---

Questions answered in this forum: Will corruption and crime dismantle reform? Will Chubais' reform programs be maintained by the next administrator ? How did Russia move from state owned business to independent business? Should we invest in Russia? What can the West expect from this cabinet shuffle ? Viewer comments NewsHour Coverage September 29, 1997: A new Russian law limits all religions outside the Orthodox Church. July 22, 1997: Elizabeth Farnsworth speaks with David Hoffman, The Washington Post's Moscow Correspondent. May 27, 1997: Russia agrees to the expansion of NATO. Browse the NewsHour's coverage of Europe and the Conference of Independent States.

Ken Basche asks: How is Chubais' sweetheart deal any different than any of our American Politician deals in our country with book deals and with cash advances. The main question is if the economic reforms are still going ahead or is the corruption and crime is going to dismantle the reforms and turn the country back to anti-democratic forces? David McGuffin, Moscow correspondent for Feature Story, Inc., responds: Ken, I think the best example of a similar scenario in the United States was in 1995 when House Speaker Newt Gingrich received a large book advance from media mogul Rupert Murdoch shortly after the telecommunications act went through Congress. Similarly, Chubais received his money from a publishing house owned by one of Russia's largest banks. The bank was a major beneficiary of recent government sales of property. And of course Chubais is responsible for overseeing government privatization. Both men were forced to backtrack. Gingrich returned his money. Chubais says he has given his money to charity and will pay taxes on the full amount. Will this scandal turn back reforms in Russia? It seems doubtful. Chubais, as of today, is still the Deputy Prime Minister responsible for overseeing government reforms. The fact that Chubais was the cabinet member who met with IMF officials this week in Moscow and the fact that, also this week, it was Chubais who worked on a loan deal with some western banks to cover a government cash shortfall, seems to indicate that Chubais is still in a position of power. But even if he were to be removed, and no member of a Yeltsin cabinet is ever really secure, Russia now has 6 years of reforms under its belt. It would be difficult for anyone to turn the country back against that momentum. Clifford Gaddy of the Brookings Institution responds: Very true, the kind of deal that got Chubais in trouble is not unheard of here. But his was an extraordinarily blatant case. To put it in an American context, imagine the following scenario. The Justice Department is about to rule on a case worth billions of dollars for the Microsoft corporation. In advance of the decision, Bill Gates pays the head of Justice's Anti-Trust Division a six-figure sum in the form of a book advance. There would, I think, be quite a reaction in the United States. Chubais' sweetheart deal was in that class. But your main question seems to be a very pragmatic one: So what if Chubais made a mistake, is it so important to punish him that one risks the entire reform program in Russia? Posing this question makes clear the true dilemma that the person of Chubais represents for the U.S. administration. Chubais has been the single most effective proponent of the market economic reform program which the administration dearly wants to see implemented in Russia. Much of his efficiency, though, came from his ruthlessness in pursuit of that goal. There were more than a few people who pointed out the contradiction of using anti-democratic methods to achieve the goals of democracy and free markets. So, already earlier, Chubais was pushing the edge of the envelope with his "the-ends-justify-the-means" approach. Up until now, despite all the criticism, Chubais had a great asset in the form of his reputation of personal integrity and selfless devotion to the cause of reform. That image is gone. Next: Will Chubais' reform programs be maintained by the next administrator ?

The PBS NewsHour is Funded in part by: Additional Foundation and Corporate Sponsors
	Program Support From:
About Us Feedback Subscriptions/Feeds Privacy Copyright © 1996- MacNeil/Lehrer Productions. All Rights Reserved.
Support the kind of journalism done by the NewsHour...Become a member of your local PBS station.