He was Second Secretary at the U.S. Embassy in Moscow (1993-1995). He currently is Associate Director of the Broadcasting Division for Radio Free Europe/Radio Liberty.

It's easy, as they always say to have wisdom in hindsight. But I think had myself and others looked more carefully at what would have happened, we would have had a much more differentiated and nuanced approached to explaining the end of the Soviet Union and the beginning of whatever it was that took its place.

Yeltsin was the leader really of a coalition of anti-Soviet forces, among which were ideologically committed democrats, I guess, reform bureaucrats-- the nomenklature, the Russians called it-- who felt they couldn't function any longer under the old system, which had, in any case, been breaking down.

And there were also national patriotic elements who really had a marginal commitment to democracy and probably even to free market reforms--but really we're interested in reviving Russia, not the Soviet Union as a great country, a country which had never really had a sense of itself other than as a Eurasian empire.

So, that's the first point I would make--whatever Yeltsin was, he was not really a democrat leading a democratic revolution in a way that had happened in Eastern Europe. He was leading a coalition of those elements.

The second point I would make, again, much clearer in retrospect, was the extent to which the role of money as a tool of political power had become important.

Not only by so-called free marketeers, challenging the command economy, but the fact that a great portion of the Soviet elite, beginning in the late 1980's--elites who we saw at the time as committed communists or hardliners were themselves engaging in quasi legal and illegal business, using state money to create companies and firms and business schemes from which they could benefit.

So, looking back on that period, you could argue that the struggle between the Soviet government under Gorbachev and the Yeltsin government and the Russian federation was not only about Russia's nationalism or Russia's independence or autonomy or not, but was also a struggle over resources.

And there were two competing networks of commercial activities. A great deal of--of internal struggle within the Soviet government, also within the Russian federation government and local--local units such as the City of Moscow--over party money, over how to use the money, the resources, the access to goods.

And I think that was not noticed very much at all. It was not just a question of the Communist Party assets. It was a question really of the extent to which people at all levels of Russian and Soviet government could profit from their access...to the whole slush fund that was the Soviet state [and] was now clearly collapsing.

But by 1992, from the America point of view, we had our team and a policy...?

Yes, I think very very clearly. The key period became the months between the end of the August 1991 coup and the end of the Soviet Union, in December 1991.

What program would the new Russian government under Yeltsin adopt? Who would be their prime minister and so forth. It's never been clear to a lot of people Yegor Gaidar was picked. He was picked for a number of reasons, but one of which I think was--at the time, Yeltsin bought his arguments and the arguments of other economists who supported freeing prices and economic reforms. That that would be the quickest way to transform the Soviet economy, now the Russian economy.

The US government, of course, saw these people as democrats and for a variety of reasons, including the US government's own belief in certain economic policies and theories. We supported a certain set of policies which would allow these, quote, democrats, and these quote, free marketeers, to build a Western oriented viable market economy and democratic state along the lines of some of the countries--in Poland, and Czech, Czech, then Czechoslovakia and Hungary--that we had seen in Eastern Europe.

I should add that very clearly this coalition of reform bureaucrats--who are not particularly democratic-- and democratic intellectuals began to break up. And you see it in the middle of 1992 in the debate over privatization and how that would take place. This break up of the coalition, of course, had its culmination in the October events of 1993 and the bloodletting on the Moscow streets.

Talk about the events of October of 1993,about how we were viewing things. By this time you are back in Moscow and in the U.S.Embassy.

It's a very interesting set of events. Because I always see the October 93 events as two separate things. One was the order by Yeltsin to disband the parliament in the middle of September. And the second was two weeks later, to resort to force to defeat his rivals, the Senate, of course, and then Supreme Court--Soviet--and to maintain his leadership. Two separate events and I think we tended, even at the time to blend them together.

Since Yeltsin was our hope for democracy and free market reforms, we tended to support him implicitly at first and then very explicitly--[A] that the dissolution of the parliament, which was clearly unconstitutional, by the, quote, "Soviet era" Russian Constitution--was justified, because only by doing that could you break the log jam to allow the reforms to go ahead. Because that was the center of resistance.

And, second, the use of force two weeks later, which we largely, not welcomed, but acquiesced to, because if Yeltsin was the guarantor of democracy and free market reforms against these hardline neo-communists, communists and assorted other undesirable elements--only by resorting to force could you finally cleanse the Russian government--Russian government of this kind of bloc that had impeded the reforms for two years. The problem is, of course that was to a significant extent, misreading events.

We, the US government talked a lot about how this Supreme Soviet, which was--actually if you go back to 1990--hailed by the US government as an unprecedented democratically elected institution.

We hailed it in 1990. Three years later we were denouncing it as a holdover of the Soviet era, as a bastion of reaction. And it was a holdover of the Soviet era, but it was, in fact, if you go back and read the comments in 1990, in the middle of the year, it was largely a democratically elected legislature. The problem was, of course, that we got in that parliament a lot of people who did not support either Yeltsin's leadership or the economic reforms.

And that began I think a series of compromises to things that the Yeltsin government did which were neither democratic nor really calculated to create the kind of civil society and market economy that we wanted. Always on the grounds that Yeltsin was the guarantor of reforms and always on the grounds that if the policies that we favored were adapted and implemented that things would turn out the way we wanted. Of course that was not true.

The final step in this key fall of 1993 was the December elections, which we saw as a way to institutionalize a Presidential system which would push through the reforms that we--we favored.

Again, in retrospect there clearly were problems. We at this time began to neglect the importance of process, the Constitutional draft, very shoddily written, clearly was designed to codify Yeltsin's power.

The Constitutional draft and the referendum on it and the elections in December came in the wake of very bloody confrontation on the streets of Moscow, which had alienated not only those other members of the Yeltsin coalition, who had already had trouble going along with some of his policies, but alienated a large number of Russians as well.

And this perhaps other original sin which is that this system was born in blood and implemented against the wishes of a lot of Russians, perhaps the majority--depending on whether you believe in the validity of the referendum that confirmed the Constitution--that had alienated a lot of Russians. But at all points, the identification of Yeltsin, Yeltsin's team with reform, with free markets and being the indispensable guarantor of the kinds of outcomes we want was the utmost policy consideration.

And, so, other things like the importance of process, of building institutions and that kind of thing--the fact that there may be other approaches to reform and that Russia might not be appropriate for those kinds of reforms--were issues that were really put to the back burner.

If they did the right thing, became the implicit and explicit message--and the right thing is what the US government thought was the right thing--it would all turn out right in the end. And that really became the central force, I think, central view pushing the policy forward, as you went on from there.

In the wake of the violence on the streets in October of 93 and of Yeltsin shelling the parliament, was there a debate within the Embassy about how the US government should react?

The debate was mostly in Washington. I think there was not a lot of debate in the Embassy. I suspect there was not a lot of debate in Washington.

...And I was holed up in the Ambassador's residence for two days with sniper fire all over the place. There was not a lot of coherent debate about the proper attitude to have toward all that had gone on.Except that it was a relief that Yeltsin had won, a relief that after a period of military indecision that enough units from the army turned out to support the President. And I think there was a sense, not really debated, but assumed, including by myself that these so-called hardline elements had been defeated and now things could--probably would get better.

What we, I think, underestimated was the degree to which this had a traumatic effect on the very people in Russian society who had supported--many of whom had supported the August coup and now had seen their hopes kind of be bloodied and sullied, because Yeltsin had adopted a military force which they regarded as unjustifiable.

After all, they had voted for this parliament the majority of Russians just three years before and now it was being shelled into submission.

The whole thing was an unfortunate way to end this two years between the coup and the shootout, which had been a time when real democratic reforms could have been more seriously established.

And what was the next set of decisions facing Washington?

Once the Yeltsin alliance, let's call it, broke up,then the US was confronted with the decision about who to support if we wanted our blueprint for Russia to go forward.

We chose for many understandable ways to support Yeltsin and the alienation of the Russian electorate from Yeltsin was immediately transferred to us and, for the first time you'd see very virulent anti-Americans in the street.

They did not like the close identification with Yeltsin and his aides with the US government. We seemed unconcerned about it. Because, after all, if they did what we wanted, it would all turn out right and these people were not representative.

The people who represented the hopes for the future were the democrats and economic reformers and those were the people--that it was Yeltsin and his--his team.

Tell me about the cable that you sent.

I did write a cable in December of 1993. I don't remember the title, but in any case, we basically interpreted the results of the December election which, as I recall--not only did it not give Yegor Gaidar's group a majority, but gave the majority to a lot of other forces that completely surprised us.

Zhirinovsky did well, as you recall. The communists did pretty well, as you might recall. So, I had a cable--the title of the cable or in the subtitle called for Russians vote for more therapy, and less shock.

I believe even deputy secretary Talbott, who was then in another job, head of the newly independent states, quoted that as I recall in a press conference and it got a--immediately a reaction from advocates of the so-called Washington Consensus that, --this phrase is inappropriate. What's good for the Russian people is the economic program that we've supported and the Gaidar party and Yeltsin's role as the President who can ram these things through.

So, it was not received well -- all of a sudden talking about something that had been implied for a long time--that to some extent there was a contradiction between democratic reforms and governance which relied to a large extent on popular support, and economic reforms that would impoverish the population if only temporarily.

...[It was a] contradiction there which, even two years before, we never really grappled with. The argument had always been that Poland did it quickly and Hungary did it quickly. Russia, had they done it quickly, could do it too, minimize the shock, get to the good part of the transformation and the country would take off. Well, Russia wasn't taking off. It was very clear for a lot of reasons. And the fact that the US Embassy began noting, not always correctly, but noting consistently that there was a contradiction here, was not something that was received very well in Washington.

Others whom I've talked with who were in the Embassy in the US government, have said that our policy after the December 1993 elections--was to keep going with the program, to ignore the referendum essentially on the program that the elections represented.

Yes, the argument both explicitly and implicitly, was 'we know what's best.' We, being the US, we, being the Yeltsin team. We, being international financial institutions. Sooner or later it will turn out okay if we just stay the course. There was a lot of evidence that we were going off course. There was a lot of evidence that it was not working in the same way that it was working elsewhere.

But in our arrogance or in our wisdom, whatever you want to say about it in retrospect--we decided that supporting Yeltsin and certain policies and people around Yeltsin would be the best way to get the outcome that we wanted, no matter what the voters wanted, not matter what the opposition wanted.

That one of the ways you could do this, of course, was to caricature the opposition as all communists or as all advocates as of a return to the Soviet Union, as people like those, I would say, militants who got gunned down in the streets of Moscow of October of 93.

The choice was always black or white. The choice was always reform or going back to the Soviet past and that I think was over simplified, did not reflect what was going on in Russia and it was something that we began to write about increasingly and of course, little attention was paid to it.

One of the people I've talked to said that-essentially the message was coming in Washington increasingly wanted to hear from the Embassy what it wanted to hear. How did that play out in the argument within the Embassy itself?

Well, the Embassy became atomized in '93 and '94 and '95. Those two years were important because the division of assets of the Soviet government began to be parceled out by the Yeltsin team under the privatization program.

Which basically became hijacked by a lot of people who were close to the powers that be. We call them oligarchs now. But that process began relatively early in 1993.

You had in the Embassy, despite the leadership of our most distinguished career diplomat, Ambassador Pickering, a very atomized group of people, some of whom while nominally responsible to the Ambassador had constituencies at home in Washington to whom they were more loyal. You had an AID apparatus which was handing out financial assistance to--to clients to help transform Russia into the way we wanted to transform. You had a foreign political external group which did what political external sections do everywhere I've served, which is to conduct the diplomatic bilateral business of the country.

You had personal relationships between people in Washington who ran Russia policy, not only Talbott, but others, and particular Russian leaders talking on the phone, calling the foreign ministry, calling the Kremlin, calling Chubias, calling Gaidar. That relationship went on as well.

You had representatives of the Treasury Department who was there to make sure that anything that had to do with Treasury related issues, which in many ways became increasingly our agenda--made sure that the treasury's point of view in the Embassy was reported and implemented.

You had the political economic section and pardon my bureaucratic tedium here, which was there to make sure the economic program of the US government was explained and implemented. And that increasingly, again, became the US policy in its entirety. And then you had the political internal section, to which I belonged.

We tried to report what was going on in Russia and this meant talking to the opposition, talking to people who later became oligarchs, talking to the communists, talking to Yurnivoski's people, and so forth, talking to real Russians.

And increasingly there was, again, a disconnect between what we started to report and what the other parts of the Embassy and the Washington bosses thought we ought to report and thought was going on.

And I understand that. As these big heated debates inside the Embassy went on, obviously it's easily to carp, it is obviously easy [for us]-- we don't have to make the decisions when we're talking to Zhirinovsky about whether aid should continue or not.

But there was a very strong disconnect between the Russia we saw and the Russia that other Washington constituencies saw and it became more and more contentious as time went on. There were a number of restrictions on our reporting. Not in the content--but it was on who you could talk to. ...

You've described this period of time in the Embassy and what you just described to some extent as well as being open warfare. Was that pretty much the feeling?

That was pretty much the feeling. I think those of us who tried to get out and get mud on our boots were seen as troublemakers, as people who didn't understand the policy. We were too much involved in the tactics, in the details and not in the strategic goal advocates of the US policy had in mind.

So, virtually, any time you would mention economic reform in a political cable-- and most of your viewers probably don't realize, a cable that mentions economics written by the political section has to be agreed to by the economics section.

And, so, that was when the warfare came in. They would say how do you know this. You say that privatization is being misused, well, how do you know that. You know, when in doubt, you can always attack the credibility of sources rather than the substance.

And it was very clear that--that people from Treasury in one case--who was very proud that he didn't speak Russian, who never ventured out to talk to people other than officials--really didn't know what they were talking about. But they were--they were there to see that the policy got--got implemented successfully. They knew they would be promoted on the basis of that. And, in fact, in hindsight they were.

And his struggle to present a balanced textured, nuanced sense of what was going on in Russia became very very difficult.

We used to have a Friday cable called Moscow Miscellany, and we would put in anecdotes, jokes, sarcastic references that we'd hear from Russians around town.

And that--it was sort of a non-cleared normal kind of cable, an admirable kind of cable which we would send out on Friday to a--usually a lot of interest in Washington and that would be the way we would park--we would park indicators and texture references and anecdotes that would indicate that things were not going as well as thought. We'd put it there in the cable as a way to get around the Embassy, the Embassy obstacles that we saw.

So, open warfare I think is accurate, it wasn't constant. But it was certainly recurrent.

So the evidence was accumulating that the path of reform that the US was pushing and Yeltsin's team was pushing was going off track?

Oh, I think that's very clear. You can look at a number of things. One of which is normal statistical indicators like income. ... It became very clear, relatively soon after the October events, that corruption was widespread, and increasing. That privatization had been hijacked by a bunch of insiders.

So, whether you look at crime or corruption or the lives of individual Russians, it was very clear that things were not going well. And, again, that message was not very well received.

...When we would ask in these internal debates how --if there's no adequate protection of property rights, if democratic institutions are relatively weak and, in fact, these reforms are rammed through by Presidential decree which had the affect of further weakening democratic institutions--how can we both build a democracy and have a free market at the same time, there was never a good answer to that. And I don't think there's a good answer today to that question. And, again, across the board this disconnect became very obvious.

I can remember going to a meeting with a very prominent ministerial level person with a prominent Embassy official and after the meeting, after being sweet talked, frankly, about how things were going well I said to this Embassy official, 'Sir, don't you realize this man is, reportedly by a lot of sources, on the take and very, very corrupt?'And he turned to me and said, 'Don, it's not my problem.' The message, of course, being that these policies were to some extent automatic and deterministically guaranteed to produce the outcome that we wanted.

You mentioned loans for shares. Did we know what was going on?

I would say no. Loans for shares, of course, is the scheme by which the prominent oligarchs, who were then even prominent and this is 1994 and 1995--were given basically cut rate shares in the remaining--remaining non privatized state assets: coal factories, aluminum factories, metal foundries around the country.

They were essentially giving them a cut rate--prices--initially as collateral for loans to the government, which was badly in need of money. But, of course, a lot of us knew at the time that they would be allowed to keep them.

And in fact, that was an additional--additional jewels in the empires of some of these oligarchs. I can't recall very many--I can't recall frankly, any discussion in the Embassy about what loans for shares was and what it meant.

And I suspect that they were at the economic side of the house-- probably welcomed them as another way to raise revenue for the government and make sure that privatization, which after all was a measurable clear determinant of how the reforms were going, took place.

You could pull out a list, and the Embassy did. As of now, 75 thousands assets have been privatized, without asking what does privatization mean, what does privatization mean if the state still has a significant share in its ownership. What does privatization mean if, in fact, this asset was given to a friend of Yeltsin or a friend of Chubais or a banker who provided other financial services for the government.

Those questions were never answered. And I left the Embassy shortly after that process got under way. And I can remember in an interagency meeting someone--someone who--someone--a very senior Russian expert in the administration asking, well, Don, what's loans for shares. And this was after the process had been going on for a year.

But it was reported, at least some in the Russian press, and it was certainly recorded in the English language newspaper published in Moscow.

It was, but I can't comment on how much US officials read--not the Russian press--I expect they read it, but perhaps not--maybe not as extensively as they should.

The problem is that the policy was so fragmented. Economics was seen as economics. Politics was seen as politics. Assistance was seen as assistance.

And there were strong public and private constituencies in Washington that were pushing the policy in a certain way, which by this time, made it very difficult to change. It was a big ocean liner, to use the cliche, that--that you could not change very easily.

Because by then, four or five years into the Yeltsin era, we were very close to all these people. Our policy had been in many ways, according to President Clinton, the centerpiece of his foreign policy, our policy toward Russia. It was very hard to change in midstream, perhaps impossible to change in midstream. But these bad signs, which had started several years earlier, before loans for shares were increasing, were louder.

And, again, the corruption, lack of support for reforms, and so forth, were ignored. The argument was, and to some extent still is--if they only do the right thing, it will be okay. They were largely doing the right thing at this time, according to macroeconomic theory, if things weren't okay. And then as increasingly Yeltsin and the political center of gravity shifted even more away from what the US wanted, the argument became--well, if they only go back to doing the right thing, things will be okay.

One of your colleagues has told me that this group of so-called reformers, as time went on really knew how to play us. That they threatened the communists were going to come back or this is going to happen or that's going to happen.

Absolutely, they knew how to play us. However sincere they were or were not, I can't comment on that. They were younger, more appealing individually. They spoke English very frequently. They had the right degrees, the right economic fears. And knew very consciously how to project what they wanted to an American audience and get the Americans to go along.

You could meet a Treasury official if you were a Russian privatization official. You could talk turkey and you would understand each other. You could speak in English, you didn't have to speak in Russian.

And because of our belief that our policies would end up being for the good of the transformation of the countries we focused on those with whom we could do business, even even if they had been repudiated at the polls in 1993 and again in 1996.

And these Russian officials could very easily demonize the communist threat as they did in 1996, talk about the possibility of communism coming back and while that looked possible after the legislative elections in December of 1995, I don't think anybody really believed that if the Communist Party under Zhuganov came back six months later with the Russian Presidency under control they would go back to the Soviet Union. No one believed that even a President Zhuganov would turn the clock back a decade.

They would certainly pursue policies we didn't like, curtailing freedom of the press or whatever. But to be honest, honest, I'm not sure the policies that they would have practiced would be--would be all that different from what President--acting President Putin right now might--might support.

Tell me about your 1996 cable, the only cable that you ever had actually killed.

In many ways it's representative of the problems that we faced. My tour ended in August '95 and I was working on some Russia issues back in Washington.

And I did a report based on my two years experience in the Embassy, on the oligarchs, who they were, what they were, where they came from and their criminal activities and criminal ties. By this time it had been clear that many of these oligarchs really were not real businessmen as the Treasury department or the US economic establishment thought they were. These were people who had traded on Communist Party connections for businesses, for their early wealth. It gave them a kick start to go forward and continue to profit by their close proximity to the government and practice of activities which in the United States might land them in a federal penitentiary.

So, I wrote this report. It was not really well received and never finally approved in the department. So, I had to go back to the Embassy to help out on the Clinton--President Clinton's summit in the spring of 96.

I used that time to refresh my contacts, to update the whole thing and to talk about these issues even in more detail. The result was a very long--for an Embassy cable--ten or fifteen pages--talked about the oligarchs.

It was really the first time we had put it together in a coherent way, naming names and kind of thing and it caused an explosion of resistance in the Embassy, especially from the Treasury representative at the time and other people as well.

How do you know this? You guys emphasized--you're not balanced, you emphasized the--the negative and not the good. And, in fact, this was to the--to the Russia press, to Russian policy experts almost common knowledge. Because the existence of the oligarchs and this close relationship of political power and money was something not only had we talked about for two or three years before that, but many Russians had talked about it as well.

They refused to clear it. The was a hellacious argument about whether they should clear it or not. Made more difficult because President Clinton was about to arrive at Sheremyetevo airport that afternoon.

... It was never cleared as far as I know. It still is around some places in Washington in somebody's drawer I was told. Because during the Bank of New York scandal last summer, people used it as an example of, well, yes, you were told about this corruption in the spring of '96, as well as in many Embassy cables before then. And it was never published, because of internal dissent about-what we would be reporting out of here.

We know them, we know who they are. And the cable still has never been cleared, but at least as of that date I can say I'm more or less on record behind the scenes about the Embassy's concerns about this. And, again, I have the support of my colleagues in the political section, but it was never sent back to Washington in any form.

I don't understand why reporting that there's corruption and that there's this group that has risen that come to be called the oligarchs--why that conflicted with US policy.

Because it was bad news. And we were intent on making our policies work. And if corruption was shown to exist in any significant degree, that was criticism of the policy.

Because we had argued for a number of years that these policies were for the good of Russia. And that if you now say that the government's completely corrupt, that it's linked directly or indirectly with organized crime--they're essentially saying that the policy the US government has followed for the past few years was wrong. And by then the ocean liner was impossible to turn around.

On a personal note, I would note that careers are made on making sure the policy works and promoted making sure the policy works. And what you've seen in the State department in the past decade really has been a mass exodus of I think people who not only knew the Soviet Union, but knew Russia.

And there aren't a lot of experts left there who could talk about what's going on in the country. Because what's rewarded is supporting the policy and it was very clear what the policy was. It was very clear who we supported. And criticism of those people or those policies was not appreciated.

Talk about some other turning points for Russia during the Yeltsin era.

The August 1898 economic collapse is a turning point. It's important for Russia because it was a definitive discrediting of the policies that Yeltsin largely pursued, although there was considerable zig-zag at the end. And it was the discrediting of the US's role as a guide for where Russia should belong.

Since then the US has given mixed messages, has pulled back in that we talk about focus on security issues, we talk about loose nukes, we talk about ratifying the arms control treaty. We talk about the fact that we're more secure now than we were a decade ago. I think that's a questionable assertion. I think we didn't worry about rotted, decaying nuclear arsenals being dangerous. We didn't talk about nuclear proliferation ten years ago. And I think that's largely a consequence of some of the misguided policies we followed.

The other thing you see is still an insistence on the initial faith in our approach to economic and democratic reforms--it still remains.

And, finally, we've heard cliches--we need strategy patience according to Deputy Secretary Talbot as if, again, implicitly at the end of the day it will turn out to be a free market democratic society along the lines that we want.

Well, that may be true. That may not be true. And certainly it's too early to tell. And there's no guarantee that strategic patience will gain us anything more than the mess in Russia we now have or an authoritarian regime and/or a thriving western oriented democracy.

So, strategy patience is likely to get us nothing if we don't understand or try to understand better what's going on here and have a relationship with Russia that is nether too intrusive nor too isolating of it to cause harm.

And what price has Russia paid, or more specifically, have the Russian people paid for the failure of these reforms, this policy?

Well, I think they pay a lot of prices. The statistics about the decline of social and demographic indicators, life expectancy, alcoholism, maternal deaths during birth--all those things show very little signs of strategic change after a decade of these policies.

Most Russians, if you ask the favorite question of Ronald Reagan, 'are you better of now than you were eight years ago?' would say no. So that the normal day to day things you need to live to make--to support your family, to make money, those are all not as high as they were, not as good as they were a decade ago.

Second, there's been a discrediting of the idea of democracy and free market reforms. You see it not only in take on the street and the mainstream press, you see it in elections. While it's a country that for some reason still gives 20 percent to the Communist Party, the so-called democracy as a goal for Russia society is not at all a view shared by most people.

They want a distinctive Russian way, whatever that is. And to be honest, most Russians are not sure, or disagree, about the distinctive Russian path of reform, what it should be. So, that's a cost, that we've discredited, at least for--for now the idea of democratic reforms.

And, third, I think it's no coincidence that the popular view of the United States has declined steadily since the early 1990's. I think it's no coincidence that the strong Russian reaction to Kosovo, to NATO expansion and the ferocious prosecution of the second war in Chechnya, is a response to among other things, including the loss of international stature, a West that they see has hectored them, has lectured them, has pursued policies which many now see were intentionally designed to emasculate the Russian state.

Of course, that's not true. And no matter how you fault US policy at any point along the line that we've talked--at no point was there ever any intentional attempt to destroy the Russian state.

The fact that many in the West seem so reluctant to rethink what they did is very alarming and disturbing and I think augers not well for restoring some kind of a stable--not cordial--but at least cooperative business relationships on issues of mutual concern.

How much of what has gone wrong in the last decade can be laid at the feet of U.S. policy?

That's very hard in the Russian context. I guess I agree with secretary Albright's cliche that the future of Russia is ultimately for Russians to decide. I think, however, there's no question that we were a factor in making it more difficult and making the lives of ordinary Russians more traumatic.

I think there's no question that's the fact. How much, I can't say. Ultimately it is their own problem and ultimately they've had a leadership that has been not very good at addressing its needs. But certainly we have been a factor, often by ignorance rather than intent--usually never by intent, often by ignorance.

How did you react when you heard President Clinton calling Vladimir Putin a reformer and a guy we can deal with?

I think we don't know who Putin is very well. We don't know what his program is. We don't know the forces that are going on around him--that affect not only his policies whatever they might be--and, so far, they've been contradictory.

But also his ability to govern the country--because one thing we've learned over the past decade is that you can't just propose interesting and good things. You have to implement that and that requires a governing and that requires institutions and it requires a sense of where power lies in the country and the ability to form coalitions to implement policies.

Putin has yet to show what he wants clearly and yet to show how he's going to implement change in the country. I certainly don't think it's going to be a KGB style resort to decrees and orders. He's going to have to grow in the office. But when you see a US administration making judgments about him based on personal qualities or hopefulness--it's not only naive, it shows that we have not learned very much about the past decade.

Once you define US national interests as linked to an individual or a certain outcome in a country that's so incredibly complex that virtually no one can really understand it, then I think you show a very minimal understanding of your own interests and the difference between tactics and strategy. And that was what was so disturbing about Secretary Albright's comments recently after the three hour meeting--that he was a leading reformerm I think she said.

And that was what was disturbing about President Clinton's comment that he could do business with him. We don't know. We hope so, but that doesn't mean that it should be declared without any further evidence.

Russians who care about democracy, who care about freedom of speech, press, etc, they are afraid that an era's ending. They're worried about Putin. Not about his positions on economic reform, but his positions on everything over the last decade.

Well, if you go back to a comment I made earlier in our discussion, there's to some extent a contradiction in Russia right now between decision reforms and some kind of desirable economic outcome. Because you have to really use force to some extent that comes at the expense of building process and the rule of law. You can get a better balance that we've had, but they are to some extent contradictory.

I think the indications are clearly-- preliminary indications--that Putin would be more interested in a free market outcome than in protecting the freedom of the press, freedom of speech. We don't know for sure.

But I think that clearly if picked, he would have picked the first over the second. And I think that makes those fears very justified and raises a lot of questions about what the future course of Russia will be under a Putin administration. It's no coincidence that the last three Russian prime ministers were all products of the security services.

... That says a lot about where Russians, not only elite, but the average Russians--what they think the country needs and where they think it's going. And for those of us who harbor hopes and have long harbored hopes that Russia will be a functioning democracy as well as a free market economy-- that is alarming.