Memorandum of Conversation Gates-Kryuchkov KGB Headquarters Moscow 3 00 p m - 5 15 p m February 9 1990 Kryuchkov received Gates in his office in the New KGB Building After exchanging greetings Gates informed Kryuchkov that he had just left the meeting between Gorbachev and Secretary Baker which was still underway after more than three hours Gates said that Gorbachev had been explaining what had taken place during the just concluded Central Committee plenum joking that the latter had been so eventful that it would take all day for Gorbachev to finish … Kryuchkov said of course perestroyka is encountering problems and that had been reflected in the debates at the plenum We should have planned for the changes to take place over a longer period of time he said because the hardest thing of all to change is the way people think It takes time especially to bring about substantial changes We had hoped to bring about large-scale change quickly but it was more than our people could take Change should be applied gradually like oxygen Too much too quickly could make one dizzy Nevertheless he continued there is no way back now We must push ahead We will make adjustments as we go making sure we remain in touch with the people checking their views and attitudes We had to do this so the leadership would not go one way the people the other Kryuchkov argued that Article Six of the constitution which gave the party the leading role in the society need not be eternal It had been inserted in the new constitution in 1977 but no longer corresponded to reality It should be either changed or omitted entirely Doing so would present no big problem Its presence had spoiled the party Party decisions were too easily turned into law The party was not then or now equivalent to society as a whole and neither was the Central Committee Since the article no longer corresponded to reality if it remained in force it could cause philosophical and practical problems As for establishment of a multi-party system he said many informal organizations already exist which function like parties Nevertheless a multi-party structure should be introduced gradually Standards and regulations should be established concerning registration minimum requirements for membership etc A monarchist party now exists which wants to restore a monarchy That obviously is not in keeping with the times and such a party is out of place Nevertheless all such groups have a right to exist There are some quite extreme groupings--anarchists for example Formal requirements should be put into place governing their activity They are not he continued like companies The U S had many companies--15 to 18 million he understood some of which lasted only a few days some for decades But parties should not be such temporary phenomena … For many years we should have been paying more attention to interethnic disputes But we had this idea that everything was developing without a problem We were wrong In regard to Eastern Europe we should let things take their own course give them a chance to develop normally But of course we could not forget the results and costs of the war Kryuchkov noted that that had been a brief outline of his thinking and his presentation He assumed that U S analysts would take a closer look at the latter and the results of the plenum … Gates said he would like to outline briefly for Kryuchkov three general problems he sees the USSR facing now The first concerns interethnic relations Gorbachev had inherited the problems of an Empire in this regard Many of the regions that now made up the USSR had not joined the Empire voluntarily but by force of arms Many now want independence and want it quickly The time needed to work out a form of voluntary federation thus might not be available Second political developments are outrunning economic developments in the society And the problem is that many of these economic problems need to be tackled at the same time Moreover many of these changes are such that they require painful adjustments by the people Thus this process of change is indeed difficult Third reform is weakening the old institutions before new institutions can be put in place The society's ability to implement necessary change is thereby also weakened Gates said one thing is difficult to understand however What has caused the recent sharp increase in crime especially large-scale organized crime There have even been reports of hijacking of trains Kryuchkov said that Gates' observations deserve serious study But they represent a view from the outside And for all of us our analysis is supplemented by our emotional reactions History has it uses Gates is correct when he says that not all of the regions had incorporated themselves voluntarily There are perhaps no parallels easily drawn between the U S and the USSR but the Civil War in the U S indicated that not all of the fifty states had agreed to their incorporation either History was history but it could not by itself be allowed to be a determining factor History could not be ignored but if it is put up front it just complicates our life New factors always arose In the case of the USSR over the past seventy years growing interdependence among the republics had increasingly tied them together especially economically The Baltic states for example got more from the rest of the Soviet Union than they gave Estonia got cotton oil energy grain forage non-ferrous metals and so on Of course it also contributed to the rest of the USSR but not as much The most dependent of all of the republics was Lithuania which was paradoxical for it is exactly there that the drive for independence is most developed But the interdependence of all of the republics is now very strong It had developed because of an intentional policy the result of a conscious effort by the center to develop the outer periphery of the country No republic can leave tomorrow without feeling this interconnection Interdependence painfully affects the Union Armenia now wants to shut down a plant that is polluting the area But the plant produces something on which seven hundred fifty other plants depend Nevertheless there is much in what Gates had to say Much effort has to be devoted toward developing a new federation as soon as possible Some areas want political independence with continuing economic interdependence Even that possibility cannot be rejected out of hand Concerning shortages in goods Kryuchkov said we in fact have increased the number of goods considerably in the past five years The problem is the enormous increase of money in people's hands plus our atrocious pricing system Wage and pension increases have contributed to the problem of the ruble overhang but the main culprit is conversion of very large amounts of what in the past had been non-liquid funds--columns of figures in accounting books--to cash In the old days if an enterprise had 50 million rubles 40 million would have been non-liquid Under the new system much more of it was available in cash So now we have hundreds of billions of rubles of bad money --money not backed up by goods--circulating in the system … Gates asked how Kryuchkov personally viewed prospects for reestablishing order putting the economy on the right track and resolving the interethnic problems Is he a pessimist or an optimist Kryuchkov replied that the German philosopher Berghoff had discussed the problem of pessimism and optimism in a treatise He had concluded that a pessimist lost nothing for if he was wrong he simply shrugged his shoulders and no one paid attention to him An optimist however staked everything on his bet and stood to lose it all Nevertheless Kryuchkov continued I am an optimist We have no choice but to change the system because other kinds of change in the USSR and around its borders make change in the system inevitable It was unfortunate that some of this change had come about only after loss of life But we should strengthen our laws to avoid such loss And we had to continue with politization of the people to create the need for enterprise among the people and to transfer power to individual enterprises and local councils in order to develop responsibility at those levels With increasing frequency this was now happening In a number of areas around the country local citizenry or local party members have risen up against inefficient or corrupt party organs and booted the rascals out That is encouraging and a sign that what we want to happen is happening … Gates asked if the Soviet Union would permit private property--the large scale ownership of land and equity Would peasants be able to pass land on to their children Kryuchkov said that cooperative land-holding is now possible and groups of 15-20 people in essence control the land they farmed But we wish to protect our people from exploitation in the Marxist sense when people could enrich themselves purely from the labor of others Your political systems in the West are more sophisticated In most countries there are two parties liberal and conservative After several years of moving toward the left under liberal democrats the conservatives were voted in to provide the people a rest A great system Thatcher had now been in power for what--thirteen years It was time for a change Kryuchkov said that the question of selling land is not yet decided There are two points of view--one for one opposed Peasants could not be given the land free of charge But if they were asked to pay for it they would reply that they should not pay for something they-- the people --already owned The new laws on land and on property would include provision for leases unlimited in time But people would be reluctant to leave the kolkhozes especially the more economically stable In Eastern Europe they would not dissolve the kolkhozes especially in Czechoslovakia and the GDR where there was an ideal proportion of collective and individually-owned land Gates said he would like to pursue that issue further but knew that Kryuchkov was busy and would like to move on to two other subjects First the German question Events are moving faster than anticipated We might see some GDR initiative after the 18 March elections Under these circumstances we support the Kohl-Genscher idea of a united Germany belonging to NATO but with no expansion of military presence to the GDR This would be in the context of continuing force reductions in Europe What did Kryuchkov think of the Kohl Genscher proposal under which a united Germany would be associated with NATO but in which NATO troops would move no further east than they now were It seems to us to be a sound proposal There are in any case only three options for a unified Germany either it would be a member of NATO neutral or a member of the Warsaw Pact Gates said that alignment with the Warsaw Pact clearly was not possible in terms of present realities A neutral Germany would suffer from the same insecurities and uncertainties regarding its security that Germany had experienced before World War I In an effort to assure its security it would be tempted to develop nuclear weapons and turn in different directions seeking reassurance A large economically powerful Germany just could not be neutral The third option membership in NATO would provide for a secure Germany integrated in Western Europe which the Soviet Union would have no reason to fear It would anchor Germany in a way that would leave it secure able to exercise a positive economic influence including in the East and without being a security problem for the USSR Kryuchkov replied that as Gates should know the events in the GDR concern the Soviet people The other countries are different But the USSR had paid a terrible price in World War II--20 million killed We can't exclude that a reborn united Germany might become a threat to Europe We would hate to see the US and USSR have to become allies again against a resurgent Germany Germany's technical possibilities and intellectual potential are well known It is difficult to predict what directions its military and technology might take That is no idle question for influential forces in the FRG do not wish to recognize the results of the War or to accept the post-World War II borders The Poles are also concerned We never said that Germany could never reunite--but the basis on which reunification took place was always important to us Trust between the US and USSR is growing true but that trust still had to be materialized The Soviet Union under present circumstances could have no enthusiasm about a united Germany in NATO We should look for other options You Great Britain and France would develop a common view and we in the Warsaw Pact would do so and we would discuss them We need not hurry so much Kohl and Genscher had interesting ideas--but even those points in their proposals with which we agree would have to have guarantees We learned from the Americans in arms control negotiations the importance of verification and we would have to be sure The U S had to participate in World War II even though it had been protected by oceans Now the oceans were meaningless An interdependent world would not allow any great power to escape involvement in a new war People here say that we have had peace for forty-five years because Germany is divided And of course Japan did not become a military superpower But the question of German unity is a very serious one and requires far-reaching frank exchanges of opinions between the US and USSR Gates said he had two points to make on professional matters First Kryuchkov would have noted that Vladimir Apinidze had returned to the USSR without any publicity Kryuchkov nodded assent Second could Kryuchkov frankly state what had happened to Major General Dimitry Polyakov Donald Kryuchkov replied that he had been shot in 1988 He added that Polyakov had told all We know everything and you know everything Gates said that Kryuchkov occupied an especially responsible position at this time of momentous happenings It was very important that our foreign ministers and heads of state met to discuss matters of mutual concern It was also important that he and Kryuchkov be able to discuss matters in this channel Gates said that if ever Kryuchkov believed that a special meeting was necessary that could be arranged through existing channels We preferred not to use the intelligence channel for political issues And of course we should not meet without the knowledge of our foreign ministers Kryuchkov nodded assent Kryuchkov thanked Gates for his observations which were useful whether or not one necessarily agreed with them all Though he was an optimist he continued that does not mean that he is not aware of the many problems the country faced There is a struggle underway between those who want change and those who do not Each side might have to make concessions A political climate is being formed in which on occasion certain actions might have to be taken The external reaction would be important It would be one thing to understand our actions perhaps even to support us It would be another to attempt to take advantage of our problems We heard nice words from you but if there were no corresponding action--for example development of good trade relations--your intentions would be interpreted differently We are not asking for material assistance for anything free Our resources are such that we do not need that Our increasing contacts with the U S had helped us increasingly to understand the U S and its foreign policy though we could not approve of Panama where you invaded a small country in order to try one possible criminal Noriega may be a very evil fellow but that was too much On the other hand we understand and support your struggle against narcotics trafficking Kryuchkov then handed Gates a list of names prepared by the KGB which he said were persons engaged in drug running operations in Europe and the U S They happened to be members of the Afghan opposition He added with a smile that it was a rare opportunity in which he could kill two birds with one stone--promote the struggle against drugs and show the U S the true face of its alleged friends He asked that Gates not reveal the source of this information How Gates used it was of course up to him If the U S did nothing more than end that supply channel that would be enough Gates said he would quickly respond to four points Kryuchkov had made First he noted that twice in the discussion Kryuchkov had made reference to the possibility that the U S would be tempted to take advantage of Soviet domestic troubles for its own ends He said he wished to repeat with all seriousness that the President did not want to cause problems for Gorbachev or perestroyka He supports perestroyka as something very much in our mutual interest Gates added with a smile that sometimes he thought Gorbachev regarded him as a bad influence in Washington Gates continued that that was not the case He supported the President's view on perestroyka fully Second as the President had made clear in Malta we are prepared to move ahead in some areas of trade He recalled the Presidents' comments on MFN the Stevenson amendment and a new Trade Agreement Third he also wanted to emphasize that the U S was aware of Soviet security concerns about a reunified Germany and understood that they must be treated seriously Fourth on Panama the U S had Treaty arrangements authorizing our presence and that in violation of those rights Americans had been harassed and even killed We had intervened to protect our citizens our Treaty rights and to remove an indicted drug dealer who had thwarted a free election The Panamanians received us as liberators Our troops would be out by the end of February … Source George H W Bush Library obtained through Mandatory Review request 2011-0841-MR by the National Security Archive