SOURCE: The St. Petersburg Times
DATE: Issue #1070 (36), Tuesday, May 17, 2005
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TITLE: Protesters'
Leaders
Detained
PUBLISHER: Staff Writer
TEXT: MOSCOW - A noisy rally by supporters of Mikhail Khodorkovsky outside the court ended in a brawl Monday, with police detaining 28 people, including Yabloko deputy head Sergei Mitrokhin, and beat former chess champion Garry Kasparov with batons.
About 300 people - a mix of children, students, middle-aged adults and pensioners - rallied outside the Meschansky District Court at noon as judges inside started reading the verdict in the 11-month trial of Yukos founders Khodorkovsky and Platon Lebedev.
Some boarded buses and trams and rode down the street outside the courthouse, waving flags from the windows and drawing loud cheers from the crowd every time they passed by. Cars drove past honking in support.
The protesters chanted, "Down with the FSB authorities! Freedom for Khodorkovsky and bread and water for Putin!", "Putin is not Russia, we are!" and "Freedom! Freedom!"
A young man wearing a black leather jacket played hip-hop songs about Khodorkovsky on a tape recorder.
Police, who kept the crowd on a sidewalk across the street from the courthouse, ordered the protesters to disperse at 2 p.m., when the two hours sanctioned by city authorities for the rally expired. Many protesters stayed.
OMON riot police then arrived, and officers began to drag a few of the protesters toward police buses. Other protesters, chanting "Shame! Shame!", tried to free the detainees, and a scuffle broke out.
Twenty-eight protesters, including Mitrokhin, were detained, and they were to appear before a judge in the Basmanny District Court on Tuesday, Yabloko spokesman Sergei Kazakov said, Interfax reported. They face charges of disobeying police orders and violating a law on holding large rallies.
OMON officers also attempted to detain Kasparov, who heads the liberal Committee 2008 opposition group, and beat him with batons when he refused to go with them to a police bus.
"People were simply standing on the sidewalk, not hindering traffic or pedestrians," Kasparov told Ekho Moskvy radio later Monday. "The OMON were deployed against peaceful, unarmed people. People were pulled out of the crowd and beaten up. ...Those who organized this carnage must be arrested."
Shortly before the clash, Kasparov said the rally showed that public discontent was growing. "There is not yet the critical mass needed for an uprising like the one in Kiev, " Kasparov said. "But the people here today and the fact that the police are trying to round them up shows that the powers-that-be are afraid."
Several protesters at the rally heaped praise on Khodorkovsky and said he was a person to emulate.
"Khodorkovsky was jailed unjustly. It is a political case. My father told me so, and I think so, too," said Vladimir Bolotovsky, 12, who came from Voronezh with his father, a lawyer, to attend the rally.
"He is smart and talented and an example for me," he said, adding that he planned to study chemistry. Khodorkovsky earned a chemistry degree.
He was echoed by Yulia Bardina, a pensioner carrying a poster reading, "My grandson asks who to model his life on. I say: Khodorkovsky."
"He is smart, talented, honest and noble, courageous. He created a big company and gave jobs to thousands of people. He helped universities and schools, and there are many more things than we can count," Bardina said.
"He has done a lot for his country, too, and not like the other so-called oligarchs who think only of themselves," she said. "He could have done a lot more, but those [activities] were frowned upon, and he is now in jail."
But many people acknowledged that they doubted Khodorkovsky would be set free.
"I think that if he were to be let go, people would get the signal that in the same way as the Ukrainian Orange Revolution they can succeed if they fight - even in the face of a lot of resistance from the authorities. Therefore, he will not be allowed to go free," said Irina Khakamada, a former presidential candidate and leader of the liberal Our Choice party. She was wearing an orange scarf, which she called a scarf of resistance.
A small group of people, who gathered several dozen meters away for a rally of their own, felt much less compassion for Khodorkovsky. A woman wearing a badge with Yukos crossed out said he deserved to go to prison.
"I bought vouchers in a cement factory. Now they're not worth anything. That's because these people took everything and put it all in their pockets," said the woman, who only gave her name as Nadezhda.
"Look at [Roman] Abramovich. Look at how much he seized, and look at how much money he's throwing around," she said. "They haven't gone after him yet, but they will do."
Walking out of the court, Khodorkovsky's father, Boris, told supporters that his son had appreciated their cheering.
"He sat and smiled," the father said. "He's tired, or course."
Staff writer Catherine Belton contributed to this report.
TITLE: Verdict Looks Serious for Khodorkovsky
PUBLISHER: Staff Writer
TEXT: MOSCOW - A Moscow court began reading on Monday a verdict of several hundred pages in the state's case against Yukos founders Mikhail Khodorkovsky and Platon Lebedev, using language that left little doubt that the two men would be found guilty on fraud, embezzlement and tax evasion charges.
The defendants' lawyers said the reading of the verdict at the Meshchansky District Court would last at least two more days and refused to speculate on the possible severity of the sentences. Prosecutors have asked that Khodorkovsky and Lebedev be sentenced to 10 years each in prison.
"The sheer wording the judge's opening sentence - 'The court has established the guilt' - means there will be a guilty verdict," Lebedev's chief defense lawyer, Yevgeny Baru, said after the court was adjourned until Tuesday. But "the degree of their guilt, has yet to be spelled out."
Baru said the portion of the verdict read Monday indicates that Chief Judge Irina Kolesnikova is siding with prosecutors because her choice of words echoes language used by Prosecutor Dmitry Shokhin when he first presented his case and when he made his closing arguments.
All eyes are on the court as the 11-month trial wraps up. The arrest of Khodorkovsky in October 2003 and Lebedev three months earlier has rattled the business community, which feared prosecution on similar charges linked to controversial 1990s privatizations. The case is widely seen as a Kremlin-orchestrated attempt to punish Khodorkovsky for his political and business ambitions.
The mood in the heavily guarded courtroom was quiet and monotonous Monday, despite a noisy rally of Khodorkovsky supporters outside and the buzz of a small army of journalists - most of whom could not squeeze into the small courtroom.
Although by law judges and the courtroom audience must stand while the verdict is delivered, Judge Kolesnikova ordered the crowd to sit down soon after she began reading Monday afternoon because the verdict was so long.
The defendants' behavior differed little from previous days in court. Lebedev bent over a book of Japanese crossword puzzles, while Khodorkovsky scribbled in a notebook and then read a computer magazine. Both men signaled to their wives to take off their dark sunglasses, which they have worn during the trial.
Kolesnikova and the two other judges, both women, took turns reading out the verdict, ignoring the muffled blare of chanting protesters and passing cars honking in support.
Khodorkovsky, however, once smiled at his mother, Marina, and pointed in the direction of the noise.
But the chants of support did not change the fact that the court was largely agreeing with the prosecution's version of events, Khodorkovsky's father, Boris, said at he left the court. "They are reading and reading. I have the impression that this is the same as the prosecution's charges, just a little bit edited," he said.
Boris Khodorkovsky's pessimism was shared by several liberal politicians who joined the protesters outside the court building.
"We have no hope left that the verdict will be fair," said Garry Kasparov, the former chess champion and the co-chairman of the Committee 2008 democratic movement.
The day that the sentence is announced "will be a sad day in Russia's history," he said.
But Yevgeny Kiselyov, the editor of Moskovskiye Novosti, which is owned by a subsidiary of Khodorkovsky's Group Menatep, said the verdict will not serve the authorities no matter what it turns out to be.
"If the verdict is light - a suspended sentence or if they are convicted to only the time already spent in jail - then there will be a huge problem about how to deal with all those thousands of people ... who have spent at least two years working on this case as hard as they could," he said.
"How would you explain that to them? And, mind you, they are the pillars on which the state is resting," Kiselyov said.
A harsh verdict would not do the state much good either, he said. "There is life after 2008 and even after 2012," he said, referring to the next two presidential elections. "And if the verdict is very tough, the people behind it must realize that one day, somebody - I am not going to name names -will call for them to be held responsible for it."
The reading of the verdict was expected to continue at 10.30 a.m. Tuesday.
Staff writer Lyuba Pronina contributed to this report.
TITLE: City Intends to Return Churches to Owners
PUBLISHER: Staff Writer
TEXT: The St. Petersburg city government last week approved a bill that is intended to return to religious organizations their property that was nationalized after the Bolshevik Revolution in 1917.
Under the bill, religious buildings and those used for religious purposes, which are currently assigned to religious organizations for their permanent, rent-free use, will become the property of religious organizations.
The city owns 94 churches, synagogues, mosques and Buddhist temples and 29 other buildings that are used for religious purposes covered by the bill. The federal government owns 19 such buildings.
Governor Valentina Matviyenko said that the property will be returned to the religious organizations on request.
"This way we restore fairness and develop the legal basis for the return of the lands to religious confessions, which used to legally belong to them," Interfax quoted her saying.
Tatyana Prosvirina, spokeswoman for the city's property committee, said the new bill will be applicable to religious buildings of any confession in St. Petersburg. The religious buildings in question include not only churches but also other buildings such as prayer houses, bell houses, refectories, and so on, she added.
However, it is not clear yet when the new law will take effect, because it must first be considered by the city's Legislative Assembly, and no date to discuss it has been assigned yet.
Most of the property involved belongs to the Orthodox Church, but no spokesman was available on Monday.
A representative of Sea Cathedral of St. Nicholas the Miraclemaker, who didn't want to be identified, said City Hall's plan will be "very important for many churches," the former property of which belongs to the city.
St. Petersburg's Chief Rabbi, Menakhem Mendl Pevzner, said the bill is direly needed by all confessions.
"It's not only for historical fairness but also because of the modern needs of religious organizations, which need to develop and need more space for that," Pevzner said Monday.
The Jewish community wants several buildings returned.
One of those buildings is at 42 Ulitsa Dekabristov, which housed a Jewish school until 1937, but then was given to a city hospital, and later to an architectural bureau.
The synagogue wants to turn the building back into a Jewish school and to use it to house other Jewish public organizations, Pevzner said.
Another building is a former orphanage for Jewish children on Vasilevsky Island, which is now a residential home.
Pevzner said the bill serves the city's interests as well as religious organizations because the latter take care of youth and the elderly.
However, Olga Azikainen, secretary of Lutheran church of St. Maria, where Finns and Ingrians worship, said the bill will not help their church because it is federal property.
The problems of restoring religious property are vexed with all the changes that have taken place over the years during which other people and organizations occupied their premises.
Thus, the parish of St. Petersburg's Catholic St. Catherine's Church of Alexandria was very concerned this year when City Hall refused to return a building adjacent to the church on Nevsky Prospekt.
The church said it has a great need for the four-story building at 32-34 Nevsky Prospekt.
"We desperately need additional space to locate our Sunday school, library, hall for cultural meetings, room for charity activities, and space for a cultural inter-Christianity center," said Father Matchay, senior priest at the church, which is the biggest of five other city's catholic churches, in February.
"We also need more space to serve our pilgrims," he said.
Matchay said the building was erected by the Catholic Church in the 19th century, along with several other buildings surrounding it, which were part of a Catholic monastery.
After the Bolshevik Revolution the city's catholic parish lost all those buildings, including St. Catherine's church itself. Due to its location in the pre-revolutionary capital, it was considered Russian Catholics' mother church since the moment of its construction in 1783.
In 1992, the federal government returned St. Catherine's church, which covers 400 square meters, for lease.
Last August, Father Matchay wrote a letter to Matviyenko asking for the return of the neighboring building, which, according to him, houses several apartments, a fitness center, drivers' school, and offices. Some rooms were vacant.
The church didn't know if it could get the building as property or merely on a lease. Therefore it just asked for receiving the building back, he said.
However, in September the church received a reply signed by Vice Governor Yury Molchanov, which said that most of rooms in the building had already been bought by ZAO Preo Nezhiloi Fond.
Father Matchay said the church had addressed the city administration about the return of the building before, but nobody had asked them about their interest when the building was sold.
TITLE: Council of Europe: More Democracy Needed
PUBLISHER: The Associated Press
TEXT: WARSAW - European leaders hailed the progress of democracy on the continent's eastern edge as its top human rights body met Monday, but they held up Belarus and Moldova's breakaway Transdniester province as evidence that more needs to be done.
Opening a two-day summit of the 46-nation Council of Europe, Polish President Aleksander Kwasniewski insisted that "no one should be belittled, abandoned or forgotten."
Presidents Viktor Yushchenko of Ukraine and Mikhail Saakashvili of Georgia, Western-leaning leaders who came to power following protests in their former Soviet republics, heard Kwasniewski argue that western Europe must support "all of those who want to live in accordance with European standards and democratic values in whatever region of our continent."
"With the Orange Revolution in Ukraine and the Rose Revolution in Georgia in mind, we can rejoice in the continuous spread of European values," said Estonian President Arnold Ruutel.
Still, there was one notable absence - Poland's neighbor, Belarus, the only nation on the continent that does not adhere to the European Convention of Human Rights and is not a member of the council.
"We all feel a particular sense of empathy with the Belarussian people, who deserve far better than the authoritarian rule that they are now experiencing under the last dictator in Europe," said Latvian President Vaira Vike-Freiberga.
French Foreign Minister Michel Barnier urged President Alexander Lukashenko's government "to make the indispensable, demanding, concrete and necessary efforts to join the 46 states in this council."
Saakashvili, however, suggested that the onus was on Europe itself. "The world can do much, much more and Europe can do much, much more ... to aid the Belarusian people in their quest for freedom," he said.
Saakashvili, whose government is trying to pressure Moscow to speed up the withdrawal of Russian military bases, stressed his desire for a "constructive relationship with Russia."
In addition to Belarus, still an ally of Russia, he highlighted concern over breakaway Transdniester, a mostly Russian-speaking territory in eastern Moldova, where Russia retains troops.
President Traian Basescu of neighboring Romania described Transdniester as one of "a number of 'gray zones' that are threatening the security and stability of the European continent" - a problem, he argued, best tackled by promoting respect for human rights and democracy.
Foreign Minister Sergei Lavrov dismissed concerns over the strength of democracy in Russia itself. "Russia was, is and will be the largest European nation," he said. "Today, no one can have any doubts about Russia's attachment to democracy and European values."
TITLE: Prosecutor Decides To
Probe Papers After All
PUBLISHER: Staff Writer
TEXT: Under pressure from human rights advocates, the City Prosecutor's Office has decided to open a criminal case over anti-Semitic articles printed in newspapers Za Russkoe Delo and Rus Pravoslavnaya.
It had previously rejected opening a criminal case and had decided that a warning to the newspaper's editors was sufficient.
On May 4, City Prosecutor Sergei Zaitsev sent an official letter to the Federation Council saying that an additional examination of the publications would be made.
"I annul the decision made on April 22 because it was groundless and return the [investigation] materials for additional examination," Zaitsev wrote.
He told human rights advocates that his office is active in preventing and punishing crimes that are committed on grounds of national hatred. A special group of law enforcement officers has been formed to address the problem, Zaitsev said.
"The group's task is to monitor such crimes in the city, to coordinate the work of law enforcement bodies in their efforts to fight crimes committed on extremist grounds and to form a database of crimes that can be treated as committed on the grounds of national hatred," the prosecutor said.
The City Prosecutor's Office is investigating two criminal cases in relation to extremist publications in newspapers Nashe Otechesvo and Nash Narodny Nablyudatel, whose editors have both been charged with printing material inciting national hatred, the prosecutor said.
In repeated comments to The St. Petersburg Times, the editors of the newspapers keep denying the charges, saying all they have done is analyze historical materials.
The editors felt vindicated by a letter written by deputy city prosecutor Alexander Korsunov in April, which said the publications were not anti-Semitic.
"The articles contain guidelines on how Jewish people behave toward people of other nationalities, which is an attempt to look into this behavior and how it corresponds to the Criminal Code, to draw readers' attention to differences between various beliefs and their historical influence on the development of political situations in the world," Korsunov wrote in April.
Korsunov's letter contradicted an earlier conclusion made in March and signed by himself that said the newspapers should be prosecuted.
Human rights advocates remain skeptical about the motives of the city prosecutor's office and question if it is sincere when it says it wants to end extremism in the media.
"I have information that there are three groups of people working in the regional prosecutor's offices," Yury Vdovin, co-head of the city branch of human rights organization Citizens' Watch, said Friday in a telephone interview.
"One that believes they can use extremists to counter unrest if it suddenly appeared in the country," he said. "The second group shares their views and the third group just wants to hide the facts to make the situation to look better."
"That is why the prosecutor's office is changing its opinion from day to day," he said.
TITLE: Anti-Kremlin Youth Leader Detained
PUBLISHER: Staff Writer
TEXT: A leader of the anti-Kremlin political movement Iduschiye Bez Putina, or Walking Without Putin, was detained by the police on Saturday while he was trying to protest against a rally organized by Nashi, the pro-Kremlin youth organization, 30 members of which gathered on St. Petersburg's Mars Field.
Mikhail Obozov, head of Iduschiye Bez Putina was detained shortly after he set a T-shirt with a symbol of the Nashi movement alight, screaming "We won't let Nashism go through!" and "No to Nashism!"
"I regret now that I burned the T-shirt in the fire on Marsovo Pole, because by burning symbols of this organization I profaned the memory of these who died," Obozov said Monday in a telephone interview.
An eternal flame in Marsovo Pole is dedicated to victims of violence during the Bolshevik Revolution in 1917.
The police held Obozov for about three hours. He was charged administrative violations and told to attend court hearings scheduled to take place this week, Interfax reported Saturday.
Obozov said the police treated him well, except for one moment when he was prohibited to talk on his cell phone.
"When I took out my cell phone one of the policemen said that I'd better put it back into my pocket because if not, it would bounce off the police station walls," Obozov said.
More than 50,000 students, many of them brought from a dozen regions by bus and train, took part in the one-hour rally titled "Nash Pobedy," or "Our Victory" - a reference to the defeat of Nazi Germany 60 years ago in Moscow on Sunday. Patriotic music blared over loudspeakers lining the street, and Nashi leaders gave speeches paying tribute to World War II veterans, hundreds of whom were in attendance.
Nashi, or Us, is seen in some circles as part of a Kremlin bid to ensure a smooth transfer of power to President Vladimir Putin's successor in 2008.
Although Nashi only held its founding congress on April 15, it has already made a name for itself with its aggressive rhetoric against the stock bogeymen of nationalist politicians: oligarchs, liberals, fascists western governments.
TITLE: IN BRIEF
TEXT: Governor: I'm Staying
ST. PETERSBURG (SPT) - Governor Valentina Matviyenko dismissed speculations about her possible relocation to Moscow, Interfax reported.
Speaking to the agency in Beijing, shortly before she took the plane to Shanghai, where she was currently on an official visit over the weekend, Matviyenko branded the rumors groundless. "All this talk about me moving to Moscow is nothing but fictitious hearsay," Matviyenko was quoted as saying on Friday. "I'd recommend you never trust rumors."
On Saturday, in Shanghai, Matviyenko signed a contract with Chinese investors to build the Baltic Pearl in St. Petersburg.
Capella Boss Mistrust
ST. PETERSBURG (SPT) - Yevgeny Kolchin, director of the city's Cappella, received a no-confidence vote from his employees Friday, Interfax reported.
Cappella staff sent a petition to the City Hall asking that the Cappella's artistic director, Vladislav Chernushenko, replace Kolchin.
The petition accuses Kolchin of "destroying the property and the core of its financial system" and "ignoring the needs of musicians and technical personnel." The letter claims Kolchin sold the Cappella's land and some of its buildings to private investors.
Nikolai Burov, head of City Hall's culture committee, said a special commission is already investigating the matter.
"The Cappella can't be sold, and the nuances of selling the land will be scrutinized," Interfax quoted Burov as saying. Burov said the Cappella, which is undergoing a major renovation, will resume its concert season in the fall.
Enovy, Judge Robbed
ST. PETERSBURG (SPT) - A deputy consul at the Finnish Consulate-General and a judge from a court of appeal in Baltimore, Maryland, were robbed in town over the past weekend, Interfax reported.
The Finnish diplomat told the police he was robbed by a stranger on Suvorovsky Prospekt on Friday night. Threatening the consul, the assailant took his cash, credit card and documents.
The U.S. judge contacted the police on Sunday, after his wallet, complete with credit cards, customs declaration and all documents were stolen in the underground. The police are investigating both incidents.
Heating Season Ends
ST. PETERSBURG (SPT) - The "heating season" officially ended Monday, Interfax reported.
At 11 a.m., the city's heat electric generating station stopped providing heat energy to all heat-supply systems.
The hot water supply hasn't changed and is still provided on full scale.
The decision to end the heating season was taken on Friday by the City Hall's energy and maintenance committee, owing to stable high outside air temperatures.
TITLE: Unrest Spreads East
After Uzbek Killings
PUBLISHER: The Associated Press
TEXT: ANDIJAN, Uzbekistan - Unrest spread through eastern Uzbekistan after a crackdown by security forces left up to 500 dead in Andijan, with disturbances reaching three other towns - including one that reportedly left 200 dead.
The clashes in the region bordering Kyrgyzstan were the worst since Uzbekistan gained independence from the Soviet Union in 1991.
President Islam Karimov's government has denied opening fire on demonstrators as witnesses have claimed, instead blaming Islamic extremists for the violence. The authoritarian government has restricted access for reporters in the affected areas.
But if the reports of more than 700 deaths since Friday hold true, and if Uzbek forces were behind the killing - as most reports indicate - it would be some of the worst state-inspired bloodshed since the massacre of protesters in China's Tiananmen Square in 1989.
Saidjahon Zaynabitdinov, head of the local Appeal human rights advocacy group, said Monday that government troops had killed about 200 demonstrators on Saturday in Pakhtabad, about 20 miles northeast of Andijan. There was no independent confirmation of his claim.
That violence would have come a day after some 500 people reportedly were killed in Andijan - Uzbekistan's fourth-largest city - when government troops put down a prison uprising by alleged Islamic militants and citizens protesting dire economic conditions.
Andijan remained tense on Monday after gunfire continued throughout the night. Residents said government troops were fighting militants in an outlying district, but the claim could not be confirmed.
Alexei Volosevich, an Andijan correspondent for the Fergana.ru Web site, said witnesses told him that militants fired at police from apartment buildings near the prison and that police eventually killed the assailants. There was no word about police casualties.
Troops and armored personnel carriers formed a tight circle around the city center, where the local administration building - at the center of Friday's violence - was on fire late Sunday.
Men were digging what appeared to be a large common grave at a local cemetery under the watch of Uzbek security service agents.
"The people now are more afraid of government troops than of any so-called militants," Zaynabitdinov told Associated Press Television News.
In a separate clash Sunday in the border town of Teshiktosh, eight soldiers and three civilians were killed and hundreds of Uzbeks fled into neighboring Kyrgyzstan, witnesses said.
In another border community, Korasuv, an estimated 5,000 people went on a rampage on Saturday and forced authorities to restore a bridge across a river that marks the border with Kyrgyzstan.
The violence puts the United States in a difficult position because it relies on Karimov's government for an air base in the country and anti-terrorism support.
So far U.S. authorities have only called on both sides to work out their differences peacefully.
Associated Press reporters Bagila Bukharbayeva and Burt Herman contributed to this report from eastern Uzbekistan.
TITLE: City Has Plan to Revive Oranienbaum
PUBLISHER: Staff Writer
TEXT: City authorities are developing a grandiose $21 million plan to revive the Oranienbaum former royal estate at Lomonosov, about 30 kilometers west of St. Petersburg.
The Oranienbaum palace complex, which contains the Menshikov Palace, the Chinese Palace, Peter III's palace and the Katalnaya Gorka building, is set to undergo a renaissance after years of neglect.
This year, City Hall has promised to spend 170 million rubles ($6 million) on the restoration of the magnificent Rococo monuments of Oranienbaum. The work on the entire complex is scheduled to be complete by the end of 2006, said Vera Dementyeva, head of the City Hall's committee for the protection of architectural monuments (KGIOP).
Oranienbaum's genuine jewel is the marvelous, but crumbling 1710 Menshikov Palace.
Despite its status as a world cultural monument within UNESCO's world cultural heritage list, the palace has in the past received little attention from the authorities, with barely any promotion or funding at all. Taken over by Soviet military forces during the war, the palace was, until 1983, a closed defense center and thus inaccessible to visitors.
During World War II, all of St. Petersburg former imperial palaces, except Oranienbaum, were occupied by the German army. Ironically, it was Oranienburg that suffered most from neglect during the Soviet and post-Soviet years.
Because it was untouched by Nazi hands, the palace has also missed out on restoration funds reserved for palaces that were almost completely destroyed during the war.
The plan for Oranienbaum envisages museums and commercial structures sharing the same territory.
Irina Voinova, the project's architect, said the concept is for the palace complex to be turned into a leisure park featuring a greenhouse, several hiking routes, renovated architectural monuments, a stables, a zoo, cafes, restaurants and new small hotels.
"A thorough concept of a recreation park has been developed," Interfax quoted Voinova as saying. "No aspect was ignored, be it landscape design, road infrastructure, new excursions, public toilets, signposts or places to eat."
Vadim Znamenov, the director of Peterhof, warned against excessive commercialization of the estate.
"Oranienbaum is such a delicate, charming structure, such a great monument with an interesting history that one shouldn't treat it roughly," Interfax quoted Znamenov as saying.
Experts say Oranienbaum's particular plight is high humidity and absence of an appropriate system of disposing of rainfall on the buildings. Without renovation, the precious monuments have been rotting from within.
"The interiors suffered the most but, the buildings themselves are in a very alarming state," Dementyeva said.
In the meantime, a helping hand has been offered from abroad.
In March, the British-based World Monuments Fund offered to pay for restoration work in the Chinese Palace, which is listed among the 100 world's most endangered sites of the World Monuments Watch, a global program launched in 1995. The program draws attention to imperiled cultural heritage sites around the world, and directs timely financial support to their preservation. But owing to bureaucratic procrastination and some shortcomings in the fund's proposal, it hasn't been able to proceed.
Earlier this spring, Mikhail Shvydkoi, head of the Russian federal agency for culture and cinematography, recommended that Oranienbaum be reclassified from being a regional monument to a federally funded national monument.
Urging that the application be fast-tracked, Shvydkoi said that more funding would become available for the palace complex under federal protection.
TITLE: U.S. Senate Panel Traces Iraq Oil Money to Russia
PUBLISHER: The Associated Press
TEXT: WASHINGTON - Former top officials from Saddam Hussein's government told U.S. congressional investigators they provided millions of dollars worth of oil allocations as a form of pay-off to Russian leaders in hopes of ending UN sanctions against Iraq, a congressional panel said.
Hussein's vice president, Taha Yasin Ramadan, told investigators that the allocations were "compensation for support," the Senate Homeland Security and Governmental Affairs investigations subcommittee said in a report being released Monday.
The investigators said their interviews and documents from the former Iraqi government added to evidence in previous investigations linking Russian officials to abuses in the UN oil-for-food program. Among the officials who have been implicated are Alexander Voloshin, former chief of staff to President Vladimir Putin, and ultranationalist Liberal Democratic Party leader Vladimir Zhirinovsky.
The Russian Foreign Ministry declined to comment on the report, saying it would be "unethical to make any statements" until a UN-appointed commission investigating the oil-for-food program releases its third and likely final report this summer. Mikhail Troyansky, deputy chief of Foreign Ministry's information department, said Russia had been cooperating with that investigation, led by former U.S. Federal Reserve Chairman Paul Volcker.
The congressional panel's findings deal with allocations given to Zhirinovsky, Voloshin and Sergei Isakov, an aide to Voloshin. Committee staff said they interviewed 16 top former Iraqi officials, but identified only two: Ramadan and Tariq Aziz, the former deputy prime minister.
The report said the "Russian Presidential Council" led by Voloshin received allocations worth more than $16 million, according to Iraq's Oil Ministry.
The committee said Zhirinovsky received allocations worth $8.7 million.
TITLE: Security Forces Kill Suspected
Militants in Apartment House
PUBLISHER: The Associated Press
TEXT: ROSTOV-ON-DON, Russia - Security forces and police killed six suspected militants, including two female suicide bombers, who had holed up in an apartment in southern Russia, officials said Sunday.
The four men and two women killed in the operation beginning Saturday in Cherkessk were subordinate to the Chechen warlord Shamil Basayev and another alleged rebel, Achimez Gochiyayev, said Anna Lyzina, a Federal Security Service spokeswoman in Cherkessk, a city in Russia's southern Caucasus region.
Gochiyayev was implicated in the series of 1999 apartment-house explosions in Moscow and other cities that became one of the Kremlin's arguments for launching a new war in Chechnya.
Meanwhile, Russian forces in Chechnya killed four rebels, including a man believed to be the republic's former separatist vice president Vakha Arsanov.
The four rebels were killed in a village outside the capital Grozny after Interior Ministry forces surrounded a house and demanded that fighters surrender, the Itar-Tass news agency reported, citing Chechen Deputy Interior Minister Sultan Satuyev.
The report quoted him as saying that Arsanov's body was identified by local residents who knew him well. However, other news reports suggested the bodies were badly disfigured by fire that broke out in the house.
A spokesman for the Interior Ministry, Ruslan Atzayev, said that the identity of those killed could be confirmed only after examination by experts.
In Cherkessk, police and paramilitary troops have moved forcefully against suspected extremists in several cities of the region, which includes Chechnya.
Citing an unnamed law enforcement source in Cherkessk, the Interfax news agency reported that one of the females killed was born in 1988, meaning she could not have been older than 17.
Both had been reported missing by their parents, according to the report, which cited other unnamed sources who claimed they had undergone terrorist training in Chechnya.
TITLE: Latvia 'No Land Sought'
PUBLISHER: The Associated Press
TEXT: RIGA, Latvia - Latvia will not seek to reclaim any of the land redistributed to Russia during the Soviet occupation and will not seek compensation for it, Latvian Foreign Minister Artis Pabriks said Friday.
Pabriks said individuals could seek compensation for losses incurred during the nearly five-decade-long Soviet occupation of the country but "that is up to them."
Russia pulled back from agreeing to sign a long-awaited border treaty with Latvia in May, after the Latvian parliament last month issued a declaration that Russia felt made territorial claims.
Pabriks said the declaration was necessary because without it, the border treaty would need to be approved in a referendum.
Pabriks also said the government did not support another declaration Thursday by the parliament that called for a commission to tally up the Soviet-era losses in Latvia and for the state to press charges for restitution.
TITLE: Depositors Still Left in the Cold When Banks Fail
PUBLISHER: Staff Writer
TEXT: MOSCOW - Few personify the country's turbulent banking history as well as Nikolai Plotnikov, a 74-year-old retired physics teacher who joined a crowd of angry protesters in front of the Central Bank on Thursday morning.
Leaning on his cane as a light drizzle pattered down on a crowd of 50 people, Plotnikov recounted how he lost his savings in three successive bank crises, starting with the 1992 devaluation of the ruble, then in the 1998 default - and finally in the Sodbiznesbank affair last year.
"We live in a state of theft," he said.
One year after the Central Bank recalled the license of Sodbiznesbank, the banking "mini-crisis" is still not over for the bank's 6,000 former customers who are waiting for their deposits to be refunded in full. Thousands more who held savings in a half-dozen other failed banks are in a similar situation.
Although only a fraction of the capital's residents lost money during the summer crisis, those who did have fought an uphill battle for restitution.
Private clients with Sodbiznesbank have recovered just 60 percent of their money, while those with Dialog-Optim, another bank that lost its license, saw just 26 percent, according to representatives of depositors.
Some saved for their children's education; others dreamed of moving into bigger apartments. At least nine Sodbiznesbank depositors have died in the past 12 months without collecting their money.
Meanwhile, corporate depositors - mostly small businesses with just a few employees each - have not seen a kopek.
The Central Bank recalled the bank's license on May 12, 2004, accusing it of padding its books with fictitious capital and processing ransom cash. The recall sparked a standoff with the bank's management, which blocked access to its offices on Krasnaya Presnya for two weeks.
Banking experts suspect that in that time, the bank managed to spirit away several billion rubles in assets - an amount that would easily have covered the 2.23 billion rubles of deposits the bank held.
The revocation of other licenses soon followed. Within a month, banks started cutting each other's credit lines, newspapers published "black lists" of impending recalls and panicked depositors pumped ATM machines dry.
The government rushed to prevent further escalation by cutting reserve requirements - thus giving banks more cash - and by promising that all depositors would get back their cash.
Although the crisis fizzled out fast, depositors have sill not been fully reimbursed.
The Central Bank "should have secured the bank's assets first instead of shouting from the rooftops and grandstanding," said Roman Konikov, 82, a feisty World War II veteran who joined the demonstration outside the Central Bank, hoping to recover 60,000 rubles ($2,200) still unpaid.
Many experts agree with Konikov, but the Central Bank has said it never expected Sodbiznesbank's management would "enter the realm of criminality."
The authorities now say they are reimbursing depositors as fast as they can cash in on Sodbiznesbank assets, like its accounts at other banks.
But since most assets have been whisked away, the money is coming in a trickle. The last payment, in March, amounted to just 7 percent of deposits.
"When we raise any cash, we try to pass it right on to depositors," said Natalia Batayeva, who represents the Central Bank-appointed liquidator.
The liquidator could ask the courts to find the bank bankrupt. But for a court to declare a bank bankrupt, the liquidator needs evidence that the assets cannot be raised. "We are collecting such evidence," said Batayeva.
According to a special law rushed through the State Duma during the crisis, the Central Bank is responsible for reimbursing up to 100,000 rubles ($3,500) per account to depositors of banks whose licenses were recalled and then went bust. That is cold comfort to some 40 percent of private Sodbiznesbank clients who each had over 300,000 rubles on their accounts, said Dmitry Slinko, who co-heads a group of former Sodbiznesbank depositors.
Even Sodbiznesbank's bankruptcy would not necessarily put a cap on the restitution process.
Dialog-Optim was declared bankrupt in September, but its 8,500 private and corporate depositors are still waiting for some 3.3 billion rubles, according to Marina Prozorova, who represents them.
"The whole process is quite non-transparent: [The Central Bank] doesn't tell us anything, and we have no way of knowing what kind of assets the bank has left," she said.
Corporate depositors, who are next in line after individual clients for reimbursement, "don't stand a chance," said Slinko.
Depositors and banking experts alike are puzzled why Sodbiznesbank has not gone bust. "The size of the default is quite enough to declare that bank bankrupt," said Vyacheslav Khorovsky, a banking consultant at Lovells law firm. "Their best proof is the crowds of angry depositors."
Thursday's meeting in front of the Central Bank resembled a wake more than a demonstration.
The mostly elderly depositors shivered under the rain and strained to hear the faint loudspeaker.
Valentina Tizhevskaya, a 69-year-old retired professor, said she had hoped to spare her family expenses for her funeral but was still owed 8,000 rubles.
Yelena Bakina's daughter graduated from high school the same month as Sodbiznesbank went into receivership. Bakina, 38, saw the savings for her daughter's education vanish. "I found myself having to gather money from friends and getting into a lot of debt," she said.
People like Bakina are likely to transfer their cash to foreign or state-backed banks - or take them out of the system altogether.
After swelling by a third in 2002 and again in 2003, the growth of deposits slowed down in 2004. Private deposits amount to just 11 percent of GDP in Russia, just a quarter of the number in countries like Poland or the Czech Republic.
According to Central Bank numbers, Russians might have squirreled away between $25 billion and $50 billion in so-called "mattress" cash, with another $200 billion stashed abroad.
Last year, the Duma finally passed a mandatory deposit insurance bill, which guarantees savings up to 100,000 rubles per account.
Officials suggested that depositors would be able to insure unlimited savings by "spreading" their money among various accounts.
Polls, however, have shown that many people have not even heard of the insurance scheme. For depositor Plotnikov, it is too little, too late.
He claimed he had lost roughly $40,000 in today's money when in 1992 the government liberalized prices and froze Sberbank accounts, sparking inflation that wiped out most people's savings.
Plotnikov has since received just 1,000 rubles - and the Finance Ministry estimates the government still owes its citizens some 11 trillion rubles ($400 billion) from the 1992 devaluation.
Plotnikov said he then became a victim of the SBS-Agro default in 1998, before transferring his cash to Sodbiznesbank.
"I'm convinced it's not a matter of simple mistakes - they really are out to get us," he said.
TITLE: Deputies Say Adamov Could Spark Revolt
PUBLISHER: Staff Writer
TEXT: MOSCOW - Two LDPR deputies on Thursday pressed for former Nuclear Power Minister Yevgeny Adamov be sent back to Russia and darkly warned that if the United States succeeds in extraditing him from Switzerland on fraud and money-laundering charges, the Kremlin could face a popular uprising.
Sergei Abeltsev, a State Duma deputy in Vladimir Zhirinovsky's ultranationalist Liberal Democratic Party, told a plenary session of the Duma that Adamov posed a national security risk because he might hand over state nuclear secrets in exchange for leniency.
"The Orange Revolution in Kiev began after [former Ukrainian Prime Minister Pavlo] Lazarenko handed over all of Ukraine's state secrets to the Americans," Abeltsev said in remarks shown on NTV television. U.S. authorities charged Lazarenko with fraud and money-laundering in 1999, and he is now being tried by a San Francisco court.
"For this reason, I suggest appealing to the Russian Prosecutor General's Office and other competent agencies to take immediate and decisive actions to return Adamov to Russia," he said.
"If this is impossible," he added, "then assign special services to liquidate the nuclear scientist-businessman."
Foreign Minister Sergei Lavrov told the Duma that efforts were being made to secure Adamov's return, but he declined to elaborate.
Adamov, 65, was detained this month in Bern on a U.S. arrest warrant. He and and an associate, Mark Kaushansky, are accused of diverting some $9 million in U.S. funds meant to improve safety at Russian nuclear facilities. Adamov served as nuclear power minister from 1998 to 2001, when he was dismissed amid accusations that he had received kickbacks through his U.S. companies.
LDPR Deputy Alexei Mitrofanov told the Duma that an appeal to prosecutors was needed because Adamov was one of a few people familiar with top-secret information, including Russia's construction of a nuclear reactor in Iran.
After a long pause, Duma Speaker Boris Gryzlov said, "We'll discuss it."
Prosecutor Ksenia Chernikova declined to comment. "Until such an appeal has been approved [by the Duma], it's pointless to fantasize," she said.
Meanwhile, Adamov's lawyer, Timofei Grindev, said his client might change his mind and agree to a quick extradition to the United States but only after consulting with a U.S. lawyer who was due to arrive in Bern by the end of last week, Nezavisimaya Gazeta reported Thursday.
TITLE: Suspects Can Now Be Put On Trial Twice for 1 Crime
PUBLISHER: Staff Writer
TEXT: MOSCOW - The Constitutional Court has opened the door to suspects being tried twice for the same crime, even after an acquittal, by issuing a ruling that brings the law into line with Western norms but could allow authorities to muzzle opposition and rights activists.
The Constitutional Court on Wednesday struck down Article 405 of the Criminal Procedural Code, which banned courts from reconsidering cases if the review might lead to stricter verdicts.
The court's ruling means that a prosecutor or crime victim who believes a lower court's decision was too lenient will be able to appeal to a panel of judges in top regional courts or the Supreme Court to order a review.
If the review finds that the lower court made "tangible and fundamental" violations of the law by handing down a light sentence or an acquittal, the lower court will have to reconsider the case, the Constitutional Court said.
The court said it made its ruling in response to 60 complaints over the past two years in which people said courts broke the law by giving very light sentences to murderers. In one of the complaints, a woman from the Chita region, Galina Dneprovskaya, said a local court handed a one-year suspended prison sentence to a man convicted of killing her son.
The country's human rights ombudsman, Vladimir Lukin, had asked the Constitutional Court to rule in favor of the complainants, saying the change would bring the law into line with the European Convention for the Protection of Human Rights and Fundamental Freedoms, his office said.
Protocol No. 7 of the convention says a person may be tried again for an offense for which he has been acquitted or convicted "if there has been a fundamental defect in the previous proceedings which could affect the outcome of the case."
Yevgeny Baru, a lawyer representing jailed oil magnate Platon Lebedev, said the ruling was fair because it would give victims a chance to seek justice if they suspect corruption in local courts. "The rights of plaintiffs cannot and must not be ignored," he said.
Alexander Podrabinek, a human rights advocate, said the ruling could help restore justice in cases where a judge was bribed to be lenient. Judges can unfairly reduce a sentence to a defendant by applying a different article of the Criminal Code, for example, ruling that a murder was in self-defense, he said.
Podrabinek added, however, that the state could also use the ruling to endlessly prosecute whistle-blowers and opposition and human rights activists through Kremlin-friendly judicial system. "The state, of course, will receive a backup mechanism for repressions," he said. "In this sense, the ruling may worsen the human rights situation."
Staff Writer Valeria Korchagina contributed to this report.
TITLE: Chinese Investors Will Bring $12Bln to the City
PUBLISHER: The St. Petersburg Times
TEXT: Chinese investments into St. Petersburg may top $12 billion by 2020, Governor Valntina Matviyenko, said Monday at a news conference.
Besides the $1.2 billion Baltic Pearl project, the investment agreement that the governor signed Saturday with the Shanghai government, the investment initiatives may include financing for techno-park construction ranging from $3 billion to $4.5 billion, Matviyenko said.
"We are discussing other ways for the possibility of expanding the Chinese presence on the city market," she said, cited by Kommersant.
Details for future projects will be discussed during the second Russian-Chinese economic forum to take place in the city in the beginning of June, she said.
As for Baltic Pearl, the first foundation stone of the 200-hectare development will be laid in the Krasnoselsky district June 9, Matviyenko said as reported by Interfax.
"The project will be a Chinese business card in Russia as well as in Europe. In return the city will recieve a huge developed district, with modern infrastructure and real estate," she said.
Calming the fears of a so-called 'Chinese invasion, publicly voiced by some city residents earlier, Matviyenko said the investment agreement signed in Shanghai stipulated that the Chinese investors will employ a mainly Russian workforce and use domestic construction companies' capabilities.
When contacted to consult on the legality of such employment and contracting limitations, Baker & McKenzie could not comment, claiming current involvement with the project.
TITLE: Sea Route to Kotka Launched
PUBLISHER: Staff Writer
TEXT: Among rising summer travel activity in the city, a local ship operator is launching a new high-speed catamaran route between St. Petersburg and Finland.
Kapitan Korsak, a 108-seat catamaran operated by Alien travel holding, will begin a regular service to Finnish border-town Kotka twice on Fridays and Sundays at the end of May, the company said Monday.
One-way travel takes 4.5 hours and costs 59 euros during the introductory period (until the end of June) and 70 euros from July onward. A roundtrip ticket costs 99 euros and 120 euros respectively, the company said.
Company spokeswoman Yevgenia Inbayeva said Monday that the new route is a pioneer service on the travel market, which until now offered either tourist cruises on ferry lines or land transportation between St. Petersburg and Finland. Alien travel is negotiating an extension of the route to Tallinn, she said.
"The new route should appeal to the Russian tourists traveling to Finland for shopping and leisure as well as to Finnish visitors," Inbayeva said.
Finnish travelers would mostly come from the southeastern part of the country, from where it is more convenient to travel to Kotka than to Helsinki, the country's main transportation hub, she said.
Negotiations started with the Kotka and St. Petersburg administrations half a year ago, and as a result the company has been given a separate pier at the Kotka port. "Kotka city government has been very keen on developing the route," she said.
Inbayeva said she could not comment on the value of the deal.
Alien general director Alexei Gakkel was not available for comment Monday.
Alien, according to company figures, is the second largest sea tours operator on the market after Russian Cruises. It hopes the new catamaran trips will reach a 70-percent occupancy rate before the end of the navigation season, which closes in October.
Tatiana Demeneva, a spokeswoman for the Russian Union of Tourism Industry, or RST, said Kotka is a small town near the Russo-Finnish border, which has not been a common travel gate between the two countries.
However, it is a popular shopping destination for Russian tourists. The new route will appeal to summer travelers who are fond of sea cruises that offer a more relaxing atmosphere than train and bus travel.
"It will also be a more timely option for business travelers, as there is less hassle at seaport customs than at land-border check points," she said.
The Finnish Tourist Board said it would wait to see how the new route performs.
"With the total travel volume between St. Petersburg and Finland reaching 2 million people annually, we are very happy to see an increase in travel options. Kotka has a lot to offer for Russian tourists as an exciting travel destination," said Marja Mustajarve, the board's marketing manager. .
Olga Pekka of the Helsinki-based Russian Tours travel agency said the route would also be interesting for Finnish tourists.
"St. Petersburg is a very popular destination in Finland, and any new options to travel there should be fairly well demanded," she said in a phone interview from Finland.
However, the tickets are considerably more expensive than train or bus tickets. A round trip railroad ticket bought through the agency costs 91 euro, while a ticket purchased together with a hotel-accommodation package costs 76 euros, Pekka said.
TITLE: Hyundai, Lada, Kia and
Daewoo Center Opens
PUBLISHER: Staff Writer
TEXT: Avtomir, the largest Russian car dealership chain, opened its first St. Petersburg branch Monday.
The company said it expects to reach a $50 million turnover at the city location, and sell about 4,500 cars per year.
The new dealership targets a middle class audience, sporting four single-brand showrooms for the Lada, Kia, Hyundai and Daewoo models.
"The car market in the St. Petersburg region is growing at a faster rate than Moscow's market, ranging from 7 to 16 percent annually," Grigory Bylov, Avtomir's development director, said Thursday at a news conference.
The city's medium-priced range of the market has not been yet thoroughly tapped into. "The brands that we chose to sell in St. Petersburg will capitalize on that potential - they are not premium class models, and the most expensive car [at the center] is under $30,000," he said.
One of the ways Avtomir hopes to reach its middle-class customer is through various consumer credit schemes supported by the company. "We work with 23 different banks to offer over 40 different credit options, including lending without down-payment, lending without compulsory insurance payments, and so forth," Bylov said.
Although consumer credits under several such schemes come out quite expensive, with interest rates reaching over 10 percent annually, Bylov said the company is straightforward in explaining that to the clients.
"We expect to occupy a 15 percent to 30 percent market share in the city for each of our four brands," Avtomir's general director Nikolai Gruzdev said at the news conference. .
Although St. Petersburg has a high number of used or new foreign cars imported from abroad directly because of its proximity to the European border, Bylov said Avtomir did not consider the imports significant enough to affect the local market.
"Customers are beginning to appreciate the service and support they can get from authorized dealerships - services which are not available if you buy a car abroad," he said.
After the fall of the Iron Curtain, many Russians preferred to buy older, foreign models rather than new, domestic cars. Last year, 363,000 used foreign cars more than three years old were brought into Russia, according to the Union of Russian Automakers.
To help domestic automakers, Russia in 2002 initially introduced protective tariffs on secondhand foreign cars more than seven years old. Import tariffs on used cars are based on engine size. The tariff on cars older than seven years is between 2 and 3 euros ($2.56 and $3.84) per cubic centimeter.
Industry and Energy Minister Viktor Khristienko said Thursday the ministry is seeking to impose protective tariffs of used foreign cars more than five years old as part of a new auto industry development plan.
TITLE: IN BRIEF
TEXT: Lenenergo Cuts Losses
ST. PETERSBURG (Reuters) - Regional electricity firm Lenenergo said Saturday that it had cut its net loss to 429 million rubles ($15 million) in 2004 from 961 million rubles the year before.
Revenues for the year rose 18 percent to 31.5 billion rubles ($1.1 billion) from 26.8 billion in 2003, the company said in a statement. Profit from core business grew to 90 million rubles compared with a loss of 1.3 billion.
Lenenergo services St. Petersburg and the surrounding region in northwestern Russia.
RZD to Spend $10Bln
ST. PETERSBURG (SPT) - Rail monopoly Russian Railways, or RZD, will spend $6.2 billion on new trains and $2.2 billion on the high-speed link between Moscow and St. Petersburg in the next three years to boost commodity and passenger shipments.
RZD's managing board on Thursday approved a three-year investment plan, which also includes 41.1 billion rubles ($1.5 billion) to spend on rail routes for crude oil shipments to China, an automatic system for control of electricity spending and rail routes from Moscow to nearby towns, the company said Friday in a statement.
New Ford Focus
ST. PETERSBURG (SPT) - Ford Motor company said Friday it has launched the production of a new Ford Focus model at its Vsevolozhsk plant in the Lenignrad Oblast.
The new Ford Focus, or Ford Focus II differs from the older model by its design and perfromance characteristics, the company said.
The Focus model was a top seller at the Ford plant in 2004, with 28,059 cars sold last year. Investments into the new model production and brand developments reach $50 million, Iterfax reported.
A total of 39,241 Ford cars were sold in Russia in 2004 at registered dealerships, up almost 50 percent from 2003.
TITLE: Carlyle Quits Russia on Lack of Business
PUBLISHER: Staff Writer
TEXT: MOSCOW - Carlyle group, the world's largest equity fund manager whose board once boasted former Yukos CEO Mikhail Khodorkovsky, has effectively closed its Moscow office and canceled plans for a $300 million Russia investment fund.
The group cited Russia's unappealing "risk profile" in its decision to curtail operations in the country.
Industry players said the group's strategy, which focuses on making large independent investments around the globe, was not suited to the insider-dominated Russian market.
Carlyle manages $25 billion in funds worldwide and has invested heavily in the defense sector, but large enterprises in Russia rely on large parent holdings for funds, while the defense industry is blocked to foreign investment.
This is the third setback in Russia for the group, which has not made a single investment in the country since setting up its latest Moscow office in March 2004.
Private equity is one of the most underdeveloped financial areas in Russia, with just a handful of players competing against each other.
"Carlyle has to deploy capital in huge amounts [to earn good profit relative to its size], which means in general they look at larger targets. I must speculate that was a factor" for its lack of success, said Patricia Cloherty, who manages Moscow-based Delta Private Equity Partners.
Carlyle might have viewed its entry into Russia as somewhat opportunistic, another local fund manager said. "They have such enormous success raising money and investing in the U.S. and Europe that their struggle to raise money for a non-core market like Russia may have increasingly become a distraction."
Carlyle's pioneer office opened in 1998, only to be closed two years later. In 2003, the long-rumored $500 million partnership with Alfa Group's Alfa Capital Partners fell through in the wake of the Khodorkovsky arrest. The Pentagon-linked group feared being tarnished in case government prosecution or negative news reached Alfa, said one person familiar with the situation.
However, Katherine Elmore-Jones, a London-based spokeswoman for Carlyle, has played down the fears that political risks may have prompted the U.S. giant's latest pullout.
Khodorkovsky and former Group Menatep executive Platon Lebedev had seats on the Carlyle Energy and the Carlyle Europe boards, respectively.
A source close to the group told The Moscow Times in 2003 that Menatep had invested over $300 million in Carlyle Group. The fund would say only that Menatep had placed up to $50 million in various Carlyle funds.
TITLE: IN BRIEF
TEXT: Russia Protects Pirates
Moscow (Bloomberg) - Russian officials are protecting the piracy of films, music, business software and books, helping make the country one of the biggest producers of counterfeit electronic goods, the Wall Street Journal reported Friday.
Music piracy has increased 30 percent in the two years since the Russian government promised to eliminate counterfeiting, the newspaper reported, citing John Kennedy, head of IFPI, a London-based organization that represents 1,500 record companies worldwide.
Illegal copying last year cost U.S. companies an estimated $1.7 billion in lost sales, the Journal reported.
Russia also has become the world's biggest exporter of illegally produced music and the second-biggest market for pirated music products after China, the Journal said, citing the IFPI.
Record Reserves
Moscow (Bloomberg) - The Central Bank added $600 million to its foreign currency and gold reserves in the week ending May 6, increasing its reserves to a record $144.7 billion as the price of oil remained high.
The reserves rose from $144.1 billion as of April 29 and 144.3 billion as of May 1, the bank said in an e-mailed statement.
Economic Development and Trade Minister German Gref said last month he expects the bank's reserves to rise $51 billion this year to exceed $175 billion as exporters such as OAO LUKoil, Russia's No.1 oil company, bring revenue home.
Urals blend crude, Russia's main export oil blend, closed yesterday at $45.64 a barrel on May 11, compared with $34.92 a year ago and $35.55 on Jan. 4 this year, according to Bloomberg data.
Crop Forecast Cut
MOSCOW (Reuters) - Russia has cut its grain crop forecast for this year by about 12 percent to 66 million to 70 million tons, from a previous 75 million to 80 million tons, Agriculture Minister Alexei Gordeyev said Saturday.
Russia harvested 78 million tons of grain in 2004.
Gordeyev said that one of the reasons for the lower forecast was a delayed start to sowing, due to a late spring. This could delay the harvesting campaign, implying higher losses due to bad weather in autumn.
LUKoil Hits Oil in Iran
Bloomberg - LUKoil said Saturday that it found oil in the first well it drilled at an Iranian field with Norsk Hydro, Norway's second-largest oil and gas producer.
The partners invested $20 million in a 4,800-meter deep well located at the Anaran block in western Iran.
LUKoil and Norsk Hydro in 2003 signed a $137 million contract to develop oil fields in Iran, known as Azar, Western Changuleh, Dekhloran and Musian, which may hold about 1 billion barrels of recoverable oil reserves.
Polish Trade Doubles
WARSAW (AP) - Polish exports to Russia in 2004 almost doubled over the previous year, despite the popular assumption that a cold political climate between the two nations would harm trade, Polish media reported Saturday.
Polish exports last year totaled $2.9 billion, well over the $1.5 billion exported in 2003, Rzeczpospolita reported.
In the first quarter of 2005, the value of exports had climbed 106 percent over the same period last year.
TITLE: Diamond Giant Faces Criminal Probe
PUBLISHER: Combined Reports
TEXT: Prosecutors have opened a criminal case against unidentified managers at the diamond monopoly Alrosa for allegedly embezzling 153 million rubles ($5.47 million), a spokesman for the Prosecutor General's Office said Saturday.
Prosecutors will examine Alrosa's finances in connection with the case, spokesman Sergei Marchenko said. The case was opened after the former head of Alrosa's legal department, Gamlet Akopian, reported violations committed by some managers, he said, declining to identify the managers or say how many were involved.
Marchenko said the investigation would include a full probe into the finances and business activities of Alrosa. Interfax quoted a source close to the inquiry as saying that a number of company officials would be questioned.
The company, which extracts one-quarter of the world's rough diamonds, said it had not been approached by prosecutors.
"Alrosa has not received any queries from prosecutors, and no investigations have been carried out in the company," an Alrosa statement said.
The company insisted it maintained the highest financial standards, saying its activities were under the "constant supervision of licensed bodies," including international auditors. Alrosa promised to offer its full cooperation to enable "an objective investigation."
The Audit Chamber, a watchdog body that reports directly to the presidential administration, said Saturday that it would open its own investigation at Alrosa over the company's tax payments for 2004 and 2005, Interfax reported, citing Viktor Panskov, one of the chamber's auditors.
Panskov said auditors and prosecutors could join forces if need be, the news service said.
The government owns 37 percent of Alrosa, while 32 percent is controlled by the government of Sakha, the eastern Siberian republic where the company mines much of its diamonds. The rest is divided among regional organizations in Sakha and Alrosa's work force.
Alrosa is on a Kremlin list of 1,063 enterprises that the state considers strategically vital.
Last year it mined rough gems worth $1.75 billion and increased net income 44 percent to 13.9 billion rubles ($501 million), the miner said in April. It is the world's second-largest rough diamond producer after De Beers, an English-South African concern.
Alrosa expects to produce $2.2 billion of rough diamonds in 2005 and post a net income of about 13 billion rubles, the company said in December.
(Bloomberg, Reuters, AP)
TITLE: Russian Competitiveness
Decreases in IMD Survey
PUBLISHER: Special to The St. Petersburg Times
TEXT: Russia has dropped four places in an annual study conducted to assess the competitiveness of 60 economies around the world.
The World Competitiveness Scoreboard, compiled by the Lausanne-based Institute for Management Development and released on Thursday, ranked Russia at 54.. The United States kept its No. 1 position.
The economies that overtook Russia in the rankings were the Philippines, Italy and Brazil.
The IMD says that its appraisal "analyzes and ranks the ability of nations to create and maintain an environment that sustains the competitiveness of enterprises."
However, the IMD also includes regions such as Bavaria and China's Zhejiang province, rather than just countries, in its list of economies, describing them as "pockets of competitiveness."
The various economies are appraised on 314 items, which are grouped under four main factors: economic performance, government efficiency, business efficiency and infrastructure.
Rankings are also based on a worldwide survey of top international business leaders, asking which countries or regions appear to offer the most attractive investment opportunities.
The survey reveals the importance of factors such as living standards, stability of the government, and levels of corruption, in influencing global executives' decisions to do business abroad.
This emphasis on the opinion of foreign investors may well explain why Russia ranks so poorly in the IMD world competitiveness chart. A different survey by FIAC (Foreign Investment Advisory council) carried out in March 2005 said that corruption and the administrative bureaucracy were seen as the biggest barriers to investing in Russia, and discouraged many foreign companies.
This year's IMD findings also reveal that foreign investors are primarily attracted by a simplified tax system.
Of the economies surrounding Russia, Finland moved up two places to 6th overall, despite having one of the highest tax pressures on its domestic output. On the other hand, Estonia has had success using low corporate tax rates to attract investment, and is now ranked 26th.
Russia's largest neighbor, China, plummeted from 24th to 31st, despite its strong economy. This fall was attributed to the business community's negative opinion of the country.
Despite Russia's fall and low position in the IMD rankings, the picture is not as bleak as it appears.
In an Ernst and Young survey conducted last year, Russia was the ninth most attractive economy to invest in.
When asked to comment on the marked difference between the two polls, Mark Jarvis, Ernst & Young managing partner client service & accounts for the CIS, explained that being currently uncompetitive does not make Russia an unattractive investment opportunity.
Investors assume that while a Russian company (compared to for example, a similar U.S. company) may be "cheap" to buy today because of uncompetitiveness, it will develop with time to become globally competitive and thus be worth more as stock, Jarvis said.
"Strategic investors look towards a five-year plus horizon and they see Russia as an important market to be in for the future," he said. "In some sectors they see growth rates of over 30 percent."
TITLE: Mobile Operators Use TV Screen to Play One-Upmanship
PUBLISHER: Special to The St. Petersburg Times
TEXT: Advertising scandals have arisen between mobile operators MTS and Vimpelcom, which trades as Beeline, several times in recent years. Mobile TeleSystems hasn't missed a chance to have a dig at its competitor with the help of video clips parodying it broadcasted on federal television.
Megafon has also been targeted in a similar way by MTS after Megafon launched on the Moscow market. A clip showing a poorly operating amplifier decorated in Megafon's colors appeared on television thus discrediting Megafon products.
All over the world, advertising battles are kept permanently on the boil by operators that constantly change their advertising agencies. Thus, at the beginning of 2003, MTS left Yury Frymov's agency Yug and began to work together with two advertising agencies in one holding - Leo Burnett and Rodnaya Rech. A little before that, Leo Burnett had merged with the D'Arcy agency, which made Vimpelcom's ads. In addition, a significant number of D'Arcy staff joined Rodnaya Rech. In this way, MTS hired the very same people who had worked for its competitor and knew Vimpelcom from the inside. Analysts predicted an escalation in the advertising war between the two companies and they were right.
THE HARBINGERS OF A STORM
At the beginning of April, Russia's No. 2 mobile operator in terms of subscriber numbers, Vimpelcom, completed a complex rebranding. From April 4 everyone who has a television could see its new advertising clips. And a month earlier, black and yellow striped posters were placed throughout cities.
Together with the launch of the new Beeline brand, once again there were indications of an advertising war between the Big Three operators. The new TV clips were made by an agency from the BBDO group. Vimpelcom has been working with it for about 2 years. But before that BBDO serviced Sonic Duo, the Moscow operator of Megafon's network. It was visible that this to some extent led to a similarity between the style of Beeline's new ads, which until recently had been associated with Megafon products.
The new clips were greatly different to those that had previously been used to advertise Beeline using the headline "It's comfortable with us." It's new positioning dictates new criteria when it comes to the creation of advertising clips. As Vimpelcom says, the new campaign is an image driven one, in that it appeals above all to the feelings of consumers and not to their reason. And it was thanks to exactly that type of advertisement that Megafon created its current image. Compare "the future depends on you" and "dream, speak, act." Both slogans suggest one and the same things - some kind of high-tech kitsch, which is a little bit offensive: someone makes a decision and effortlessly implements it with the help of a mobile phone.
Vimpelcom's competitor MTS continues to advertise its Jeans brand with the help of creative agency Leo Burnett, the staff of which not long ago were busy creating famous ads for Vimpelcom. One of its most recent clips, advertising a $10 bonus for subscribing to Jeans, which features a coach talking to a soccer team, continues the best traditions of ads for Beeline GSM during the period of "how much do you want in grams?"
As a result of all this, some market observers are inclined to forecast the start of a new marketing war between the Big Three operators. Their conclusions are not unfounded because there are precedents in the recent past.
THE BEES ARE ATTACKING
The new Beeline logo was created in the depths of the agency Wolf Olins. It consists, as many have already noticed, of two parts: an original drawing and a round black and yellow symbol. Beeline is associated with bees, and the black and yellow is linked to this idea. Company managers say the logo reflects the fundamental values of the new brand - "simplicity, ease, understanding, access," which are replacing the former image of a technocratic mobile company. Apart from that, room has been found in the company's style for many different subjects, including decoration. Nikolai Pyanishnikov, vice president of Vimplecom, said that it symbolizes the opportunity for consumers to choose. And the stripes of the brand are supposed to make people associate any striped subject with the name of the company. A survey on the web site www.sotaweek.ru, showed that most people have taken the operator's new brand to heart. It must also be said that it can be associated with the St. George victory stripe, and for this Vimpelcom's timing is just right.
TITLE: City's Football Stadium Plans Fascinate, Annoy Critics
PUBLISHER: Special to The St. Petersburg Times
TEXT: The city may be close to meeting one of its longest standing needs - building a world-class football stadium. Politicians have said all the right things and financiers have made generous promises. But after nine different proposals over the years, FC Zenit St. Petersburg fans are still left to conjure up the future stadium in their imagination.
This time the process is unfolding with greater urgency. Zenit is facing a deadline imposed by UEFA, European soccer's ruling body. Clubs without a properly equipped stadium by the 2010-2011 season will forfeit the privilege of taking part in the European competitions. At this time, among all Russian football venues, only Lokomotiv and Luzhniki arenas in Moscow correspond to the requirements set by UEFA.
Zenit now plays at the Petrovsky Stadium, which has undersoil heating and more advanced facilities offering advantages over the team's previous pitch at the Kirov Stadium on the Krestovsky Island.
The city administration has recently outlined a concrete proposal that calls for building the new arena for 50,000 spectators on the site of the existing Kirov Stadium at an estimated cost of $100 million.
Governor Valentina Matviyenko and Gazprom CEO Alexei Miller, whose company will finance the stadium's construction, confirmed the plan in a joint announcement just prior to a Zenit-CSKA game on April 17.
The wide-ranging discussion about the future look and location of the arena has had wide resonance in the city's design and planning community.
In April, when Gazprom was reportedly wavering about the site on Krestovsky Island, the Architects' Union sent an open letter to the governor in support of continuing to use the existing complex.
Vladimir Popov, president of the Architects' Union, continues to back the idea. "We supported and continue to support the initiative to develop and build around the existing stadium," he said in a recent interview. "It gives us the best chance to preserve the building and to assure its future viability."
Kirov Stadium is a landmark structure, one of the most outstanding buildings of the Soviet period left in St. Petersburg. Designed by Alexander Nikolsky and built between 1932 and 1950, the stadium is part of an extensive parkland area, pierced by a two kilometer-long esplanade that leads from the Krestovsky Island metro station to the stadium site.
The terraced stadium bowl is located inside an artificial hill in the manner of an amphitheater, which nearly conceals it from outside. But the venue has been used sporadically in recent years.
The stadium holds the status of a protected federal monument while the surrounding Park Pobedy has been accorded the rank of a regional monument. The stadium was renovated for the 1980 Olympic Games and the Goodwill Games in 1994.
Popov opposes building a stadium on another site because such a decision might imperil Kirov Stadium. "There was a danger of a commercial housing development going up in its place," he noted. An elite Fifth Element residential complex was recently built near Park Pobedy.
Petromir, the stadium's managing company, administered a design competition in 2003-2004 to determine the best strategy for developing the present arena and the surrounding parkland. The architectural studio of Pyotr Yushkantsev submitted the winning proposal but the results of the contest have not been adopted or developed any further.
"A competition was held and one proposal was selected," Popov said. "We believe it could still serve as a kind of foundational scheme for the future design, although I am not sure about the current status of the winning project."
Sergei Shmakov, an architect whose desing came second in the Petromir competition, has been an outspoken advocate of retaining Kirov Stadium as the essential component of any future design.
"Building on the site of Kirov Stadium will restore this traditional area of sports and recreation," he said.
During the Russian Economic Forum in London in April, Matviyenko visited the gleaming facilities of the recently built City of Manchester Stadium, now home to Manchester City FC. She came back enthused by what she had seen and declared that Manchester offers the most suitable model for St. Petersburg.
The next day, city papers resounded with headlines that evoked the fanciful vision of Manchester on the Neva. Arup Associates, a leading British-based engineering firm that designed the stadium in Manchester, does not foresee replicating any of their previous buildings.
"Every project is unique and has to be conceived in its own terms," said Alan Hart, the associate director of Arup's office in Moscow. "Whatever design is prepared, it would have to take into account the environment into which it is placed. It has to fit into the urban landscape and not be an eyesore."
Hart confirmed that ArupSport, a division of Arup Associates, has conferred with city officials but these contacts are still preliminary.
"We've had discussions with people in St. Petersburg and there has also been a visit to the Allianz stadium in Munich [Germany]. We'd feel proud and privileged to become involved."
ArupSport has ongoing stadium projects in places ranging from Beijing to Kuwait. Initial work has also recently started on a future arena for Shakhtar FC in Donetsk, Ukraine.
In Russia, Arup is acting both as an engineering consultant and a chief designer on selected projects. The firm is involved in a number of ambitious developments in St. Petersburg, including the expansion of the Corinthia Nevskij Palace hotel.
But Hart reiterated that their approach to a possible stadium in the city will chart a new course. "St. Petersburg is a unique challenge. It's a historical site in a historical city. The design solution has to be appropriate for St. Petersburg."
"We would certainly use features of Manchester that are appropriate but we wouldn't just take the design in Manchester and copy it."
The City of Manchester Stadium was built as the central venue for the 2002 Commonwealth Games at a cost of Pound110 million. Later it became the home stadium of English Premier Leauge club Manchester City FC. The stadium has been given credit for regenerating east Manchester while offering an innovative design solution.
For all its benefits, a dazzling new arena on Krestovsky Island would certainly affect the prized natural setting of the area, especially if it spawns additional infrastructure and facilities.
Predictions of how the situation will develop vary but the future arena is likely to remain a subject of heated debate.
"There is the possibility of a new international design competition and the results could be unpredictable," Shmakov said. "But to wreck what's there now would be a big mistake."
TITLE: Finnish Consortium Eyes Investments in Russian Real Estate
PUBLISHER: Special to The St. Petersburg Times
TEXT: A consortium of Finnish companies has unveiled a joint plan to expand investment into the Russian and Baltic real estate markets. SRV Group, a leading Finnish construction company, together with a group of high net-worth shareholders, established Vicus Ltd., a fund that will be based in Finland. A Finnish investment bank, Conventum, will manage the endowment.
Vicus anticipates making diversified long-term investments into real estate in Russia and the Baltic states. During the first three years, Vicus will allocate 100 million euros ($127 million) for purchases and development projects. SRV International Ltd., a subsidiary of SRV Group, will consult on all aspects of the enterprise.
"The sum is going to be divided between many projects in Baltic countries and in Russia," said Veli-Matti Kullas, managing director of SRV Russia. "SRV has good experience in project developments and real estate developments in both Finland and Baltic countries.
"Our target is to utilize our good network among the investment and financing institutions to promote new real estate developments in Russia," he added.
Until recently, the prevailing trend among Finnish firms has been to develop and invest into properties that are directly related to their own business operations in Russia.
"Most investments are involved with companies' own production," said Anne Pajalin, director of the St. Petersburg office of the Finnish-Russian Chamber of Commerce. "Pure real estate investments are rare. In the near future I see companies investing more into Russia because of the more stable economic and political situation."
The formation of Vicus also bolsters the rate of Western institutional investment in Russia. In March, Moscow witnessed the third institutional real estate deal when Britain's Fleming, Family & Partners (FF&P) purchased an office and retail center. In two earlier acquisitions, FF&P Russia Real Estate fund bought a premier business center and Switzerland's Eastern Property Holdings purchased the Berlin House office and retail center.
However, Vicus' release does not detail the background of its shareholders. According to Hanna Kaleva, director of research services at KTI, an independent research group in Finland that specializes in real estate and economics, Finnish institutional investors, such as pension funds, tend to be more open about their participation and the standard practice is to specify their involvement.
Kaleva believes that Vicus represents an arrangement between opportunity funds and developers. She cautions that the Russian market is not yet stable enough to sustain continuing expansion in the sector of institutional investment.
"It might take some time before they'll come to Russia because they seem to apply pretty risk-averse strategies in their internationalization," she said. "But even this interest might arise as the market gets more established."
However, opportunity funds tend to focus on short-term, high returns while Vicus' press-release stated that the company will target long-term investments in retail, logistics warehouse and industrial property.
During a gathering of the Russian-Finnish intergovernmental commission on economic cooperation in Moscow in March, Economic Development and Trade Minister German Gref said Finnish investment in Russia in 2004 surpassed $1 billion, Interfax reported. Bilateral trade grew 36 percent to a record $12 billion. Gref expects Finnish investment could soon exceed 2 billion euros.
St. Petersburg and the northwest region account for the bulk of Finnish investment into Russia. According to the city administration, Finnish investment accounts for 10 percent of foreign capital invested into St. Petersburg.
The local real estate market continues to draw sustained interest because of its high rate of profitability. "Real estate in Russia remains a promising sector in the near future because of growing prices," Pajalin said. "Investors make good profit when prices are going up all the time."
The program announced by Vicus consolidates the position of Finnish companies in the city and also expands their presence across the country. Kullas noted that besides St. Petersburg and Moscow, the company will focus on such regional centers as Yekaterinburg, Nizhny Novgorod, Samara, and Kazan.
SRV is already overseeing several construction projects in the city, such as the Trade and Entertainment Center District 700. But Kullas said they will be separate from announced initiative.
"The investment and financing plan of the Trade and Entertainment Center District 700 does not include the involvement of Vicus. SRV has negotiated with other investors and financiers for this District 700 project and these negotiations have proceeded very well."
The long-established trade and economic ties between Russia and Finland provide an added assurance to present-day relations between the two countries. SRV has similarly taken account of their first-hand knowledge and practical expertise.
"Our long experience in the construction business in Russia is, of course, a very good foundation for the new developments in Russia," Kullas said. "We have many good and long lasting Russian partners and together with them we intend to increase our operations in Russian markets in the coming next years."
As Finnish property companies expand abroad, the proximity of Russia and the Baltics may begin to play a decisive role.
"The Finnish property sector is internationalizing rapidly right now," Kaleva said. "Baltic countries and Russia are natural markets to look at from the Finnish point of view because of both geographical vicinity and long traditions of cooperation in other business areas."
The availability of the Russian export market has already bolstered Finland's economy. KTI Finland lists Russia along with China as the country's two vital trade partners.
Nonetheless, investment still proceeds at a slow pace. Vicus intends to invest around 100 million euros over three years, a figure that may be insufficient to make impact on the market.
"The total sum is obviously rather small, especially considering that it will be diversified into both Baltic and Russian markets," Kaleva said.
"But obviously it's only a start. These types of transactions tend also to increase the interest of other players, so they might have some intermediate effects as well."
TITLE: Freeing the Books From Bureaucrats
TEXT: Most people associate accounting reform with moving to international accounting standards. However, the problem is really far broader than this. The accounting and financial reporting system in Russia absolutely has to change. And the question of whether this system will take its cues from international standards is naturally very important but is in fact redundant.
The current system is less than satisfactory because it is shaped by the state and designed exclusively to protect the interests of the bureaucracy. I am specifically talking about bureaucrats because the state no longer has any direct or objectively justified interest in financial reporting. Taxes are assessed via tax reporting, and statistics gathered based on statistical reports. Financial reporting is really only of use to investors, who use reports to make investment decisions.
The state, in theory, should be interested only in whether reports are transparent and match companies' actual economic status. For this reason, in most countries, the state does not play a major role in establishing accounting standards and, after setting up the basic foundation for decision making, leaves the rest to the expert community. Experience has shown that this approach works.
Yet the Russian system is very strange and the only one of its kind in the world. Accounting standards are developed solely by the Finance Ministry. As a result, company financial reports, which are prepared according to the state's demands, have almost no influence on investment decisions, as reports do not take actual investor interest into account. Thus, this crucial basis for attracting investment in market economies is extremely underdeveloped in Russia.
Now would be the perfect time to overhaul the system. Government administrative reforms already in progress aim to transfer excess regulatory functions from the state to nongovernmental organizations. Accounting and reporting reform would be relatively simple, and the market is more than ready for it, which makes it an ideal opportunity to test drive this new approach.
The job of developing a national accounting system should be handed over to a new, nonprofit organization that would select the appropriate experts with qualifications clearly established by legislation. These experts should include not only auditors and accountants; they should also include the people who use and who need financial reports.
Accounting standards need to be discussed openly in the financial community. Market players should have a chance to make suggestions and recommendations before standards are finalized. The new regulatory organization, which would function transparently and collegially, would be effectively insulated from any form of corruption. Finally, this organization would be independent from the state and would not cost the federal budget a cent.
To be fair to the Finance Ministry, it did acknowledge the damage done by the current system's exclusion of experts in its plan for developing accounting and reporting in the medium term. The plan went on to emphasize the importance of involving experts in the process. But what concrete measures did the ministry suggest to rectify this? Judging by the plan, basically none. It only recommended waiting a few more years before returning to the issue.
However, the Finance Ministry's first steps toward putting this plan into action proved to be the financial community's worst nightmare. The proposed federal law on financial reporting that recently sprung from the depths of the ministry was created under such a veil of secrecy that even the Central Bank, not to mention experts, found out about it only once it was presented to the State Duma. As a result, there were so many objections to the law that the presidential administration had to step in to fix ministerial mistakes, which seems to be happening with increasing frequency.
Reform of the way accounting and financial reporting are regulated needs to start with better legislation. This means more than making some changes to the current law on accounting. A relic of the command economy days, the current law focuses on narrow technical and methodological problems that would be better solved by companies themselves or the expert community. To make this possible, we need a new law.
The new legislation will have to solve a very difficult problem. It will have to make it possible for Russian companies to move completely to international accounting standards, or IAS. The current law does not allow companies to do so. Companies that use IAS should not have to report according to Russian standards, too. However, the road to this goal will be long and hard. Any attempts to speed up the process that ignore the objective limits of Russian business are doomed to failure and could discredit the whole idea of moving to IAS. The most important thing here is not speed, but a clear and well-considered plan that will allow all participants in the process to get ready for the big change.
Another bill - the proposed law on accounting and financial reporting regulation - is being developed by a working group created by the National Organization for Accounting and Reporting Standards. The first draft of this bill will appear on our organization's web site this month, where all interested parties can read, discuss and critique the proposed legislation. The principle of transparency that forms the basis for this new law should be fully reflected in the bill's development.
One thing can be said with confidence: the community of financial experts is more than ready to regulate itself.
Andrei Burenin is a deputy in the State Duma and a member of the Budget and Taxes Committee, as well as chair of the National Organization for Accounting and Reporting Standards. He contributed this comment to Vedomosti, where it first appeared.
TITLE: Russia's Noveaux Riches Develop Sophisticated Lives of the Wealthy, Famous
PUBLISHER: The Los Angeles Times
TEXT: MOSCOW - The billboard appears at kilometer 5 of the post-Soviet boulevard of big-ticket dreams that is the Rublyovskoye Shosse.
"Any house," the sign by a prestigious homebuilder proclaims. "Helicopter as a bonus."
Only in the millionaire's suburb of Rublyovka are houses so pricey that a helicopter is thrown in like a carpet upgrade.
Rublyovka is the diminutive of the highway's name and the word Muscovites usually use to describe it.
How elite is? So classy that real estate prices have streaked skyward even on Kutuzovsky Prospekt, the "Rublyovka adjacent" avenue in northwest Moscow - presumably because those who drive along it, as almost anyone who is anyone in Russia does, are probably on their way to Rublyovka.
The Rublyovka is shut down twice each day as President Vladimir Putin is chauffeured between work and his Rublyovka estate in his black Mercedes 600 Pullman, prompting an elite traffic jam that locals love to fume about to acquaintances consigned to lesser bottlenecks.
Russians throughout history have lived large, from the gilded palaces and Faberge eggs of the tsars to the epic miseries of the World War II. Today's prosperity is no exception. Fourteen years after the arrival of capitalism, Forbes magazine's annual survey of the wealthy last year found Moscow with more billionaires than any other city on earth.
A recently published survey shows the city dipping slightly below New York, thanks to the Yukos prosecution's disastrous effect on the company's stock.
The days of the profligate "new Russians" of the 1990s, famous for their maroon sport coats, gold chains, crew cuts and bad taste, are largely over. In their place is a tightknit aristocracy, more discreet in its appetites and with fortunes hard to imagine even on an international scale.
The net worth of the nation's 36 richest men and women, according to Forbes' calculations, is more than $110 billion, equal to 24 percent of the nation's gross domestic product.
In some cases, the new "new Russians" are the same businessmen who got rich in the shady privatizations of the 1990s. Now, most have reached their late 30s and 40s, and they've moved their businesses toward legitimate operations. They own oil companies and huge metal mining operations, cellphone companies and real estate development firms.
And after more than a decade of traveling between Paris, London, New York and Moscow, they have begun to expect at home - in districts such as Rublyovka and a growing number of other high-end Moscow neighborhoods - the kind of amenities they have long enjoyed abroad.
Rublyovka, once the exclusive retreat of Stalin, Brezhnev and other Soviet leaders, has even become the subject of a bestselling new novel, "Casual," a Russian version of "Desperate Housewives." The book is the talk of Moscow because it is the first to portray the privileged lifestyle behind Rublyovka's towering, closely guarded walls.
Lots in the community are being snatched at the equivalent of $5 million apiece, and miles of forest are falling under the bulldozers to make way for $10-million homes, some with elaborate turrets, Russian Empire facade styling, private chapels and, in one case, a motorboat grotto. But the trail of Russia's millionaires doesn't end there.
Crocus City, on the north side of Moscow, bills itself as the largest luxury mall in the world - and that's before construction begins on an expansion that will double the size of the shopping center and include 15 high-rise office buildings, a yacht mooring terminal, helipad, 1,000-room hotel, 216,000-square-foot casino and 16-screen movie theater.
Shoppers at this "city within a city" spend an average of $560 on clothes and shoes during each visit.
Lest Crocus City be dismissed as an enclave only for the wealthy, says co-owner Emin Agalarov, "We've got a JLo store which positions itself as an everything-here-is-around-$100 outlet. So anyone could theoretically come and buy something here."
Meanwhile, Gucci, Chanel, Dolce & Gabbana, Prada and Armani are ensconced less than 16 kilometers away, in a cobblestone nook off fashionable Tverskaya Ulitsa downtown. They are within walking distance of an array of high-end clubs and restaurants distinguished mainly by the scowling bodyguards standing beside cars with tinted windows outside and the jewel-and-mink-draped beauties inside - often until 5 a.m. or 6 a. m.
Cafe Galleria, this year's hot spot, requires a weeklong wait for reservations to dine in its sleek, yellow-and-black-columned halls. Even then, it won't admit those who might "spoil the atmosphere," as owner Arkady Novikov puts it.
California rolls - in a city suddenly mad for sushi, not a single fashionable restaurant can afford to be without it - go for $17 each. A hunk of creamy burrata cheese with cherry tomatoes costs $24.
"Practically every restaurant in Moscow has to have this cheese now. Russians can't live without it," Novikov says of the coveted mozzarella, which must be flown in fresh from Italy.
Novikov owns a network of eateries that have at one time or another been at the center of Moscow's social beehive, including the tiny but tony Vogue Café downtown and the popular Czar's Hunt and Veranda u Dachi restaurants in Rublyovka. He operates 15 acres of greenhouses outside the city to keep his clients in arugula and wild strawberries throughout the Russian winter.
"People are becoming more sophisticated," he says. "The attitude of people with money had changed toward many things, first of all toward the money itself. Now the money is no longer falling on your head from the sky, like before, and the culture of the people has changed for the better.
"We learned a lot of things from the West, including how to dress, how to behave and how to eat."
Ksenia Sobchak, Russia's 23-year-old answer to Paris Hilton, grew up in far from underprivileged circumstances - her father was mayor of St. Petersburg - but insists she's no spoiled debutante.
"Me myself, I never considered myself to be rich, though I get a real big salary. So how did I get this image of this golden rich girl?" wonders Sobchak, who hosts a reality television show and lives with her millionaire fiance in an apartment on Tverskaya Ulitsa.
Then she answers her own question: "I really am a socialite. I don't like to spend time at home in a cozy armchair. I really enjoy going to cinemas, visiting friends, going to restaurants. For me, Moscow is the best city in the world. If you want to have fun for 24 hours, you can have fun."
This summer, Sobchak is preparing for the "it" marriage of the season, to Russian-American businessman Alexander Shustorovich, a Harvard graduate who helped broker a $2-billion business deal when he was 30. Sobchak is planning a "simple" and "nice" wedding, at a resort near St. Petersburg, for 300 people.
Today's wealthy Russians, she says, are sensitive to the issues that have sent thousands of pensioners into the streets to protest the partial loss of their benefits. There are 25 million Russians who live on less than $87 a month, and the average monthly wage is less than $240. Many of the well-to-do, Sobchak says, remember what it's like to have nothing.
"I was a Pioneer," she recalls, referring to the old Communist youth camps. "I remember the songs about Lenin. I remember those huge lines. I remember buying kilos of green bananas and putting them under the bed to ripen, because you didn't know when you'd be able to get bananas again."
Russia's wealthiest classes, says Eduard Dorozhkin, editor of Rublyovka's local newspaper, Na Rublyovke, "know they made mistakes in the past, and their mistake was to show how rich they are. It's impolite to look rich in a country with so many poor people."
At the same time, many say, the memory of penury is what inspires an abundance of wealthy Russians to spend with abandon.
"If Americans have $1 million, they're not going to spend $200,000 on a car. The Russians, they will," says Alla Verber, vice president of Mercury Ltd., which operates luxury shopping centers in downtown Moscow. "The Russians think, 'You only live once, and God knows what's going to happen in five years."
These days, though, most ostentation is anonymous - a phenomenon attributable as much to nervousness about government tax crackdowns and the ever-present possibility of mafia violence as to a lingering sense from the Soviet years that being splendidly rich is anything but politically correct.
The city's many Humvees and their even-more-fortified Russian equivalent, the $144,000 Kombat, have tinted windows. Neighbors often have no idea who lives in the gated palace at the end of their street. The magazine Arkhidom, Russia's equivalent of Architectural Digest, features glossy pages of ornately decorated mansions and multimillion-dollar penthouse apartments but not a word about who owns them.
Oksana Robsky's "Casual," which sold 50,000 copies in the first 10 days after publication, provided ordinary Muscovites with another peek at life in Rublyovka, which even in the Soviet era was the storied enclave of Politburo members, nuclear scientists and presidents. Today, former Presidents Boris Yeltsin and Mikhail Gorbachev have homes there; so does Nobel Prize-winning author Alexander Solzhenitsyn.
The world Robsky portrays, however, is mostly about Rublyovka wives: the thin, carefully coiffed, Dior-clad women who were lucky enough to snag a business mogul, then spend much of the rest of their lives plotting to keep from being dumped for a younger woman.
"The book was perfect. I loved it," says Roman Kondratov, a stylist at the Place in the Sun salon in Zhukovka, one of several elite neighborhoods that make up the Rublyovka district.
"These women in the book, they exist," he says. "Let's see. The typical Zhukovka woman: First, she gets up at 2 p.m. Then gym, spa, hair. They come in here and some of them look like Christmas trees, jewels everywhere. And the things they talk about, they're mind-boggling for me.
"Where they're going on vacation. What they're going to buy. Mostly, they think about clothes. What they're wearing, what their friends are wearing, where they're going to buy the clothes they want, where they're going to fly to buy them. The kind of money they talk about spending is almost incomprehensible to me. And plastic surgery, endless talk about plastic surgery. Most of them go to the States, to the guy who did all Michael Jackson's work."
Over green tea at the elegant Prichal restaurant near her Rublyovka home, Robsky says, "It's my world. I need to write about what I know."
And the author's age? "Let's say 28."
"It was important for me to portray this world not as it is reflected in tabloids and magazines. It's interesting to show that these people not only go to hairdressers and get manicures, but they live there," says Robsky, wearing a powder blue sweater set and an 11-karat diamond teardrop pendant. "They live their lives and lose their loved ones and die of incurable diseases. They fall in love and get betrayed. I think it's stupid to say that only those people who possess nothing have feelings inside."
Robsky knew whereof she wrote when her heroine's husband was killed in a contract hit. Her second husband died the same way.
Her next book will deal with Rublyovka as well, but it will take readers far into the world beyond it. Robsky plans to write about the female bodyguard agency she once ran, providing stylish armed protectors to wealthy businessmen throughout Russia.
Indeed, for a growing number of wealthy Russians, even Rublyovka is too confining - especially now, when tawdry new dachas are lined up on the roadside and Putin's traffic jams are simply impossible.
Portrait artist Nikas Safronov, who for a $70,000 fee has painted many of the leading women of Rublyovka society ("The shape of the nose, their eyes, look as if they have emerged from the same lab," he confides. "Special, exquisite, elite and expensive."), recently bought a castle in the Scottish Highlands.
Oil oligarch Roman Abramovich, who is believed to be Russia's richest man with a net worth of $13.3 billion, spends more and more time in Britain, where he recently bought the Chelsea soccer team along with a $9.5-million flat in the Knightsbridge area of London and a 450-acre estate in Sussex.
Not everyone is sad to see them go.
"In the past, I used to pick mushrooms and berries on the forest floor over there. Now you can't even set foot there," says Tamara Vorontsova, 74, whose cottage lies on a street that is now little more than a driveway leading to a compound of mansions behind locked gates.
"You can't get down to the river anymore, because everything is closed off with fences. But I have to say, the area has improved."
Are they good neighbors? Vorontsova seems puzzled by the question.
"What can you say? They're rich. But we know nothing about them," she says. "They come in their cars, and they go in their cars. They live behind fences, and they are surrounded by guards."
TITLE: Governor Gets Blessing,
Another Fights for Job
PUBLISHER: Staff Writer
TEXT: MOSCOW - The governor of Penza has won President Vladimir Putin's approval for an extended term, while embattled Altai region Governor Mikhail Yevdokimov has asked 12 deputy governors to resign.
The developments are connected to Kremlin-drafted legislation that came into force Jan. 1 and gave the president the right to hire and fire governors.
Putin moved to abolish direct gubernatorial elections after September's attack on Beslan, saying the change was needed to strengthen the state.
Putin on Wednesday nominated Penza Governor Vasily Bochkaryov to the local legislature for a new term. Bochkaryov, whose term would have expired in April 2007, asked for Putin's blessing to remain in office in mid-March. Bochkaryov, 55, was first elected in April 1998 and re-elected in 2002.
A spokesman for the Penza legislation said the deputies would probably unanimously confirm Bochkaryov.
In an attempt to keep his post, Yevdokimov on Wednesday asked his deputy governors and the other members of his administration to resign so that he and the local legislature could jointly form a new governor's team.
Yevdokimov made the decision after consultations with the presidential administration and Putin's envoy to the Siberian Federal District, Anatoly Kvashnin. Local discontent has been swelling, and Kvashnin urged Yevdokimov in the talks to find a compromise with lawmakers, Yevdokimov spokeswoman Oksana Klipenshtein said.
In March, an alliance of political parties and nongovernmental organizations called for Putin to dismiss Yevdokimov, accusing the former stand-up comedian of poorly running the region. In April, the legislature nearly unanimously approved a no-confidence motion against Yevdokimov. "We hope that by involving local deputies in the nomination of the governor's team we will be able to sort out all the disagreements that we have had with them," Klipenshtein said.
Also Wednesday, Kostroma Governor Viktor Shershunov, who received Putin's approval for a third term in April, was sworn in for a new term despite low approval ratings. Kommersant reported Thursday that only 20 percent of the people in Kostroma support him.
Meanwhile, presidential envoy Konstantin Pulikovsky said he was preparing a list of candidates to replace Chukotka Governor Roman Abramovich when his term expires in December, Interfax reported. Abra-movich, the wealthy oil magnate, announced last year that he would not seek a second term.
Vedomosti said the Kremlin had set up a schedule to deal with governors wishing to be reappointed.
TITLE: Suspect Detained for Blasts
PUBLISHER: The Associated Press
TEXT: MOSCOW - A 28-year-old man has been detained on suspicion of involvement in a series of explosions at bus stops over the past two years in the central city of Voronezh, prosecutors said Thursday, and they tied the suspect to radical Islamic movements that are battling authorities.
At least one person was killed and nine wounded in the three blasts, Itar-Tass reported. All were carried out during morning rush hour, and all involved the use of homemade bombs filled with metal shrapnel, NTV television said.
"This man adopted Islam, he shared the views of ... Wahhabis, which probably inspired him to commit these crimes," said Voronezh regional prosecutor Alexander Ponomaryov, referring to the ascetic Islamic sect.
"He belonged to illegal armed formations, whose headquarters are in the Caucasus," Ponomaryov said in remarks broadcast on television, which showed footage of explosive components and Islamic literature allegedly found in caches the suspect showed investigators.
The detainee testified that the explosions were organized by Nikolai Kipkeyev, a member of a criminal group called Muslim Society No. 3, Interfax said. Kipkeyev was killed last year when a female suicide bomber whom he was directing blew herself up outside the Rizhskaya metro station, the report said.
TITLE: Let's Talk About Climate Change
TEXT: The commonplace view of the earth from an airplane at 35,000 feet - a vista that would have astounded Dickens or Darwin - can be instructive when we contemplate the fate of our earth. We see faintly, or imagine we can, the spherical curve of the horizon and, by extrapolation, sense how far we would have to travel to circumnavigate, and how tiny we are in relation to this home suspended in sterile space. When we cross the Canadian northern territories en route to the American west coast, or the Norwegian littoral, or the interior of Brazil, we are heartened to see that such vast empty spaces still exist - two hours might pass, and not a single road or track in view.
But also large and growing larger is the great rim of grime - as though detached from an unwashed bathtub - that hangs in the air as we head across the Alps into northern Italy, or the Thames basin, or Mexico City, Los Angeles, Beijing - the list is long and growing. These giant concrete stains laced with steel, those catheters of ceaseless traffic filing towards the horizon - the natural world can only shrink before them.
The sheer pressure of our numbers, the abundance of our inventions, the blind forces of our desires and needs, appear unstoppable and are generating a heat - the hot breath of our civilization - whose effects we comprehend only hazily. The misanthropic traveller, gazing down from his wondrous, and wondrously dirty machine, is bound to ask whether the earth might not be better off without us.
How can we ever begin to restrain ourselves? We appear, at this distance, like a successful lichen, a ravaging bloom of algae, a mould enveloping a fruit. Can we agree among ourselves? We are a clever but quarrelsome species - in our public discourses we can sound like a rookery in full throat. In our cleverness we are just beginning to understand that the earth - considered as a total system of organisms, environments, climates and solar radiation, each reciprocally shaping the other through hundreds of millions of years - is perhaps as complex as the human brain; as yet we understand only a little of that brain, or of the home in which it evolved.
Despite that near ignorance, or perhaps because of it, reports from a range of scientific disciplines are telling us with certainty that we are making a mess of the earth, we are fouling our nest and we have to act decisively and against our immediate inclinations. For we tend to be superstitious, hierarchical and self-interested, just when the moment requires us to be rational, even-handed and altruistic. We are shaped by our history and biology to frame our plans within the short term, within the scale of a single lifetime; and in democracies, governments and electorates collude in an even tighter cycle of promise and gratification. Now we are asked to address the wellbeing of unborn individuals we will never meet and who, contrary to the usual terms of human interaction, will not be returning the favor.
To concentrate our minds, we have historical examples of civilizations that have collapsed through environmental degradation - the Sumerian, the Indus Valley, Easter Island. They extravagantly feasted on vital natural resources and died. Those were test-tube cases, locally confined; now, increasingly, we are one, and we are informed - reliably or not - that it is the whole laboratory, the whole glorious human experiment, that is at risk.
And what do we have on our side to avert that risk? Against all our deficits, certainly a talent for co-operation; we can take comfort from the memory of the Partial Test-Ban Treaty (1963), made at a time of hostility and mutual suspicion between the cold war superpowers. More recently, the discovery of ozone depletion in the upper atmosphere and worldwide agreement to ban chlorofluorocarbon (CFC) production should also give us heart. Secondly, globalization has not only unified economies, it has focused global opinion to put pressure on governments to take action.
But above all, we have our rationality, which finds it highest expression and formalisation in good science. The adjective is important. We need accurate representations of the state of the earth. The environmental movement has been let down by dire predictions, "scientifically" based, which over the past two or three decades have proved spectacularly wrong. Of itself, this does not invalidate dire scientific predictions now, but it makes the case for skepticism - one of the engines of good science. We need not only reliable data, but their expression in the rigorous use of statistics.
Well-meaning intellectual movements, from communism to post-structuralism, have a poor history of absorbing inconvenient data or challenges to fundamental precepts. We should not ignore or suppress good indicators on the environment - and there are quite a few - simply because they do not make the advocate's case. It is tempting to embrace with enthusiasm the latest bleak scenario because it fits our mood. But we should be asking, or expecting others to ask, for the provenance of the data, the assumptions fed into the computer model, the response of the peer review community, and so on. Pessimism is intellectually delicious, even thrilling, but the matter before us is too serious for mere self-pleasuring. It would be self-defeating, if the environmental movement degenerated into a religion of gloomy faith. (Faith, ungrounded certainty, is no virtue). It was good science, not good intentions, that identified the ozone problem, and it led, fairly promptly, to good policy.
The wide view from the airplane suggests that whatever our environmental problems are, they will have to be dealt with by international laws. No single nation is going to restrain its industries while its neighbours' are unfettered. Here too, an enlightened globalisation might be of use. And good international law might need to use not our virtues, but our weaknesses (greed, self-interest) to lever a cleaner environment; in this respect, the newly devised market in carbon trading was a crafty first move.
The climate change debate is hedged by uncertainties. Can we avoid what is coming at us, or is there nothing much coming at all? Are we at the beginning of an unprecedented era of international cooperation, or are we living in an Edwardian summer of reckless denial? Is this the beginning, or the end? We need to talk.
This article appears as part of openDemocracy's online debate on the politics of climate change. The debate was developed in partnership with the British Council as part of their ZeroCarbonCity initiative - a two year global campaign to raise awareness and stimulate debate around the challenges of climate change.
TITLE: Medical System Needs Radical Change
TEXT: There can be no doubt that the Russian medical system needs to be changed: it is costly, ineffective and fails to fulfill its fundamental goals - to keep the population healthy. Health and Social Development Minister Mikhail Zurabov has announced it will be reformed at the federal level next year, although details are still being decided.
The St. Petersburg city government has started to reform the health system in the city. City Hall is concentrating on raising the effectiveness of the budget spent in the sector. Because of the declining population over the last 15 years some polyclinics are only using 55 percent to 60 percent of their capacity, the bureaucrats say. Nevertheless the city pays for their buildings and communal service bills.
To reduce this irrational expenditure, City Hall will reorganize 23 polyclinics. This year some half-empty polyclinics will be amalgamated - some will close and adjacent ones will receive their patients. Others will be affiliated to hospitals. In many cases all that is involved is an amalgamation of management teams, accountants, and laboratory services so that expenses for maintaining these enterprises will be lower.
Another problem is the irrational use, according to the health committee, of expensive hospitals. The bureaucrats say that the bedspace is often not used as it should be. For instance, two-thirds of patients spend several days in the expensive beds of surgical wards waiting for operations. Financing their stays accounts for 70 percent of the budget expenditure on health.
To raise the effectiveness of spending, a radical change in how medical services are provided is necessary. Those who can be treated in polyclinics or as outpatients should be kept out of hospitals. In this way the time in hospital beds could be cut to a minimum. A patient booked for an operation should be prepared in a diagnostic center and after the operation should spend most of his time recovering as an outpatient.
To do this, a pyramid of those most in need must be created. The base would be made up of health clinics with therapists, pediatricians and general practitioners. These clinics would be assisted by consultancy centers developed as some of the polyclinics and would have more modern and sophisticated equipment and better specialists than the clinics. In this way, the "center of gravity" would shift from the expensive long-term wards to more economical health clinics, which would ideally grow from 30 percent to 50 percent of budget health expenses.
Such a reform might raise the effectiveness of budget expenditures, but is unlikely to raise the quality or access of health services. When it comes to access, it may even get worse. After the amalgamation of polyclinics, the distance to the nearest one will increase for many citizens. High-quality care is impossible under the current standards set by the Health Ministry - only 15 minutes is allotted for a doctor's visit. However, neither this norm can be raised nor can the range of services be extended because of the chronic lack of doctors.
As was noted by participants in a recent session at the Legislative Assembly, two things need to be done to reduce the deficit - the number of places in medical universities needs to be raised and the wages of medical staff should be hiked several times over. But City Hall is not doing either of these things. Nor will Zurabov's reform.
They are also doing nothing to solve the main problem of the Russian health system - a catastrophic lack of money in all areas - for wages, medicine, hospital equipment and polyclinics and health centers. Calculated per capita, we spend almost 30 times less than in Europe. The St. Petersburg reform may increase the effectiveness of spending, but won't solve the problem of financing - the bureaucrats estimate the savings at 0.5 percent. This calls for radical decisions. What they might be, I will explain next week.
Vladimir Gryaznevich is a political analyst with Expert Severo-Zapad magazine. His comment was first broadcast on Ekho Moskvy in St. Petersburg on Friday.
TITLE: Miami Vice
TEXT: The next president of the United States was on the road last week, throwing red meat about "moral issues" to a baying crowd of Bushist Party faithful - while simultaneously trying to cut off medical support for a 6-year-old girl his agents had previously tried to kill.
Yes, it was Jeb Bush, governor of the ruling family's Florida dominions, pounding the pulpit - er, podium - at a Republican conclave in Georgia. Jeb told the flock that the party must stand for "absolute truth" (something previously associated with religious cults) if they want to maintain their "ascendancy" over the nation, The Associated Press reports. "There is such a thing as right and wrong," he declared. Whipped into a frenzy by this blazing revelation, the crowd responded with cries for Bush to ascend to his brother's throne in 2008.
But even as Jeb basked in the bootlicking adulation, his peculiar sense of "right and wrong" was on vivid display in a Florida courtroom. There, his minions are fighting to stop state aid for young Marissa Amora - four years after they sought a court order to let her die following a savage beating, The Palm Beach Post reports. What's more, these same minions - the Department of Children and Families - could have prevented the beating, which left Marissa permanently disabled.
In late 2000, as Jeb was ensuring the "ascendancy" of his brother by - among many other tricks - deliberately slashing thousands of eligible African-American voters from the rolls, Marissa was hospitalized for a month. Doctors and nurses saw telltale signs of past beatings - and witnessed her neglectful mother abusing her in the hospital. They pleaded for DCF to intervene. But the agency, perhaps mindful of Jeb's fierce public championing of "family values," declined to step in.
Then came the inevitable: a few weeks later, Marissa was back in the hospital, beaten nearly to death, with severe injuries to her brain and liver and several broken bones. Now the DCF took an interest: they rushed to court to obtain a "Do Not Resuscitate" order for the mangled 2-year-old. For God's sake, don't let her live, the DCF told Marisa's doctors, because she might "potentially" be left "in a vegetative state."
But the doctors disagreed with the Bushists' expert diagnosis. And so Marissa is still alive today - brain-damaged, crippled, fed through a stomach tube, but alert, talkative, happy, with a new foster mother. Indeed, she would seem to be a shining example of the "culture of life" that we hear so much about these days from certain pulpit-pounding politicians. But to Jeb and the DCF, she's just a "useless eater," a budgetary burden, a mistake to be flushed away. Without state aid, her new family will sink beneath the staggering cost of Marissa's treatment - and the decent life that she's clawed back from the hellhole Jeb left her in years ago will wither on the vine.
'Tis passing strange. After all, this is the same agency - and the same governor - that just fought all the way to the Supreme Court to keep the long-brain-dead Terri Schiavo existing in a very real "vegetative state." Jeb even found himself lauded on the front page of The New York Times for "cementing his political stature" in the case, with his maneuvers "rooted" in a "deep" religious faith "rather than in political posturing." Yet he was perfectly willing - even eager - to pull the plug on Marissa Amora, and is still trying to destroy her life.
How can this be? For one who lives solely by the "absolute truth," what could possibly be the difference between a crippled, abused, neglected little black girl with no money or connections, and a nice white woman whose case was promoted worldwide by the maniacal, filthy-rich extremist factions that form the base of his brother's "ascendancy"? Since we know from the highest authority that Jeb would never stoop to mere "political posturing," the apparent hideous hypocrisy in his behavior must forever remain an ineffable mystery, like the Trinity, or the 2000 Florida election results.
But then, Jeb has always been the most mysterious of the Kennebunkport Klan. Like the two Georges, he trawled murky waters indeed to make his fortune. One of his business partners, Camilo Padreda, was indicted for drug-dealing, gun-running and embezzlement; but the charges were dropped when the Bush family firm - the CIA - told the FBI that Padreda was their man, fronting covert ops. Padreda then worked Jeb's Washington contacts to steal millions of federal dollars intended to provide housing for the poor. He was convicted of fraud in 1989.
Jeb then hooked up with Miguel Recarey, an associate of Miami mob boss Santo Trafficante Jr., Mother Jones reports. Federal investigators called Recarey's company, IMC, "a criminal enterprise interlaced with intelligence operations." It was in fact yet another front, this time for the Reagan-Bush gang's illegal terrorist war in Nicaragua. Recarey also milked Jeb's Washington connections, diverting millions of Medicare dollars intended for needy patients into the IMF-CIA slush fund. Recarey later fled the country to avoid fraud charges.
In yet another scam, Jeb and a partner used a frontman to wangle a $4.5 million federal loan to buy an office building. When their shill went belly-up, Daddy's federal government obligingly revalued the prime Miami real estate at $500,000. Jeb and his pal coughed up that chump change - and kept the building for themselves, receiving $4 million of pure gravy.
Now with just one more step, this mobbed-up, money-grubbing absolutist will have the whole world in his hands. "Right and wrong" mean nothing to such big-time operators; power is their only truth, their only god.
For annotational references, see Opinion at www.sptimesrussia.com
TITLE: Austria Reflects On 50 Years of Progress
PUBLISHER: The Associated Press
TEXT: VIENNA - Austria on Sunday celebrated the 50th anniversary of an international treaty that returned sovereignty to the country following a decade of Allied occupation after the Second World War, reflecting on the progress made in half a century.
Representatives from the four occupying powers - Britain, France, Russia and the United States - attended a ceremony at the Belvedere Palace, the castle where the state treaty was signed May 15, 1955. Thousands had gathered in the garden outside for a public party.
Austria has dubbed 2005 a year of reflection to observe the many war anniversaries taking place. Several of the milestones, such as the end of the war and the liberation of Austrian concentration camps, have evoked painful memories of a past the country is not proud of.
But Sunday's anniversary was a reason to celebrate just how far Austria has come in the past 50 years.
Britain's new Europe minister, Douglas Alexander, described Austria's progress as "remarkable" during Sunday's ceremony. "From the rubble of war, you built one of Europe's most prosperous countries," he said.
Chancellor Wolfgang Schuessel acknowledged that Austria was late in accepting that it not only was a victim, but also a perpetrator of Nazism. Such acceptance came decades after 1955.
Fifty years ago, thousands of Austrians gathered in the palace garden to await the much-awaited news of the signing of the state treaty. Foreign minister Leopold Figl came out on the balcony, accompanied by the former occupiers' foreign ministers and displaying the signed treaty, and declared - "Oesterreich ist frei!" - "Austria is free!"
The declaration became a much-repeated and cherished statement that found its way into history books.
TITLE: IN BRIEF
TEXT: U.S. sanctions on Iran
WASHINGTON (AP) - As Iran appears to move closer to resuming nuclear activities, support has been quietly building in Congress for new U.S. sanctions, including penalties that could affect multinational companies and this country's foreign aid recipients.
The legislation would put the United States on a more confrontational course than the one pursued by President Bush. He has supported European efforts to offer Iran incentives in exchange for abandoning its nuclear program.
In Tehran, Iranian lawmakers instructed the government Sunday to develop a nuclear fuel cycle, which would include resuming the process of enriching uranium, which could be used in developing atomic weapons.
New England Execution
ENFIELD, Conneticut (AP) - Connecticut prison officials put serial killer Michael Ross to death on Friday as capital punishment opponents mourned liberal New England's first execution in 45 years.
Ross was administered a chemical cocktail at the Osborn Correctional Institution in Somers, Connecticut shortly after 2 a.m., said state officials. The drugs sedated him, paralysed his muscles, and stopped his heart.
Ross, who admitted killing eight women in the 1980s, was pronounced dead at 2:25 a.m., a senior Connecticut correctional official said.
The 45-year-old Cornell University graduate hastened his own execution last year when he waived his remaining appeals, saying he wanted his death to serve as closure for his victims' families. He made no statement before his death.
Several hundred death penalty opponents held a vigil near the Osborn facility, many of them praying aloud and expressing disgust at the return of capital punishment to New England after nearly a half-century absence.
Ethiopia Holds Polls
ADDIS ABABA (AP) - Ethiopians voted by the millions Sunday responding enthusiastically to a parliamentary race between the coalition that ended a brutal dictatorship and an opposition promising greater liberalization.
The worst problem was the crowds, with voters having to wait hours to cast their ballots.
More than 25 million people had registered and election officials estimated turnout at more than 85 per cent.
There have been accusations of voting irregularities from the opposition, but Prime Minister Meles said people should await the reports of foreign election observers before making any conclusions on alleged electoral abuses.
Mercenaries Deported
HARARE, Zimbabwe (AP) -Sixty-one accused mercenaries held in Zimbabwe for more than a year for alleged involvement in a coup attempt in Equatorial Guinea were deported to South Africa on Sunday, where they could face charges of violating that country's anti-mercenary laws.
A lawyer for the men, Jonathan Samkange, said Zimbabwe released all 62 men who completed their yearlong sentence on immigration charges. Home Affairs spokesman Nkosana Sibuyi told the South African Press Association that one man was left behind in Harare because he was Zimbabwean.
South Africa is embarrassed about its reputation as a ready source of mercenaries, many of whom used to fight in apartheid-era defense forces. Some of the men held in Zimbabwe were of Angolan and Namibian origin who joined forces with South Africans against liberation movements in their own countries in the 1980s.
TITLE: Canada's Dominance Czeched by Jagr
PUBLISHER: The Associated Press
TEXT: VIENNA - Martin Rucinsky made sure the Czech Republic wouldn't need overtime or a shootout to win the world hockey championship.
Rucinsky set up Vaclav Prospal's first-period goal, and scored one of his own in the third as the Czech Republic denied Canada its third straight title and won the world championship 3-0 Sunday.
"Scoring a goal in a world championship final is already fantastic, but winning is even better," Prospal said. "Canada was tough, but we were better."
Tomas Vokoun, named the tournament's best goalie, made 29 saves in earning the shutout. The Czechs (8-1) hadn't won the gold since 2001 when they captured their third title in a row. It is their fifth world championship since 1996.
"It was a very tough game, but we always believed in ourselves," forward Jaromir Jagr said. "It helped, of course, that we scored the opener, because then the Canadians had to attack.
"It was a very tactical game and our coach told us to remain calm, stay back and wait for our chances. I'm sure our fans have forgiven us now for not winning at home last year."
A year ago in Prague, the United States eliminated the Czechs from the quarterfinals with a shootout victory.
This one didn't come easily. The Czechs got revenge and beat the United States in a shootout to win their quarterfinal game on Thursday, and then eliminated Sweden - the runners-up the past two years - Saturday to win that semifinal matchup 3-2 in overtime.
It was the first time in the tournament that Canada was shut out.
The world championships took on even more importance this year because of the NHL lockout that canceled the entire North American season and threatens next season, too.
Earlier in the day, Maxim Afinogenov had two goals and an assist to lead Russia to a 6-3 victory over Sweden in the bronze-medal game.
Afinogenov scored after just a minute and added his second goal at 3:58, both off assists by Alexander Ovechkin - last year's top NHL draft pick by the Washington Capitals. That helped lift Russia to a world championships medal for only the third time since the breakup of the Soviet Union in 1991.
Russia finished a disappointing 10th last year, but rebounded for a 6-1-2 performance. The only loss came Saturday, 4-3 to Canada in the semifinals.
Ovechkin, 19, also scored as the Russians knocked Henrik Lundqvist, a New York Rangers goalie prospect, out of the game with three first-period goals.
"We're happy, but we're disappointed with what happened in the last game because we lost to Canada," said Ovechkin, who scored five goals in the tournament.
"My best game was today, because we won third place. You always want to win your last game of the season."
Before the worlds, Russia beat Sweden in the two-game final series to win the European Hockey Tour - the finale of Europe's top three hockey tournaments - for the first time.
TITLE: SPORTS WATCH
TEXT: Zenit Thwarts CSKA
MOSCOW (Reuters, SPT) - CSKA Moscow's morale suffered a blow before its first European final when they lost 1-0 at FC Zenit St. Petersburg in the Russian Cup semi-final's first leg on Friday.
In its last game before facing Portugal's Sporting in the UEFA Cup final on Wednesday, CSKA coach Valery Gazzayev had most of his first-team players on the pitch but they came up short against an inspired St. Petersburg side.
CSKA also had to play with 10 men for more than a half after Brazilian striker Vagner Love was sent off in the 42nd minute.
Zenit striker Alexander Kerzhakov, the Russian league's top scorer last season, beat CSKA goalkeeper Igor Akinfeyev with a strong header midway through the second half to settle the tie.
CSKA had to thank its 19-year-old keeper for keeping the team's hopes alive before the return leg in Moscow on May 25 with several fine saves in the second half.
The winner takes on first division side Khimki in the Russian Cup final on May 29.
If Zenit goes through to the final, it will be welcome news for the St. Petersburg team which was fined 10,000 rubles ($360) after its fans threw fireworks onto the pitch in an April 17 Premier League clash against CSKA. Local media also reported that Zenit trainer Vladimir Borovichka was fined 50,000 ($1,785) for swearing at his CSKA counterpart Nikolai Latysh during the same match.
Man U Fans vs. Glazer
LONDON (Reuters) - Die-hard supporters of Manchester United pledged Saturday to keep fighting a takeover by U.S. billionaire Malcolm Glazer as he edged nearer to gaining full control of the world-famous English soccer club.
The owner of the Tampa Bay Buccaneers American football team only needed to buy a few thousand more shares when markets opened Monday to reach the 75 percent stake level needed to delist the 127-year-old club from the stock market and make it private.
Safina Wins in Prague
PRAGUE (AP) - Top-seeded Dinara Safina of Russia defeated the Czech Republic's Zuzana Ondraskova 7-6 (3) 6-3 on Sunday to win the Prague Open.
"It was important for me to win this tournament," Safina said. "Before, I played well but wasn't winning matches."
In the doubles final earlier, Emilie Loit of France and Australia's Nicole Pratt won 6-7 (6) 6-4 6-4 over the Czech Republic's Barbora Strycova and Jelena Kostanic of Croatia.
West Brom Stay Up
LONDON (Reuters) - Manager Bryan Robson hailed West Bromwich Albion's fighting spirit after it re-wrote the Premier League record books by avoiding relegation on Sunday.
Bottom of the table before kickoff, West Brom's 2-0 win over Portsmouth saw them leapfrog Crystal Palace, Norwich City and Southampton, which will all play second division football (non-Premier League) next season.
Robson's decision to send on Geoff Horsfield as a second half substitute paid dividends as he scored West Brom's opener with his first touch of the ball.