Source: New York Times 
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>http://www.nytimes.com/yr/mo/day/news/world/sorostroubles.html
>> 
>>           July 12, 1997
>> 
>>           Soros Pushes Democracy, but Autocrats Push Back
>> 
>> 
>>           By JUDITH MILLER
>> 
>>           [M] INSK, Belarus  For the past decade, George
>>               Soros, the Hungarianborn financier and
>>           philanthropist, has spent more than a billion
>>           dollars promoting a free press and political
>>           pluralism abroad  everything the world's
>>           authoritarian rulers despise.
>> 
>>           Now some of those political leaders are fighting
>>           back.
>> 
>>           In Albania, Kyrgyzstan, Serbia and Croatia,
>>           Soros' foundations have been accused of
>>           shielding spies and breaking currency laws. His
>>           employees have been assaulted and threatened
>>           with imprisonment or financial sanction for
>>           alleged crimes.
>> 
>>           Here in Belarus, Soros recently suspended
>>           operations after the government, headed by
>>           Aleksandr Lukashenko, the popular but autocratic
>>           42yearold president, fined a Soros foundation
>>           $3 million dollars for alleged tax violations
>>           and seized its bank account.
>> 
>>           While expressing a desire to resolve the crisis
>>           here and lessen tensions with other
>>           authoritarian governments, the man whose own
>>           fortune was made in highstakes business gambles
>>           is vowing not to back down.
>> 
>>           "We would like to continue working in Belarus,
>>           to do what we can wherever we can," Soros said
>>           in a recent interview in New York. "But we
>>           insist that all our foundations remain
>>           independent. We will not play by Mr.
>>           Lukashenko's rules."
>> 
>>           The growing pressure on Soros' philanthropic
>>           empire, which stretches from South Africa to
>>           Haiti and employs 1,300 people in 24 countries,
>>           with two regional offices in New York and
>>           Budapest, appears to have only stiffened his
>>           resolve.
>> 
>>           This year he opened five new offices in Central
>>           Asia  Mongolia, Tajikistan, Uzbekistan,
>>           Azerbaijan and Armenia  and one in Guatemala,
>>           his first in Latin America. And soon he is to
>>           open nine new foundations in southern Africa, he
>>           said, expanding the number of countries in which
>>           his foundations are active to 40.
>> 
>>           Moreover, given his growing personal fortune,
>>           which friends estimate at $5 billion, his
>>           efforts are likely to continue at current levels
>>           for at least a decade, and perhaps for two.
>> 
>>           While American foreign aid in the last decade
>>           has been cut in half in real terms, Soros, 66,
>>           recently signed a 20year lease on his new
>>           headquarters in New York.
>> 
>>           In Central Europe alone, he spent more than $123
>>           million between 1989 and 1994 trying to help
>>           democracy take root  roughly five times the
>>           sum spent by the U.S. government's chief
>>           democracypromoting foundation, the National
>>           Endowment for Democracy.
>> 
>>           Unlike U.S. government development aid, about 80
>>           percent of which is given to American
>>           contractors and consultants, most money Soros
>>           distributes is given quickly and with few
>>           strings to local groups and individuals, says
>>           Thomas Carothers, a former State Department
>>           lawyer at the Carnegie Endowment for
>>           International Peace, because local activists are
>>           less expensive and more efficent at spreading
>>           the democratic, freemarket mantra.
>> 
>>           Soros' philanthropy has its critics. Some say it
>>           is too impulsive and mercurial, too arrogant and
>>           micromanaged, too confined to friends on the
>>           left of center and not as open to public
>>           scrutiny.
>> 
>>           Others criticize his investment in countries to
>>           which he gives; Soros' defenders reply by citing
>>           strict rules within the foundations for avoiding
>>           conflicts of interest.
>> 
>>           Soros noted, for example, that his investment
>>           company sold its interest in Alliant
>>           Technologies, a French company, after learning
>>           that Alliant helped manufacture land mines, a
>>           direct conflict with his program to ban land
>>           mines.
>> 
>>           But Soros has permitted his foundation in Russia
>>           to own GTS, now the secondlargest
>>           telecommunications company in Russia, because
>>           the profits accrue to the foundation, not to him
>>           or to his investment funds.
>> 
>>           Some of those involved with his foundations
>>           wonder whether the financier is spreading
>>           himself too thin.
>> 
>>           "His Central European giving has been effective
>>           partly because of his personal involvement and
>>           familiarity with the region and its problems,"
>>           said a longtime associate, noting that Soros
>>           visits Eastern Europe about five times a year.
>>           "But can he possibly have the same passion for
>>           nine new African countries?"
>> 
>>           Soros himself acknowledges that he has had
>>           setbacks, including, for example, his
>>           foundations in Russia, which he was forced to
>>           restructure after discovering that employees
>>           were diverting foundation funds into Swiss bank
>>           accounts and using them to buy luxury cars.
>> 
>>           "I never have regrets," Soros said, "about
>>           having spent a lot of money trying to make
>>           things better."
>> 
>>           The current struggle in Belarus is shaping up as
>>           a test of Soros' staying power and a benchmark
>>           for him and perhaps for Central Europe.
>> 
>>           Serbia last year revoked his foundation's permit
>>           before finally restoring it under Western
>>           pressure. Croatia has put three Soros foundation
>>           employees on trial, charged with currency
>>           violations, a criminal offense.
>> 
>>           But no government has ever forced a Soros
>>           foundation to close permanently.
>> 
>>           "If Lukashenko can take Soros down, no one is
>>           safe," said Andrei Sannikov, Belarus' former
>>           deputy foreign minister, who quit his post last
>>           year. "Perhaps not even in Russia, where our
>>           president's rightwing allies in Moscow sit and
>>           wait for Boris Yeltsin to die and their
>>           nationalist moment to come."
>> 
>>           Standing up to the West by taking on a man as
>>           powerful as George Soros would enhance
>>           Lukashenko's standing among hardline
>>           nationalists, another diplomat said. "Kicking
>>           out Soros," he added, "is like shutting down
>>           General Motors."
>> 
>>           Soros' troubles in Belarus can be traced to the
>>           1994 elections, when Lukashenko, a former boss
>>           of a collective farm, won an overwhelming
>>           victory.
>> 
>>           While Belarus' previous government had stressed
>>           national identity and sought to free the country
>>           from Russian control, Lukashenko campaigned on a
>>           platform of reunifying Belarus with the Russian
>>           heartland and its fellow Slavs, while ending
>>           corruption.
>> 
>>           After taking office, he set out to restore at
>>           least the symbols of Russian rule, and appeared
>>           determined, one diplomat said, to make Belarus,
>>           a Kansassized nation of 10 million people, a
>>           "Soviet theme park."
>> 
>>           This year he and Yeltsin signed a "unity"
>>           agreement, though it was watered down at the
>>           last minute at the insistence of Yeltsin's
>>           liberal advisers, who dislike Lukashenko and
>>           fear his rightwing Russian friends. But
>>           Lukashenko lost no time in (literally)
>>           rehoisting the red flag.
>> 
>>           "We have McDonald's, but no freedom of
>>           assembly," said Sannikov, the former deputy
>>           foreign minister. "People have subsidence
>>           potatoes and vodka; the streets are clean and
>>           wellmaintained. Lukashenko doesn't kill
>>           massively because he doesn't have to. This is
>>           the new face of dictatorship in Europe."
>> 
>>           To express its displeasure, Washington has
>>           suspended some $40 million in aid. Europe, too,
>>           has frozen aid, as have the World Bank and the
>>           International Monetary Fund, all so far without
>>           visible political effect.
>> 
>>           A report in April from the Organization for
>>           Security and Cooperation in Europe accused
>>           Belarussians of "constructing a system of
>>           totalitarian government" and found a "clear
>>           pattern" that the government was using tax
>>           audits and fines to silence opposition.
>> 
>>           The report also criticized a referendum last
>>           November that allows the President to rule by
>>           decree, and permits random arrests of opposition
>>           leaders. The new definition of "order" was
>>           characterized as "a complete lack of public
>>           expression of any views not authorized by the
>>           authorities."
>> 
>>           It is no accident, diplomats say, that the first
>>           person expelled from Belarus was Peter G. Byrne,
>>           an American who directed the Belarus Soros
>>           Foundation, which finances about 80 percent of
>>           the country's tiny independent sector. (In
>>           Belarus there are 1,115 officially registered
>>           associations not controlled by the government,
>>           only a handful of which are politically active
>>           or foreign sponsored.)
>> 
>>           Lukashenko has set his tax collectors against
>>           virtually every major foreignsupported
>>           foundation, as well as the independent news
>>           media, arguing that they support the opposition.
>> 
>>           "Lukashenko's gone over the edge," said the Rev.
>>           Paul Moore, an American who heads Citihope
>>           International, a New York charity that has
>>           provided more than $5 million in medicine since
>>           1992 and which was recently told it must pay tax
>>           on its contributions. "As of now, we are out of
>>           business in Belarus."
>> 
>>           The Belarussian Soros Foundation made 5,000
>>           grants totaling just over $6 million last year.
>> 
>>           One of the largest went to the foundation's
>>           "Step by Step" education project, which enrolls
>>           1,000 Belarussians from kindergarten to high
>>           school. The program, which encourages children
>>           to think for themselves, had won the support of
>>           two education ministers and four deputy
>>           ministers since its inception four years ago.
>> 
>>           But problems abounded even before the government
>>           charged the foundation with tax fraud, said
>>           Irinia Lapitskaya, its director. Customs
>>           officers, for instance, kept a $5,000 wooden
>>           play house for Kindergarten No. 56 in Minsk in
>>           storage for more than a year until hefty duties
>>           were paid.
>> 
>>           Also in jeopardy is Soros' support for high
>>           school debates, Belarus' only law library, the
>>           "Transformation of the Humanities" project,
>>           which oversaw the selection and publication of
>>           53 new textbooks last year, and a $500,000
>>           program to link Belarus to the Internet, a
>>           mainstay of Soros' philanthropy.
>> 
>>           "The irony is we have connected state
>>           institutions to the Internet, but not yet the
>>           independent sector," said Igor Boskin, the
>>           foundation's technical director. "So from the
>>           government's standpoint, this is a perfect place
>>           to stop our work."
>> 
>>           Foreign Minister Ivan I. Antanovich insisted in
>>           an interview that Belarus was becoming more
>>           democratic, but slowly. He said Soros had been
>>           "let down by his staff," who he said were
>>           supporting opposition political groups. In
>>           addition, he contended, the foundation had been
>>           "extremely careless with financial matters," a
>>           charge for which he offered no evidence.
>> 
>>           "The foundation has not financed nor will it
>>           finance the opposition," Soros replied in the
>>           interview. "We insist on preserving our
>>           independence. We would like to stay in Belarus,
>>           but not at any price."
>> 
>>           If Soros regrets his decision to spend
>>           twothirds of his time and half of his annual
>>           income on promoting democracy abroad and a more
>>           tolerant society in the United States, there is
>>           no sign of it.
>> 
>>           He exudes the quiet confidence of a man who
>>           knows his access to almost any world leader,
>>           including President Clinton, is just a phone
>>           call away.
>> 
>>           In the interview, he said his philanthropy was
>>           still most heavily influenced by his former
>>           professor, Sir Karl Popper, a philosopher who
>>           wrote a reknown critique of Marx and Marxism.
>> 
>>           It was Popper's emphasis on addressing
>>           "unintended consequences" that led to some of
>>           Soros' most creative giving  the $127 million
>>           in grants he made between 1992 and 1996 to
>>           Russian scientists to discourage them from
>>           selling their nuclear knowhow to the highest
>>           bidder, for instance; or his $50 million gift in
>>           1992 to help alleviate the suffering of Bosnia's
>>           civilians.
>> 
>>           But he acknowledged that he was increasingly
>>           concerned about political developments in the
>>           Balkans and efforts by East European governments
>>           to centralize power.
>> 
>>           Soros is deeply disappointed in Washington's
>>           failure to seize what he saw as a "historic
>>           moment" created by the fall of communism. The
>>           West, he said, has failed to pour money and
>>           resources into bolstering the former communist
>>           nations' pluralistic, tolerant and independent
>>           forces  the forces that underpin Western
>>           democracies.
>> 
>>           At the same time, he said, he is encouraged by
>>           the "growing social cohesion" of the people of
>>           the former Soviet bloc.
>> 
>>           Yes, he had known failure, Soros said. "But I'm
>>           willing to have the failures to get the
>>           successes," he continued. "I was just naive in
>>           thinking that it was only a question of time
>>           before the U.S. government and the American
>>           people would feel the same."
>> 
>>              Copyright 1997 The New York Times Company
>>