Open Letter to the President

One Hundred Fifth Congress

Congress of the United States

Committee on International Relations

House of Representatives

Washington, DC 20515

May 28, 1998

The President

The White House

Washington, D.C.

Dear Mr. President:

Press reports this week indicate that the government of the Russian Federation has inquired
with
the International Monetary Fund regarding the possibility of a new, low-interest loan to
supplement large loans it has earlier received from the IMF, including a $9.2 billion loan that is
still in the process of disbursement to that government. I am writing to share with you my very
strong concern over this reported request by the Russian Government.

As you know, I and other Members of Congress have been increasingly disappointed by the
conduct of Russian foreign policy. That concern stems from many negative aspects of that
foreign policy, including: Russia’s relationship with Iran, which involve nuclear and ballistic
missile technology and investments in Iran’s energy sector; the Russian Parliament’s unwillingness
to ratify the START-II nuclear arms reduction treaty; the Russian Ministry of Atomic Energy’s
continuing efforts to finance the construction of a nuclear reactor in Cuba; Russia’s efforts to gain
concessions — such as major revisions in the Treaty on Conventional Forces in Europe — from the
process of expansion of the NATO Alliance; the reported sale of advanced Russian arms and
military technology to China; Russian financial support for the authoritarian regime of Alexander
Lukashenko in Belarus; Russian efforts to “re-integrate” the newly-independent states of the
former Soviet Union; reports of covert Russian arms sales and military involvement in regional,
ethnic conflicts, particularly in the Caucus region, that have promoted instability in such regions;
the Russian manipulation of gas and oil exports from the newly independent states of Central
Asia, a manipulation that has brought financial pressure to bear on the governments of those
states by cutting off badly-needed hard currency earnings.

The most troublesome aspect of Russian foreign policy, however, is the repeated refrain on
the
part of high Russian officials, including Foreign Minister Yevgenii Primakov and President Boris
Yeltsin himself, that there should be a “multipolar world.” Under the cover of seeking such a
“multipolar world,” Russian foreign policy apparently seeks to challenge American leadership
around the world and dissipate America’s ability to organize international cooperation to address
pressing problems. This unconstructive approach to our bilateral relationship comes at a time
when the United States must lead the charge on tremendously serious problems involving
proliferation of weapons of mass destruction and the stabilization and prevention of conflicts
around the world.

Mr. President, much of Russia’s current fiscal difficulty arises from the inability or
unwillingness
of President Yeltsin to vigorously pursue badly-needed economic reforms over the last few years
and from Mr. Yeltsin’s willingness to grant large-scale tax breaks during his 1996 presidential
election campaign. The IMF cannot be expected to finance the Russian government to make up
for a lack of action and fiscal responsibility on the part of its own officials and legislators. The
reports that the recent auction of the large Russian oil firm “Rosneft” met with no bids may be a
clear indication of how private investors view this situation in Russia. The United States
Government should be equally cautious at this time to ensure that it is not placed at greater risk of
a Russian default on its official debt.

Mr. President, I strongly urge the United States withhold its support for any additional IMF
loans
to the government of the Russian Federation until the concerns I have outlined are addressed in a
manner that responds to the interests of the United States and its ability to organize effective
international responses to the threats to peace and stability around the world.

With best wishes,

Sincerely,

BENJAMIN A. GILMAN

Chairman

BAG/mg