You Can Read In English About The Most Important Events In Kursk In 1999 A.D.

In Kursk Oblast, Governor Aleksandr Rutskoi backed Yedinstvo and that party won 31.45 percent of the vote, just short of the front-running Communists who took 31.95 percent. Rutskoi's candidate won in one of the region's two single-member districts, but his pick lost in the other.

In District 96, Oblast Communist Party Secretary Nikolai Ivanov defeated Rutskoi's candidate Deputy Governor for relations with the Oblast Duma and local governments Aleksandr Fedulov. Ivanov ran a very modest campaign, refusing to participate in the televised debates and not buying any commercials. He only produced two small brochures. According to official data published in Kurskaya Pravda, he spent a paltry $2,000, much less than the other candidates in the race.

Fedulov had the support of Yedinstvo and the governor. According to official figures, he spent $33,000 on his campaign, more than any other candidate. His campaign produced numerous flyers and newspapers and he was constantly on the air. The gist of his campaign was to associate himself with such Yedinstvo leaders as Putin and Shoigu.

In District 97, Rutskoi's candidate Aleksandr Chetverikov won. He is the owner of Agrokholding, which employees 11,000 workers. The enterprise is thriving and the workers are paid good salaries on time. His campaign stressed the need to support agriculture and domestic production. His supporters allegedly distributed goods produced by the firm to win voter support.

22 December 1999

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KURSK: TOBACCO FIRM BENEFITS FROM CRISIS

Most of Kursk's industry was privatized in 1992 and 1993. The Kursk Tobacco Factory was also "privatized," but the state retained control of a majority stake. With the state as owner, a new team of young, energetic managers led by General Director Vadim Zakharov took over at the factory. Their first step was to modernize the enterprise so that its products would be more competitive. This process has continued for several years, and in the first half of 1999 alone, the company spent 1.5 million rubles on new equipment. The investment funds come from money the factory has earned, not outside credits.

The economic crisis starting on 17 August 1998 was a major benefit to the factory because it made imported cigarettes too expensive for most consumers to buy. While some former Camel puffers quit smoking altogether, many are now smoking Kursk's Primas. One dollar buys at least 10 packs of the local brand.

The plant purchased its new equipment from the Czech firm Skoda (a subsidiary of Volkswagon). The resulting product is of relatively high quality and reasonably inexpensive. The firm has also begun producing new products, such as filterless cigarettes, that it did not produce before.

One of the key ingredients of the firm's success was its ability to win a contract with the Defense Ministry and the Ministry of Internal Affairs to supply cigarettes to the Russian forces serving in Chechnya. As a result, the factory began to pay off its tax and wage debts. Salaries have been doubled and the number of workers at the plant has increased 25 percent. During the first half of 1999, the factory increased its output 25 percent in comparison with the first half of 1998. Even more importantly, sales have increased by a factor of 15.

14 December 1999

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SHABDURASULOV IN KURSK: SUPPORT FOR YEDINSTVO-BACKER RUTSKOI

Shabdurasulov visited Kursk on 18 November. His main focus was the elections and he declared that Governor "Aleksandr Rutskoi thinks like me on many key issues...". Shabdurasulov said that he saw only two realistic contenders for the presidency in 2000, Vladimir Putin and Yevgenii Primakov. He made clear that he was supporting Putin. Of Primakov and Luzhkov, he said that they were worthy individuals, but that "politics and popularity makes them different people." In other words, power has ruined them.

Rutskoi also said that he would support Putin in the presidential election, since he is "a prime minister who knows what he wants" and "he is the first responsible prime minister in the Russian Federation." Of course, after Rutskoi led the anti-Yeltsin opposition in 1993, Yeltsin forbid all prime ministers from talking with him. That taboo has now been broken thanks to Rutskoi's support for Yedinstvo. The two Yedinstvo candidates for the State Duma in Kursk, Aleksandr Chetverikov and Aleksandr Fedulov, accompanied Rutskoi and Shabdurasulov at all of their appearances.Rutskoi is doing a lot to make sure that Yedinstvo is victorious in the elections.

According to Agrarian State Duma candidate Aleksandr Kozyavin Rutskoi has moved the evaluation of raion heads in the oblast from 1 November to 3 January so that he can decide whether to retain or fire them depending on the outcome of the elections. Kozyavin said that Rutskoi warned the local leaders, "If Medved [another name for Yedinstvo] does not win in your region, look for another job." He claimed that Yedinstvo has a team of twenty people seeking campaign violations by other candidates. His testimony is credible because he resigned from Rutskoi's administration only two months ago.

During his trip, Shabdurasulov said that he considers Rutskoi a worthy and orderly person. "He is an officer, and that says everything." Rutskoi said that he had known Shaburasulov for six months and that they meet once a month. "I know what I want, what Shaburasulov wants, and he knows what I want. Many of our goals are the same," Rutskoi said.

It is not hard to figure out what kind of deal the Kremlin has cut Rutskoi. In exchange for supporting Yedinstvo in the parliamentary elections and Putin in the presidential elections, the Kremlin has promised massive support for Rutskoi's election in the fall of 2000. In the mean time, Shaburasulov's trip brought significant results for Rutskoi: the head of the oblast branch of the Federal Security Service (FSB) Major General Viktor Surzhikov was transferred to Volgograd Oblast. The federal law enforcement agencies have been attacking Rutskoi's administration for much of his tenure. Additionally, head of the local police Aleksei Volkov and Kursk Procurator Nikolai Tkachev have been offered promotions in other regions as well. So far only the FSB's Surzhikov has accepted his offer and is preparing to leave for Volgograd.

This saga is far from over. During his stay, Shaburasulov graded the accomplishments of the federal law enforcement agencies in the region with a "C."

14 December 1999

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INCUMBENT DENIED REGISTRATION IN KURSK...

On 26 November the district electoral commission for Kursk Oblast District #97 cancelled the registration of incumbent KPRF State Duma Deputy Aleksandr Potapenko with a vote of 8 to 4. Potapenko has been elected from this district three times in succession, and gathered 100,000 more votes than his closest competitor in the last elections.

Potapenko's registration was overturned due to alleged violations in campaign procedures. As explained by District #97 Electoral Commission Chairwoman Yelena Mikhailova in a 29 November interview on the Kursk television station, the complaint against Potapenko, which was filed by the Yedinstvo movement, accused the deputy of campaigning before he was registered. Additionally, a calendar displaying his portrait did not include the necessary information of the date, place of issuance, and name of the producer. The commission told Potapenko that the calendars violated the law and ordered him to destroythem. Instead of doing this, Potapenko ordered another 200,000 copies of the calendar to be printed and placed them all over the district. As a result, Potapenko's registration was revoked.

Potapenko countered that as a member of the State Duma and citizen of the Russian Federation he had the right to publish calendars with his picture. He claimed that the calendar in question had been ordered to give to young women he knew. Although the calendar does bear KPRF emblems, it does not say "Vote for Potapenko."

This situation raises two questions. The first is whether or not Potapnko's punishment was too extreme. Six of the nine candidates could have also had their registration revoked on the same grounds, but they were only issued warnings. However, an appeal has already been filed with the Central Electoral Commission in Moscow, and lawyers believe that the case will be decided in Potapenko's favor. Additionally, there is a very strong chance that Potapenko will be elected to the Duma from the KPRF federal party list. This incident has attracted considerable attention in the media and protestors are demonstrating in front of the district electoral commission building. Potapenko's rating is going up in the polls 3-5 percent per day, causing him to come in second behind the OVR's Aleksandr Chukhraev.

The second point is that this incident plays into the hands of the Communists. Truly, there is no better commercial for a candidate in the regions than conflict with authorities. The mentality of the Russian electorate is such that it is not violations of the law that provokes antipathy, but rather a candidate's conformity with the authorities. This attitude reflects the population's general distrust of power. The electoral commission refused to register Aleksandr Rutskoi for the Kursk Oblast 1996 gubernatorial election since he did not live in Kursk Oblast, and the Supreme Court overruled it. This is a very similar situation. Both the electoral commission and the candidates can use a literal interpretation of the law in their battles.

8 December 1999

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KURSK: PRIVATIZATION HURT KHIMVOLOKNO

In the 1980s Khimvolokno was Europe's largest producer of artificial fibers. Then it had three independent production facilities: Kapron, Lavsan, and a textile factory. During the last five years only the Kapron has functioned, making the fibers that are used in the production of tires. Now it has more orders than it can fill.

In 1998, the factory was only working at 16-17 percent capacity. Now more than half of its production facilities are in use. In the meantime, the Moscow financialindustrial group Neftekhimprom bought a controlling stake and has appointed a new director, Andrei Arefev. The new owner has helped the plant gain access to new sources of raw materials. It has also increased the area in which the factory's products are sold.

Cloth produced in Kursk is now used to make stockings, socks, rugs, lace, and knitted garments at factories in the Black Earth region, Moscow Oblast, and Ukraine. The 36- year-old director told Kurskaya pravda on 15 October that the factory has every chance of becoming profitable.

Some German investors are willing to put up significant sums, but they want to have the backing of a solid guarantor. So far, however, the Kursk governor and legislature are not willing to do this. Another problem that the factory faces is that it must support the housing stock and municipal services of a settlement with a population of 40,000 people who earlier worked at the factory or serviced its needs.

2 December 1999

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KURSK: POOR POLITICAL LEADERSHIP BLOCKS PLAN IMPLEMENTATION

Kursk Oblast's regional development plan is called the "Kursk Oblast Concept for Social and Economic Development, 1997-2005." The plan was developed and widely discussed over the course of six months in 1997, immediately after the election of Aleksandr Rutskoi as the region's governor. Subsequently, the oblast administration adopted it as a guiding document.

Why does the plan cover an eight-year period? Because Rutskoi said at the beginning of his first term that he would be governor for no less than two terms, eight years. He faces reelection next year, and the voters will decide whether he will stay on the job for another four years.

The Kursk Oblast Duma did not officially discuss or adopt the program so it has not been codified in law. In 1998 and 1999 neither the media nor oblast officials mentioned the program. During this period, Rutskoi changed his closest subordinates three times (deputy governors, raion leaders, and sectoral leaders). Additionally, the structure of the Kursk Oblast administration was completely overhauled when Rutskoi introduced a Kursk Oblast Government. The economic situation dramatically changed after the 17 August crisis began. Thus, there are plenty of reasons to forget about this program, especially as elections are approaching.

17 November 1999

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KURSK OBLAST BEFORE 1999 STATE DUMA ELECTIONS

District 96 - KPRF candidate Nikolai Ivanov stands the best chance of becoming District 97's deputy. Ivanov, who is the deputy chairman of the Oblast Duma, is well known in the district. He presents himself as a "man of the people," and his 30 percent showing in the Kursk mayoral elections this past summer testifies to his popular appeal. Ivanov's top competition comes from KPRF State Duma Deputy Sergei Faleev, who was elected in 1995 from the KPRF party list. In these elections, however, Faleev is running as an independent. He was excluded from running on the KPRF ticket by the Kursk Oblast KPRF Executive Committee since he independently established his candidacy and easily collected the 5,000 necessary signatures for his nomination. Faleev has received support in the press, on both radio and television, and he has experience in the State Duma. However, Faleev is dogged by strong and persistent rumors that he is a homosexual and if evidence proving this point is revealed, Faleev is unlikely to earn many votes in this provincial district. Kursk Governor Aleksandr Rutskoi is supporting Deputy Governor Aleksandr Fedulov, who is running on the Yedinstvo ticket. Rutskoi is known for his dirty campaign tactics, so it will be interesting to see how Fedulov fairs.

District 97 - The top two candidates in District 97 are Head of the Russian Federation Audit Chamber, Petr Novikov, and OVR candidate Aleksandr Chukhraev, the chief doctor at the oblast clinical hospital. Novikov is well known in the region, and Governor Rutskoi's books have always passed his inspection. Although Rutskoi has not officially offered his support, many people believe that Novikov will have the governor's backing. Chukhraev is well known throughout Kursk for his dedication to social concerns , including social justice, salary issues, and the weak social infrastructure. He is also on friendly terms with Governor Rutskoi. Kursk Police Chief Aleksei Volkov is a serious competitor as well as current KPRF State Duma Deputy Aleksandr Potapenko.

17 November 1999

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COMMUNIST DUMA PROSPECTS DIM IN KURSK

In the 1995 State Duma elections, the Communist Party of the Russian Federation won a overwhelming victory in both of Kursk Oblast's single-member districts and the region's party list voting. Both the trade unions and the extremely influential agrarians then lent their support in rounding up the crucial rural vote. That year Kursk's entire delegation to the lower house was Communist, Aleksandr Mikhailov and Aleksandr Potapenko from the single-member districts and Sergei Falaleev from the party list. This trio played a relatively minor role in the Communists' faction and generally voted with the orthodox wing of the party.

After four years, the deputies have not changed, but the oblast's relationship with them has shifted considerably. Many voters are upset that their representatives did not really solve any problems through lobbying in the lower house. The State Duma was not interested in addressing the problems of the regions and the Communists thought about these issues even less than the other factions. They spent their time attacking the "antipopular regime" of Boris Yeltsin, focusing on issues such as his health, impeachment, and the battle for seats in the cabinet.

After 1996, the Communists had thought that they could form an alliance with newly-elected Governor Aleksandr Rutskoi. They had particularly hoped to place Mikhailov in the chairmanship of the regional legislature so that they would have an additional seat in the Federation Council. However, Rutskoi did not go along and the Communist members of the lower house began to file federal complaints about the governor's activities, which led various federal agencies (the Procurator General, Chamber of Accounts, and the tax services, among others) to carry out more than 50 investigations of Rutskoi's administration. No crimes were uncovered, but Rutskoi did not forget the Communists' hostility.

Now the Communists are experiencing considerable difficulty. Rutskoi's allies, rather than the Communists, won the recent mayoral elections in Kursk and other cities in the oblast. Rutskoi allies also won in the local legislative elections. In the rest of the country, the Communists are also in trouble. They have lost their attractive image, failed to win a number of local elections (Belgorod and Sverdlovsk oblasts), and the party has fractured, with the moderate nationalists, orthodox Communists, military supporters, and most of the Agrarians leaving, while contradictions inside the party continue to grow. The Kursk party believed that it had discipline problems with its Duma members.

As a result, the oblast party conference decided to nominate Nikolai Ivanov, the deputy chairman of the oblast Duma, as the region's representative on the party list instead of Falaleev. Falaleev had become too independent for party tastes. Even worse, the press had started to print rumors about his "nontraditional sexual orientation," which the party faithful did not like or understand. As a result, Falaleev is running in a Kursk singlemember district, with the support of the local ICN pharmaceuticals plant and an influential bearing factory. This decision further angered the party, according to the Communist newspaper Golos naroda on 8 October.

Given the party's difficulties, the Kursk trade unions and agrarians are not supporting the Communists in this election cycle. The unionists are backing the Otechestvo-Vsya Rossiya candidates in the region. The governor, of course, is supporting Yedinstvo, whose list was approved at its 6 October congress. Perhaps, following the next election, Kursk Oblast will no longer be part of the so-called "red belt" of regions that instinctively support the Communists.

14 October 1999

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WHILE KURSK GOVERNOR CONTROLS PRESSES, OPPOSITION WORKS FROM BELGOROD

Many believe that freedom of the press is the main positive result of reform in Russia. And, in fact, there are more newspapers and magazines, although their print runs have shrunk. With the election season approaching, publishers and editors are looking forward to a surge of orders for printed election materials and increased purchases of advertising space in newspapers. Accordingly, it is a good time to survey the media scene in Kursk Oblast.

Governor Aleksandr Rutskoi controls the few printing houses in Kursk Oblast since the oblast administration owns most of their shares. They will only publish material that does not contradict the key platform points of the governor. Two printing presses are located in Kursk and another three are in the raion capitals of the oblast. These presses are technologically backward and can only dream about completely computerizing the printing process or buying offset color presses.

There are about 15 small private publishing houses which are able to produce high-quality printed material. However, these houses have limited capacity which will likely be fully employed by mid-December, in the weeks before the elections.

With newspapers, the situation is sim ilar. The Kursk Oblast government is the cofounder of two oblast newspapers, Kurskaya pravda (printrun 24,000) and Kursk (7,500). By appointing the editors, the administration has a strong voice in determining what is published. This week the editors of Kurskaya pravda sought to end Rutskoi's direct control over the paper. After editor-in-chief Nikolai Bezrukov resigned, the paper's employees (who, along with the administration, are also co-founders) voted against the governor's choice for a new editor, Gennadii Borzenkov, the chairman of the oblast Committee on Information and Press Affairs. Instead the journalists elected as their new editor Yevgenii Kotyaev, the correspondent of Delovoi mir in Kursk Oblast, and a well known writer for Sovetskaya Rossiya until 1993. The governor still has to confirm this appointment and it is unlikely that he will accept the unpredictable Kotyaev as the editor (see EWI Russian Regional Report, 23 September). Rutskoi would naturally prefer to keep the paper under his direct control.

Other newspapers express the interests of other groups. Usually, the governor forbids their publication in Kursk Oblast and they are printed in neighboring Belgorod Oblast. The paper Golos naroda (3,000) is financed by the Communist Party of the Russian Federation obkom. Khoroshie novosti (20,000) is owned by Yurii Vorotnikov, who is currently sitting in jail for failing to pay his taxes. Nevertheless, the paper has continued to pursue a strongly anti-Rutskoi line. This publication is directly associated with the local version of Argumenti i fakti and Komsomolskaya pravda - Voronezh.

Kurskii vestnik (11,000) belongs to the Rutskoi's main competitor in the upcoming gubernatorial elections, Aleksandr Degryarev, and naturally expresses the interests of his bloc, Kurskoe edinstvo. The newspaper Drug dlya druga (30,000) belongs to the powerful local entrepreneur and Oblast Duma member Nikolai Greshilov, who backs a pragmatic position.

Thus, the newspapers on the eve of the State Duma elections are essentially evenly divided between the pro- and anti-Rutskoi camps.

7 October 1999

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GOVERNORS ANNOUNCE NEW BLOC

On 19 September 39 members of the Federation Council signed a declaration which will apparently serve as the basis for the formation of a new electoral bloc. Chukotka Governor Aleksandr Nazarov is the coordinator of the new bloc and it will hold its first meeting on 27 September, according to polit.ru on 23 September. The new bloc is tentatively being called the Interregional Movement "Unity," which shortens to the Russian acronym Medved (Bear). The most active supporters in creating the new bloc are Primorskii Krai Governor Yevgenii Nazdratenko, Belgorod Governor Yevgenii Savchenko, and Kursk Governor Aleksandr Rutskoi, Vremya MN reported on 22 September. Sverdlovsk Governor Eduard Rossel, initially identified as an active supporter, has said that he will not join. The preliminary list of regional executives signing on to the new bloc as gathered from information in the central press (which may not be entirely accurate) is as follows:

Amur Governor Anatolii Belonogov

Astrakhan Governor Anatolii Guzhvin

Belgorod Governor Yevgenii Savchenko

Buryatiya President Leonid Potapov

Chukotka Governor Aleksandr Nazarov

Dagestan State Council Chairman Magomedali Magomedov

Gorno-Altai President Semen Zubakin

Irkutsk Governor Boris Govorin

Kaliningrad Governor Leonid Gorbenko

Kamchatka Governor Vladimir Biryukov

Kemerovo Governor Aman Tuleev

Kharbarovsk Governor Viktor Ishaev

Komi President Yurii Spiridonov

Krasnodar Governor Nikolai Kondratenko

Kursk Governor Aleksandr Rutskoi

Leningrad Governor Valerii Serdyukov

Novgorod Governor Mikhail Prusak

Novosibirsk Governor Vitalii Mukha

Omsk Governor Leonid Polezhaev

Primorskii Krai Governor Yevgenii Nazdratenko

Rostov Governor Vladimir Chub

Saratov Governor Dmitrii Ayatskov

Stavropol Governor Aleksandr Chernogorov

Ulyanovsk Governor Yurii Goryachev

Volgograd Governor Nikolai Maksyuta

Apparently several members of the new bloc are trying to convince Krasnoyarsk Krai Governor Aleksandr Lebed to join them as well. Several of the above regional executives already belong to other political movements, including Otechestvo-Vsya Rossiya, Our Home is Russia (NDR), and the Communist Party, and it is unclear how the new bloc will impact these alliances. The bloc's stated goal is to elect a new generation of honest and responsible people to the State Duma. Nazarov also said that the bloc will focus on changing the budgetary relationship between the center and regions (www.polit.ru, 23 September).

A possible leader for the new bloc is Minister of Civil Defense, Emergency Situations and Natural Disasters Sergei Shoigu. Shoigu is popular among regional leaders for his apolitical stance and reputation for addressing crisis situations effectively. He has not yet agreed to head the bloc, but said that he would make his decision known shortly.

One interesting development is that Belgorod Governor Savchenko called on Yeltsin to transfer his powers to Prime Minister Vladimir Putin and then place a moratorium on replacing the prime minister before the presidential elections (www.polit.ru, 23 September).

Savchenko thinks that it is unrealistic to expect Yeltsin to resign, but that the solution he proposed would solve the problem of the president's inability to carry out his duties effectively. Some of the governors in the movement claim that Putin is one of the organizers.

The political purpose of this new governors' bloc, which is rumored to have been initiated by Boris Berezovskii (Yunosti, 21 September), is to serve as an anti-Luzhkov force in the Duma elections, and its organization is clearly related to Kremlin politics. On 3 September Yeltsin appointed former head of Russian Public Television (ORT) Igor

Shabdurasulov as the presidential administration first deputy chief of staff (see EWI Russian Regional Report, 16 September). Shabdurasulov was put in charge of handling the president's relations with the regions, and clearly his influence is playing a significant role in promoting and directing the new bloc. The bloc not only brings together traditional Yeltsin loyalists like Prusak, but also includes Rutskoi, who had been a strong Yeltsin oppositionist since he helped to lead the storming of the White House in October 1993, as well as several members of the Communist Party.

The organization of an anti-Luzhkov bloc complements the propaganda campaign ORT is conducting against Otechestvo-Vsya Rossiya and its leaders, former Prime Minister Yevgenii Primakov, Luzhkov, and Tatarstan President Mintimer Shaimiev. All of the wellknown news and analysis programs on the first channel are participating in this battle. For example, Vremya reported about how poorly the Moscow police works and claimed that Luzhkov does not want to correct its mistakes. Journalist Pavel Sheremet sharply criticized Tatarstan President Mintimer Shaimiev for the region's decision to stop sending soldiers to the Russian armed forces (see related story in this issue). The station is also trying to blame Primakov for accepting $800,000 from Saddam Hussein while he headed the secret service in 1997. Prior to joining the new bloc, Rutskoi never appeared on ORT because of his poor relations with Yeltsin, but he announced the establishment of the new bloc on the channel's Vremya program on 21 September.

23 September 1999

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RUTSKOI INSTITUTES GRAIN BAN AS ELECTORAL TOOL

In July, for the second year in a row, Kursk Governor Aleksandr Rutskoi introduced an illegal ban on the export of grain outside of the oblast. There are several reasons for Rutskoi's decision.

First, of the 352,000 tons of grain the oblast needs for its food fund, only 86,000 tons have been stored. Second, the oblast is trying to settle the agricultural sector's debts to fuel and fertilizer suppliers. In addition to these frequently repeated reasons, it is possible to add one more factor, which has probably had the greatest influence on Rutskoi's decision. Rumors are rampant throughout the oblast administration that the grain is being seized by the administration to cover Rutskoi's campaign expenses and ensure his reelection in elections that could be moved up to as early as this December.

However, Rutskoi cannot move the elections without the approval of the oblast duma. Yet to rely on the Duma's unconditional agreement is risky. The Duma has already suggested that it will refuse to approve the export ban. However, it is possible to find a way to keep the duma in check. For example, the Kursk Oblast charter states that

if a quorum is not gathered in three official duma sessions, the duma is automatically disbanded. Rutskoi loyalists have already prevented a quorum at one session (see EWI Russian Regional Report, 11 August). Therefore, if the duma fails to gather a quorum two more times, it might be blackmailed into adopting the export ban. However, the deputies are not afraid of being dismissed. Such a move would be damaging to Rutskoi since if reelections are held in the near future, the deputies will be viewed as heroes who have suffered for justice, having an excellent chance at winning reelection to the oblast legislature.

Yet, what will happen is still anybody's guess. If early elections do take place, we will see for ourselves how the governor prepares himself. Rutskoi knows that he cannot expect financial help from Moscow as he did in 1996. Therefore, out of despair he is seizing the peasants' grain. It is rumored that even the money oblast officials previously took in return for secretly permitting bread exports is now also going to the campaign pot.

The tax for one ton of grain is 100 rubles. Yet this is not the limit of the oblast powers' hypocritical policies. Kurskii Vestnik wrote on 25 August that Rutskoi himself, who publicly has repeated over and over that he would not allow one ounce of grain to leave the oblast, is looking to sell thousands of tons of Kursk wheat in Moscow.

Rutskoi will need a lot of money to pay out pensions, salaries, and benefits in the last days before the election. If all Kursk residents turn out to be as unpretentious and trustful as those who live in Kursk, Kurchatov, Zheleznogorsk or Oboyana (who received payment arrears on the day before the election and then voted for the party of power), then the governor's efforts will have been worthwhile.

2 September 1999

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RUTSKOI AND LEBED AGREE TO COOPERATE

Kursk Oblast Governor Aleksandr Rutskoi and Krasnoyarsk Krai Governor Aleksandr Lebed signed an agreement last week on economic, technological, and cultural cooperation between their respective regions. On 26 August Kurskaya Pravda reported that cooperation will take place in such areas as the energy sector, resource extraction, machine building, light industry, agriculture, construction, transportation, communication, personnel training, and tourism.

Kursk Oblast's main interest in the agreement is the possibility of disposing of solid and liquid radioactive waste from the Kurchatov atomic power station at the Krasnoyarsk Krai landfill, which is the only facility of its kind in Russia. The waste from the Kurchatov station has not been removed for the last five years and is being stored at the power station. Additionally, Kursk hopes to begin using a new variety of fuel for the station's reactors. The fuel contains erbium, which is produced in Krasnoyarsk enterprises. This fuel will increase the plant's reliability and the length of service of the atomic reactors. In exchange for this, Kursk will supply manufactured goods to Siberia through barter arrangements.

The agreement, which expires on 31 December 2000, also demonstrates that both Lebed and Rutskoi are seeking to maximally stimulate the development of cooperative investment projects, including attracting foreign capital directed at reconstructing and modernizing enterprises and building new production facilities.

2 September 1999

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RUTSKOI BATTLES KURSK DUMA

On 23 July Chairman of the Kursk Oblast Duma Viktor Chernykh and Chairman of the Duma Committee for Legal Regulations Nikolai Yefremov held a press conference to discuss the numerous problems dividing the regional duma and the Kursk Governor Aleksandr Rutskoi. Yefremov explained that newspapers had recently published a series of articles "containing false information," which described the duma majority as the "opposition." He defended his position, stating, "We are not the opposition. We simply convey the interests of our voters." The reasons behind the newspaper attacks are clear: the duma voted against signing an open letter supporting Rutskoi's deputy governors, Vladimir Bunchuk and Yurii Kononchuk, who are under are under arrest as they are being investigated (EWI Russian Regional Report, 18 June 1998); rejected a prohibition on exporting grain from the oblast; and did not authorize a loan backed by a guarantee of the oblast budget. These actions were enough to anger Rutskoi.

In addition to the media attacks, the governor struck another blow by cutting the deputies' salaries, even though they have already been subject to a salary cut. This move was particularly disturbing to the deputies since in order to reduce the deputies' salaries the governor falsified the text of the oblast charter on 8 points. Yefremov stated that the duma did not even discuss amending the charter and that the changed points are not in the assembly's records. Such illegal activity on the part of the governor has provoked the duma to appeal to the oblast procurator, whose relations with Rutskoi are tense, for help in resolving the situation. Following the procurator's intervention, the governor immediately changed his decree and restored the legislators' salaries.

Another point of contention between Rutskoi and the regional duma is the governor's desire to move up the oblast gubernatorial elections nine months to coincide with the State Duma elections in December. There are precedents for holding elections ahead of schedule, such as Yevgenii Savchenko in Belgorod (EWI Russian Regional

Report, 3 June) and Yegor Stroev in Orel. This dispute has become the subject of another media battle involving Chernykh and Rutskoi's top supporters in the oblast duma, led by Deputy Governor Aleksandr Fedulov. Rutskoi's backers described an interview with Chernykh published in the local press as "insulting, especially to the voters who have placed their faith in us to defend their interests."

11 August 1999

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KURSK RESIDENTS UNPHASED BY STEPASHIN DISMISSAL

The dismissal of Sergei Stepashin, though unexpected, was not surprising for the residents of Kursk Oblast. The last political year and the unfounded dismissals of the Chernomyrdin, Kirienko, and Primakov governments accustomed Russians to such events. August seems to be a very appropriate month for political change in Russia (remember the 1991 coup and the 1998 economic crisis). Most likely even federal politicians and officials were not used to Stepashin in the role of prime minister, often forgetting his patronymic and calling him Sergei Vladimirovich, instead of Sergei Vadimovich. They will have no problem transitioning to Vladimir Putin, whose patronymic is Vladimirovich. Everyone assumes that Stepashin's dismissal had nothing to do with the quality of his work and attributes his dismissal to the continuation of President Boris Yeltsin's personal policies.

Thus there was no indignation or exaltation. The real excitement regarding Stepashin's dismissal was found at currency exchanges. Yeltsin's decision was made public on 9 August around 10 am and by 11 am there were lines of people hoping to purchase dollars. The value of the dollar rose at a rate of .5 ruble per hour, closing the day at 29 rubles to the dollar in private banks. The lines grew even more quickly the following day, but dollars were sold at the same price.

This time, Kursk residents did not run out to buy large quantities of salt, matches, flour, and sugar.

11 August 1999

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MINISTERS, GOVERNORS AGREE ON LITTLE AT BLACK EARTH ASSOCIATION MEETING

First Deputy Prime Minister Nikolai Aksenenko, Unified Energy System (EES) Chairman Anatolii Chubais, and several other ministers and deputy ministers attended the 30 July meeting of the Black Earth interregional association meeting in Kursk. Judging by the official side of the meeting, the participants merely defined the problems facing them rather than coming up with ways to work together in solving them. The main stumbling block is that the governors and ministers have different conceptions of the main problems, such as the energy crisis, promoting culture, and fighting crime, and different ways of addressing them.

Cooperation between the ministers and governors amounted mainly to sharing information rather than any practical action. The inability to get together is logical since the governors were elected for four years, while recent governments have been changed every six months. If any decisions were adopted, they were made informally in the corridors between official sessions.

In the formal speeches, the differences between the ministers and governors were clear. Aksenenko said that the main responsibility of the regions who are members of the association was providing the country with food through the development of local agriculture and ensuring that the regional population's social needs are met. Orel Governor Yegor Stroev, Voronezh Governor Ivan Shabanov and Kursk Governor Aleksandr Rutskoi expressed their unhappiness with the current gasoline shortage.

Rutskoi said that there was not enough gas to bring in the harvest and called the situation apocalyptic. First Deputy Fuel and Energy Minister Aleksandr Kochnev was optimistic, noting that the region had excess energy, particularly electricity, and called on the regions to economize.

Taking on the role of middleman between the two sides, Chubais gave the most weighty speech. He agreed that many of the problems under discussion needed to be resolved immediately. However, he stressed payments to his EES as the most important issue. "We want to be paid in money. During 1998, EES raised the income it received in real money from 9 to 17 percent and we don't intend to stop at that." Chubais and EES are angry that some governors set electricity prices below the norms established by the federal government. Chubais also warned that the energy crisis could be come even more acute in the central region because of shortages of fuel oil ( mazut). Currently, the fuel sells only for half the world price in Russia, and oil companies are rushing to export it.

5 August 1999

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KURSK RESPONDS TO FEDERAL COMPLAINTS ON LOCAL GOVERNMENT

The federal procurator, presidential administration, and State Duma have sharply criticized the Kursk Oblast Duma and Kursk Governor Aleksandr Rutskoi for revisions made to the oblast charter on 9 March that do not coincide with federal law and the Russian Constitution. The amended charter abolishes the region's system of local self-government and brings back the Councils of People's Deputies. According to the revised charter, the 511 municipal structures currently in existence will be winnowed down to 38 councils in 28 agricultural raions and 10 cities. By amending the charter, Rutskoi clearly wanted to gain greater influence over the heads of local administrations and the local budgets. The federal authorities have issued 11 complaints regarding the governor and oblast duma's decision to eliminate local self-governments, and now the oblast authorities are trying to rescind their actions.

Thirty votes are necessary to repeal the revisions. However, since it is summer many deputies are on vacation. At the 7 July session only 31 of 40 deputies were in attendance, making it impossible to gather enough votes to return the charter to its original formulations. The following day the presidential administration phoned Kursk Oblast Duma Chairman Viktor Chernykh to inquire whether the assembly had changed the charter. He said that if it was difficult for the oblast duma to rectify the problem, the Constitutional Court could take up the issue (Kurskaya pravda, 9 July). The only thing the Oblast Duma could do to appease the federal authorities was to remove the changes that had been introduced into the oblast legislation.

15 July 1999

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SAVCHENKO WINS BY LANDSLIDE IN BELGOROD

Incumbent Governor Yevgenii Savchenko won the 30 May Belgorod elections taking 53.46 percent of the vote, according to the Central Electoral Commission. The two main competitors trailed significantly, Communist-backed Mikhail Beskhmelnitsyn won 19.71 percent, while Liberal Democratic Party of Russia (LDPR) leader Vladimir Zhirinovsky took 17.72 percent. Turnout was unusually high at 71.33 percent.

A variety of factors apparently contributed to Savchanko's victory. Even after the 17 August economic collapse, the economic situation in Belgorod remains among the best in the country. As a result, his slogans of "my goal is to make life comfortable" and "our main concern is to strengthen the family" seem to have struck a reassuring chord.

Savchenko also benefited from his dominance of the local media (see Vremya MN, 1June). Beskhmelnitsyn, on the other hand, attributed Savchenko's victory to his ability to move the elections forward to 30 May from their originally scheduled date in December.

Changing the date of the ballot made it difficult for the opposition to organize against the incumbent. Zhirinovsky's participation in the race may have consolidated much of the electorate around Savchenko as the only viable alternative (Izvestiya, 1 June). In an interview with Kommersant Daily (1 June), Savchenko said that he was considering joining the Vsya Rossiya bloc and praised Tatarstan President Minitimer Shaimiev and St. Petersburg Governor Vladimir Yakovlev as "very good people."

The presence of Zhirinovsky in the race accounts for the high turnout since he brought a level of sizzle the race would have otherwise lacked. Many observers believed that the Belgorod voters would dump their local leaders and elect the Moscow politician as their governor. However, Zhirinovsky ruined his image in the region in the days leading up to the vote. Komsomolskaya pravda (1 June) claimed that Zhirinovsky had tried to win the race by asking Anatolii Chubais, the head of Russia's electricity monopoly, to temporarily cut power to the region, so that he could then appear as a savior by turning on the lights in the homes of loca l residents. Chubais rejected this idea. Three days before the elections, Zhirinovsky grabbed a motorist by the hair and forced him to his knees after the unfortunate driver had tried to pass the LDPR entourage on a regional highway. Such incidents do not play well in the provinces, where all the voters feel that they are being grabbed by the hair themselves.

Observers also pointed out that Zhirinovsky's campaign was extremely cynical and aggressive. "All stand when you are being addressed by a member of the State Duma," "Dregs, mongrels," "You are fools, brainless idiots, economically illiterate dolts" were just some of the more moderate ways Zhirinovsky addressed the voters. His defeat showed that the provincial electorate was not going to fall for his populist tactics.

If these elections are a model for the upcoming national parliamentary and presidential elections, then parties will likely violate all principles and overcome all antipathies in forming alliances of strange bedfellows. For example, both the Communists and Yabloko supported the independent Beskhmelnitsyn. Savchenko had the support of a wide spectrum of parties: the Agrarians, Otechestvo, Pravoe delo, Novaya sila, and the local press. He was able to win reelection even though voters often do the opposition of what the media tells them. In this case, the local elite was able to hang on to power.

3 June 1999

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BELGOROD ELECTIONS HEAT UP DURING LAST WEEKS

Russia will elect 14 governors by the end of the year and the elections to be held in Belgorod may set the tone for the subsequent elections. The major candidates in this race are incumbent Governor Yevgenii Savchenko, Liberal Democartic Party leader Vladimir Zhirinovsky, and Communist Accounting Chamber Auditor Mikhail Beskhmelnitsyn.

The elections should have taken place in December 1999, but Savchenko moved them up, hoping that he would do better in the spring . This ploy almost failed when on 13 May the Supreme Court's Collegium on Civil Affairs declared that moving the elections forward was illegal, acting on a suit brought by the Communist Party ( Novyi Izvestiya , 15 May). Despite the ruling, preparations for the elections continued without pause and on 26 May the Supreme Court's Presidium overturned the Collegium's ruling and declared that the elections could take place 30 May.

Several local experts think that Beskhmelnitsyn has a good chance of winning. He is famous for launching noisy anti-corruption investigations against such targets as the Railroads Ministry, Unified Energy System, and Gazprom. During the last two years he has given the procurator general evidence in more than 30 cases based on his raids.

Beskhmelnitsyn has the support of the Communist Party, the Popular Patriotic Union, and other left -wing groups, while Savchenko is backed by the Agrarian Party. Beskhmelnitsyn was the first candidate to collect the required number of signatures to register, doing so without the strong financial backing Zhirinovsky wields or the apparat support of Savchenko.

He made a big splash at the beginning of the campaign by stressing the theme that "By voting for Savchenko, you are voting for Yeltsin." He published a well-received flyer that reproduced a quote from Savchenko supporting Yelstin in 1996. Next to it, was a 1993 quote from Beskhmelnitsyn noting the fruitlessness of Yeltsin's policies. Linking Savchenko to Yeltsin is a good campaign tactic since Belgorod is firmly within the socalled "red belt." In contrast Beskhmelnitsyn is well known for his crusades against corruption. A former chairman of the Oblast Council of People's Deputies, Beskhmelnitsyn battled Savchenko in the 1995 gubernatorial election and presumably learned from his failure then. In that race, Savchenko won 55.54-32.19 percent.

One of Beskhmelnitsyn's main minuses is that he has not worked in Belgorod for the last three years. The local press has made a big deal of this issue, labeling him as someone just passing through or a person cut off from the rest of the community. He also made a tactical mistake, announcing that if he were elected, he would immediately replace all the staff members in the administration. This statement may cost him dearly when the votes are being counted.

Zhirinovsky's participation in the campaign has made it more interesting and many local people are flattered to have the attention of a national politician. Zhirinovsky is likely inspired by the success attained by such well-known leaders as Aleksandr Lebed, Aleksandr Rutskoi, and Aman Tuleev in gubernatorial elections. Although this is Zhirinovsky's first gubernatorial campaign, his staff is working very well. His local staff combined with supporters from Kursk, Voronezh, and Bryansk oblasts numbers 2,000.

According to his headquarters, Zhirinovsky plans to spend $2 million on the campaign, an enormous sum for Belgorod. When he is in town, Zhirinovsky campaigns hard, having met with seven different groups of voters in one day. However, according to Polit.ru, he has only been in the region for three short visits. Local observers think that his chances for success are not great, although he may benefit from the division of the oblast's left-wing parties between Beskhmelnitsyn and Savchenko.

Nevertheless, Savchenko is clearly concerned about the possibility of a Zhirinovsky victory. The regional authorities have unleashed an anti-Zhirinovsky campaign under the slogan "Belgorod is in danger!" Local and regional legislators were shown a film called "Werewolf," a play on Zhirinovsky's patronymic Volfovich, which shows Zhirinovsky vacationing in Malaysia, swimming in the ocean, eating bananas, and racing monkeys. These scenes are contrasted with clips of ominously marching members of Zhirinovsky's Hawks.

Savchenko occupies the center of the political spectrum. He has the backing of the local nomenklatura and the advantages of incumbency. He has effectively privatized the local press, radio, and television, which live off of subsidies from the oblast budget.

Every day, the local press publishes panegyrics to Savchenko that would make Stalin jealous (for an interview in this genre, see Rossiiskaya Federatsiya segodnya, no. 9, 1999). Nevertheless, there are rumors circulating in the region that Savchenko himself and his closest associates are corrupt. Such local magnates as the former director of the Lebedinskii Iron Ore Works Anatolii Kalashnikov are opposing him (on the relationship between Savchenko and Kalashnikov, see EWI Russian Regional Report, 6 November 1997).

The tense situation in the oblast between the two Supreme Court rulings on 13 May and 26 May certainly increased the level of rhetoric surrounding the election. The disinformation circulated by Savchenko's team played a particularly strong role.

Savchenko's Press Officer Oleg Polukhin suggested that President Yeltsin was going to give the region to Zhirinovsky because Zhirinovsky had delivered enough votes in the State Duma to prevent Yeltsin's impeachment. Rumors that the president had personally called Belgorod Chairman of the Electoral Commission Nikolai Pletnev also turned out to be unfounded. Polukhin also claimed that Communist Party leader Gennadii Zyuganov supported Savchenko, but State Duma Deputy Sergei Sukharev held a special press conference to rebut this assertion, stressing that Zyuganov backed Beskhmelnitsyn.

Several politicians from outside the region have come to support Savchenko. Saratov Governor Dmitrii Ayatskov visited, bringing along journalists, directors of large enterprises, ministers, and choirs. During their meetings, Ayatskov and Savchenko signed an inter-oblast cooperation agreement. At the subsequent press conference, Ayatskov did not hide his support for Savchenko. People's Power State Duma faction leader Nikolai Ryzhkov also showed up during the May holidays to praise Savchenko.

What will determine the final results? Much will depend on skillfulness with which Beskhmelnitsyn attacks the corruption of the governors' associates and attracts the support of the important businessmen who are sick of Savchenko's populist appeals.

27 May 1999

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BELGOROD PREPARES FOR GOVERNOR'S ELECTIONS

Belgorod Oblast will hold its gubernatorial elections on 30 May, seven months earlier than originally scheduled. Incumbent Yevgenii Savchenko was elected for a four-year term on 17 December 1995, when the State Duma elections were held. Yeltsin then allowed 12 governors to stand for election on that date, just six months before the 1996 presidential elections, because he considered them loyal and likely to win. On 20 February 1999 Savchenko convinced the oblast legislature to move the elections up from December 1999 to May, apparently to prevent his opponents from preparing effective, full-scale campaigns against him (Komsomolskaya pravda - Voronezh , 26 February). The Communist Party has unsuccessfully protested this decision. (Belgorodskaya pravda , 10 March).

Of the eight candidates, three have realistic chances of winning. Besides Savchenko, they are Communist Mikhail Beskhmelnitsyn, an auditor for the Russian Federation Accounting Chamber, and Liberal Democratic Party of Russia leader Vladimir Zhirinovsky.

Despite the active campaign waged by his opponents, Savchenko only submitted his signatures for official registration on 3 May. Nevertheless, every day he visits various parts of the oblast, holds meetings, and draws attention to his activities. He did not even attend the recent meeting of the Federation Council in Moscow, which discussed the fate of Procurator General Yurii Skuratov, so that he could stay home and campaign.

In Moscow, Savchenko's main supporter is Agrarian Party Chairman Mikhail Lapshin, who visited Belgorod in April. At meetings with the leaders of Belgorod's agricultural enterprises, Lapshin all but openly called on members of the audience to vote for Savchenko. Lapshin argued that the agricultural situation was better in Belgorod than in other regions and especially emphasized Savchenko's success in providing gas to regional customers and building roads. Lapshin warned that if the population did not support Savchenko, then Zhir inovsky would come to power and the region "could forget about future growth." He also claimed that Zhirinovsky would reduce Belgorod to the level of Kursk, where former air force pilot and Russian Vice President Aleksandr Rutskoi is now the governor.

Savchenko's main support base consists of middle-aged and elderly rural residents and urban pensioners. Veterans also back him because he built a monument nearby commemorating a tank battle. Such segments of the population are the most likely to turn out on election day.

The Belgorod State Television and Radio Company actively supports the governor, broadcasting information about his current activities, past accomplishments, and plans for the future if he is re-elected. Local newspapers also back the governor and have recently begun publishing material critical of Beskhmelnitsyn and Zhirinovsky.

Zhirinovsky's backers have already swung into high gear and are now going door - to-door offering voters T-shirts or caps in exchange for a Zhirinovsky vote.

Beskhmelnitsyn understands that Russian voters could accept Zhirinovsky's gift and vote for someone else, so he is not wasting his money on such presents. There is circumstantial evidence that President Yeltsin's local representative, Sergei Kisin, and the local representatives of the Federal Security Service and tax services support the Communist Beskhmelnitsyn. The Agrarians' decision to support Savchenko while the Communists back Beskhmelnitsyn marks a split in the Popular Patriotic Union of Russia, which unites these leftist groups under one umbrella. (see Segodnya, 29 April).

During a recent two-day visit to Belgorod, Zhirinovsky explained his electoral strategy. He said that the LDPR is using the Belgorod gubernatorial elections as a rehearsal for the more serious State Duma and presidential campaigns. His main slogans are free education, reduced unemployment, support for the local banking system, and stepping up the battle against crime. Zhirinovsky claims that he will soon bring a large number of campaign workers to the region to sponsor his effort.

6 May 1999

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NEW SOCIAL ORGANIZATION FORMS IN KURSK

A new social organization,Nadezhda-99 (Hope -99), will defend the rights of Kursk teachers and other workers in the social sphere. The organization plans to lobby at multiple levels and forums, from the oblast administration to the State Duma to the courts. The group's primary goal is to participate in the elections for Kursk mayor and the Kursk city assembly. The appearance of the organization roused anxiety among the leaders of science and education trade unions who were planning to put forth their own candidates for the city assembly. Chairman of the oblast committee of trade unions in the sciences and education Igor Pigorev announced, "We do not need to fight with Nadezhda-99 in the long-term. As soon as salaries are paid, the group will dissolve itself."

1 April 1999

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KURSK SETS MAYORAL ELECTIONS

For two years Kursk politicians have been battling over the adoption of the city's charter, meaning the city had no basic law. The main dispute was over the combination of two posts, mayor and chairman of the City Assembly. The Communist opposition led by Yurii Maiorov inside the City Assembly opposed such a merger. When the deputies were finally able to reach an agreement, the Justice Administration refused to register the charter, citing numerous problems, and sent it back for further consideration.

Mayor Sergei Maltsev was seriously concerned that if the charter was not adopted, Kursk would repeat the situation in Vladivostok, where the governor has simply appointed the mayor. So the charter was quickly adopted and the assembly set the elections for 6 June. Now the campaign season is already under way.

25 March 1999

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KURSK GOVERNOR SIDES WITH MINERS AGAINST ROSSIISKII KREDIT

Vadim Samoilov, the general director of the Mikhailov Ore Enrichment Combine (MGOK), announced his resignation on 25 February, under pressure from the plant's majority shareholder, Moscow-based Rossiiskii Kredit bank. Only two weeks before, Samoilov had come to Kursk to report that the company had grown 24.7 percent in 1998.

By January 1999 the combine's growth reached 110 percent of projections, exceeding even the best performance of the Soviet era. Samoilov's resignation seems especially puzzling after such an "economic miracle."

Kursk Oblast officials cite three reasons for the resignation. First, Rossiiskii Kredit has decided to liquidate some of its MGOK stocks for cash in order to shore up its sad financial condition following the 17 August economic collapse. Second, the United States has introduced anti-dumping quotas against Russian cast iron and steel, which will cut Russian exports of these products to less than a quarter of their former size this year. And, third, the so-called "Solntsevo gang" of organized criminals has shown interest in MGOK stocks.

Oblast Governor Aleksandr Rutskoi, enraged by Rossiiskii Kredit's action, showed up at the 25 February meeting of the MGOK board. He was accompanied by Major General Aleksei Volkov, the oblast chief of police; Major General Viktor Surzhikov, the head of the oblast branch of the Federal Security Service (FSB); and Colonel Leonid Bashkeev, presidential representative in the region. The governor, a retired major general himself, with the support of his high-ranking associates, tried to talk sense into the bankers. He noted that Rossiiskii Kredit acquired MGOK not for cash but with privatization vouchers, and that the oblast itself had invested considerable resources into the company, in the form of favorable railroad and energy tariffs. Rutskoi warned the bankers that they will not be allowed to run the show in his region and called on them to ask the people for their opinion.

The people, in turn, numbering somewhere around 15,000, mobilized by the miners' union, staged a rally with slogans calling on Rutskoi to save them, on Samoilov to come back and on Rossiiskii Kredit to leave MGOK alone. Rutskoi and the other officials addressed the rally at length. The governor assured the people that they should keep working and remain calm, and promised to stand up for their interests. However, the bankers proved intransigent and refused to meet with the miners' representatives. It is not clear what will happen next, at least until the 27 March annual shareholders meeting.

4 March 1999

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RUTSKOI DISMISSES KURSK PRIME MINISTER FOR REVEALING FINANCIAL PROBLEMS

On 8 December 1998 the Kursk Oblast Duma amended the regional charter to establish a new government, which would handle the majority of the oblast's nitty gritty, day-to-day economic concerns. Governor Aleksandr Rutskoi would merely monitor the actions of the government, allowing him to avoid direct responsibility for any unpleasant decisions the regional prime minister adopted. At the December meeting, the Duma elected Boris Suraev as the first Kursk prime minister.

Peaceful coexistence between Suraev and the governor lasted all of two months.

During this time Suraev launched an extensive investigation of Kursk's economic situation. Having examined the debts incurred over the two years since Rutskoi came to power, Suraev prepared a very interesting document which detailed how much money Kursk Oblast actually owed and to whom. The figures indicated that the oblast could be declared bankrupt.

On 12 February the paper was distributed to the governor, the chairman of the oblast duma, and the presidential representative in the oblast. The following day Rutskoi dismissed Suraev.

In trying to explain Rutskoi's decision, Oblast Duma Deputy Chairman Nikolai Ivanov, a member of the Communist Party of the Russian Federation, said , "I think that the governor considers this information to be confidential and its publication could hurt our ability to attract investors. Since Kursk Oblast is heavily indebted, no one will want to offer additional credits to the region. Rutskoi felt that this information was harmful to the oblast, and dismissed Suraev. By law the duma has the right to question the governor about this."

18 February 1998

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KURSK RAISES MONEY THROUGH HIGHER UTILITY, TRANSPORT RATES

On New Year's Eve, the Kurk City Council voted to increase the rates for all types of utility services: rent, water, heat, waste collection, electricity and others. The council members justified their decision by citing a federal law that requires residents to pay at least 50 percent of these services in 1999 (in contrast to 30 percent in 1998). However, in rubles these services will increase not by 20 percent, as one would expect, but nearly twice. The council leaders blamed this sharp increase on the crisis and the ruble devaluation in the last six months. Not everybody across the board will incur the price hike, only those, whose income exceeds 500 rubles per person in the household. The rest will pay old tariffs.

However, the main reason for such a radical decision is the failure of the oblast to pay what it owes to the city budget. Two months ago the city sued the oblast duma, which had blocked the transfer of 120 million rubles to the city. Another source of revenue for the city is revoking privileges to ride public transportation free of charge on weekends for some groups that enjoy these benefits according to federal and local laws. About half of all adults in Kursk and all the

children under the age of 16 enjoy these benefits. This measure would help the city avoid raising the general price for public transportation, an unpopular measure the council members want to avoid on the eve of elections this year. Here again the city clashed with the oblast, which had approved these benefits recently. During the first weekend when the benefits were revoked, on 16-17 January, revenues from public transportation increased by 2.5-3 times.

21 January 1999

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