Russian Republic Pays $50,000 Month for a Lobbyist in Washington

By MARCY GORDON
Associated Press , 29 May 1991

The Soviet Union’s biggest republic is paying a Washington lobbyist $$3 million a year to help
snag the Western aid it wants to reshape its economy.

Entrepreneur-attorney O. Roy Chalk is getting $$50,000 a month — a very high fee even by
Washington standards — in a two-year contract with the Russian Republic. His associates are
getting another $$200,000 per month, according to documents filed with the Justice Department.

It’s unusual for Russia, one of 15 republics within the Soviet Union, to have its own lobbyist.

“I have been keeping a low-key front, but behind the scenes I’m busy,” Chalk, 83, said in a
telephone interview Friday. He declined to elaborate on the arrangement.

“It’s all delicate subject matter,” said Chalk, the son of a Russian immigrant who made millions
in New York real estate and Caribbean airlines. “I’m dealing with very important people and don’t
want to step on their toes.”

One of those people is Ivan S. Silaev, the Russian Republic’s prime minister, who in December
signed the contract with Chalk in Moscow.

Another is Grigori A. Yavlinsky, an adviser to Russian Republic President Boris Yeltsin and an
architect of the highly touted “500-Day Plan” for rapidly converting the Soviet Union to a market
system.

Yavlinsky has been in the United States for the past week working on a new Soviet rescue plan
with a group of Harvard University economists, with the encouragement of Soviet President
Mikhail S. Gorbachev.

The group will visit Washington this week to present the Bush administration their “grand
bargain” — a plan to finance Soviet economic reform with massive Western aid.

Yavlinsky, 39, is a co-chairman, along with Chalk, of the Intra-National Privatization Fund Ltd.,
Chalk’s brainchild.

“It’s a beautiful plan,” said Aleksandr Tarasov, a first secretary at the Soviet Embassy. “We have
to promote it with all the resources we have.”

The plan calls for setting up two huge joint ventures between the Russian Republic and the
Soviet Union — a $$2 billion food-processing corporation and a $$3 billion industrial corporation,
according to documents obtained by The Associated Press.

The $$5 billion to set up the ventures would come from the Intra-National Privatization Fund,
which would be financed by aid from other governments.

“I am confident that the Intra-National Privatization Fund will receive full cooperation and
consideration from the U.S. government, various European governments and several Far Eastern
governments,” Chalk told Silaev in an April 25 letter.

The $$2 billion food corporation would work with “an American investing food corporation to
do the whole processing sequence, from purchase of raw grain to packaging and distribution for
sale,” he told the Russian prime minister in another letter.

Russia and the Soviet Union each would buy 42.5 percent of the food corporation’s stock,
paying for their shares with 10-year notes. The other 15 percent would be owned by Chalk’s
Intra-National Privatization Fund, which later would sell its interest to unnamed foreign investors.

Chalk told Silaev he had received “innumerable replies from major corporations worldwide …
(that) indicate an immediate desire to do business in Russia, providing all is quiet on all fronts.”

The food corporation would work closely “with various U.S. agribusiness companies
representing the agricultural leadership of the United States,” Chalk wrote.

“It would, if possible, initially purchase, in cooperation with the Commodity Credit Corp., $$2
billion in basic raw food products for delivery during the period 1991-92,” he wrote.

The Commodity Credit Corp., part of the Agriculture Department, guarantees food loans by the
U.S. government to foreign nations. Any defaults are losses to U.S. taxpayers.

On May 15, the Senate passed a resolution urging President Bush to grant $$1.5 billion in new
grain credits for the Soviet Union.

“There is a real danger of public disorder caused by shortages of available food in some areas of
the Soviet Union if such credits are not provided expeditiously,” the resolution stated.

An Agriculture Department official recently told Congress there is a question whether Moscow
can keep up payments on $$1.5 billion in loans on top of the $$1 billion in agricultural loans the
United States guaranteed in December.

Bush, however, is likely to grant the new credits, Senate Republican Leader Bob Dole has said.