Swoop Down and Buy
-- But Not To Privatize, for Example, the Kantemirovskiy Division?

Moscow TRUD 18 Apr 95 p 2
by Fedor Yemchenko

The collective of the Radio Instrument Building Scientific Research Institute (NIIRP) has been struggling with apologists of privatizing in the Russian way for over a year now. It is still hard to predict the final result. The point is that two, as it has turned out, approximately equal forces have clashed over the unique property: on the one hand -- those defending the interest not only of the collective, but also of the state, as well as the Russian Federation Law, and on the other hand -- a group of high-ranking, influential officials.

According to procedure, however, the Radio Instrument Building NII is the main developer of the Russian scientific-experimental program, Planet, aimed at creating promising systems of guaranteed protection against missile and air attack. This institute, in cooperation with other enterprises, developed a system of A-35 PRO [antiballistic-missile defense], deployed around Moscow. A system of second generation antiballistic-missile defense (A-135) has now been accepted for operation. It, as specialists claim, is the most modern of the presently existing strategic antiballistic-missile systems. It ensures the interception ("close" and "long-distance") of the enemy's warheads and their destruction, with the aid of nuclear atmospheric explosions.

Even this information, it seems, is enough to make one realize that only people for whom the country's security and its intellectual capital is a matter of no importance could take it into their head to privatize an institution like this.

Nevertheless.... In 1992, during the reform of the administrative structures of the former main administration or, as it was called, the Vympel Central Scientific-Production Association, it was decided to transform Vympel into an interstate joint-stock corporation (MAK), and N. Mikhaylov, general director of the TsNPO [Central Scientific-Production Association] became its president. The corporation was to have combined enterprises of Ukraine, Belarus and Russia. On the instructions of A. Ivanenko, deputy chairman of RF Goskomimushchestvo, NIIRP was transferred to MAK as part of the charter capital on the Russian side. At that time N. Mikhaylov convinced everyone that this was done to maintain and develop the top scientific-intensive technology of antiballistic-missile defense.

Time, however, showed the opposite. Ukraine refused to enter the corporation, and Belarus had only an eight-percent share in the charter capital. In 1993, the Russian government issued a decree on privatizing NIIRP. Again in the guise of the same "sauce": allegedly to maintain PRO technology in Russia. V. Polevanov, the former chairman of the GKI [State Property Committee], saw this privatization as an encroachment on the interests of the state, and promised to get the institute out of the corporation. He did not succeed, however. He was transferred to a different job. The State Institute was turned into a joint-stock company of the open type.

The work collective's council appealed to the Procurator-General about this. But since the evaluation of government decrees is not within the jurisdiction of the procurator's office, V. Davydov, Procurator-General, wrote a letter to Vice-Premier O. Soskovets.

"The Statute on including the NII in the corporation," the procurator informed him, "was passed in violation of articles 13 and 33 of the RF Law 'On Enterprises and Entrepreneurial Activity.' The NIIRP, according to the Charter, was registered by the Registration Office on 20 February 1992, and was at that time an independent state enterprise with property under its full economic authority, and consequently, in accordance with the law and Edict of the President, it would require the agreement of the work collective to decide on its entering the corporation."

This resolution, let us explain, was passed by an assembly of the board of directors, the trade union committee, the scientific-technical council and the chairmen of the trade organizations of the structural subdivisions. The question of privatizing NIIRP as part of the corporation was examined for the first time at a conference of the institute's work collective on 23 June 1993. The results of the voting made it impossible to pass this resolution. The organizers of the conference, however, worked on manipulating things. Information that the collective had allegedly agreed went to the legislative bodies.

Ignorance of the procedure put many people in a bad spot: the necessary majority -- is not just "plus one vote." The people, therefore, probably knowing where this "privatization" would lead, appealed to the collective and explained to it "what was at the bottom of it." The next day, the work collective conference elected a council, which was entrusted with clearing up all the legal fine points of this collision.

In January of last year, on the initiative of the STK [work collective's council], the collective again assembled at a conference and passed a resolution to consider the documents on privatization as not subject to execution, since they contradicted RF legislation. After the conference, it was decided to appeal to the Higher Arbitration Court, which expressed the unanimous opinion -- right was on the side of the work collective.

The government was in no hurry to put this mistake right, however. Moreover, Anatoliy Chubays wrote a statement on introducing a protest against the VAS [Higher Arbitration Court] resolution. In his opinion, it was not the government, but the court that had made the mistake. While the collective's argument with the privatizers was going on, the institute fell apart completely. Orders from the Ministry of Defense were cut back 10-fold. For four or five months the people received no wages. V. Savelyev, director of NIIRP was relieved by MAK Vympel of the position he occupied, "because of his state of health." B. Vinogradov was named acting director. Daughter enterprises and partnerships with limited liability were created out of the structural subdivisions.... It is possible the readers will ask the question: just what is it that so attracts privatizers to this institute? Of course, the property. The Institute has 60 hectares of land, about 20 buildings and structures (and what buildings and structures!), developed engineering networks and infrastructure. All this is assessed at 500 million rubles [R]. How could you resist not "privatizing" all this for a song!

The other day, employees from the Institute -- Leonid Yefimov, chairman of the STK, and Vitaliy Zharkovskiy -- dropped in at the editorial office.

"Well, how goes it?" I asked.

"Look here," they showed me a paper. "The Moscow Arbitration Court passed a resolution 'to recognize as invalid the act of registering the AOOT NII Radio Instrument Building (certificate of 21 June 1994, registration N 008629).'"

"Does this mean I can congratulate you?"

"Don't be in any hurry, our opponents will not give in so easily. This is too tasty a morsel for them...."

The dispute between the labor collective of NIIRP and the boards of directors of MAK Vympel and AOOT NIIRP must not be regarded only as a struggle for possession of the property. Today it is already acquiring another shade of meaning. In April, as we know, an International Conference on Extending the Force of the Agreement on Nonproliferation of Nuclear Weapons will be held. It is difficult to say right now the scenario the negotiations will take. In any case, right now the world is not so stable that Russia can forget about its security. It appears, however, someone wants very much to turn NIIRP into a joint-stock company of the open type. Swoop down, buy shares and dictate how best to protect Russia's interests. In this way one can, really easily, take up the armament well known from history: "Our land is great and abundant, but there is no order in it. Come and possess us"?