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Larry King, Host: Good evening, and welcome to this special edition of LARRY KING LIVE. It's our honor to have as our special guest for the full hour here in New York at the Millennium Summit at the United Nations — we're at our studios — Vladimir Putin.

Vladimir Putin is, of course, president of Russia. There's lots of things to talk about tonight. We thank him for coming, and welcome to the United States.

What about this job so far, if anything, has surprised you?

President Vladimir Putin (through translator): I'd say I was much surprised prior to my presidency, since for a while I fulfilled the duties of the head of the Russian government. And in that capacity, I had to deal very frequently with the functions of the president himself. So nothing was exceptionally new. But the volume of my job has certainly increased.

King: Are you enjoying it?

Putin (through translator): Partially, yes.

King: Let's get to the part that may not have been enjoyable. What can — what happened? You tell me. What happened with the submarine?

Putin (through translator): It sank.

King: But why? What caused it? What happened? What do we know?

Putin (through translator): Unfortunately, today we cannot say much about the reasons of this tragedy. However, it's clear that the result of this tragedy were certain explosions. But we don't know what triggered those explosions.

All the rest, you know. There was a large hole in the pressure hull around one and a half meters to two meters, and now we know for sure that in result of that powerful blast for 75 or 80 percent of the crew died within 90 seconds since the submarine was at so-called periscope depth at the moment, which implies that all the crew were at battalion stations in the first two or three water-tight compartments. And they were destroyed within 90 seconds after the blast. What happened next, you also know.

King: Mr President, it has been said all over the world, why didn't you ask for the help of other countries right away?

Putin (through translator): This is not a difficult question. I can recall the chronology of events those tragic days. On the 12th of July 23, p.m., the communication was broken, and immediately the search started.

And the usual procedure is seven days for a rescue operation, but it was detected within four and a half hours. It was not clear what was going on at the time. But the navy had the necessary rescue operation means, which were provided for by the engineers and the designers of such type of submarine. Together with the submarine, they designed these rescue operations tools, and they were at the possession of the navy.

And the sailors were thinking about using those means and did so at the time when it became apparent that something was going wrong, something failed. Later on, it turned out that the area of that docking pad was broken, making it difficult for the rescue submarines to dock. The issue of foreign assistance was raised and on the 15th of July, for the first time, an official proposal was tabled concerning foreign assistance. It was proposed by the military attache of the United Kingdom. It was immediately accepted. But that's not really the matter here.

What matters here, immediately after accepting the proposals of foreign rescue operation, people needed six days to open the hatch. And if we now count those days and nights, even had our sailors on their own incentive addressed them earlier, 13th, 14th, 15th, 17th would have already passed — at least five days.

There would have been no chance anyway.

King: In retrospect, Mr. President, is there anything you would have done differently knowing what you know now?

Putin (through translator): No. The only thing which I would have changed in my conduct as head of state, would have been to halt my working meetings, to suspend everything I was doing at the place of my vacation. I could go back to Moscow, to the capital. But again, it would have been a PR activity, since in any city of the country or all over the world, I'm always linked to the military. I have communications means that allow me to discuss any problems on the table. Therefore, from the point of view of PR that could look better. Maybe yes, it would look better. But what matters here subsequently became clear that this situation was used for certain attacks on Russia, the pose of the presidency, which is in itself bad and dangerous for this stage.

Therefore, perhaps it was necessary to do it differently here. There were some suggestions and recommendations made to do something different. To go to the ground, to go down on this rescue submarine to the submarine itself. You are smiling yourself, but that's true…

King: I don't think security would have let you do that.

Putin (through translator): In such situation, I would not ask permission from security. Security serves me, not me serving them.

But not because of security, I wouldn't do that. But at the ground, you know, each second counts. Minutes, days, it's all important. Professionals should do their job, and politics should not be engaged in scoring points here because of the tragedy.

As regard to the security, I participated in the trainings. I was at the submarines. I spent a night with sailors at the bottom of the ocean. Therefore, it has nothing to do with security. I am commander-in-chief, and it's my duty to be together with the military.

King: In concluding on the submarine, will we some day know fully what happened, do you think?

Putin (through translator): We'll do our best. We'll seek to do it. It's important not only because of the need to understand what really happened to our sailors, but also to avert such tragedies in the future.

This has not been the first incident of this kind in Russia. This was the fourth nuclear engine submarine which perished. We'll do whatever it takes to recover the bodies and to raise the submarine and to figure it out. We are aware that similar tragedies are known to the United States. They lost their two submarines.

King: Does it give you concern, this incident, about the entire military machine of your country?

Putin (through translator): It sure does.

It raises questions as to what we need to look into the status of our armed forces. Like I said, it was not the first incident of a kind. Such incidents happened both in the Soviet Union and the United States.

Now as regards the reasons as to why it happened, coming back to that issue, I might say that since 1967, we have a whole set, a whole number of 19 collisions of our submarines with other underwater objects. Therefore, nothing extraordinary has happened in that regard.

The question is, however, like I said, to analyze it thoroughly is an imperative. And maybe jointly, with our partners, to work out a more efficient rule of conduct at the high seas so that we would be able to join our scientific and research potential and rescue operations experience when it is needed beyond the territorial waters. Sailors find themselves there in a hostile environment , and it can be only dealt with jointly.

King: Did you discuss that with President Clinton, the possibility of jointly looking at submarines and underwater activities?

Putin (through translator): We sure did. Usually, President Clinton and I discuss a broad range of issues, and I'm very thankful to him that he responded quickly to this tragedy, expressed his condolences, proposed his assistance in our very first conversation on the phone, which testifies to the fact that this issue will be on our constant agenda in future.

King: Concerning that, you know Vice President Gore, do you not?

Putin (through translator): I have met him only once, and it was in passing when he visited in St. Petersburg a few years ago. So it was a very quick contact.

King: Do you have a great interest in the American presidential race?

Putin (through translator): Naturally. First and foremost, I take interest of what's going on in my own country, but the United States is one of the major partners we have, one of the most important partners. And therefore, we are very much interested in what's going to happen with respect to the next presidency in this country.

King: Do you favor any of the candidates?

Putin (through translator): I think the American people should express their preferences, and we'll accept their choice.

King: Would you like to meet with both candidates?

Putin (through translator): I'm ready to do so but wouldn't like to interfere in this very acute pre-election campaign. One needs to exercise caution. We don't want to cause any detriment or tension in our interstate relations.

We are ready to work with all candidates, especially so that in both candidates' programs a position vis-a-vis Russia has been laid out which is quite satisfactory to us.

King: All right. Do you like then the positions of both Governor Bush and Vice President Gore as it relates to Russia?

Putin (through translator): Basically, what we've seen in their pre-election documents gives us a sense of optimism. We would like to see that everything positive which has been accumulated over the years of President Clinton's presidency, he would be able pas on to his successor, whoever it might be.

King: There is a lot of talk today in the United States about this businessman, Edmund Pope. I believe you talked to President Clinton about him. He is detained in Russia on espionage charges, there's a lot of movement here to try to get him to come back. There are stories that you want to make a trade. What's the story on Mr. Pope?

Putin (through translator): Indeed our security services believe that he was involved in illegal activities, an investigation has been carried out, now according to the criminal code, he has been provided with all the necessary documentation to get acquainted with. Currently he is reading those documents.

President Clinton has expressed his concern with respect to the situation with American citizens. We are not hiding anything. I have talked about it to my American colleagues in detail. But, in our country, like elsewhere the legal process should be finalized and then, depending on the situation and certainly in the spirit of good relationships between our two countries, we'll see we can do.

And we'll take into account the relevant decision to be taken by the court. Ultimately, it's only the court who, in a democratic state, could decide whether the man is guilty or not.

King: Do we gather from that, that should you find Mr. Pope did do some things you might want to exchange him for Mr. Ames who's in a prison here for selling spies to you, so we put an end to spying?

Putin (through translator): I wouldn't like to trade these things, this is not my job to bargain. But I think that experts will decide on what needs to be done.

King: Is — you were a spy — I mean, you wanted to be a spy, you were up in the KGB, is spying among friendly nations still warranted?

Putin (through translator): Intelligence is not running around in the drainage, underground cellars of Moscow or New York. This is an information gathering work. Therefore, intelligence people are very close by their duties to the staff in mass media. They pursue the same goals to gather information, to synthesize it and to present it for the consumption of the decision makers, who could use that information while deciding on things. If the government is active in foreign policies, then such a tool can be efficient. If it's well organized and workable, therefore intelligence could be a good support in deciding and settling international problems.

King: Did you enjoy your career at the KGB?

Putin (through translator): Well, you know, it was an interesting job. It allowed largely to increase my vision, to get certain skills, skills of dealing with people, with information, which was referred to earlier. It taught me to choose what is the priority and what is less important. That was useful in this regard.

King: I know that you are trying to stop the United States from getting in to more anti-missile defence systems and the like. Why should it matter to you, if another country builds a system that's just defensive? As long as one country doesn't attack another country, what's the difference if we spend 80 billion on defence systems? Why care?

Putin (through translator): Are you prepared to listen to my monologue.

King: As long as it's not 20 minutes, yes. Why should you care about our defence system?

Putin (through translator): Well, when our countries agreed on limitations of ABM systems, that was not an accident. When we deploy on our own territories ABM systems, we put together certain facilities which are hard to penetrate for the strikes from outside. If we cover the entire territory by such systems, or try to do so, then according to our experts today, this is a mission impossible.

But let's imagine it would take place. That could create on one side an impression — an illusion – that they could without being punished in international affairs whenever they like deal a blow, decide on attack. That would disrupt the balance of strategical interests and forces, which in my opinion is extremely dangerous.

When discussing with our American colleagues on this matter, I've always been tempted to remind them of the beginning of the arms race — nuclear arms race. I always recall the fact that initially nuclear arms emerged — were created — in the United States. And subsequently, some scientists who invented those arms, in part at least, the secret concerning the A-bomb, on their own will transferred those secrets to the Soviet Union.

Why did they do that? I always ask my American colleagues: ”Can you invent something of the kind?“

No, we cannot come up with anything like this.

Neither can I, but your scientists could do that. They were smarter than you and I. But voluntarily they transferred those secrets to the Soviet Union because they wanted to restore the balance. And thanks to that balance the humankind has survived without major conflicts, large-scale wars, for about since 1945.

If we disrupt that balance, then we'll put the whole world to this real great danger, which doesn't serve the interests either of Russia or other countries.

In my impression, that's the most important thing, and why we seek to retain that balance; why we object to the deployment of the national ABM system is because of that.

King: Do you think the United States might go ahead with it?

Putin (through translator): This is a choice to be made by the United States itself. We've been pursuing a dialogue on this matter. We have different approaches. To a certain extent, we agree, coming closer and we hope we'll be able to find a mutually acceptable solution.

The most acceptable solution, in my opinion, would be to preserve the balance of interests as we know it today and jointly to try and avert all these dangers, which can surface later on versus all of our countries. That would be a step in the right direction.

King: Freedom of the press. Lots of the talk in the United States about worries over this in Russia. We have a jailing of Vladimir Gusinsky, Boris — I want to pronounce this right — Berezovsky, is the media mogul who has been asked to transfer his own holdings to the state. Are you looking to stop opposition?

Putin (through translator): Opposition? On who's side? On the side of those who are interested in retaining the situation, which is, I believe very dangerous and detrimental to Russia today. This is about rule of law, implementation of the existing legislation.

Wherever I go, I try to meet with the business community. In the U.K., I've just visited Tokyo. Wherever I go, the first question asked by the business community, it's one and the only question, they ask (and I agree, it is the most important question) whether there will be time in Russia, they ask, when law will be abided by?

Letting alone the fact that laws should be measurable to the demands of economy and democratic society, but the government should provide for their execution.

Now, the cases you have mentioned, have nothing to do with the freedom of press. In the first case, we're talking about so-called Most Holdings. And the owner of 70 percent, to the best of my knowledge is, incidentally, Mr Gusinsky. But this holding has been in red, with credits and debts, and has not returned, according to creditors, these debts. So they are disputing, primarily, between the creditors and the owners, concerning the activities of the holding.

And in the second case, again, there are no problems concerning the freedom of expression, since Mr Berezovsky and the structures under his control own around 49 percent of the leading TV program company, ORT; 51 percent is owned by the government.

Therefore, it has nothing to do with the freedom of expression, because of the fact that the owner of 51 percent, the government, by the charter, has already any right to define the policies of that company, completely. So, regarding the staffing and the policies there, 49 percent by the charter could in no way affect the policies of the company.

And the owners of those 49 percent could claim only profits, but there is none, since, you know, they work with loss. And we do not demand them transfer those 49 percent in the hands of the government.

King: A business question: But you're not out to stop a newspaper or a television station from saying, ”We don't like President Putin, we think he should go.“ You don't want to do that?

Putin (through translator): No problem, whatsoever.

No, no, you have mentioned the Most holdings owned Mr Gusinsky. They've been criticizing us all along. And we don't have any objections in our government. And they've been so critical to such an extent, like it doesn’t happen in the United States, I think.

The other thing, I think the duty of the government in this area is to guarantee to all the competitors on the market, fair share, fair equal taxation, technical conditions, and other rules of fairness. We have been doing so. There is no difference in our approach towards the private mass media and government press mass media, the same taxation policy is being used. The approaches taken by administrations are the same.

Therefore, I believe that when they are talking about the need to protect the freedom of expression, that's only a pretext to be able to cover their own commercial interests in some quarters.

King: Now, let us discuss Chechnya. Is this solvable? Will the troops stay? I know that you had great support when you started. The Russian people are now having their questions. What's the situation today?

Putin (through translator): Today the situation is fundamentally different. If I may, I will probably give you a history of the situation, how it started, all those most recent events. I will allow myself to remind you of the very start of those most recent events last year. Since 1996, Russia completely and fully fled Chechnya. Russia did not recognize de juro independence of Chechnya, but de facto they got full state independence. All the structures of governance of Russia were dismantled — police, the military, public prosecutor’s offices, courts — all the offices of administration were destroyed and the president was elected in the way that did not comply with the procedures of the Russian Federation.

What happened afterwards? You all know. They didn't get any independence and de facto the territory was occupied by foreign mercenaries and religious fundamentalist, fanatics from Afghanistan and other circles in the Arab East. This is a fact of life. They started firing squads working on the thoroughfares, beheading people, mass capture, hostage taking in the adjacent territories of the Russian Federation and inside Chechnya. Over this period they took hostage of over 200,000 people. That was a market of slave driving in the contemporary world in Chechnya.

And Russia, finding itself in a similar situation like America found itself in the wake of the Vietnam War, did not respond to it at the time, and naturally that promoted, in a way, those international terrorists who spread around — who had their cradle now in this area, their nest was set up there, and it resulted in the direct attack on Dagestan last year, armed attack direct attack, coupled with destruction of a shelter, property and death of people. And Russia had to react to protect its people and its territory.

King: And is still reacting.

Putin (through translator): No, the quality of this reaction has changed. When our armed forces entered Chechnya, our armed forces were met with a surprising good reception by the local populace. Over the years of Chechnya regime, we probably didn't pay attention to certain new phenomena. It turned out the foreign mercenaries who captured, in fact, certain spheres of authority in the territory of Chechnya, they didn't have unified governance, it was broken, with certain chieftains, those military commanders, governing certain segments of society.

So it turned out that they also threw from outside into Chechnya a new ideological platform, religious platform for conception in Chechnya, coming from Middle East, and they tried to impose on the local population the Sunni trend of Islam. And our people in the Caucasus are mainly Shiites, therefore that caused a certain revolt on the part of the population there with respect to those mercenaries, and that caused tension between the two.

So whence the federal forces stopped resistance of the organized troops there, subsequently increasingly actively, the political process was started with the local population, and today there are no large-scale military operations in progress, none.

King: No more suicide bombings? No? Do the Russian people support you?

Putin (through translator): Yes, absolutely so, they do support me. But this phase is over, like I said, and now we've started to look for a political solution and, now the former clergy, mufti, the clergy head is the leader in Chechnya. And the other thing, just two or three days ago we held elections for the deputy of Chechnya to the parliament of Russia. Both the results and the figure of the population who participated surprised me, over 69 percent of local population actively participated in this election campaign and elected their deputy to the Russian parliament.

King: We hear stories, terrible stories about the Russian economy, half of the people are living below poverty level, lots of corruption, mafia is everywhere. What's the health of the nation? What's the stability of the country?

Putin (through translator): Oh, Larry, this is small surprise to me, our country has been coming through a dramatic tectonic change, unprecedented internationally. Such experience does not exist elsewhere.

Transfer from the totalitarian regime and the military-oriented economy to democracy, to the marketplace methods of economy control one needs to define the place of the state, what laws we needed, to see to it that these laws are abided by, which had not been possible to do to the full extent.

Let's also not forget about the so-called ”ideological heritage.“ People were always taught about the Communist paradise, Communist — people beliefs were decayed and that was their life. And this has also been our past, resulting in an ideological vacuum, which affected the status of the state.

But, as of late, what we have seen in our country gives us promise that the future is looking good, and we'll cope with it, a solid foundation has already been laid in the market relations and the basis of the democratic society has been set up.

King: You are optimistic.

Putin (through translator): I certainly am.

King: In other word, big problems resulted from that drastic switch from one kind of government to another kind of government. This was to be expected?

Putin (through translator): Nobody expected there would be such changes and couldn't imagine what will be entailed here. But I would think that, right now, we can confidently state to the fact that the country is able to deal with it.

King: Mr. President, I like to touch some other bases, we have a few minutes remaining. You are a Judo expert – you know much about Judo. Tell us about your experience.

Putin (through translator): While I am fond of that sport, I have been involved in martial arts since my childhood, but I am not an expert, I am an amateur.

King: But you were on your team, weren't you? You performed martial arts, you were on your school squad?

Putin (through translator): Oh, yes I did. I mean, in St. Petersburg, Leningrad, as a kid, I was involved, I was member of the city team, and I got a black belt in the all-national competition and I was master of sports…

King: Do you practice?

Putin (through translator): … at the time.

King: Do you still work out?

Putin (through translator): Unfortunately, I don't have enough time to do it very frequently, but when I have time and space I take pleasure in doing it, yes.

King: A couple of other quick things. Are American businesses hesitant to invest in Russia because of corruption?

Putin (through translator): Well, I think they have reason to be hesitant here. In order to invest money, one needs to be confident that his investment will be productive, it will pay back, it will give profit easy enough; if not firmly confident, then it is better to refrain from investing money.

But it seems to me that those people are right who don't waste time waiting. We have developed a network of contacts with the U.S. community, and many American businesses are doing business successfully in Russia, many companies are already there. A lot needs to be done, if we are to make our cooperation with business partners more effective and our country become more attractive. We understand that and will work on it.

We have adopted new laws, taxation code, which we failed to do earlier. This is another result of essential consolidation of the society. Our parliament has become more solid, and it's to possible pass-through those laws which are necessary for effective work, effective investment.

We have introduced a unified 13-percent tax for all physical entities, which is not known all over the world as a system. Now we are working on liberalization, fighting with corruption in the customs services and move ahead.

I believe that the question which you have posed is very urgent. We understand the problems. We understand what needs to be done to make our country to become more attractive and we will follow through.

King: How is the health of President Yeltsin?

Putin (through translator): I met him quite recently one week ago before my visit to Tokyo. I must say that today he looks much better than when he did being a president.

King: There is much talk about Vladimir Putin and religious faith. I'm told that you wear a cross. Is that true? Are you religious? What are your feelings in this area?

Putin (through translator): I prefer — I would prefer not to develop on that subject in detail. I think such things are sacred for everybody. Everybody's belief is not to be shown off, it's inside a man's heart. As regards to wearing cross, earlier I never had it. Once my mother gave it to me when I visited Israel. I was there two times. First on an official invitation of the minister of foreign affairs of that country. The second time, I liked the country, and I traveled there with my family as a tourist. So my mother gave it to me to have a blessing there at the Tomb of Lord. I did so and now it's with me always.

Incidentally enough, there was a story about this cross and since then I have always decided to have it on my body. I have a summer house close to St. Petersburg, there was fire on this dacha, it happened because something went wrong with sauna.

I took off the cross before entering the sauna, and then with my friends we jumped out naked, since it was so unexpected. And I cherished that cross very much, it was my mother's cross, and the fire was really in earnest at the time. So I was thinking perhaps I wouldn’t get even remnants of it, it was an aluminum-made cross, a very simple thing.

I was surprised completely when one of the workers, just muddling through those ashes of the remnants, found that cross intact. And the house fell, that was a surprise, a revelation, and therefore I always now keep it with me.

King: Do you believe there is a higher power?

Putin (through translator): I believe in human beings. I believe in their good intentions. I believe in the fact that all of us have come to this would to do good things. And if we do so, and if we do so together, then success is awaiting for us. And both with regards to our relations as people to people, or inter-state relations. And most important, we will achieve the ultimate goal, comfort and joy in our own heart.

King: Thank you Mr President.

Putin (through translator): Thank you.

King: Vladimir Putin, President of Russia, thanks for joining us.