Source: New York Times Contact: >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 >>