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This is a partial transcript of "Special Report With Brit Hume," May 9, 2005, that has been edited for clarity.

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(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, PRESIDENT OF RUSSIA (THROUGH TRANSLATOR): Democracy cannot be exported to some other place. This must be a product of internal domestic development in a society. But if the U.S. were to leave and abandon Iraq without establishing the grounds for a united country, that would definitely be a second mistake.

(END VIDEO CLIP)

BRIT HUME, HOST: That from "60 Minutes" last night, Vladimir Putin. The president meanwhile arrived in the former Soviet republic of Georgia tonight following V-Day observances in Moscow in which he and Soviet President Putin were outwardly very friendly, but against the backdrop of Putin sounding positively nostalgic for the age of Stalin and the heyday of the Soviet Empire.

So what is up here? For answers, we turn to Steven Sestanovich, a veteran diplomat and policy specialist on Russia and its neighbors who is now a professor at Columbia University.

Good evening. Welcome.

STEVEN SESTANOVICH, COLUMBIA UNIVERSITY PROFESSOR: Thanks.

HUME: How do you interpret — Putin has said a number of things lately. You heard him just there complaining about Iraq policy, which we knew he disagreed with. He also talked about the fall of the Soviet Union being a catastrophe, not merely a strategic retreat, but a catastrophe, as if it was a loss to the world.

He clearly is unhappy about the visit to Georgia. He didn't like the visits to the Baltics. He repeated the old idea that the Russian occupation of the Baltics was by invitation during the post-World War II era. What's going on?

SESTANOVICH: Well, Putin has got an anniversary on his hands, and he's trying to satisfy a lot of constituencies and look as though — this is an occasion that reminds people that Russia is a powerful force. If you ask Russian domestic analysts why he is evoking Stalin, they will say, "Oh, it's to appeal to the old folks."

I think it's clear there is a little bit of his own sentiment at work here, you know, the KGB alumnus who has kind of an appreciation of the way in which the old guy was able to establish order. There was even a little nostalgia in that car ride that he and Bush took.

HUME: It was a 1956 Volga?

SESTANOVICH: Well, strictly speaking, the Khrushchev era, of course. But the nostalgia for Soviet times is actually relatively strong in Russian politics.

HUME: Well, why? I mean, is it because things were less chaotic then or they all had bread, or things are hard now, or democracy is difficult? What?

SESTANOVICH: It's been a chaotic 15 years. And Putin has been able to present himself as the guy who is ending that chaos. You know, you didn't like the steady depreciation of the ruble, you didn't like the uncertainty of whether you would actually have a job, you didn't like uncertainty about whether Russia was a significant international force?

His program is, "I'm offering you a reversal of all of that." You didn't like Yeltsin because he was sort of old and out of it? "I'm a young, sober guy who can talk sternly to the president of the United States."

HUME: Is there a sense that the Russian people, having had the long history they have had, first under the czars and then under the Soviet commissars, never had much democracy, that they kind of have a taste for this sort of leadership?

SESTANOVICH: You know, one of my favorite Russian political analysts wrote a couple of days ago that the Putin regime is openly czarist. And he meant by that it, you know, invokes some real popularity and historical resonances.

You know, I think this is greatly exaggerated, as something that the people want, because Putin could change it. If he wanted to make it more democratic, it would be simply up to him. It's not just a matter of social trends.

But if you look at polls, press freedom and that sort of thing, they get now about 1 percent on the popular concern meter.

HUME: Because people don't care about that stuff?

SESTANOVICH: Yes, they care about what we would call pocketbook issues.

HUME: Sort of like us. I mean, one gets the impression that people in this country enjoy press freedom, and they'd probably speak up for it, but it's not probably uppermost on their minds.

SESTANOVICH: No, they care about it.

HUME: Let me ask you about the relationship between Putin and Bush. Despite the grumbling, and despite the acid comments in the "60 Minutes" interview and before that about the U.S. election being not so terribly democratic in his eyes and so on, the president was clearly the guest of honor in the way he was treated in the observances at Moscow.

SESTANOVICH: Right.

HUME: What about this relationship? Is this a good personal relationship that is more important or less important than the political disagreements?

SESTANOVICH: The president's calculation is obviously that, if they have a good relationship, he will have more leverage, influence, over Putin. What I think is becoming a little clearer is that the signals from all of this "bon ami" confuse people. I had a Polish journalist ask me, "How can we really believe that the president has been seriously conveying this message about democracy to Putin when they seem to be such good buddies?" Somehow, the public relationship has to capture a little bit of that message.

HUME: For what purpose?

SESTANOVICH: In order to convince the Russians and Putin personally that the president means it. Otherwise...

HUME: So you think the message he may take away from the fact that Mr. Bush is so personally friendly to him, despite what Bush says, despite the other visits, despite the speech over the weekend in Lithuania — it was Lithuania, correct?

SESTANOVICH: Latvia.

HUME: Latvia, excuse me. That's right. That that's all that matters, is that he didn't mean it?

SESTANOVICH: The big guys always deal with each other this way. You know, we've got this great personal relationship which enables us to solve problems. The question is, when you've got a tough issue that you think is really, really serious, how do you convince the other president to — that you mean it when you're still having these social dinners and having a great time?

HUME: But the people in the Baltics probably heard the president and took him at his word?

SESTANOVICH: They did.

HUME: And the people in Georgia doubtless will.

SESTANOVICH: They did.

HUME: So the people who may be getting the mixed message here are the people in Russia.

SESTANOVICH: And Putin himself, maybe.

HUME: And let me just ask one final question. Do you think that Putin's — just a few seconds left — statements about the good old days have any geopolitical consequence?

SESTANOVICH: They are a warning to Russia's neighbors. They put them on guard about what the purpose of Russian policy is. And I think that's entirely understandable. If you're thinking that the Soviet Union's collapse is a great catastrophe, watch out.

HUME: Steven Sestanovich, great stuff. Thank you.

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