Boris Yeltsin's fatal folly.

• Author: Nathan, James A.

TWO GREAT FAILINGS stand behind Moscow's relentless suppression of Chechnya: greed and folly. The former is endemic to a new system of quasi-criminal economics that has arisen from the post-Soviet shambles; the latter is a strange inability, author Barbara Tuchman once observed, "to perceive that a given policy is harming rather than serving self-interest."

Greed is harder to document, especially in the murky world of contemporary Russia where the LUKoil company has emerged as one of the largest oil companies in the world and an uncounted player in Russia's national politics. LUKoil is critical to Moscow, providing cheap fuel for the military in exchange for deferred taxes, and ample provisions for relevant members of Russia's current power elite. Yuri Shafranik, Pres. Boris Yeltsin's fuel and energy minister, for instance, is but one of the current high-level officials with large stock holdings in LUKoil.

LUKoil's recent fixation is said in the oil business to be "the deal of the century": access to the oil fields of the Caspian Sea. However, the Caspian fields are controlled by a new republic, Azerbaijan. If Azeri oil were pumped across Russia through LUKoil-controlled pipes, a great piece of the European market might be claimed by the oil company. The Russian state also could reap substantial fees.

Washington, however has lobbied Azerbaijan for an alternative route across Georgia and Turkey. The latter, a NATO member with a history--in the Gulf War and, still, today--of turning off the tap at NATO's bidding, would control the Caspian pipeline.

The key to Caspian oil is to pump and carry it first. "Early oil" tends to establish its own distribution and servicing infrastructure. Once locked in, "early oil" is hard to re-route. The Russians should have a leg up since there already is a well-established pipeline passing through the North Caucuses by way of the Russian Federation's Chechnya province. There is no Russian advantage if the pipeline can not be secured, however, in the face of civil war.

In 1993 alone, one Chechen leader, Dzhokhar Dudayev, raided 559 trains, diverting some of the proceeds to a Chechen independence fund. Some said that Russian defense minister Pavel Grachev--"Pasha-Mercedes" to his enemies--particularly was offended that a rail route for narcotics seemed to be drying up. More telling an indication of Russia's real concerns was Moscow's first choice as the "legitimate" Chechen voice within the Russian...