11 Quotation from Vladimir Zhirinovskii, interview with the author (January 22, 2002). That the Kremlin paid the LDPR money is widely believed in Moscow. Two persons who served in very high official posts in 1998 said in interviews that cash was provided from pro-government businesses and from a covert item in the federal budget.
12 Ivan Rodin, “Kommunisty predlagayut reshit’ uchast’ Dumy otkrytym golosovaniyem” (The communists suggest that the Duma make its decision by open vote), Nezavisimaya gazeta, April 24, 1998.
13 Baturin et al., Epokha, 754.
14 Only twenty-five voted against; almost 200 spoiled ballots, abstained, or stayed out of Moscow; twelve sent in written declarations in favor, which were not counted in the total. Since the ballot was secret, the party breakdown is not known with certainty. But journalists estimated twenty to twenty-five KPRF deputies broke with Gennadii Zyuganov to support Kiriyenko. See Ivan Rodin, “Duma progolosovala za Sergeya Kiriyenko i prodlila svoë sushchestvovaniye” (The Duma voted for Sergei Kiriyenko and prolonged its existence), Nezavisimaya gazeta, April 25, 1998; and David Hoffman, “Third Vote Confirms Kiriyenko as New Russian Premier,” The Washington Post, April 25, 1998.
15 Kiriyenko interview.
16 Mikhail Mikhailovich Zadornov, an economist who worked with Grigorii Yavlinskii on the Five Hundred Days Program in 1990, is not to be confused with Mikhail Nikolayevich Zadornov, the stand-up comedian referred to in Chapter 13.
17 Source: interviews with two of the parties to the affair. Word of it circulated in the press around May 20. Boris Nemtsov had instituted a tender system for most other civilian agencies in 1997.
18 Alexei Goriaev and Alexei Zabotkin, “Risks of Investing in the Russian Stock Market: Lessons of the First Decade,” Emerging Markets Review 7 (December 2006), 380–97.
19 At one meeting with aides, Yeltsin interrupted to dial Chernomyrdin and ask him what the trend was with Russian treasury notes. “The premier became confused and asked for time to prepare an answer. Yeltsin hung up and remarked, ‘Well there you have our premier, and he doesn’t know. But I know.’ The president beamed: See how I have left him. He wanted to be first in everything.” Baturin et al., Epokha, 734.
20 Yel’tsin, Marafon, 204. Boris Nemtsov, Kiriyenko’s mentor and now one of his deputy premiers, believed a stabilizing devaluation could have been done in the first few weeks of the Kiriyenko premiership. Like Yeltsin, he said Kiriyenko would not hear of it. Nemtsov, second interview with the author (February 6, 2002).
21 Yel’tsin, Marafon, 203.
22 Aleksandr Livshits, interview with the author (January 19, 2001).
23 Russian GKOs were first issued in February 1993. Coupon-bearing OFZs (Federal Loan Bonds) were introduced in 1995 as a complement, but GKOs defined the market throughout. Western advice paved the way for both types. Although GKOs were denominated in rubles, instruments known as dollar-forward contracts hedged against reduction in the exchange rate. Once the ruble went into collapse, the dollar-forward contracts hastened its demise.
24 See Venla Sipilä, “The Russian Triple Crisis, 1998: Currency, Finance, and Budget,” University College London, Centre for the Study of Economic and Social Change in Europe, Working Paper 17 (March 2002); and Padma Desai, “Why Did the Ruble Collapse in August 1998?” American Economic Review 90 (May 2000), 48–52. For historical perspective, see Niall Ferguson and Brigitte Granville, “‘Weimar on the Volga’: Causes and Consequences of Inflation in 1990s Russia Compared with 1920s Germany,” Journal of Economic History 60 (December 2000), 1061–87.
25 The package, and the expectation that it would be granted, aggravated the crisis by facilitating the conversion of rubles into dollars by Russian and foreign speculators. Brian Pinto, Evsey Gurvich, and Sergei Ulatov, “Lessons from the Russian Crisis of 1998 and Recovery,” in Joshua Aizenman and Brian Pinto, eds., Managing Volatility and Crises: A Practitioner’s Guide (New York: Cambridge University Press, 2005), 406–39.
26 Vera Kuznetsova, “Boris Yel’tsin v ocherednoi raz poobeshchal ne idti na tretii srok” (Boris Yeltsin makes his latest promise not to seek a third term), Izvestiya, June 20, 1998. Kuznetsova added that the mill would need to put together a sound business plan to get assistance, but the gist of Yeltsin’s remarks was that a subsidy was on the way. For a humorous account of Yeltsin’s high spirits and how he mistook a female journalist for a model from the factory, see Yelena Tregubova, Baiki kremlëvskogo diggera (Tales of a Kremlin digger) (Moscow: Ad Marginem, 2003), 81–84.
27 Mikhail Fridman, interview with the author (September 21, 2001).
28 Yel’tsin, Marafon, 211–12.
29 Indicative are remarks made by Stephen F. Cohen of New York University on The NewsHour with Jim Lehrer on September 14: “The country is in profound crisis. It’s coming apart at the seams politically, economically, socially, psychologically. The economy has collapsed. Winter is coming. People have no money. They have no food. There’s no medicine. . . . The so-called free market reforms in Russia have collapsed; they’re over.” Transcript at http://www.pbs.org/newshour/bb/europe/july-dec98/russia_9-14.
30 Sergei Parkhomenko, “Podoplëka” (The real state of affairs), Itogi, September 15, 1998.
31 Vitalii Tret’yakov, “Vopros o vlasti” (The question of power), Nezavisimaya gazeta, July 10, 1998.
32 Tret’yakov did not explain how to reconcile the council with the constitution or what would happen if its head disagreed with Yeltsin, who would still have the highest standing in the state, or with the prime minister, who would continue to answer to the president.
33 Family members were emphatic on this point in interviews. Some press articles in late August and early September cited Kremlin sources and even provided the date on which Yeltsin would supposedly hand in his resignation.
34 Viktor Chernomyrdin, interview with the author (September 15, 2000); and Valentin Yumashev, fifth interview with the author (September 17, 2007). Yeltsin reiterated in Marafon, 219–20, that his former prime minister was not the best leader for the future. But in August 1998 he accepted the Chernomyrdin option. Had the nomination gone through, Yeltsin, Yumashev said, could not have faced up to dismissing him a second time prior to the 2000 election.
35 Strobe Talbott, The Russia Hand: A Memoir of Presidential Diplomacy (New York: Random House, 2002), 288.
36 On the way in from the airport on September 1, Chernomyrdin “used the half-hour ride to lobby the president [Clinton] to support his nomination with Yeltsin, who was rumored to be giving up on him.” Ibid., 287. Clinton was smart enough not to intrude.
37 Vitalii Tret’yakov, “Vitse-prezident i drugiye” (The vice president and others), Nezavisimaya gazeta, September 12, 1998.
38 They were Andrei Kokoshin, secretary of the Security Council; Yevgenii Savast’yanov, deputy head of the Kremlin executive office; and Sergei Yastrzhembskii, press secretary and foreign-policy assistant.
39 Yeltsin felt after his conversations with Yumashev that a Chernomyrdin restored to the prime minister’s office would have “the aura of an unjustly offended person.” “In that sense, my moral loss would turn out to be a win for Chernomyrdin.” Marafon, 221
40 Viktor Zorkal’tsev, a Zyuganov deputy, had signed for the KPRF on August 28, and the pact was supported by Nikolai Ryzhkov and other pro-communist factions in the Duma. Chernomyrdin was more favorable to it than Yeltsin.
41 Yevgenii Primakov, Vosem’ mesyatsev plyus . . . (Eight months plus) (Moscow: Mysl’, 2001), 14.
42 In his memoir account (ibid., 7), Primakov says Yeltsin offered the post of prime minister to Maslyukov, in a desperate outburst in the presence of him and Chernomyrdin. Maslyukov, he says, declined the offer but said he would work under Primakov. Valentin Yumashev, who conducted most of the negotiations with other candidates, has strongly denied (interviews) that any such offer was made, as Yeltsin could not accept a member of the KPRF as his head of government. Yeltsin’s own memoir only mentions Maslyukov as someone he considered
. It is possible that he made a statement that Maslyukov or Primakov misconstrued as an offer, or that he made and retracted one without informing his chief of staff.
43 This success should not be exaggerated. The day before Yeltsin fired him in May 1999, Primakov spoke proudly of having cut the state debt to pensioners in half and of public-sector doctors and teachers waiting two months for their pay instead of five.
44 Yel’tsin, Marafon, 239–40.
45 These trends are summarized in Goohoon Kwon, “Budgetary Impact of Oil Prices in Russia,” http://www.internationalmonetaryfund.org/external/country/rus/rr/2003/pdf/080103.pdf; and Philip Hanson, “The Russian Economic Recovery: Do Four Years of Growth Tell Us That the Fundamentals Have Changed?” Europe-Asia Studies 55 (May 2003), 365–82.
46 Yel’tsin, Marafon, 232.
47 Michael R. Gordon, “A Rough Trip for Yeltsin Adds to Worries about Health,” New York Times, October 13, 1998.
48 Yekaterina Grigor’eva, “Vladimir Shevchenko: za rabotu s Yel’tsinym ya blagodaren sud’be” (Vladimir Shevchenko: I am grateful to fate for the chance to work with Yeltsin), Izvestiya, May 21, 2007.
49 Maksim Sokolov, “Zhenikhi v dome Yel’tsina” (The bachelors in Yeltsin’s home), ibid., June 17, 1999, 2.
50 Talbott, Russia Hand, 350.
51 Quotation from Yelena Dikun, “I prezident imeyet pravo na miloserdiye” (The president, too, has the right to charity), Obshchaya gazeta, October 15, 1998. Dikun, reporting on Yeltsin’s abbreviated trip to Central Asia, said he had come to resemble Brezhnev and Konstantin Chernenko, and urged family members to take matters into their own hands: “You have nothing to explain, you know perfectly well what is going on. Every person is entitled to grow old, anybody can get unwell—there is nothing in this to be ashamed of. But to turn the process of a person’s dying away into a public spectacle or attraction is inhuman and un-Christian.”
52 Mikhail Margelov, a then-official in the executive office, interview with the author (May 25, 2000).
53 Yeltsin reclaimed first place in the April poll and held it until September 1999, when Vladimir Putin took the lead.
54 On the phone conversation, revealed to the press by Samuel Berger, Clinton’s national-security adviser, see David Stout, “Yeltsin Dismisses Graft Allegations,” New York Times, September 9, 1999. Pacolli said in 2000 that he had arranged for credit cards for Yeltsin’s daughters in 1995; his guarantee expired in two months, and Mabetex paid no bills on their behalf. Carlotta Gall, “Builder in Yeltsin Scandal Discounts Its Gravity,” ibid., January 21, 2000. The Swiss case was closed in late 2000.
55 If anyone doubts the downward spiral in Chechnya, read as follows: “There was violation of human rights on a mass scale. . . . A slave market openly operated in the center of Grozny, with hundreds of people (mainly Chechens) held captive as hostages and subjected to violence. Kidnapping people for exchange acquired epidemic proportions, with more than 3,500 Chechens ransomed between 1996 and 1999. Bandits and terrorists killed thousands. . . . Not only did Chechnya become the criminal cesspool of the CIS countries; it also became a base for international terrorism. Terrorists from many different countries became active on its territory, with their activities financed by foreign extremist centers.” Dzhabrail Gakaev, “Chechnya in Russia and Russia in Chechnya,” in Richard Sakwa, ed., Chechnya from Past to Future (London: Anthem, 2005), 32.
56 Yel’tsin, Marafon, 253.
57 Yelena Dikun, “Bol’shaya kremlëvskaya rodnya: anatomiya i fiziologiya Sem’i” (The great Kremlin clan: anatomy and physiology of the Family), Obshchaya gazeta, July 22, 1999.
58 A hypercritical treatment of Russian politics in the 1990s, for example, writes of Berezovskii both buying the favors of the Yeltsins and blackmailing them. The former assertion rests largely on the testimony of Aleksandr Korzhakov, which is unreliable on the question of Berezovskii’s personal favors and presents. The latter assertion is not backed up by hard evidence and does not square with the impression in the book that Yeltsin’s daughter Tatyana respected Berezovskii’s advice and sought it out. Peter Reddaway and Dmitri Glinski, The Tragedy of Russia’s Reforms: Market Bolshevism against Democracy (Washington, D.C.: U.S. Institute of Peace, 2001).
59 Leonid Dyachenko first came to public attention when an American investigation into money laundering discovered that he had two sizable bank accounts in the Cayman Islands. No charges were laid. Yurii Skuratov, the procurator general whom Yeltsin forced out of office in the spring of 1999, doubted that the president was informed about Dyachenko’s actions. Robert O’Harrow, Jr., and Sharon LaFraniere, “Yeltsin’s Son-in-Law Kept Offshore Accounts, Hill Told,” The Washington Post, September 23, 1999.
60 It was widely reported, for example, that Berezovskii favored the removal of Chernomyrdin in March 1998. But as replacement he advocated Ivan Rybkin, the former Duma speaker, and not Kiriyenko. Berezovskii, no more consistent in this regard than Yeltsin, was all for the reinstatement of Chernomyrdin in August 1998, and one American journalist wrote at the time that, “More than anyone else, Berezovskii brought back Chernomyrdin to power” (David Hoffman, “Tycoons Take the Reins in Russia,” The Washington Post, August 28, 1998). As we know, though, Chernomyrdin never came back to power because the Duma refused to confirm him. Primakov, who was confirmed, viewed Berezovskii as a schemer.
61 Yel’tsin, Marafon, 109–10. Yeltsin grumbled openly about Berezovskii’s pushiness at a ceremony for Russian cosmonauts in April 1998 (Hoffman, Oligarchs, 409–10).
62 Yeltsin says in his memoir that he had “several” meetings with Berezovskii. Berezovskii told me (interview, March 8, 2002) there were two conversations during the 1996 campaign and “very few” after that, three or four at most, plus a handful of larger gatherings at which both he and Yeltsin were present.
63 Berezovskii interview.
64 This statement is in Boris Berezovskii, Iskusstvo nevozmozhnogo (The art of the impossible), 3 vols. (Moscow: Nezavisimaya gazeta, 2004), 2:250.
65 “Berezovskii said to me that he had a program for psychological influence on Tanya. He could tell her for hours at a time how I, for example, was a scoundrel . . . and, since she was impressionable . . . she in the end had come to hate me fiercely.” Second Nemtsov interview. Berezovskii made the claim about meeting Dyachenko every two or three months in a press interview in 1999 (Berezovskii, Iskusstvo nevozmozhnogo, 1:142). It is possible that he was exaggerating.
66 Quotations from Berezovskii interview and third interview with Tatyana Yumasheva (January 25, 2007).
67 Valentin Yumashev, fourth interview with the author (January 22, 2007), and third Yumasheva interview; Reddaway and Glinski, Tragedy of Russia’s Reforms, 606. Dikun, “Bol’shaya kremlëvskaya rodnya,” reports yet another example tending in this direction: that Yumashev as Kremlin chief of staff led the opposition to the Sibneft-Yukos merger in 1998. But Yumashev has assured me there is not an ounce of truth to this story.
68 “Pravo pobedilo emotsii” (Law has beaten emotions), Rossiiskaya gazeta, November 6, 1998. The Duma brief was not as clear-cut as one might think. In neighboring Ukraine, where the constitutional wording and the status of the incumbent were almost identical, the court ruled in December 2003 in favor of President Leonid Kuchma. He chose not to seek re-election in 2004.
69 Naina Yeltsina, second interview with the author (September 18, 2007).
70 Grigor’eva, “Vladimir Shevchenko.” An alternative explanation was that Yeltsin disguised his intentions until the very end, even from close aides.
71 Michael Wines, “Impeachment Also Is Proceeding, in a Convoluted Way, in Russia,” New York Times, December 19, 1998. The proceedings are described in detail in Kaj Hobér, The Impeachment of President Yeltsin (Huntington, N.Y.: Juris, 2004). Some deputies favored a sixth charge blaming Yeltsin for the financial collapse of 1998.
72 Sergei Kovalëv, “Ne zhelayu igrat’ v beznravstennyye igry” (I do not wish to play immoral games), Nezavisimaya gazeta, May 15,
1999.
73 Strobe Talbott, interview with the author (January 9, 2006).
74 “Confrontation over Pristina Airport,” http://news.bbc.co.uk/2/hi/europe/671495.stm.
75 By this time the affair had entered the sphere of theater of the absurd. The government claimed that Skuratov was being blackmailed by the prostitutes and this left him unable to serve.
76 This historical parallel is drawn in Yel’tsin, Marafon, 302. Yeltsin was most alarmed by a comment Primakov made in February emphasizing the need to free up cells in Russian prisons for persons who would soon be arrested for economic crimes. He thought it reflected Soviet-era stereotypes.
77 Ibid., 303.
78 The main indicator of favor was seen on the nightly television news on May 5. At a Kremlin meeting that day on preparations for the millennium celebrations, Yeltsin made a show of asking Stepashin to leave his seat at the table and take the chair between him and Patriarch Aleksii II.
79 Natal’ya Konstantinova, “Boris Yel’tsin poshël na politicheskoye obostreniye i otpravil Yevgeniya Primakova v otstavku” (Boris Yeltsin has gone for a sharpening of political tensions and sent Yevgenii Primakov into retirement), Nezavisimaya gazeta, May 13, 1999.
80 These maneuvers are analyzed in Aleksandr Sadchikov, “Partiinaya distsiplina ne vyderzhala ispytaniya impichmenta” (Party discipline failed the test of impeachment), Izvestiya, May 18, 1999; and Ivan Rodin, “Kak Boris Yel’tsin obygral Zyuganova i Yavlinskogo” (How Boris Yeltsin beat Zyuganov and Yavlinskii), Nezavisimaya gazeta, May 18, 1999.
81 Valentin Yumashev, first interview with the author (February 4, 2002). A number of press accounts described Aksënenko as a flunky of Berezovskii’s, but I never found any evidence that this was so. He was appointed minister in April 1997 at the initiative of Boris Nemtsov, who was as hostile to Berezovskii as any governmental leader in 1997–98.
82 Yel’tsin, Marafon, 315.
83 Yevgenii Yur’ev, “Duma odevayetsya v kamuflyazh” (The Duma is getting dressed in camouflage), Segodnya, May 13, 1999.
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