in turn, to replace his daughter, Marina Rogacheva. 
Russians are shell-shocked by this political chain of events 
because Stroyev had managed to serve as a Governor for 
decades, throughout the Gorbachev, Yeltsin, and Putin eras, 
as a member of both the Communist Party and United Russia. 
 
5. (SBU)  Sources in Orel presented diametrically opposing 
views about this scandal; that Stroyev's career will further 
blossom now that he is in the Federation Council or that he 
is on "honorary exile" since Kozlov merely gave Stroyev a 
generous gift in the form of a cushy job as senator in an 
administrative organ of little importance.  Veronika Katkova, 
Deputy Director of "United Europe" Public Problems Research 
Institute and former adviser to Kasyanov told us on April 22 
that Stroyev had an agreement with Putin that he would not be 
removed, but that Medvedev acted on his own.  She argued that 
Putin then helped Stroyev by ensuring that he ended up in the 
Federation Council.  Stroyev used to be close to Yeltsin and 
is now close to Putin.  She told us that Stroyev wants power 
in Moscow and thought he could ultimately become the next 
Federation Council Chairman replacing Just Russia's Sergey 
Mironov.  She said that this is all reshuffling and that 
Medvedev did not address corruption by firing Stroyev. 
 
6. (SBU)  On the other hand, Dmitriy Krayukhin, Director of 
two human rights organizations "United Europe" and the Orel 
Regional NGO "For Human Rights" told us on April 22 that 
Stroyev lost his influence in the Kremlin last year and there 
was a domino effect which resulted in many corruption 
scandals in Orel.  He told us that Stroyev is very talented 
and intelligent.  Initially, according to Krayukhin, Yeltsin 
hated Stroyev, but Stroyev managed to earn Yeltsin's respect. 
 Last year Stroyev was excluded from the list of so-called 
untouchable people which was the first sign that he was 
losing power in the region.  A few days before Stroyev was 
sent to the Federation Council, he was accused of stealing 
land.  People from Orel are upset that he was sacked as 
Governor, but made a "soft landing" as their un-elected 
senator. 
 
Kasyanov:  Tax Evader or Political Outsider? 
-------------------------------------------- 
 
 
7. (SBU)  Turning attention to corruption on the city level, 
Mayor Alexander Kasyanov was taken into custody on March 18. 
Officially he is being tried for tax evasio
n in the 
Novocheboksarsk City Court in the far-away Republic of 
Chuvash where Kasyanov was General Director of the 
construction company "Stroyinvestdevelopment."  Deputy Mayor 
Valentin Bocharov told us on April 22 that he believed this 
arrest was based not on politics but on strict violations of 
the law and that Kasyanov was accused of hiding profits 
related to his construction company.  He told us that 
Kasyanov was an independent candidate, but that the KPRF 
supported him.  Bocharov admitted that the relations between 
Stroyev and Kasyanov were not close and he characterized 
Kasyanov's relations with current Governor Alexander Kozlov 
as "business-like, but not close." 
 
8. (SBU)  The KPRF's Regional Council Faction Head Vasiliy 
Ikonnikov told us that Kasyanov's removal was "absolutely 
political" and that there was a personal conflict between 
Stroyev and Kasyanov which resulted in Stroyev ousting 
Kasyanov.  Katkova told us that Kasyanov did not realize 
"Stroyev was like a monster."  Ikonnikov explained that 
nobody has ever been convicted under the obscure charge that 
Kasyanov was facing (concealment of due financial payments, 
Article 199.2 of the Russian Criminal Code).  Ikonnikov told 
us that Kasyanov was the head of an enterprise in Chuvash and 
people supported him; "he was not corrupt."  According to 
Ikonnikov, during the last mayoral elections in 2006, Stroyev 
endorsed a candidate who lost to Kasyanov, and investigations 
of Kasyanov date back to this time.  After a year in office, 
however, Kasyanov joined United Russia and this change eroded 
his base of support among the Communists.  According to 
Katkova, Stroyev threatened Kasyanov that if he did not join 
United Russia, he would go to prison.  State Duma elections 
were held by party list and United Russia put Kasyanov on the 
top of the Orel Regional voting list to attract voters. 
Although United Russia won, Kasyanov gave up his seat instead 
of resigning as mayor.  Katkova argued that after joining 
United Russia, Kasyanov lost KPRF's support and was arrested. 
 She stated that "this was all done intentionally, there is 
no issue of tax evasion and nothing criminal; this is 
strictly political."  Finally, Kommersant newspaper reported 
on March 19 that Kozlov "invited Stroyev to voluntarily write 
a letter of resignation," which further implies a political 
scandal. 
 
9. (SBU)  Kasyanov's days as mayor appear to be numbered, but 
he could face one of several different scenarios.  Kasyanov 
is currently being held in pre-trial detention.  On April 29, 
the Federation Council approved federal legislation to allow 
representative bodies of municipal authorities to terminate 
the powers of mayors.  When Medvedev signs this law (expected 
any day), it will allow for the City Council to sack Kasyanov 
for failure to carry out his duties, but it is not clear if 
or how soon they may dismiss him.  Deputy Mayor Bocharov told 
us if there is a guilty verdict, he will step down as mayor. 
However, Bocharov hopes Kasyanov will be acquitted and can 
work again.  According to Bocharov, Kasyanov is in the middle 
of serving a five-year term as mayor and the next elections 
are not scheduled until March 2011.  Katkova thought that 
Kasyanov may not be acquitted because the Chuvash prosecutor 
would have to admit to Stroyev pressuring him.  In Katkova's 
view, Kasyanov was doomed.  She argued that Stroyev had used 
this case to demonstrate his power and did not expect to be 
removed.  Krayukhin argued that the mayor will likely get a 
conditional sentence (guilty, no prison time) this summer. 
He told us "this is the only way out" because if Kasyanov is 
acquitted the authorities will have to acknowledge that they 
acted wrongly by arresting him.  Mayoral elections would then 
likely be moved up to the fall of 2009. 
 
Communist Party Attracts Disenfranchised Voters 
--------------------------------------------- -- 
 
10. (SBU)  According to our interlocutors in Orel, voters in 
the Orel Region have shifted their attitudes away from United 
Russia and toward KPRF leadership because they are fed up 
with corruption and the economic crisis.  According to Deputy 
Mayor Bocharov, KPRF already had a good basis of support 
before these events as Orel has 263,000 military veterans in 
a population of nearly 900,000 and is located in Russia's 
agrarian "Communist Red Belt."  In the December 2007 State 
Duma elections, the KPRF posted a relatively strong showing 
(17.58 percent) in Orel, overshadowed by United Russia with 
59.85 percent of the vote.  Similarly, as a result of the 
2006 elections for the Orel City Duma, there are 11 KPRF 
deputies as opposed to 27 United Russia members.  In the 
Regional Council of Peoples' Deputies, there are 11 KPRF 
 
deputies (20 percent) compared to 35 United Russia members, 
and members from both the Liberal Democratic Party of Russia 
(LDPR) and Just Russia.  The KPRF's Ikonnikov told us on 
April 22 that the Communists played a key role in removing 
Stroyev as governor as well as his two deputies.  He 
described the Communists' growing role in Orel Region, 
stating that 30-36 percent of voters currently support KPRF 
in Orel City and Region, but that the numbers are growing and 
may soon reach 40 percent.  He attributed this spike in 
popularity to KPRF's anti-corruption measures and proposed 
alternative 15-point strategy to handle the economic crisis. 
He explained how the Communists have initiated several 
corruption cases in Orel and that they have made 
anti-corruption their key goal.  Ikonnikov thought that the 
factors behind this shift, included that the KPRF party is 
very active; it has a very effective anti-corruption 
campaign; protest actions regarding housing, rising communal 
services prices, and employment are perceived as evidence of 
the Communists defending social rights of the population; and 
people see the Communists' tangible results concerning 
anti-corruption. 
 
Comment 
------- 
 
11. (SBU)  Medvedev's sacking of Governor Stroyev, allegedly 
to root out corruption, only resulted in a reshuffling.  This 
shows that corruption continues to be an endemic problem here 
that will be difficult to address.  In spite of these signs 
in Orel Region as well as in other regions, United Russia 
will have little trouble maintaining broad national support 
in the short term. 
 
BEYRLE

Wikileaks

09MOSCOW1123, THE KHODORKOVSKIY SHOW, UP CLOSE

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Reference ID Created Released Classification Origin
09MOSCOW1123 2009-04-30 13:39 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO3344
RR RUEHDBU
DE RUEHMO #1123/01 1201339
ZNY CCCCC ZZH
R 301339Z APR 09
FM AMEMBASSY MOSCOW
TO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHC/SECSTATE WASHDC 3118

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 001123 
 
SIPDIS 
 
E.O. 12958: DECL: 04/29/2019 
TAGS: PHUM PREL KDEM KJUS RS
SUBJECT: THE KHODORKOVSKIY SHOW, UP CLOSE 
 
REF: A) MOSCOW 696 B) MOSCOW 624 C) MOSCOW 994 
 
Classified By: Pol Minister Counselor Alice Wells for reason 1.4 (d) 
 
1. (C) Summary: On April 28, we attended the 
Khodorkovskiy/Lebedev trial in Moscow's Khamovnikchesky 
Court, which began on March 31.  Although on previous visits 
we had been restricted to a viewing room for journalists, on 
this occasion we gained entrance to the courtroom.  The 
prisoners' approximately 30 vocal supporters elicited a calm 
response from court officers.  Prosecutors read from lengthy 
evidentiary documents included in their 188-volume 
indictment, at times appearing to have little comprehension 
of what they were reading.  Khodorkovskiy's defense continues 
to maintain that the charges against their client are absurd 
and trumped-up for political reasons.  International pressure 
on the GOR is mounting as overseas Yukos investors seek 
damages related to the breakup of the company.  Despite the 
recent release of former Yukos associates Svetlana Bakhmina 
and Vasiliy Aleksanyan, one of Khodorkovskiy's lawyers 
expressed pessimism regarding his chances of acquittal.  Post 
will continue to monitor the trial in coordination with EU 
colleagues.  End summary. 
 
Spectators at the trial keep their spirits up 
--------------------------------------------- 
 
2. (SBU) On April 28, we attended the Khodorkovskiy/Lebedev 
trial in Moscow's Khamovnikchesky Court, which began on March 
31.  Although on previous visits we had been restricted to a 
viewing room where journalists watched the proceedings on 
closed-circuit television (which was sometimes blocked), on 
this occasion we asked to enter the courtroom, and one of the 
officers of the court replied, "Yes, of course, go ahead; 
everything is open."  Along with a group of approximately 30 
spectators, all supporters of the prisoners, we were ushered 
into a stairwell while awaiting the prisoners' arrival.  When 
Khodorkovskiy and fellow prisoner Platon Lebedev arrived, 
members of the group began shouting, "You are great men!", 
"We will see you soon!", and other words of support.  One 
older woman exhorted her comrades to "be more active."  A man 
in a T-shirt reading, "Khodorkovskiy Go Home," told us, "We 
do not belong to any special organization; we are simply 
citizens who have come to observe the process."  Police 
officers present reacted to this display with equanimity, 
appearing more bored than annoyed.  Their only admonition to 
the group was to make sure their cell phones were off before 
the proceedings began. 
 
3. (SBU) Inside the small and stuffy courtroom, allies of the 
prisoners went to their glass cage to confer with them while 
waiting for the prosecution to arrive.  (Note: The usual 
metal cage with bars had been replaced with a glass cage at 
the defense's request; despite the closeness of the room, the 
cage had ample ventilation.  End note.)  Khodorkovskiy busied 
himself writing out arguments and passing them to members of 
the defense team.  Spectators called one of the officers over 
and bantered with him about his FSB badge. 
 
"The prosecutors don't understand it either" 
-------------------------------------------- 
 
4. (SBU) In the segment of the trial that we observed, the 
prosecution had the floor.  After a protracted explanation of 
the legal basis for denying the prisoners parole -- for 
which, according to the defense, they became eligible in 2008 
-- the prosecution resumed its reading of documents from its 
188-volume case file to be introduced as evidence in the 
embezzlement indictment.  (Note: The prosecution alleges that 
Khodorkovskiy and Lebedev embezzled 350 million metric tons 
of oil worth over USD 25.4 billion and laundered over USD 
21.4 billion (ref A) .  End note.)  A stupor settled over the 
courtroom as the prosecution's designated reader droned on, 
interrupted only once by a heated exchange between the two 
sides that occurred when the defense objected that one of the 
evidentiary items was based on hearsay.  The judge overruled 
the objection. 
 
5. (SBU) The prosecutors frequently hesitated and stumbled 
over their words, and had trouble reading from their own 
documents, as well as finding the items that they needed. 
They rarely looked up at either the judge, the defense, the 
prisoners, or the spectators, and often covered their faces 
or mouths with their hand as they spoke.  As the prosecutor's 
reader delved into mind-numbing detail regarding a particular 
set of Yuganskneft shares that had followed a convoluted path 
through a series of Yukos's subsidiary companies, we asked a 
fellow spectator sitting next to us, "Are you following 
this?"  He replied, "No, I am not; and neither is the person 
reading it." 
 
"A joke from start to finish" 
 
MOSCOW 00001123  002 OF 003 
 
 
----------------------------- 
 
6. (C) Khodorkovskiy and his defense team have maintained 
throughout the trial that the charges against them are absurd 
to the point of incomprehensibility, and that this is simply 
a politi
cally-motivated "show trial" designed to ensure that 
the prisoners remain incarcerated.  In conversations on April 
16 and April 27, Khodorkovskiy lawyer Maria Logan explained 
to us the heart of the defense's argument: that there could 
not have been any embezzlement when the same volumes of Yukos 
production were reported, accounted for and heavily taxed; 
and that there could not have been any "money laundering" 
when there was no underlying crime.  As Logan noted, "The 
prosecution has not explained how it was possible that Yukos 
covered its operating expenses and invested heavily in 
capital improvements and acquisitions and paid dividends, 
when the funds necessary for these operations were allegedly 
stolen." 
 
7. (C) Other commentators, such as Evgeny Kiselyev of Ekho 
Moskvy, have pointed out that the volume of allegedly 
embezzled oil constitutes Yukos's entire production over the 
period in question, and that Khodorkovskiy appears to be on 
trial for the same offense for which he was previously 
convicted -- tax evasion, now being referred to as 
"embezzlement."  On April 21, Khodorkovskiy pleaded not 
guilty to the charges, and stated, "The claim that 350,000 
tons of oil have been stolen or hidden makes no sense; it's 
no bucket of paint stolen from a store."  Irina Yasina, 
director of the Club of Regional Journalists who also 
previously worked for Khodorkovskiy's Open Russia institute, 
told us on April 29 that "there are no rules" in this case, 
and that "the whole thing is a joke from start to finish." 
 
GOR runs into trouble overseas 
------------------------------ 
 
8. (SBU) Already a subject of intense media attention, the 
Yukos case is rapidly spilling into international territory. 
On April 14, the Stockholm Court of Arbitration agreed to 
hear a complaint by several Spanish investment funds 
demanding compensation from Russia for losses caused by the 
government's forced Yukos bankruptcy.  According to Vladimir 
Khvaley, a lawyer with Baker & McKenzie, Russia is "90 
percent likely" to lose the Stockholm Court case, and the 
only question is how much the damages will be.  Although the 
suit only covers investors who held Yukos securities and who 
live in countries that have bilateral agreements with Russia 
protecting investments, estimates of the possible damages run 
as high as USD 10 billion.  Even this large sum is dwarfed by 
another case, dating to 2005, in which former Yukos investors 
from several different countries seek USD billion in damages 
from Russia under Article 26 of the Energy Charter Treaty, 
which protects investors in the energy sector by prohibiting 
"biased and arbitrary legal proceedings."  Since November 
2008, a court in the Hague has been deciding whether the ECT 
has jurisdiction over Russia in the Yukos case; the GOR 
argues that it does not, because Russia signed the Treaty in 
1994 but never ratified it, while the plaintiffs argue that 
Article 45 of the Treaty binds its signatories even while it 
is waiting to be ratified. 
 
9. (SBU) The potential damage to the GOR in this instance 
goes beyond political symbolism; in the event of an 
arbitration ruling in a foreign court against the GOR, 
plaintiffs may be in a position to recover damages by selling 
GOR property located abroad.  In recent years, the Hague has 
decided that the ECT has jurisdiction over other countries 
that signed the Treaty without ratifying it, establishing a 
precedent that does not look promising for the GOR.  Logan 
told us that she expects a ruling on this point in the next 
one or two months. 
 
10. (SBU) In addition to these other cases, a Yukos-related 
case is pending at the European Court of Human Rights in 
Strasbourg (ref B), in which the GOR theoretically stands to 
receive a USD 50 billion penalty.  (Note: There are actually 
three cases: This one in which investors are demanding 
compensation, and two others which accuse the GOR of 
violating the defendants' right to a fair trial.  End note.) 
Logan told us that the Court is unlikely to impose this 
penalty, and will more likely find "damages" for an 
unspecified amount, probably affordable for the GOR. 
However, the symbolism of losing additional cases at the ECHR 
further intensifies the pressure on the GOR in the case.  On 
April 23, a decision in the Moscow Arbitration Court in favor 
of state-owned oil company Rosneft, allowing its subsidiary 
Samaraneftegaz to recoup a 50 percent stake in a former oil 
field of Yukos, ironically harmed the GOR in the ECHR case by 
undermining its claim that to the Court cannot review the 
liquidation of Yukos. 
 
 
MOSCOW 00001123  003 OF 003 
 
 
11. (SBU) The Yukos case continues to make headlines beyond 
Russia's borders, in a fashion which has become increasingly 
difficult for the GOR to control.  For example, on April 27, 
as he was preparing to give a talk at the Institute of 
International Economics in Washington, U.S. lawyers 
representing Khodorkovskiy and Lebedev served Finance 
Minister Aleksey Kudrin with a supoena to testify in a 
Washington district court in a lawsuit filed against the GOR 
by U.S.-based Yukos shareholders.  Khodorkovskiy's lawyer 
took pains to note that "we are not accusing Kudrin of 
anything," but seek his testimony as a witness who has 
information about oil pricing and production in Russia.  More 
ominously, on April 24, gazeta.ru reported that a witness for 
the defense, a former Yukos manager with Spanish and Russian 
citizenship named Antonio Valdez-Garcia who was staying 
abroad for his own safety, had his video testimony blocked at 
the trial.  Valdez-Garcia alleges that he returned to Russia 
in 2005 in order to give evidence to the investigation of the 
Yukos case, but that when he failed to accuse Khodorkovskiy 
and Lebedev, investigators beat and threatened him. 
 
Great that Bakhmina is free, but "the State never loses" 
--------------------------------------------- ----------- 
 
12. (C) The Khodorkovskiy case proceeds amid a backdrop of 
recent signals of a possible trend towards liberalization 
from Medvedev (ref C).  In the context of this case, foremost 
among the promising signals were the recent parole decisions 
freeing former Yukos lawyer Svetlana Bakhmina, and former 
Yukos vice-president Vasiliy Aleksanyan.  The Aleksanyan 
decision received little fanfare, as the intense level of his 
illness (terminal cancer and HIV) meant that his "freedom" 
was relatively insignificant, given that he was already being 
treated in a private hospital.  However, the April 21 
decision by a Moscow court to free Bakhmina (she returned 
home on April 24), after a year-long public campaign for her 
release that garnered nearly 100,000 signatures, was widely 
hailed.  Rumors that the prosecution intended to use her as a 
witness immediately began to fly around Moscow, but thus far 
there has been no evidence of any such intention, and 
Khodorkovskiy lawyer Vadim Klyuvgant expressed his doubt to 
us on this point on April 29. 
 &#x0
00A;13. (C) Notwithstanding these parole decisions, few expect 
the Khodorkovskiy case to showcase Medvedev's expressed 
intent to promote rule of law.  Some of our contacts have 
suggested that the GOR may cut a deal with Khodorkovskiy's 
team, such as a reduced sentence or an acquittal, in exchange 
for Khodorkovskiy's public contrition and agreement not to 
dabble further in politics.  Yasina told us that, although 
the decision "will be based on telephone justice rather than 
legal rules," she was "not sure" that the case would "end in 
a sentence."  However, Logan expressed pessimism to us about 
the outcome of the case, saying that "the State never loses" 
a trial, and adding that in contrast to the first trial, 
there are no negotiations taking place between GOR 
representatives and Khodorkovskiy representatives. 
 
Comment 
------- 
 
14. (C) The pressure is mounting on the GOR, as international 
investors cry foul in courts much more sympathetic to their 
arguments than the Khamovnikchesky Court, and as unfavorable 
Yukos headlines appear in foreign and domestic newspapers. 
The case is also creating procedural headaches for the GOR; 
for example, Logan told us that legislation that would likely 
free hundreds of prisoners, by increasing the amount of time 
served that can be applied to parole, is currently held up in 
the State Duma, specifically because said legislation would 
apply to Khodorkovskiy. 
 
15. (C) Some of the public bitterness directed at 1990s 
oligarchs such as Khodorkovskiy has dissipated with the 
passage of time, as evidenced by a recent Levada Center poll 
in which 40 percent of respondents believed Khodorkovskiy 
should be acquitted.  Nonetheless, the GOR has little wiggle 
room in the case.  Any move that would please liberals would 
enrage conservatives, and vice versa.  Statements from some 
commentators comparing the case to the "show trials" of the 
Stalin era are facile; Khodorkovskiy's powerpoint defense is 
available on the internet, and it is easy for his supporters 
to attend and to express themselves, as even the firebrand 
activist Garry Kasparov did on April 29.  Nonetheless, 
virtually nobody believes that the judge will make his 
decision free of GOR influence.  As a result, the world is 
watching the case in order to learn about the GOR's political 
intentions, rather than the judge's legal intentions.  We 
will continue to monitor the case closely in coordination 
with our EU colleagues and report on its developments. 
BEYRLE

Wikileaks

09MOSCOW1122, DEMARCHE DELIVERED: PARTICIPATION IN THE ISLAMABAD

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Reference ID Created Released Classification Origin
09MOSCOW1122 2009-04-30 13:33 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXRO3335
PP RUEHDBU RUEHPW
DE RUEHMO #1122 1201333
ZNR UUUUU ZZH
P 301333Z APR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 3117
INFO RUCNAFG/AFGHANISTAN COLLECTIVE

UNCLAS MOSCOW 001122 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ENRG ETRD EAGR KPWR EAID BEXP PREL AF RS
SUBJECT: DEMARCHE DELIVERED: PARTICIPATION IN THE ISLAMABAD 
REGIONAL ECONOMIC COOPERATION CONFERENCE ON AFGHANISTAN 
 
We delivered reftel demarche on April 30 to MFA Afghan desk 
chief Vitaliy Rugalyov, who informed us that Russia would be 
represented at the conference by its Ambassador to Pakistan, 
Andrey Budnik. 
BEYRLE

Wikileaks

09MOSCOW1120, RUSSIAN ENERGY CHARTER PROPOSAL: NO RESPONSE

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Reference ID Created Released Classification Origin
09MOSCOW1120 2009-04-30 13:15 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO3306
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHMO #1120/01 1201315
ZNY CCCCC ZZH
P 301315Z APR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 3113
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 001120 
 
SIPDIS 
 
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT, 
AND FOR S/EEE MORNINGSTAR AND NESHEIWAT 
DOE FOR HEGBURG, EKIMOFF 
DOC FOR JBROUGHER 
NSC FOR MMCFAUL, JELLISON 
 
E.O. 12958: DECL: 04/30/2019 
TAGS: EPET ENRG ECON PREL RS
SUBJECT: RUSSIAN ENERGY CHARTER PROPOSAL: NO RESPONSE 
NEEDED FOR NOW 
 
Classified By: Ambassador John R. Beyrle for Reasons 1.4 (b/d) 
 
------- 
Summary 
------- 
 
1. (C) President Medvedev issued on April 21 a "Conceptual 
Approach to the New Legal Framework for Energy Cooperation," 
putting down on paper the GOR's ideas for, in effect, a new 
global Energy Charter Treaty, replacing the existing European 
Energy Charter Treaty (ECT), which Russia has signed, but not 
yet ratified.  Russia has long-simmering legal interests 
behind its document; however, we believe the initiative stems 
less from a desire for a new legal framework than from a GOR 
desire that Russia be (or be perceived to be) an "equal 
player" in international relations.  While the principles 
offered in the Russian document do not appear particularly 
problematic per se, opening new negotiations on such a 
complex topic appears fraught with difficulty.  Therefore, we 
see no reason, for now, for us to respond to the proposal 
formally.  However, we do recommend a visit by Ambassador 
Morningstar to follow up on his discussions in Sofia.  End 
summary. 
 
------------------------------------ 
"A NEW SYSTEM OF ENERGY INSTRUMENTS" 
------------------------------------ 
 
2. (SBU) Seeking a "new universal international legally 
binding instrument" to cover "all aspects of global energy 
cooperation," the Kremlin issued (and sent to all G-20 
members) on April 21 a paper outlining its ideas for such an 
instrument.  While not explicitly suggested by the Kremlin, 
such an instrument would ostensibly replace the existing ECT, 
which provides the legal framework for trade and investment 
in the energy sector among the XX parties to the treaty.  The 
document is not a formal proposal in itself, but instead a 
broad blueprint of what a future Russian proposal might look 
like. 
 
3. (SBU) In general terms, the document covers similar themes 
as the existing ECT and the G8 St. Petersburg Energy 
Principles -- open energy markets, sovereignty over national 
resources, transparency, energy efficiency, etc., but it does 
not propose detailed language on any particular topic. 
Furthermore, the document contains some potentially 
problematic language such as on the preference for diplomatic 
over legal channels in dispute resolution, the desirability 
of "coordination" of supply and demand, and the "promotion of 
mutual exchange of energy business assets." 
 
-------------------------- 
RUSSIAN CONCERNS ABOUT ECT 
-------------------------- 
 
4. (SBU) The document also reveals some of the GOR's 
long-standing complaints and concerns regarding the existing 
ECT.  It stresses "balance" between producing and consuming 
countries and "mutual responsibility" for global energy 
security.  It suggests the ECT favors "certain categories of 
actors" (consuming countries) to the detriment of others 
(producing countries such as Russia). 
 
5. (SBU) The wording of the paper and statements by Medvedev 
both before and after its release also illustrate the 
importance to Russia of transit provisions.  In an 
unpublished April 23 paper, Dr. Andrei Belyi of the Higher 
School of Economics points out that Gazprom is specifically 
concerned that the dispute settlement mechanisms of the 
current ECT allow the conciliator to set interim tariffs 
while a dispute is being resolved.  Giving this kind of power 
to an independent authority goes against the GOR's preference 
for political deals, promoting instead transparent legal 
mechanisms for resolving transit issues.  As Belyi points 
out, the Kremlin's preference for "diplomatic over court 
channels to resolve conflicts," is clearly noted in the 
document. 
 
6. (SBU) Furthermore, the GOR claims to be seeking to produce 
an agreement that could apply globally, including in Russia. 
 
MOSCOW 00001120  002 OF 003 
 
 
Tatiana Mitrova, of the Energy Research Institute of the 
Russian Academy of Sciences told us April 27 she is 
"absolutely sure that Russia will never sign (sic) the 'Old 
Energy Charter'" and that it is now up to the EU to decide 
whether or not they want to work on a new document.  In a 
speech during his April 20 visit to Helsinki, Medvedev made 
clear that Russia does not see itself bound by the current 
ECT.  Moreover, PM Putin said in a news conference following 
his meeting with visiting Bulgarian PM Stanishev on April 28 
that Russia is likely to withdraw its signature from the ECT. 
 (Note:  Although Russia has not ratified it, the ECT 
specifically obligates signatories who have not yet ratified 
the treaty to abide by its provisions; this "obligation" has 
been disput
ed by the Russians.  End note.) 
 
------------------------ 
UNLIKELY TO MOVE FORWARD 
------------------------ 
 
7. (C) Ulrich Weins (protect), head of the Energy, 
Transportation, Science, and Environment section at the 
delegation of the European Commission in Moscow told us on 
April 23 that the EC was studying the Russian paper and would 
be "happy to discuss it" with Russia.  However, he added that 
he didn't "see it going anywhere."  He pointed out that even 
if the Russians were to propose legal amendments to the 
existing ECT or to propose a new treaty altogether, "it would 
take ages," to reach consensus on the text among all the 
relevant parties.  Belyi notes the same problem in his paper. 
 He writes that a new EU-Russia agreement, requiring 
consensus among EU members, would be very difficult in the 
current political atmosphere, and that a new global energy 
treaty would be "even harder to achieve." 
 
----------- 
MOTIVATIONS 
----------- 
 
8. (C) Russia's recent rhetoric in the international arena 
and comments by analysts suggest a combination of 
psychological, legal, and political factors also lie behind 
the GOR's proposed framework.  Elements of the Russian 
leadership appear obsessed with ensuring that agreements and 
conventions to which Russia subscribes include "Russian" 
values and norms on an equal basis as the values and norms 
that the GOR often feels are being foisted upon it -- 
including ones it claims to support, such as transparency and 
open markets.  "Russia in Global Affairs" editor Fyodor 
Lukyanov compared this proposal to Medvedev's European 
Security Treaty, as indicative of the Russian President's 
penchant for grandiose concepts, apparently formulated in the 
absence of any consultation with key Euro-Atlantic partners. 
 
9. (C) Opposition politician and former Deputy Energy 
Minister, Vladimir Milov (protect) told us on April 29 that 
he thinks the Kremlin's paper is a "PR initiative... to show 
that Moscow has something serious in its pocket and is not 
just talking about energy security."  He questioned why the 
Kremlin did not highlight any specific complaints about the 
existing ECT and he dismissed as "nonsense" the GOR position 
that the ECT doesn't treat producers fairly. 
 
10. (C) As one western oil company executive noted to us 
recently, the GOR's offer of a new framework could also be 
Russia's way of reinforcing its position that the ECT does 
not apply to Russia.  The GOR would have a strong interest in 
fending off any legal claims or challenges brought against it 
under the ECT.  There are, for example, long-standing 
international court cases over the Yukos affair, which could 
have significant financial repercussions if the courts decide 
that the current ECT were to apply to Russia. 
 
11. (C) Russia may also be trying to demonstrate that it is 
not opposed to rules-based norms of transparency and open 
markets.  Belyi, noting the difficulty of reaching agreement 
on any new legal instrument, suggests in his paper that the 
document is more an attempt by Russia "to portray itself as a 
constructive partner on the international energy scene," than 
a practical solution to energy disputes.  An Italian diplomat 
suggested to us that the document is largely a political 
 
MOSCOW 00001120  003 OF 003 
 
 
statement and not a true proposal given that Russia could 
have put forth a more substantive legal document for 
consideration.  The EC's Weins said he thought the document 
was meant to "deflect attention" from Russia, which "has been 
on the defensive," as an unreliable partner in the wake of 
the Ukraine gas crisis.  Weins also noted that the fact the 
document was not directed specifically to energy partners, 
but to the entire G-20, demonstrates its political nature. 
 
------------------------------ 
COMMENT: NO RESPONSE NECESSARY 
------------------------------ 
 
12. (C) The GOR's concerns about the ECT are long-standing. 
However we suspect the GOR's desire for a "new system" of 
energy cooperation is based more on psychological, political 
and legal motivations than from a real interest in producing 
a rules-based and transparent legal framework.  It is an 
attempt to do away with another of what it sees as 1990s 
relics, like production sharing agreements, signed by the 
"old, weak" Russia. 
 
13. (C) Unless pressed or specifically requested by the 
Russians to do so, Embassy recommends that we refrain from 
responding to this document for now.  Assuming the EU does 
not present a major public response, it is likely that the 
Russian "proposal" will simply linger, but without any 
significant consequence.  If the GOR were to become more 
serious about open markets, open investment regimes, and 
rules-based and market-based economic interactions, the 
outline offered by the Kremlin could be taken more seriously, 
despite its flaws.  Encouraging movement on all these issues, 
of course, is still our primary objective, and we would 
welcome a visit to Moscow by Ambassador Morningstar 
(following up on his surprisingly positive discussion with 
Energy Minister Shmatko in Sofia) to that end. 
BEYRLE

Wikileaks

09MOSCOW1119, MEDVEDEV’S LIBERAL GESTURES AND PUTIN DYNAMICS

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Reference ID Created Released Classification Origin
09MOSCOW1119 2009-04-30 13:08 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO3290
RR RUEHDBU
DE RUEHMO #1119/01 1201308
ZNY CCCCC ZZH
R 301308Z APR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 3110
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 001119 
 
SIPDIS 
 
E.O. 12958: DECL: 04/30/2019 
TAGS: ECON PGOV PINR PREL RS
SUBJECT: MEDVEDEV'S LIBERAL GESTURES AND PUTIN DYNAMICS 
 
REF: MOSCOW 994 
 
Classified By: Ambassador John R. Beyrle: Reasons 1.4 (b, d). 
 
1.  (C)  Summary: A series of liberal political gestures by 
Medvedev have excited speculation about dynamics within the 
political tandem, with a couple of analysts going so far as 
to predict Putin's imminent demise.  However, well-connected 
political observers argue against over-interpreting these 
admittedly "interesting signals."  While welcoming Medvedev's 
change in tone and emphasis on opening up channels of elite 
communication, they stress that the President is operating 
within a Putin-approved framework.  While opinion-shaping 
political commentators and analysts depict a Putin as fully 
in charge and engaged, they acknowledge that Medvedev has 
become more comfortable in power and in emphasizing the 
democratic development of Russian political institutions. 
Medvedev's steps, however incremental, are in the right 
direction and reinforce the window of opportunity we have to 
encourage Russia's political and economic modernization.  End 
Summary. 
 
Medvedev's Spring Cleaning 
-------------------------- 
 
2. (SBU)  The significance of a series of liberal political 
signals by President Medvedev has dominated discussions of 
Moscow's commentariat (reftel).  In quick succession, 
Medvedev gave: 
-- his first Russian print interview to the opposition 
newspaper Novaya Gazeta; 
-- held a three-hour meeting with the reconstituted 
Presidential Council on Human Rights in which he expressed 
regret over the demonization of NGOs; 
-- attended a meeting of his liberal Institute for 
Contemporary Development think tank; 
-- used a television interview to reassert that economic 
stability does not come at the price of democracy; 
-- launched a blog on the popular Live Journal provider as 
part of his commitment to an unfettered Internet; 
-- personally sacked a Moscow Ministry of Interior General 
for corruption; and 
-- has made plans to visit the only region in Russia governed 
by an opposition politician. 
 
The cumulative effect of Medvedev's gestures was interpreted 
by some as a slap at his patron, Prime Minister Putin.  One 
Internet deputy editor proclaimed that Putin's departure was 
just a matter of time, with even an establishment 
political-military analyst like Aleksandr Golts predicting 
that Medvedev's thaw would led to the collapse of Putin's 
political construct. 
 
3.  (C)  In a series of recent conversations, well-connected 
editors and political analysts welcomed Medvedev's tone and 
his commitment to opening up channels of elite communication, 
but argued that the President's actions to date were more 
about style than substance.  Carnegie Center's Masha Lipman 
told us that Medvedev was providing a new sounding board for 
elites, which was necessary during a time of economic 
uncertainty, but argued against over-interpreting the 
President's "interesting signals."  Ekho Moskvy Chief Editor 
Aleksey Venediktov maintained that there was no fundamental 
shift in Russian policy, adding that this was the consensus 
view that came out of his twice weekly meetings with Moscow 
editors.  Both noted that Medvedev's gestures were challenged 
by political realities on the ground: the politically driven 
trial of Khodorkovskiy, constant pressure against liberal 
news outlets (with Ekho the target of continued threats), the 
beating of human rights activist Lev Ponomarev, the actions 
to charge a regional Internet provider with extremism, the 
cancellation of one of the last political shows on television 
(the popular "To the Barrier" hosted by Vladimir Solovyev, 
who has highlighted corruption in the Russian judiciary), and 
the predictably manipulated mayoral elections in Sochi. 
 
Coloring Inside the Lines 
------------------------- 
 
4.  (C)  Both critics (Nezavisimaya Gazeta Editor Konstantin 
Remchukov) and boosters of the President (Center for 
Political Technology Deputy Director Boris Makarenko) 
insisted to us that Medvedev was acting within a 
Putin-approved framework. On one hand, Makarenko described 
the President as cautious, legalistic, and quick to explain 
away GOR excesses -- a legal councilor rather than an 
advocate of liberal political change. On the other, Makarenko 
posited that Putin too was evolving; he noted Putin's 
insistence on designating a "contemporary and modern" 
successor and argued that "continuity does not rule out the 
possibility of course corrections."  Trumpeting an opening in 
the political discourse, marked by principled and frank 
 
MOSCOW 00001119  002 OF 003 
 
 
debates over economic policy, Makarenko argued that Putin was 
changing in response to the crisis, as seen in his frequent 
engagement with audiences around Russia, where he has been 
forced to listen respectfully to criticism.  "He is no longer 
the impeccable communicator." 
 
5.  (C)  We find little support for the thesis that Medvedev 
is infringing upon Putin's political power.  Lipman, 
Venediktov and Remchukov all underscored to us that Putin 
proteges dominate the
Russian economy and security services, 
with Medvedev still lacking a "team" that he can call his 
own.  Remchukov told us the failure of the Kremlin-supported 
opposition Right Cause political party to jell was indicative 
of Medvedev's inability to create alternate vehicles for 
political encroachment.  Remchukov speculated that the 
architect of Right Cause, Kremlin ideology czar Vyacheslav 
Surkov, was happy to see the project still-born, since his 
loyalties still lay with Putin and the ruling United Russia 
party.  (Note: Surkov and Medvedev had a noticeably tense 
exchange during the President's meeting with civil society 
leaders.  When Surkov attempted to deflect a question by 
responding that America tortured its prisoners, Medvedev -- 
without looking at Surkov -- tersely added "then Russia will 
be more democratic than America.")  Remchukov noted that one 
of Medvedev's team, press spokesperson Timakova, was called 
on the carpet by Surkov for background comments to the press 
critical of Putin.  Both Timakova and her husband, political 
analyst Budberg, have hinted that the spokesman position may 
be "too much for a woman" -- perhaps laying the foundation 
for her being eased out. 
 
6.  (C)  There is consensus among the elite observers that 
Putin remains the center of power, with polling data 
revealing that more that half of Russian respondents to a 
nation-wide, BBC-sponsored survey expect the Prime Minister 
to return to the Kremlin, with his popularity only marginally 
dipping during the economic crisis.  (The survey showed that 
only 15 percent of respondents considered Medvedev to be "in 
charge," vice 27 percent for Putin and 41 percent who saw 
them sharing power equally.)  Ekspert editor Valery Fadeyev, 
who advises the liberal ruling party November 4 club, argued 
to us that press speculation over Medvedev's rise did the 
President real harm, because it was palpably false.  Adamant 
that Putin had not lost his desire to rule Russia, Fadeyev 
pointed to the Prime Minister's trademark grasp of complex 
data during his presentation to the Public Chamber on the 
anti-crisis program.  Likewise, Venediktov reversed his 
earlier assessment that Putin was disengaging from the 
demands of being Prime Minister, emphasizing his busy 
schedule (that remains underreported on the White House 
website).  Taking issue with press speculation over a new 
"thaw" under Medvedev, Fadeyev said that a real thaw -- in 
the context of Soviet history -- required a Stalin; rather 
than a thaw, the Russian leadership was placing a "democratic 
accent on the development of political institutions." 
 
Medvedev Maturing 
----------------- 
 
7.  (C)  Nevertheless, there is general agreement that 
Medvedev is becoming more comfortable with the trappings of 
power and with public appearances, with our contacts echoing 
the assessment of Dr. Kissinger and other western 
interlocutors that the President is more at ease and 
commanding than in the past.  His three-hour session with the 
Council on Human Rights was praised by Editor of "Russia in 
Global Affairs" Fyodor Lukyanov, who told us that Medvedev 
acted "normally," without the wall of reserve that separates 
Putin from members of the liberal establishment.  Lukyanov 
commented that it was natural for Medvedev to develop a 
different leadership persona, since "no one can be harder 
(tougher) than Putin," but maintained that the President's 
open and polite demeanor made a real difference with the 
human rights activists.  Former Director of Khodorkovskiy's 
Open World Society Irina Yasina agreed with this 
characterization, even as she emphasized that Medvedev's 
civility did not translate into a rift with Putin or a 
reformulation of the tandem's balances of power. 
 
8.  (C)  Comment:  Medvedev's steps -- albeit incremental and 
cautious -- are in the right direction and underscore the 
window of opportunity we have to re-engage on issues of 
political modernization and economic reform.  While the word 
"democratization" for many here evokes bitter memories of the 
chaotic 90s and the perceived complicity of the U.S. in 
weakening Russia's political and economic standing, 
modernization and innovation are buzzwords around which the 
westernizing elite are prepared to rally.  Building on 
existing civil society dialogues and re-establishing 
business-to-business and government economic dialogues are 
vehicles for deepening our engagement in favor of Medvedev's 
new policy impulse and growing command of the political 
 
MOSCOW 00001119  003 OF 003 
 
 
space.  The fact that none of his "liberal gestures" would be 
undertaken without at least the tacit consent of his patron 
Putin is perhaps the most noteworthy integer in the equation. 
 End Comment. 
BEYRLE

Wikileaks

09MOSCOW1116, PATRUSHEV TELLS CODEL LEVIN RUSSIA WANTS CLOSER

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Reference ID Created Released Classification Origin
09MOSCOW1116 2009-04-30 06:50 2011-08-30 01:44 SECRET Embassy Moscow

VZCZCXRO2897
RR RUEHBC RUEHDBU RUEHDE RUEHDIR RUEHKUK
DE RUEHMO #1116/01 1200650
ZNY SSSSS ZZH
R 300650Z APR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 3104
INFO RUCNIRA/IRAN COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEKJCS/SECDEF WASHDC
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUEKDIA/DIA WASHDC

S E C R E T SECTION 01 OF 02 MOSCOW 001116 
 
SIPDIS 
 
E.O. 12958: DECL: 04/17/2019 
TAGS: PREL PGOV PARM PINR PINS MARR MCAP MASS MNUC
ECON, RS, IR, IAEA 
SUBJECT: PATRUSHEV TELLS CODEL LEVIN RUSSIA WANTS CLOSER 
COOPERATION ON MD, IRAN 
 
Classified By: Ambassador John R. Beyrle.  Reasons 1.4 (a), (b), (c), ( 
d), (e), and (h). 
 
1. (S) Summary:  National Security Advisor Patrushev told 
visiting CODEL Levin on April 15 that Russia wanted closer 
intelligence cooperation on Iran, and said that the GOR would 
pass to the USG via intelligence channels a list of Western 
companies assisting Iran in its nuclear ambitions.  Medvedev, 
he said, wanted intelligence agencies to share information on 
the subject.  He argued that a nuclear-armed Iran would pose 
a greater threat to Russia than to the United States, but GOR 
intelligence estimated it would take Iran five to ten years 
to develop nuclear weapons and a delivery vehicle.  Russia, 
he said, has proposed bilateral and multilateral cooperation 
to deal with Iran's ambitions, and the U.S. and Russia should 
determine which approach would be best.  Patrushev also 
argued the IAEA must play an important role in preventing 
Iran from getting nuclear weapons.  He said the U.S. and 
Russia should work to build a joint missile defense system 
that would not pose a threat to Russia.  Patrushev told CODEL 
Levin that Russia's soon-to-be-released National Security 
Doctrine would take a holistic approach to Russia's national 
security and would emphasize the development of society to 
keep Russia secure.  He also noted the recent improvement in 
U.S.-Russia relations, and said the two countries should 
focus on what unites, rather than divides them.  End summary. 
 
--------------------------------------------- ---- 
GOR Seeks Closer Intelligence Cooperation On Iran 
--------------------------------------------- ---- 
 
2. (S) On April 15 National Security Advisor Nikolay 
Patrushev told Senate Armed Services Committee (SASC) Chair 
Senator Carl Levin (D-MI), as well as SASC members Senator 
Bill Nelson (D-FL), and Senator Susan Collins (R-ME), and the 
Ambassador that the GOR would, via intelligence channels, 
pass to the USG a list of Western companies which GOR 
intelligence services determined were cooperating with Iran 
in its attempts to develop nuclear weapons.  He added the GOR 
does not allow Russian companies to cooperate with Iran on 
such issues, and works hard to prevent information and 
technology leaks.  Any allegations of assisting Iran obtain 
nuclear technology are thoroughly investigated, he said. 
 
3. (C) Patrushev told CODEL Levin that it was important for 
U.S. and Russian intelligence services to work together to 
prevent Iran from developing nuclear weapons, and he 
expressed Medvedev's desire to share information on Iran with 
Russia's "Western partners."  Iran, he said, does not possess 
the intellectual capacity to develop nuclear weapons on its 
own.  He argued Iran could obtain them only by buying 
technology and materials from other countries; something 
which Iranian intelligence is actively pursuing. 
 
----------------------------------------- 
Nuclear-Armed Iran Poses Threat to Russia 
----------------------------------------- 
 
4. (C) When asked about Medvedev's statement to President 
Obama that Russia was concerned about the speed of Iran's 
progress on nuclear matters, Patrushev told CODEL Levin that 
a nuclear-armed Iran would pose a greater threat to Russian 
than to the United States.  He added, however, that Russia 
estimates that Iran would need another five to ten years to 
develop a nuclear weapon and delivery vehicle.  The U.S. and 
Russia, he argued, still had time to work together on the 
issue.  The rocket Iran used to launch a satellite into space 
had a range of only 1,500 km, which does not pose a threat to 
the U.S., he said.  Patrushev argued, however, that Iran 
should be allowed to have a civilian nuclear program. 
 
5. (C) To address Iran's nuclear ambitions, Patrushev said 
the GOR had proposed bilateral and multilateral cooperation 
with Russia's Western partners.  He argued that bilateral 
agreements would be easier to achieve, but might not receive 
support from other countries.  Multilateral agreements would 
have the support of more stakeholders, although they would 
take longer to reach.  He suggested the U.S. and Russia 
should explore both options, and determine which approach to 
take. 
 
6. (C) While unwilling to discuss possible sanctions, 
Patrushev argued that the IAEA must play an important role in 
 
MOSCOW 00001116  002 OF 002 
 
 
dealing with Iran.  The IAEA has criteria to distinguish 
whether a country's nuclear program is civilian or military 
in nature.  If, for example, Iran obtains highly-enriched 
uranium, this would mean Iran had not cooperated with the 
IAEA.
  The U.S. and Russia, he said, must support the IAEA as 
it tries to convince Iran to be transparent in its endeavors. 
 
--------------------------- 
GOR Wants Joint MD With USG 
--------------------------- 
 
7. (C) Patrushev pushed for the development of a joint 
U.S.-Russian missile defense (MD) system, and complained the 
Bush administration had not taken Russia's proposal to use 
radar facilities in Gabala and Armavir seriously.  The 
development of a joint MD system would not pose a threat to 
Russia, unlike current U.S. plans to deploy a system in 
Poland and the Czech Republic.  A joint MD system would 
therefore eliminate the need for Russia to respond to the 
perceived "threat" of missiles in Poland and radar in the 
Czech Republic, he said. 
 
----------------------------------- 
Russia's National Security Strategy 
----------------------------------- 
 
8. (C) Patrushev told CODEL Levin that Russia needed to 
update its National Security Strategy because the world "has 
greatly changed" since the current doctrine was drafted in 
1997.  The soon-to-be-released National Security Doctrine 
would take a holistic approach, promoting development 
throughout Russia as the catalyst for national security, 
Patrushev said.  He argued that the Russian military would 
need healthy conscripts, advanced technology, and economic 
growth, among other things, in order to ensure Russia's 
security.  According to Patrushev, the new National Security 
Doctrine, while not perfect, will address all of these issues. 
 
9. (C) Patrushev said the National Security Doctrine was 
still a work in progress, as the financial crisis had forced 
the GOR to reexamine some of its "accounting figures."  For 
example, the National Security Doctrine presupposes 
unemployment to be approximately five percent, but right now 
it is "in the double digits."  The finished product, 
Patrushev said, would not be perfect, and could be subject to 
change.  It will be made public, and a copy will be sent to 
NSA Jones, according to Patrushev. 
 
------------------------------- 
U.S.-Russia Relations Improving 
------------------------------- 
 
10. (C) Patrushev noted the recent improvements in 
U.S.-Russia relations, and expressed his hope that President 
Obama and Medvedev would share a good personal relationship. 
He said his recent phone call with General Jones convinced 
him the U.S. and Russia could have good relations.  He also 
noted that meetings between U.S. and Russian officials had 
come more frequently and had been more fruitful than under 
the Bush administration.  He argued the U.S. and Russia must 
concentrate on what unites, rather than divides them. 
 
11. (U) CODEL Levin did not clear this cable. 
BEYRLE

Wikileaks

09MOSCOW1115, CODEL Levin with Duma Foreign Relations Chairman Kosachev

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Reference ID Created Released Classification Origin
09MOSCOW1115 2009-04-30 06:41 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO2880
PP RUEHBC RUEHDBU RUEHDE RUEHDIR RUEHIK RUEHKUK RUEHLN RUEHPOD RUEHSK
RUEHVK RUEHYG
DE RUEHMO #1115/01 1200641
ZNR UUUUU ZZH
P 300641Z APR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 3102
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUCNIRA/IRAN COLLECTIVE
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS SECTION 01 OF 02 MOSCOW 001115 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: OREP AMGT ASEC AFIN RS
SUBJECT:  CODEL Levin with Duma Foreign Relations Chairman Kosachev 
on post-Start, Iran, and Missile Defense 
 
Summary 
------- 
1.  (SBU) On April 15, State Duma International Relations Chairman 
Kosachev told Senators Levin, Collins, and Nelson that President 
Medvedev had issued instructions to finalize a post-START agreement 
by the end of the year.  Although he stated that negotiators must 
re-link arms control and defensive systems, the disposition of 
removed warheads, and the number of U.S. carriers.  He accepted 
cooperation on missile defense development in principle, avoided any 
specific commitments, and called for a joint threat assessment as a 
first step.  He also shared his view of Russian security threats, 
putting terrorism high on the list, but dismissing the threat posed 
by Iran's nuclear program.  He urged the U.S. to avoid provoking 
Iran into leaving the NPT and dismissing IAEA inspectors.  Kosachev 
stated that Medvedev was firmly in charge of Russian foreign policy 
and that PM Putin gave advice but not instructions.  End summary. 
 
Post-START Negotiations 
----------------------- 
 
2.  (SBU) In an April 15 meeting, State Duma International Relations 
Committee Chairman Konstantin Kosachev discussed with Senators Carl 
Levin, Susan Collins, and Bill Nelson prospects for U.S.-Russia 
relations, cooperation on missile defense, Russian views on security 
threats including Iran, and issues that must be addressed in 
post-START negotiations.  Kosachev attended the April 2 G20 meeting 
with President Medvedev and reported that after the April 1 meeting 
with President Obama, Medvedev issued explicit instructions to the 
government on completing a framework agreement on a post-START 
accord by the July summit and finalizing a full text by December. 
 
3.  (SBU) Kosachev said that from the Russian perspective, 
post-START negotiators needed to resolve three issues:  restoration 
of the linkage between arms control and anti-ballistic missile 
systems; clarification on what will be done with removed warheads 
(storage, re-use, or dismantlement); and the number of U.S. carrier 
groups.  He was skeptical that the U.S. military would be flexible 
in negotiations.  Senator Levin commented that Kosachev put too much 
value on the role of the U.S. military on policy-making and that it 
was important to reengage the military-to-military relationship. 
 
Missile Defense and the Iranian Threat 
-------------------------------------- 
 
4.  (SBU) Senator Levin said that the main focus of the delegation's 
visit was to discuss the potential for developing joint missile 
defenses against the common threat posed by Iranian nuclear and 
missile programs.  Kosachev reacted strongly to Levin's statements 
that in London, Medvedev had acknowledged that Washington's 
assessment of Iran's progress on missile development was more 
accurate than Russian assessments.  "I confirm that in London, 
President Medvedev acknowledged that Russia underestimated Iran's 
development," but that the U.S. and Russia should have a better 
dialogue, he said.  He also noted that American information was "not 
always right," as demonstrated by events in Iraq. 
 
5.  (SBU) Kosachev called Iran an "uncomfortable partner" that was 
not transparent.  He argued that Russia was not seeking to earn 
money through cooperation with Iran, pointing out that Germany had 
three times more trade with Iran than Russia did.  He assessed that 
Iran had not yet decided on whether or not to move forward on its 
military program.  "We have no proof that Iran violated the NPT.  If 
we treat them as if they already have, we will provoke them to 
pursue a nuclear program.  Just like North Korea."  In his view, the 
best path was to maintain the presence of the IAEA within Iran. 
 
6.  (SBU) Kosachev also disagreed with U.S. assessments of Iranian 
missile development, commenting that the current stage was dangerous 
for Israel, but that the range of Iranian missiles was 2,000 
kilometers, well short of being able to reach Warsaw.  Referring to 
the exchange of letters between Presidents Obama and Medvedev, 
Kosachev said that a quid pro quo between Russia and the U.S. on 
missile defense and Iran was not sustainable and that the two sides 
should work to build trust and transparency. 
 
7.  (SBU) Senator Levin asked whether practical cooperation on 
missile defense, including sharing radar information and sites, was 
possible.  Kosachev hedged, saying everything was possible, but that 
it needed to be taken step by step -- although he mentioned that 
Turkey was a more sensible location for missile defense assets. 
Avoiding direct comment on practical missile defense cooperation, 
Kosachev said that the two sides must instead revisit the linkage 
between offensive nuclear weapons and defensive systems, "START was 
done in a different environment of nuclear parity and under the 
blanket of the ABM treaty.  It
is not possible to carry forward in 
 
MOSCOW 00001115  002 OF 002 
 
 
the same way."  He continued that the U.S. dominated in conventional 
and nuclear forces and that there were voices in the Russian 
military that did not want to negotiate.  He said, "We need to reach 
a workable and sustainable balance and not seek an agreement that 
provides greater efficiency for one side at the expense of the 
other." 
 
8.  (SBU) For Kosachev, the necessary first step in practical 
cooperation was the development of a joint threat assessment.  "The 
military does not accept" the U.S. threat assessment and because I 
am not an expert, "I have to accept their view."  While dismissing 
the ten to twenty proposed interceptors as "nothing," Kosachev 
called the deployment of a radar in the Czech Republic as "something 
different." 
 
9.  (SBU) Underlining his visits to Pyongyang and Tehran, Kosachev 
said that these two regimes were motivated by the threat of a 
U.S.-led regime change in their countries; they did not want a 
situation like Iraq.  He argued that the leadership of these 
countries did not wish to strike the U.S. but to prevent an attack 
by the U.S.  Kosachev blamed U.S. policies that ignored 
international law and the role of the UN as forming the basis of 
North Korean and Iranian concerns.  Kosachev said it would be better 
to work to build better democracy and transparency in Iran.  In 
reply to Senator Levin's appeal for assistance in accomplishing 
this, Kosachev said that when Russia repeats the importance of 
democracy and transparency, Iran counters that it does not want to 
end up like Iraq. 
 
10.  (SBU) Senator Levin pushed back saying that Iran had threatened 
the existence of another state, Israel; it had not been transparent 
with the IAEA, and it continued to support terrorism by funding 
HAMAS and Hizballah.  Kosachev reflected that Israel had nuclear 
weapons and that Iran had no response; if Israel was to abandon its 
nuclear weapons, it could change the situation. 
 
Russian Threat Assessment 
------------------------- 
 
11.  (SBU) The primary threat facing Russia, Kosachev argued, was 
not Iran or proliferation but terrorism and religious extremism, 
followed by narcotics (especially from Afghanistan).  Proliferation 
and the possibility of a terrorist getting a weapon of mass 
destruction was a distant third place, because "frankly Russia is 
not likely to be the first target."  Kosachev also said that Russia 
is still confronted by threats to its territorial integrity, 
including its declining population and its dependence on the export 
of raw materials. 
 
12.  (SBU) Senator Levin recommended that Kosachev add climate 
change to his list of threats.  Kosachev responded that climate 
change was not on Russia's short list of threats, as it "was not a 
matter of any concern."  He added that it may work to Russia's 
advantage by reducing the cost of transportation and easing access 
to petroleum resources in the far north. 
 
Medvedev in Charge 
------------------ 
 
13.  (SBU) Responding to Senator Nelson's question on the potential 
personal chemistry between PM Putin and President Obama, Kosachev 
replied that Medvedev is "firmly in-charge of Russian foreign policy 
-- Putin provides advice but not instructions."  He continued that 
of course there would be a meeting between the two during the 
upcoming meeting in July, but the relationship between Putin and 
President Obama was less important than that between the President 
and Medvedev. 
 
14.  (SBU) Commenting on decision-making during the war with 
Georgia, Kosachev admitted that Medvedev depended on Putin's advice 
and instructions then, but over time Medvedev had become more 
confident and independent.  He was careful to point out that "Mr. 
Putin does not interfere because the tandem functions.  Putin trusts 
Medvedev to make the right decisions." 
 
15.  (U) CODEL Levin did not clear this message. 
 
BEYRLE

Wikileaks

09MOSCOW1113, MFA ON THE PEACE PROCESS, ISRAEL, IRAN AND SUDAN

WikiLeaks Link

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Reference ID Created Released Classification Origin
09MOSCOW1113 2009-04-29 14:27 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO2156
PP RUEHBZ RUEHDBU RUEHDU RUEHMR RUEHPA RUEHRN RUEHROV RUEHTRO
DE RUEHMO #1113/01 1191427
ZNY CCCCC ZZH
P 291427Z APR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 3100
INFO RUEHZO/AFRICAN UNION COLLECTIVE
RUEHXK/ARAB ISRAELI COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHGG/UN SECURITY COUNCIL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 001113 
 
SIPDIS 
 
E.O. 12958: DECL: 04/29/2019 
TAGS: PGOV PREL UNSC IS IR SU RS
SUBJECT: MFA ON THE PEACE PROCESS, ISRAEL, IRAN AND SUDAN 
 
Classified By: Political M/C Alice G. Wells for reasons 1.4 (b/d). 
 
1. (Summary):  MFA Middle East and North Africa Department 
Director Sergey Vershinin told us on April 28 that the GOR 
envisioned the proposed May 11 UNSC ministerial on the Middle 
East as a general discussion of the situation in the region 
and a chance to reiterate the Security Council's support for 
the peace process.  Urging the Secretary's participation, 
Vershinin described the draft Presidential Statement as a 
general document that should not draw Israeli opposition.  He 
described DFM Saltanov's April visit to Israel as a chance to 
take the pulse of the new government and discuss bilateral 
relations that are "intensifying."  Vershinin complained that 
Netanyahu had "emasculated" the Palestinians and diminished 
the chances for a viable Palestinian state, but held out hope 
that governing would lead to greater pragmatism.  He was 
pessimistic about success in talks between the Palestinian 
factions, and reiterated that it was necessary to engage 
Hamas since it controlled Gaza.  Vershinin said that 
satisfying Israeli concerns about Iran factored prominently 
into Moscow's discussions with Tel Aviv, and explained that 
the Russian proposal for a Gulf security organization was 
intended to provide the region with assurances regarding 
Iranian intentions.  The GOR is interested in possible 
consultations on Sudan between Special Envoy Gration and 
Russian envoy Margelov.  End summary. 
 
Proposed UNSC Ministerial on the Middle East 
-------------------------------------------- 
 
2. (C) Urging the Secretary's participation, MFA Middle East 
Department Director Vershinin explained to us on April 28 
that FM Lavrov envisioned the proposed May 11 UNSC 
ministerial meeting on the Middle East as a short discussion 
among Security Council members of the general situation in 
the Middle East and status of the MEPP.  The proposed 
Presidential Statement would be a general document 
reiterating UNSC support for a two state solution, the 
Quartet principles, and the need for continued discussions 
between Tel Aviv and the Palestinian Authority.   Vershinin 
thought the draft document, which was still being worked in 
New York, was innocuous enough so as not to alarm the 
Israelis or Arab states.  Russia also proposed holding a 
Quartet meeting either the same day or day after the UNSC 
ministerial, but did not want to mix its UNSC ministerial 
with a meeting with the Quartet's Arab partners.  The GOR 
would also look for support for its proposed Moscow Middle 
East conference, for which "all sides" have said they are 
ready, according to Vershinin.  He expressed concern that 
upcoming U.S. meetings with Arab leaders may presage a 
U.S.-hosted multilateral event, and urged U.S. reaffirmation 
of support for the Moscow conference. 
 
Russia Getting to Know Israeli Government 
----------------------------------------- 
 
3. (C) Vershinin explained that DFM Saltanov's April visit to 
Israel was intended to get a sense of the new government, and 
he met with PM Netanyahu, FM Lieberman, and National Security 
Advisor Arad, among others.  Vershinin commented on the 
difficulty the new government faced, and the difficulty in 
getting a grasp on the direction it would take, because of 
the size and makeup of a potentially unwieldy coalition that 
included the Labor Party leader as Minister of Defense. 
Vershinin commented that FM Lieberman brought both positives 
and negatives to the new government, and considered him 
pragmatic despite the FM's often harsh rhetoric.  Saltanov's 
visit also focused on bilateral relations, which Vershinin 
characterized as "intensifying" on both the political and 
economic fronts. 
 
4. (C) Vershinin said that Russia's proposal for a UNSC 
ministerial was a topic of several of Saltanov's 
conversations in Tel Aviv, as was the proposed Moscow Middle 
East conference.  Vershinin was mildly dismissive of Israeli 
concerns about holding the ministerial, commenting that 
Israel  was "very sensitive" about any international 
conference or meeting on the MEPP or the situation in the 
Middle East.  Russia's intensive lobbying of Lieberman helped 
produce Israeli support for the UNSC ministerial. 
 
Netanyahu Has "Emasculated" the Palestinians 
-------------------------------------------- 
 
5. (C) Vershinin was particularly critical of Netanyahu for 
combining ambiguous statements on prospects for a two state 
solution with harsh polemics, policies, and caveats that have 
"emasculated" the Palestinians and all but eliminated the 
chances for a viable Palestinian state.  Israel has not 
allowed adequate funding, aid deliveries or security 
 
MOSCOW 00001113  002 OF 002 
 
 
assistance to the PA.  The situation was especially acute in 
Gaza, which was in much worse condition than it was before &#x000A
;the recent Israeli military incursion against Hamas. 
Vershinin  held out hope that the vigors of governing, 
combined with international pressure, would produce more 
pragmatic policies. 
 
Hamas and Hizbollah 
------------------- 
 
6. (C) Vershinin was pessimistic about the chances for 
success in the Egyptian-led dialogue between the PA and 
Hamas, which could not go on indefinitely.  He reiterated 
that although Hamas did not appear willing to recognize the 
Quartet principles, it was still necessary to engage this 
organization that was a "reality that cannot be ignored" 
because of its physical control of Gaza.  He pushed for U.S. 
tolerance of a Palestinian unity government that endorsed the 
Quartet principles, even if the position of Hamas officials 
remained ambiguous.  Vershinin compared Hamas and Hizbollah, 
which were outgrowths of the poor political and economic 
situations in Palestine and Lebanon rather than purely 
Iranian constructions.  He explained that when his Lebanese 
interlocutors complain that Hizbollah is an Iranian product, 
he counters that Hizbollah is a Lebanese creature that, 
judging from its electoral success, has significant support 
among the Lebanese people.  Hamas is similarly a product of 
conditions in the occupied territories. 
 
Iran 
---- 
 
7. (C) Vershinin acknowledged the shadow cast by Iran on 
Israeli politics, which presented a "big problem" for Russia. 
 DFM Saltanov sought to satisfy Israeli concerns over Iran 
during bilateral conversations, although he did not go beyond 
Russian talking points that it would limit arms sales to 
defensive systems that do not destabilize the regional 
balance.  He expressed appreciation for the Secretary's 
recent statement that progress on Iran and Palestine had to 
go "hand in hand," and agreed with the message that S/E 
Mitchell delivered to Middle East leaders that we have to 
move quickly on the MEPP in order to avoid an incident in the 
region that could have unpredictable results.  Vershinin 
reiterated that Russia sees Iran as a "major player in the 
region" that is also looking for signals regarding the new 
Israeli government's intentions.  Iran also needs to provide 
assurances to its neighbors, which, Vershinin explained, was 
the main reason for including Iran in the GOR proposal to 
form a Gulf security organization, an idea that has been 
floated by Russian officials during visits to the region but 
not yet been fleshed out. 
 
Sudan 
----- 
 
8. (C) Vershinin expressed the GOR's interest in a visit to 
Moscow by Special Envoy for Sudan Gration, which would allow 
for consultations with the Russian President's envoy to 
Sudan, Mikhail Margelov, who is Chairman of the Federation 
Council's International Affairs Committee.  Vershinin said 
that Margelov and the MFA cooperated on Sudan, but that the 
envoy handled the political side while the MFA "did the work." 
BEYRLE

Wikileaks

09MOSCOW1112, RUSSIAN JOBLESS RATE CLIMBS AS ECONOMY CONTRACTS

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. #09MOSCOW1112.
Reference ID Created Released Classification Origin
09MOSCOW1112 2009-04-29 14:02 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO2093
PP RUEHDBU RUEHHM
DE RUEHMO #1112/01 1191402
ZNY CCCCC ZZH
P 291402Z APR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 3097
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXI/LABOR COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 001112 
 
SIPDIS 
 
STATE FOR EUR/RUS, DRL 
NSC FOR ELLISON 
DOL FOR BRUMFIELD 
 
E.O. 12958: DECL: 04/29/2019 
TAGS: ELAB ECON EIND PGOV SOCI RS
SUBJECT: RUSSIAN JOBLESS RATE CLIMBS AS ECONOMY CONTRACTS 
 
REF: MOSCOW592 
 
Classified By: EconMinCouns Eric T. Schultz, Reasons 1.4 (b,d) 
 
------- 
Summary 
------- 
 
1. (C) According to GOR statistics released this week, actual 
unemployment surged to 7.5 million workers, or approximately 
10% of the workforce, in March 2009.  3.5 million Russians 
have lost their jobs since last August.  Meanwhile, the 
number of workers on administrative leave and partly employed 
has reached 1.3 million.  According to a Levada Center public 
opinion poll, unemployment is becoming the number one concern 
for the populace.  The GOR maintains that unemployment will 
continue to grow at a much slower pace for the remainder of 
the year and that government support programs will bring some 
relief.  Nevertheless, as major Russian companies continue 
cutting their staffs, it is probable that unemployment will 
exceed the GOR's projections of 10.4-10.7 percent by year's 
end.  The combination of rising unemployment and contracting 
GDP is likely to lead to a higher government budget deficit, 
and there are indications that the GOR is preparing to start 
borrowing both domestically and internationally to help cover 
the deficit.  End summary. 
 
-------------------------- 
Sharp Rise in Unemployment 
-------------------------- 
 
2. (SBU) According to reports released this week by the 
Russian Statistical Agency (Rosstat), Russian households 
continue to suffer from rising unemployment, falling incomes, 
and swelling wage arrears.  In March 2009, actual 
unemployment in Russia shot up to 7.5 million workers, or 
almost 10% of the economically active population.  The GOR 
estimates that altogether 3.5 million Russians have lost 
their jobs since last August.  Public reaction to the figures 
has been such that at a press conference on April 23, 
Alexander Sokolin, Rosstat Director, announced that Rosstat 
would no longer release unemployment statistics every month 
but instead only quarterly through the end of 2009. 
 
3. (SBU) Earlier in the year, the Ministry of Economic 
Development had predicted a 2009 average unemployment rate of 
8.2%, but it has now revised its forecast from 8.2% to 
10.4-10.7%.  In addition to the spike in unemployment, 
Rosstat reported the average real income of the Russian 
worker fell 2.3% during the first quarter of 2009.  Wage 
arrears also shot up 8.3% to 8.7 billion rubles from March 1 
to April 1.  The number of individuals on administrative 
leave and partially employed reached 1.3 million this month. 
 
4. (SBU) Some experts have attributed the first quarter surge 
in unemployment to traditional seasonal factors, but many 
nonetheless expect a further spike.  In an interview with 
"Vedomosti," Andrei Korovkin of the Institute of National 
Economic Forecasting at the Russian Academy of Sciences noted 
unemployment traditionally peaked each year in March and 
began to recede in May, owing in part to seasonal demand for 
labor in the agricultural sector.  Dmitriy Abzalov, from the 
Center of Political Affairs, explained in an internet 
interview that employers delayed decisions regarding layoffs 
until after the conclusion of contracts and orders for the 
new quarter, when they knew how many workers they would need. 
 These delays caused the noteworthy jump in actual 
unemployment towards the end of the first quarter.  However, 
Abzalov also noted that the next round of quarterly contracts 
and the start of the summer "dead season" for demand could 
cause another wave of unemployment in May. 
 
5. (SBU) Independent analysts have also questioned the 
accuracy of Rosstat's estimates and have criticized its 
decision not to disclose monthly data.  Center for 
Macroeconomics Analysis and Short-Term Forecasting expert 
Igor Polyakov contended in a "Kommersant" interview that the 
substantial March unemployment surge was in fact due to 
Rosstat's under measurement of unemployment earlier in the 
year.  Nikolai Volgin, President of the National Assembly of 
Specialists in the Field of Labor and Social Policy, told the 
paper the decreased frequency of Rosstat data would impede 
the accurate assessment of labor market trends. 
 
--------------------------------------------- 
Government Claims Unemployment is Leveling... 
 
MOSCOW 00001112  002.2 OF 003 
 
 
--------------------------------------------- 
 
6. (SBU) At an April 21 cabinet meeting, PM Putin announced 
that the unemployment situation was improving - albeit 
slowly, and Health and Social Development Minister Tatyana 
Golikova declared that sharp surges in unemployment were not 
expected in the near future. 
 
7. (C) During a recent meeting with us at the Ministry of 
Public Health and Social Development (MHD), Irina Grivina, 
Deputy Head of the Employment and Labor Migr
ation Department, 
and Olga Telegina, Head of the Office of Employment Program 
Planning, acknowledged the seriousness of the current labor 
market situation but expressed confidence in the GOR's 
ability to prevent unemployment from exceeding 10% in 2009. 
Grivina and Telegin told us the MDH had concluded agreements 
to fund employment programs with all 83 regions of the 
Russian Federation (reftel), more than half of which had 
already started to implement their programs.  They also 
highlighted the GOR's decision earlier this year to expand 
annual funding for regional employment centers by 33.9 
billion rubles in order to cover the 2009 increase in 
unemployment benefits, new staff, and professional training 
as well as other employment assistance. 
 
------------------------------------ 
...But Companies Continue to Lay Off 
------------------------------------ 
 
8. (SBU) In spite of the GOR's guardedly optimistic 
predictions, the continuing contraction of Russia's 
industrial production and consumer spending do not augur well 
for a significant improvement in the unemployment rate. 
Industrial output remains at 13.7% below the March 2008 
level.  Consumer spending also continues to decline. 
According to Rosstat, retail trade circulation fell 4% y-o-y 
in March, the second month of negative growth following years 
of increases in retail sales.  CitiGroup recently reported 
that Russian consumers used up a large share of their savings 
during the previous two quarters and were reluctant to erode 
them further.  Its analysts expect a sharper contraction of 
consumer spending in the second quarter of 2009 compared with 
the first, which would likely lead to still more layoffs. 
 
9. (SBU) By the GOR's own estimates, a third of Russian 
companies intend to continue cutting staff, with most of the 
reductions in the metallurgy and automobile manufacturing 
sectors.  The GAZ automobile producer fired 7,500 people in 
the first quarter of this year as car sales dropped by 40 
percent.  Severstal, the country's largest steel producer, 
plans to cut 9,500 jobs, and the state-owned Russian railways 
recently announced its plans to lay off 54,000 workers. 
 
----------------------- 
Not So Quiescent Public 
----------------------- 
 
10. (C) According to a recent Levada Center Poll, 
unemployment is now seen as the number one problem faced by 
the population (according to 49% of the respondents).  This 
is the first time in 20 years that unemployment has been as 
seen as a bigger problem than inflation.  On the other hand, 
Levada Center surveys also indicate that the Russian 
population is adopting a cautiously optimistic attitude 
toward the economy as a whole, with consumer confidence 
falling at a slower rate in March. 
 
11. (C) Despite rising concerns about unemployment, Marina 
Krasilnikova, Director of Levada's "Quality of Life Research" 
Department, told us Russians were still largely apathetic.  A 
March survey had shown that a third of Russians expected in 
social protests to occur.  However, 59% placed little faith 
in the efficacy of such actions.  Krasilnikova further 
discounted the possibility of widespread social unrest owing 
to the lack of an active and organized political opposition 
and the preference of Russian households for "finding their 
own individual solutions to financial problems." 
 
12. (C) Russians were generally disinclined to participate in 
protests, Krasilnikova observed.  A survey by the All Russia 
Center for the Study of Social Opinions at the end of March 
revealed that although a third of Russians did not exclude 
the possibility of social protests directed against the 
falling quality of life in their respective regions, 59% 
placed little faith in the efficacy of such actions. 
Krasilnikova discounted the possibility of widespread social 
 
MOSCOW 00001112  003 OF 003 
 
 
unrest owing to the lack of an active and organized political 
opposition and the preference of Russian households for 
"finding their own individual solutions to financial 
problems." 
 
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Comment 
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13. (C) If accurate, Rosstat's actual unemployment rate 
estimate for the first quarter would indicate that the labor 
market has declined in only three months almost as much as 
the GOR predicted it would for the entire year.  Higher 
unemployment compared to earlier projections will necessitate 
additional budget spending for unemployment benefits and job 
stimulus programs.  Moreover, mounting unemployment will 
likely force the government to allocate more of its 
anti-crisis support to the real sector of the economy.  The 
mixture of increased social spending, rising unemployment, 
and a contracting GDP is likely to lead to a higher 
government budget deficit.  In that regard, there are 
indications that the GOR is preparing to start borrowing both 
domestically and internationally to help cover the deficit. 
End Comment. 
BEYRLE

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