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    Russia's Top Nuclear Energy Official Resigns

    By David Hoffman
    Washington Post Foreign Service
    Tuesday, March 3 1998; Page A12

    Viktor Mikhailov, who oversaw Russia's vast archipelago of civilian and military atomic-energy facilities and who aggressively sought to export Russian nuclear know-how abroad, has resigned, Russian officials said today.

    As minister of atomic energy, Mikhailov directed a far-flung, state-owned empire that included the two nuclear weapons design laboratories known as Arzamas-16 and Chelyabinsk-70. They sit in a web of once "closed" cities from the Soviet era that created, manufactured, preserved and disassembled nuclear warheads. In recent years, the closed cities, many of which are still off-limits to outsiders, have fallen on hard times economically.

    Information about his exit was sketchy. Interfax and Tass news agencies quoted officials as saying he submitted his resignation. A source outside the government, speaking anonymously, also said Mikhail had quit and said his departure appeared to be the result of a power struggle between Mikhailov and the two reformist first deputy prime ministers, Boris Nemtsov and Anatoly Chubais.

    The source said a fight had been brewing over financial issues for months between Mikhailov, 64, who sought independent sources of profit to finance his complex, and the ministers who wanted to rein him in.

    The source said there had recently been conflict over a plan by some of the closed cities to give big companies tax privileges if they register in the city. According to the newspaper Izvestia, the plan attracted some large overseas companies as well as Russia's Gazprom, the natural gas monopoly. The source said the reformers opposed the tax breaks.

    In the past, the nuclear weapons centers also have resorted to other methods to raise money, including loans from private banks. In October 1996, the director of the Chelyabinsk-70 weapons laboratory committed suicide at a time when debts to banks were mounting.

    Mikhailov told a news conference last week that 1997 "was the worst ever in terms of financing." His ministry received only 48 percent of what was budgeted from the Russian government, he said, and payment of wages was running six weeks behind. But Mikhailov said exports were lucrative, bringing the ministry $2.2 billion last year, including sales of uranium for nuclear reactor fuel.

    In Washington, Energy Secretary Federico Pen~a said his department's "strong working relationship" with Mikhailov's ministry had made possible "a strong record of cooperation on nuclear and energy issues" between Washington and Moscow.

    But other officials expressed surprise at the news of his departure because he had scheduled meetings in Washington next week in connection with the semiannual meeting of the joint commission headed by Vice President Gore and Russian Prime Minister Viktor Chernomyrdin. They speculated that Yeltsin had removed Mikhailov because of growing congressional suspicion about his plans for selling $4 billion worth of uranium that the United States is returning to Russian control as part of a deal in which Washington is buying bomb-grade uranium out of dismantled Soviet-era nuclear weapons.

    Staff writer Thomas W. Lippman in Washington contributed to this report.

    © Copyright 1997 The Washington Post Company

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