SOURCE: The St. Petersburg Times
DATE: Issue #1087 (53), Friday, July 15, 2005
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TITLE: Residents Protest Against Road-Widening Scheme
AUTHOR: By Vladimir Kovalev
PUBLISHER: Staff Writer
TEXT: A group of residents in the Kalininsky district is protesting against City Hall’s plans to widen Piskaryovsky Prospekt in the northeast St. Petersburg, a project that threatens  hundreds of trees in the area that will need to be chopped down.
Residents say that if the project goes ahead, 435 lime trees and 20,374 bushes will disappear from the prospekt.
“Reconstruction of the road complex has reached Kalininsky district,” Vladimir Soloveichik, co-head of the Citizens’ Initiative movement, said Wednesday in a statement.
“The next plans are to widen by 50 percent Piskoryovsky Prospekt, one of the biggest and most polluted roads in the city,” he added. “They are going to clear to the ground the green strips that stand for 3 kilometers on both sides of the prospekt from Sverdlovskaya Naberezhnaya to Prospekt Mechnikova.
“It is going to be done to turn the prospect into a six-lane highway that will allow more freight to go though this area. The trees do somehow provide some protection to neighboring residential buildings from noise and pollution,” Soloveichik said.
When presenting the project to the public, City Hall did not mention that the green strips would be destroyed. Authorities have not shown the conclusions of an environmental impact report, which they should do according to a city law that says citizens can participate in the process of making decisions on construction projects, he added.
However, City Hall says that not only will other trees be planted to replace those chopped down, but also that it is not yet clear which trees will be chopped down.
“Probably those trees are already ill, so they should be chopped down anyway,” the press service of City Hall’s road construction committee said Wednesday.
“We usually plant as many trees as are chopped down near where the old ones were standing. Quite often we plant even more trees than were there before,” the press service said.
But the St. Petersburg branch of Greenpeace said it is likely that the project violates the regional law on protecting green areas. The environmental group declined to make detailed comments saying it had not studied the documentation on the project.
“Judging by the information that we have now this road is scheduled to go along the Park Sakharova as well as Pionersky Park and this violates the law that bans trees in parks from being chopped down,” Dmitry Artamonov, head of the branch, said Wednesday in a telephone interview.
“Besides it is not clear how they would plant more trees for those chopped down because there are municipalities that have little vacant land. It seems this is another crazy idea that [City Hall] will try to push through in every way possible,” he said.

TITLE: Court Lets Tax Probes Backdate
AUTHOR: By Alex Fak
PUBLISHER: Staff Writer
TEXT: MOSCOW — Tax authorities can press ahead with investigations after the three-year statute of limitations has passed if they can prove that the taxpayer obstructed the original inspection, the Constitutional Court ruled Thursday.
Moreover, authorities only have to open an investigation within three years of the period they are examining in order to proceed with it indefinitely, according to the court decision, a copy of which was obtained by The Moscow Times, sister paper of The St. Petersburg Times. 
The ruling leaves it up to individual courts to determine whether a company obstructed an inspection.
The decision, which carries the force of law, will affect every company working in Russia. It comes as firms urge the government to protect them against seemingly arbitrary tax inspections and as many investors are worried about politically motivated back tax audits. 
“This is a horrifying decision for all taxpayers, and not just for taxpayers but for the business community in general,” said Sergei Pepelyayev, a managing partner at Pepelyayev, Goltsblat and Partners, a law firm. “Now, any court will be able to make decisions that are not dictated by the law but by whichever interests” control it.
In making its decision Thursday, the Constitutional Court rejected a request from tax authorities to strike down the statute of limitations as unconstitutional. The Federal Tax Service had argued that the statute contradicted two points within the Russian Constitution: the guarantee of equality before the law and a requirement that everyone pay their taxes in full.
The court also said that in instances of obstruction, authorities could prosecute tax cases only “within the specified period covered by the inspection.” Authorities had sought permission to revisit any period in the tax history of repeat offenders. 
Most companies could not pay their taxes in full during the 1990s because tax laws at the time were too complex and sometimes contradictory. 
The Association of European Businesses in Russia, a corporate lobbying group, filed a brief with the Constitutional Court in May that argued that watering down the statute of limitations “may come to be used as an efficient instrument to bring pressure on business, degrading Russia as jurisdiction and regressing it for many years.”
“The tax inspectorate did not get what it wanted from the Constitutional Court,” said a court source who asked for anonymity in order to talk freely about the issue.
“It won the right to go to court and complain that a taxpayer did not let it do its job, and if there is a proof of that, then the court can look into it,” the source said.
The source conceded, however, that the court had left unclear what could be constituted as evidence of obstruction.
But the newly opened loophole allowing the indefinite pursuit of taxpayers means that the statute of limitations has been watered down, said Olga Boltenko, a tax lawyer at LeBoeuf Lamb Greene & MacRae who helped draw up the Association of European Businesses brief. 
“They [tax authorities] just have to say they have not received one single document, and this rigmarole could continue indefinitely,” Boltenko said. 
Pepelyayev said tax inspectors would be able to “make it seem as if the taxpayer had hindered their inspection” — for example, by presenting a company with a request for unspecified documents and then accusing it of obstruction if some papers were not turned over.
The Constitutional Court ruling came in response to two similar cases. One involved $1.4 billion in back tax claims against oil giant Yukos for 2001, while the other involved Galina Polyakova, a pensioner ordered to pay taxes on a dacha she sold in July 1999. Although inspectors demanded she pay up in May 2002, the courts did not back up the claim until three years had passed. Both Polyakova and Yukos will now have to pay up. 
Lawyers suggested that the court might be toeing the Kremlin line. Although the judicial branch of government is independent in theory, the Constitutional Court is widely seen as obeying orders from the executive branch.
Yelena Zatsepina, a legal expert at the Association of European Businesses, said that Gadis Gadzhiyev, one of the 19 judges deciding the case, said at a tax conference on May 31 that the then-pending ruling would not be a surprise. Those present interpreted this to mean that the ruling would go against the taxpayer, in this case, Yukos. 
“I have the impression that someone ordered this decision because the Constitutional Court ruled on questions that no one had asked it to interpret,” Pepelyayev said. 
For instance, the decision to combine the cases of Polyakova and Yukos, and the ruling to let investigations proceed if they were started within three years of the period in question, will help the tax authorities in a separate back tax case against Yukos for 2000, Pepelyayev said.
The Constitutional Court source dismissed the concerns. “These two cases were on a similar matter, and it is not at all unusual that the court decided to examine them together,” the source said. 
Gadzhiyev could not be reached for comment late Thursday.

TITLE: Two Get Jail Sentences for Hazing Conscripts
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: In a rare case of soldiers being punished for bullying, the military court of the Kronshtadt garrison on Wednesday found two navy conscripts guilty of beating other recruits and sentenced them to jail.
Ivan Arsakov, 20, was sentenced to 3 1/2 years in jail while Viktor Fyodorov, 21, received a one-year suspended sentence.
Andrei Pichugin, senior assistant of the military prosecutor of the Leningrad Military District, said the court found the sailors guilty of breaking rules of how they should behave toward others.
“The sailors were charged with beating up their colleagues and extorting money,” Pichugin said Thursday in a telephone interview.
One victim, Ivan Kugurov, said on city-owned television station Channel 5 after the verdict that he had gone to court because he wanted “to find justice.”
“They [the offenders] humiliated me, and I didn’t like that,” Kugurov said.
A criminal case was opened against the two sailors after 12 conscript sailors fled their military unit in Lomonosov in April and complained to military prosecutors of beatings and extortion. 
Some of the sailors were hospitalized.
Medical experts found evidence of beatings on the bodies of seven sailors.
Those who suffered violence were mainly young sailors, who had just arrived to start their military service in the unit. 
Arsakov and Fyodorov had already served for 1 1/2 years and by an unwritten tradition of the Russian army considered themselves superior and able to do whatever they wanted with the younger sailors. 
This is called in Russian dedovshchina, or hazing, which is derived from the word grandfather, reflecting the greater status that older recruits assume for themselves.
Arsakov and Fyodorov extorted money and belongings, including safety razors, from the later arrivals and beat them up. Channl 5 reported that Arsakov was the worse offender and he therefore received a harsher punishment than Fyodorov.
The sailors who fled first went to got the city office of Soldiers’ Mothers human rights organization, which contacted the military prosecution.
Zinaida Tropina, a spokeswoman for Soldiers’ Mothers, said Thursday the organization was satisfied that the case had received wide publicity and that the offenders had been punished.
“We were especially satisfied with the effective and competent work of the military prosecutors, who supported the conscripts who suffered,” Tropina said.
However, Soldiers’ Mothers was still not fully satisfied with the results of the case. “We were concerned that none of the officers who allowed the dedovshchina to occur in the unit were punished,” Tropina said. “The very existence of dedovshchina suggests that the officers do not do their work well,” she said.
Earlier, Soldiers’ Mothers said the navy unit in question had bad reputation for frequent cases of dedovshchina.

TITLE: Metro Station Faces Long Repair
AUTHOR: By Angelina Borovikova
PUBLISHER: Special to The St. Petersburg Times
TEXT: The Proletarskaya metro station will close for repairs for up to 18 months by Aug. 25, Konstantin Kocherov, head of City Hall’s transport committee’s transport network department, said Wednesday.
The closure of the station on the green line in the southeast of the city was announced early to allow people to decide how they will cope without it, he said.
“It will allow people who buy long-term transport passes to think if it is still profitable for them to buy a card for the next month after the station has closed,” he added.
Igor Vybornov, head of St. Petersburg Metropolitan’s production-technical department, said the station is set to close on Aug. 20, but that the transport committee will make the final decision on the exact date. 
Trains will continue to run to and from the Obukhovo and Rybatskoye at the end of the line. They will pass Proletarskaya without stopping, Vybornov said. 
The St. Petersburg Metropolitan is in the process of choosing a contractor to do the repairs to the escalators.
During flooding in 2003 water got into the lobby and caused the elevator to start corroding, presenting a danger to passengers, Vybornov said.
To cope with the extra numbers of passengers who will divert from Proletarskaya to neighboring stations, Kocherov said the number of trams running to the Lomonosovskaya metro station will be increased. 
A new temporary bus route will be launched from Obukhovo to Proletarskaya and the number of trams running from Rybatskoye will increase, he said.
None of the new services will be free. 
“It’s not a crash. Repairs are a normal situation, it’s part of city life,” he said.

TITLE: Further Progress On Mariinsky II
PUBLISHER: For The St. Petersburg Times
TEXT: Russia on Thursday signed a state contract with French architect Dominique Perrault to supervise the planning and construction of the second stage of the Mariinsky Theater, Interfax reported.
It was the third agreement signed with Perrault. The first contract on pre-project developments was signed with Perrault, as winner of an architectural contest. The second state contract signed on July 13 in Moscow was for the scheduling of the project.
Perrault’s design is for a new theater in the shape of a geometric form, combining rooms of different sizes and different storys. The new building will have nine floors and three underground levels.

TITLE: Comeback for Alphabet Cookies
AUTHOR: By Cornelia Riedel
PUBLISHER: Special to The St. Petersburg Times
TEXT: Russia’s royal family is said to have enjoyed Russisch Brot, or Russian bread, German cookies made of egg white,  sugar, flour and caramel syrup, and shaped like the letters of the alphabet. But the bukvy, or “letters,” as they are called in the country where they were invented, are totally unknown in Russia today. 
Dresden baking entrepreneur Hartmut Quendt is seeking a partner in the city so that St. Petersburg snackers will be able to enjoy the alphabet cookies alongside typical Russian pies. Dressed in a yellow jacket and carrying three bags full of Russisch Brot, Quendt visited St. Petersburg bakeries last month. 
“I want to sell Russisch Brot here,” he said. “After all, this is where it comes from.”
The Dresden office of the Saxony Chamber of Commerce organized a two-day tour of the city’s leading bakers for the entrepreneur. In the conference room of the Obukhovsky Khleb enterprise near the city gates, Quendt spread out his wares.
General director Mikhail Fukhs examined the baked letters professionally and tasted the Dresden dough. His assistant brought a tray of different kinds of Russian piroshki, or pies, fresh from the oven. 
Quendt praised their quality. The men went on to discuss the preparatory dough, the water content, drying, packing technology and the distribution of baked goods. 
Quendt said Russisch Brot was invented in St. Petersburg. In 1844, the Dresden apprentice baker Ferdinand Wilhelm Hanke brought the recipe from the city back to his home in Saxony. At the time bukvy were very popular in St. Petersburg. Hanke had learned his trade on Nevsky Prospekt, St. Petersburg’s main boulevard, and opened a German and Russian bakery immediately after his return to Dresden, Quendt said.
Bureaucratic hurdles are not the only things standing in the way of the return of the Dresden alphabet cookies from returning to Russia, he added. The alphabet itself could prove tricky.
Quendt has already decided that he will not bake a Cyrillic version of the cookies for the Russian market. 
“Our letters will stay as they are because the Latin alphabet is well known here in Russia,” he said.

TITLE: Latvia Sets Daily Sum For Russian Visitors
AUTHOR: By Vladimir Kovalev
PUBLISHER: Staff Writer
TEXT: Russian citizens visiting Latvia would have to have at least 10 lats ($17.20) a day at hand for every day they want to spend in the Baltic republic, according to a new regulation approved by the Latvian government this week, the Baltic News Service reported Tuesday.
If a visitor has to pay for accommodation, they will have to have 30 lats ($51) per day, the regulation says.
A lesser sum of money may be allowed if a foreigner is ill or a close relative has died in Latvia or, if a visit is linked to family unification or “if there are no grounds to believe that the visitor would complicate the activity of the national system for social assistance,” the report said.
Traveler’s checks, a bank statement, cash in lats or hard currency, but not rubles, will be accepted as proof of a visitor’s ability to support themselves. A person who invites the visitor could also take financial responsibility for the traveler, the regulation says.
The regulation does not affect citizens of the EU or from the European Economic Area, members of their families or holders of diplomatic passports.
“It’s seems to me like some sort of discrimination,” said Marina Panchenko, a manager at Information Highway E-18, a St. Petersburg travel company. “Why is this that the citizens of the EU won’t have to have the money and Russians will?”
Meanwhile, Britain and Lithuania last week raised their fees for processing visas. It now costs not £36 ($53), but £50 for a visa to Britain while the cost of a visa to Lithuania has risen from 20 euros ($24) to 35 euros.
Representatives of the British embassy in Moscow said the raise was made to cover costs, while Lithuanian officials said the price was raised to make the cost of visas for Russian tourists visiting Lithuania equal to those for Lithuanian citizens visiting Russia, Izvestia reported last week.
Costs for an EU citizen visiting Russia range from $50 to $100 for a tourist visa.

TITLE: Hot Weather Set to Continue
PUBLISHER: The St. Petersburg Times
TEXT: While the hot weather is making it hard for some St. Petersburgers to breathe in stuffy offices, city meteorologists predict the thermometer will stay high through to the end of July.
“Day temperatures won’t drop lower than 20 degrees Celsius,” Alexander Kolesov, head of the forecast department at the St. Petersburg Meteorological Center, said Wednesday, when it was 29 degrees.
July day temperatures are expected to vary between 23 and 30 degrees.
The hot weather, accompanied by high pressure, was brought to St. Petersburg by anti-cyclones and southern winds, Kolesov said.
The high temperatures have so far not exceeded the norms for July. He said St. Petersburg’s July temperatures don’t usually exceed 30 degrees.
Meteorologists also forecast a hot August, but say it won’t be as hot as July.

TITLE: Russian, Chinese Skaters Wed
AUTHOR: The St. Petersburg Times
TEXT: After dating for the past five years St. Petersburg skater Denis Petrov, who won a pairs silver medal at the 1992 Olympic Games, married Lu Chen, a Chinese 1995 figure skating world champion, in Shenzhen, China last Friday.
The couple were married in an elegant outdoor wedding ceremony followed by a romantic candlelight reception. Petrov and Chen had about 200 guests, Canadian Skate Today newspaper reported.
Petrov, a former student of famed Russian skating coach Tamara Moskvina, first met Lu Chen at the competitions in St. Petersburg in 1988. However, they started living together only four years ago. Last year both moved from the United States to China.
Petrov and Chen have opened their own business in the super modern Chinese city of Shenzhen. 
They own a new international skating club, which is proving to be very popular, the newspaper reported.

TITLE: Japanese Make Bet On Cell Phone Ring Tones
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — Sumitomo, a Japanese industrial and financial conglomerate, has bought a blocking stake in SPN Digital, a Russian provider of downloads for mobile phones, the companies said Wednesday.
Sumitomo said it had acquired a more than 25 percent stake, which SPN Digital said it had sold for “less than $10 million.” Both companies declined to provide any more details.
So-called mobile content — the array of downloadable ring tones, games and music available for cell phones — is a booming market in Russia. Last year, it was worth $300 million and in 2005 is expected to race to $550 million, according J’Son & Partners consultancy. In the first quarter of this year, the market grew by 80 percent from the previous quarter.
SPN Digital, still a relatively small player on the mobile-content market, is expecting to get an injection of know-how and cash in the deal, while Sumitomo said it was interested in the Russian firm’s advertising capabilities.
“There are 100 million [cell phone] subscribers in Russia, but the number of mobile content users is very small,” said Katsuya Kashiki, a senior manager for new business and investments at Sumitomo. 
A multimillion-dollar injection could help SPN Digital move up to become Russia’s sixth- or seventh-largest mobile content provider, said Polina Maslennikova, an analyst with J’Son & Partners who tracks the market.
Today, SPN Digital is just beyond the top 10, she said, out of some 180 companies jostling for the attention of mostly young mobile phone users. J’Son & Partners said it expected 70 new firms to join the mobile-content market by year’s end.
SPN Digital is part of the SPN Group holding, which also owns SPN Publishing house and the SPN Ogilvy public relations agency. 
Pavel Bondzinsky, general director of SPN Digital, said the company planned to use its cooperation with Sumitomo to expand into the markets of Japan, South Korea and Egypt within a year.

TITLE: ‘Fun’ Sector Grows Fast
AUTHOR: By Maria Levitov
PUBLISHER: Staff Writer
TEXT: MOSCOW — Russia’s entertainment and media market is the fastest-growing in Europe, surging 27.4 percent last year, according to a new report published by PricewaterhouseCoopers.
The market, which includes film, video, Internet products, print media, sporting events and theme parks, hit $12.45 billion in Russia last year, PwC said in its annual study of the world’s entertainment industry.
The report said that Britain’s $74 billion entertainment market was Europe’s largest. Japan’s $92 billion market topped the Asia Pacific region, while China’s grew 30.6 percent in 2004. The United States towered over the world with its $525 billion entertainment market, accounting for nearly half of the global $1.3 trillion market.
Music downloads and other forms of wireless and Internet entertainment are becoming big money makers, PwC said, while book publishing and newspaper markets growth is slowing in all regions. Total revenues from new entertainment forms will increase from $11.4 billion in 2004 to nearly $73 billion worldwide by 2009, PwC projected. 
In Russia, however, it is the film and advertising industries that are driving the country’s booming market.
Higher disposable incomes and the appearance of new cinemas pushed spending on movie tickets, videos and DVDs to grow 18.2 percent, reaching $565 million in 2004, PwC said. 
While about 150 movie theaters were upgraded or constructed in Russia last year, the film industry was held back from greater development by the high consumption of pirated DVDs and video cassettes, the report said.
Just in Moscow, counterfeit products in certain consumer goods segments, including electronics, reach 60 percent, said Olga Alexeyeva, an expert with the Moscow Fund for Consumer Protection.
“We receive complaints every week about pirated video cassettes,” she said.
Nevertheless, PwC projected that Russia’s film market would exceed $1 billion by 2009. Television advertising already reached $1.434 billion last year, growing 24.9 percent. 
PwC did not take into account Russia’s gambling market because of a lack of transparency. The domestic slot-machine business alone is worth $3.5 billion, according to MDM Bank.

TITLE: National Budget Airline Unlikely to Take Off Soon
PUBLISHER: The St. Petersburg Times
TEXT: Private American firm Indigo Partners and TPG Aurora, an eastern European division of Texas Pacific Group,  are planning to launch a new budget airline in Russia by September, Interfax reported this week, citing a newspaper source.
The news agency cited Biznes, a Moscow business daily, as reporting that a new budget airline has been registered under the name Aurora. It will operate as a private company, with routes between Moscow and other Russian cities.
But Owen Blicksilver, head of Owen Blicksilver Public Relations, the firm in charge of Texas Pacific Group media coverage, denied any connection between TPG and the air industry.
“TPG has no relations with Aurora at this point and has no intention of investing in a start-up airline in Russia,” Blicksilver said by e-mail from New York.
Interfax quoted industry experts saying that the new airline, if launched, would face serious obstacles. “Regional airports will probably defend the interests of their main carriers,” said Boris Rybak, general director of Infomost consulting.
The CEO of Utair, Andrei Martirosov, added that a lack of regional airports suitable for budget operators and undeveloped usage of the Internet for online ticket buying will be the main handicaps for a budget enterprise.
Eventually, Aurora will be equipped with a fleet of 40 Airbus A-320 planes, and advance payment for the first 15 jets to be supplied in late 2007 has already been made, Interfax reported. Until that time, the company will use second-hand A-320s, Biznes reported.

TITLE: No. 2 Airline Alliance Forms
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A new airline alliance is forming that will be second only to Aeroflot in its passenger numbers and could eventually replace Sibir as the country’s No. 2 carrier.
The alliance, dubbed AiRUnion, will bring together regional carriers KrasAir, Domodedovo, Samara, Omskavia and Sibaviatrans, according to a statement put out by state-controlled KrasAir, Russia’s No. 4 carrier by passenger numbers last year.
“We are not yet talking about a single airline but more of an alliance like Star Alliance,” said KrasAir spokeswoman Olga Trapeznikova, referring to the alliance of 16 international carriers including Lufthansa, Thai and United.
“Eventually, we will move to become a single airline under a new brand, but this will require changes to the legislation. ... This alliance is an interim stage.” 
For now, the five AiRUnion airlines will remain independent legal entities but coordinate their fleets and destinations, Trapeznikova said by telephone from Krasnoyarsk.
Forming an alliance would follow a global trend of airline consolidation, said Boris Rybak, director of the Infomost aviation consultancy.
“Yet I am skeptical about AiRUnion. They will find a lot of bureaucratic hurdles on their way,” he said. 
The consolidation process, which could take more than a year, could negatively influence the efficiency of the new carrier, said Ilya Novokhatsky, a spokesman for Sibir.
AiRUnion’s five member airlines have a combined fleet of 79 aircraft, including two Boeing 767s. 
In 2004, the airlines together flew 3.5 million passengers and are aiming for up to 4.5 million passengers this year. Flag carrier Aeroflot flew 6.8 million passengers last year and projects 7.2 million this year; Sibir plans to fly 4.1 million people this year, up from 3.7 million in 2004.

TITLE: IN BRIEF
TEXT: Starbucks Wins Name 
MOSCOW (Bloomberg) — Starbucks Corp., the world’s largest coffee-shop chain, won the rights to its trademark in Russia, ending a three-year legal dispute that kept the U.S. company out of the $500 million brewed-coffee market, Vedomosti reported.
The Seattle-based company is now in talks with two local chains about operating its stores under a franchise agreement, the paper said.

Gazprom Sued in Texas
MOSCOW (Bloomberg) — Gazprom, the world’s biggest natural gas company, is being sued in Texas by Moncrief Oil International Inc., which is seeking billions of dollars in cash or a stake in a Gazprom unit developing a major gas field.
Moncrief is suing over an “alleged joint venture for the development of the Yuzhno-Russkoye” field, Gazprom said this week in a prospectus distributed before a bond sale. The U.S. company is “seeking to re-establish its rights” to the Arctic field “or to recover monetary damages of up to several billion dollars for past and future financial losses.”

TITLE: City Renews Privatization Call
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: The city has issued a call to private investors to help save the city’s crumbling historical property. With ownership of property listed as an object of historical heritage not available, however, analysts question the return on investments the city can offer private business.
Local and federal budgets cannot stretch to preserve St. Petersburg’s historic property in full, officials said this month at a Rosbalt news agency roundtable. But the terms of cooperation between the state and business remain unclear.
St. Petersburg boasts 7,500 buildings of architectural and historical importance. Of those, 87 have been listed as in need of reconstruction by the Northwest region authorities. The region has previously claimed that in 2006 it will need 7 billion rubles ($250 million) to carry out the reconstruction works, Interfax reported.
Last week federal ministry officials said “that figure is unrealistic and it’s extremely hard to get financing through the federal investment program,” Interfax reported.
Lack of federal support has made the city turn to private business. However, a law on privatization of historical property, proposed by City Governor Valentina Matviyenko, has been suspended until a legal distinction is set between what counts as federal and what regional cultural heritage.
The city can offer joint usage of historical property if an investor participates in the building’s reconstruction. In this way the investor “creates the private property for himself,” Yelena Alexeyeva, head of investment and economic analysis at the city property committee (KUGI), said at the roundtable.
Another option would be to strike the building from the list of cultural heritage sites and agree on long-term rent. Both schemes entail reconstruction expenses.
So far, there has been only one example of privatization through reconstruction in St. Petersburg, Alexeyeva said, the building on 2 Shpalernaya Ulitsa, where a customs department is located.
A far more common solution has been long-term rent. “Following the investment agreement, the long-term tenant can get property ownership later,” Alexeyeva said. Reconstruction work must be carried out within 42 months of the signing of the agreement.
Experts say the latter solution can be a realistic option for private businesses.
“Long-term lease may be appealing. The major question there is whether the private company can get a return on investments before the lease agreement expires,” Maxim Kalinin, partner at Baker & McKenzie in St. Petersburg, said Wednesday.
Many businesses say that taking long-term leasing a step further to holding full property rights may be more trouble than it is worth. They say the procedure for it is unregulated and largely depends on individual bureaucrats.
“Many projects are hampered for years and decades due to procedure vagueness,” Igor Tupalsky, director of Building Demolition Association, said at the roundtable.
“Investors want fair play. They need to estimate project costs in advance. If they don’t know whether it’s a cultural object or not and what scale of reconstruction is required, such estimation is impossible,” Tupalsky said.
Alexei Komlev, head of investment, licensing, expertise and privatization at the committee for state monument protection (KGIOP), says that reconstruction recommendations are made by independent experts.
“The experts decide whetheran investor should reconstruct only the facade or the whole building,” Komlev said.
Currently, 34 cultural heritage sites are on a city sale list, some of them in dangerous condition. Investors sometimes apply to buy the building simply for the prime location, where they could construct a modern structure.
“Lots of ‘monuments’ in industrial areas along Vyborgskaya embankment are not being allowed to be demolished, which halts the investment project,” said Vasily Sopromadze, president of construction firm Corporation S.
The city authorities say they are willing to make some exceptions, but remain against a trend of wholesale demolition, Komlev said.
“I’m tired of expert reports recommending demolition because of high building maintenance costs. The only reason for demolition should be an immediate danger to human life,” Komlev said. The city receives three applications for demolition a week. It approved only three claims in 2004.
Kalinin agrees that the city has to keep a flexible approach, making decisions on a building by building basis. He lists the most important issues to resolve as property rights, the tax treatment of investments made into historical property, and the possibility of reconstructing property to suit investor needs.
“Historical interiors may be a disadvantage once the building is in commercial use. Tough reconstruction policies can make it unprofitable for investors to apply for buildings in the historical center of the city,” Kalinin said.

TITLE: Major Auto Takes Over Dealership
PUBLISHER: The St. Petersburg Times
TEXT: The ownership of one of the city’s two Mercedes dealerships is set to change.
Vekho, a subsidiary of the Finnish firm VEHO, will pass on its business to Moscow-based Major Auto in a move that may be worth up to $8 million, business daily Delovoi Petersburg reported Wednesday.
Vekho, a St. Petersburg car dealer that is officially licensed to sell DaimlerChrysler models, underperformed last year, the paper said, citing unofficial sources.
“The sale of the dealership is certainly due to the incompetent management at Vekha,” Mikhail Kontserev, deputy director of Zvezda Nevy, the second Mercedes dealer in St. Petersburg, told the newspaper.
Neither Major Auto nor Vekho would officially confirm the deal, but Mikhail Bakhtirov, the president of Major Auto said the “process [with Vekho] is in the final stages, and after that we will provide all the interesting details.”
Zvezda is not particularly worried about the arrival of competition from Moscow. Petex, formerly the third Mercedes dealer in St. Petersburg, already transferred to selling Toyota’s luxury Lexus brand in the spring.
“Perhaps Major Auto will be able to make something of Vekho, but they’ll need about $10 million in investments,” Kontserev told the newspaper. “What’s more, the St. Petersburg dealership Aurora Auto, which is also owned by Major Auto, does not meet the standards expected of a dealership,” he said.

TITLE: Heineken Unloads Non-Core Distillery
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Industrial Investors, the main shareholder in Russian Alcohol, is expanding into the low-alcohol market through the acquisition of St. Petersburg’s Bravo Premium distillery, one of the main players in the field, Industrial Investors said Thursday in a statement.
Bravo Premium’s former owners, Dutch brewer Heineken and a group of Irish businessmen, shed the company to concentrate exclusively on beer. 
Industrial Investors said it hopes “this asset with a successful history and strong brand portfolio will secure us a leading position in the Russian low-alcohol market,” said Sergei Sorokin, general director of Russian Alcohol.
Industry players said that spirits producers, who have huge financial resources, are hampered by the shrinking alcohol market and are seeking investment opportunities. Low-alcohol beverages, such as mixed drinks, represent a good option.
“This trend has been evident for some time,” said Dmitry Khoroshev, president of Peterburgskaya Shirota alcohol company. “The consumption of low-alcohol beverages is growing in direct proportion to a strong decrease in alcohol consumption. Consumers are younger. Advertising, which is forbidden for vodka, generates customer loyalty for low-alcohol producers.” 
However, low-alcohol projects aren’t necessarily successful for spirits companies, he warned.
“The difference in market conditions, technologies, specialists and a lack of experience prevent alcohol companies from taking over the market, where strong players with a Western marketing approach resist against newcomers,” Khoroshev said. 
Russian Alcohol chose one of the safest ways of entering the market, by buying an existing company, he added.
Bravo Premium’d production capacity is 9 million decaliters a year. The company produced 7.4 million decaliters in 2004. It has 11.5 percent of the national low-alcohol beverage market, according to company statistics.

TITLE: Shale Crisis Unresolved By Talks
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Russia and Estonia signed a protocol on mutual cooperation this week to solve the crisis surrounding the Leningrad Oblast’s beleaguered shale mine, Leningrad-
slanets, Interfax reported.
The Russian side will appeal to the Estonian government this week with possible crisis solutions. The move could lead to Estonia transferring additional greenhouse gas emissions quotas to Narva Power Plants, which will allow the Baltic firm to process Russian shale until the end of 2005.
Despite the news, head of Leningradslanets Grigory Freiman was less optimistic.
“It is not yet clear whether Estonia will agree to process our shale. So far it agreed only to consider the suggestions of the Russian side,” Freiman said Tuesday in a telephone interview.
The possibility of ceasing all shale processing in Estonia has not been ruled out, he said. The final decision, which Freiman says depends on actions of the Russian government, will be made by the end of this year.
One way out for Leningradslanets is for Russia to share its free greenhouse gas emissions quotas with Estonia. However, “its political ambitions” have restricted this possibility, Freiman said.
The crisis at Leningradslanets broke out when Estonia refused to continue processing Russian shale mined by Leningradslanets on April 1.
Until that time, the shale mined at Leningradslanets had been supplied to Estonia’s Narva Power Plants. The Estonian plants processed the shale into electricity, which was directed back to Russia. There are no shale-processing plants in Russia.
At capacity, Leningradslanets extracted 6 million tons of shale a year, which annually produced 3.6 billion kilowatts an hour of electricity. However, on April 1, Narva Power Plants annulled the agreement with the quarry.
Estonia used up its quota on emission of greenhouse gases, limited by the Kyoto Protocol, on burning the Russian quarry’s shale — a quota the Estonian side said was more pro¸table if sold to other countries.
Estonia’s quota was then offered to Russia, which refused it saying that the Baltic state’s allowance was provided speci¸cally for processing shale from Leningradslanets.

TITLE: IN BRIEF
TEXT: City Rating Confirmed
ST. PETERSBURG (SPT) — International rating agency Fitch confirmed St. Petersburg’s long-term  “B+” rating in foreign and national currency liabilities, Interfax reported Wednesday. Fitch also confirmed a short-term “B” rating.
The forecast is positive in the long run, Fitch said in a press release. “St. Petersburg’s rating reflects the diversified and dynamic city economy, strong budget figures and good opportunities for debt payment. It also reflects the fact that forthcoming operational profits are slowing down, which can affect the city budget,” Fitch experts said.
The local economy plays a key role in city solvency because city profits largely depend on taxes. The St. Petersburg economy showed strong growth in 1999-2003 and has exceeded national averages for the last two years, Fitch said.

Peugeot Auto Sales Slip
MOSCOW (SPT) — Peugeot sales in Russia in the first half of this year were 4,067 compared to 4,335 in the same period last year, even though internationally its sales rose from to 1,028,000 compared to 1,021,000 in the same period last year, the company said Tuesday in a statement.
The French carmaker’s most popular models in Russia are the 307 and 206, the report said. 

Swiss Target High Flyers 
MOSCOW (SPT) — The Swiss company that fitted the plush interior of billionaire Roman Abramovich’s Boeing is planning to set up shop in Moscow by the end of the year.
“Our customers want us to be in Russia,” said Markus Inaebnit, vice president of strategic planning at Jet Aviation, a Basel-based company that specializes in business aviation services.

TITLE: The Fate of ‘Political Technology’
AUTHOR: By Andrew Wilson
TEXT: The changes to Russia’s election laws passed by the State Duma before the summer recess have led many observers to wonder about the future of so-called “political technology,” the techniques used to influence election outcomes across the former Soviet Union. Is this really the end of an era? Is the golden age of political technology coming to an end?
Ukraine’s Orange Revolution was supposed to be a revolution against these techniques, a resounding defeat for political technologists and their methods. Arguably, its most important effect was psychological, activating populations throughout the region who will henceforth be harder to fool. The Orange Revolution also made certain political technology methods — especially mass producing propaganda through control of the commanding heights of state television — look distinctly old-fashioned. The Ukrainian opposition made skillful use of alternative sources of information and agenda-setting technologies such as the Internet, text messages and video clip posting. 
Events in Ukraine showed what a huge difference outside intervention can make, and not just in terms of money and diplomatic support. Political technologists rely on selling a particular dramaturgia, or scripted scenario. Their methods are therefore vulnerable to local populations switching off-message, and there was a powerful new message in town. After the recent wave of color revolutions, the United States has locked into the rhetoric of democracy promotion. Significantly, for example, the rigged election in Azerbaijan in 2003 was more or less ignored in the West, but now in 2005, U.S. Secretary of State Condoleezza Rice is aligning herself closer to Baku’s critics.
Yet at the same time, the 2004 Ukrainian presidential campaign was not that bad an ad for political technology. It certainly demonstrated the fallibility of crude fraud when undisguised by a convincing cover story. But the political technologists, both Russian and Ukrainian, succeeded in one key task. If the 2002 Rada parliamentary elections had been largely a referendum on a scandal-ridden government and Viktor Yushchenko’s premiership from 1999 to 2001, in 2004 voters were sold a new story of “East versus West,” both within Ukraine and in terms of geopolitics. More exactly, the second script overlay the first, rather than completely replacing it, and Yushchenko refused to fall into the trap of fighting the election on these terms. But the strategy brought the otherwise unappealing Viktor Yanukovych close to victory. 
On the other hand, times have changed. Yanukovych and the Party of Regions are still trapped in the political-technology paradigm as they prepare for the Rada elections in 2006, but they no longer control many administrative resources and need to play their game more circumspectly even on their home turf in the Donbass. The political space for launching some new branded project is narrow, despite optimistic talk of setting up a “third force.” Most east Ukrainian elites are regrouping under party labels that accept the agenda set by the new regime: “New Democracy,” “Democratic Ukraine” and the “People’s Will.”
Other post-Soviet regimes have a choice of survival strategies. Traditional authoritarian methods — cowing the population, imprisoning the opposition and cracking down hard on protest — have been tried in Uzbekistan and are clearly being contemplated in Belarus and possibly Kazakhstan. So-called administrative technology — such as gerrymandering or culling the ranks of the opposition via the courts — is also an option. However, in the new international context, use of either method on its own without a cover story will produce only fragile success and possibly even stimulate a stronger counter-reaction. 
Even in Uzbekistan there is a role for classic political technology, as demonstrated by the fake opposition party Sunshine Uzbekistan, which was established almost simultaneously with the Andijan events in May. The party is led by Sanjar Umarov, one of Uzbekistan’s richest men with interests in oil, cotton and a joint U.S. telecoms venture — all areas under the authorities’ tight control. Sunshine Uzbekistan’s role seems to be to stage the appearance of pluralism for the West rather more convincingly than recent parliamentary elections, although some believe Umarov has quarrelled with President Islam Karimov’s oldest daughter, Gulnara.
Belarus may well use administrative methods to fix the result of the presidential election scheduled for 2006 and traditional authoritarian methods to cow the population beforehand. But the electoral arithmetic provides an opening for political technology. Belarussian President Alexander Lukashenko normally receives between 40 percent and 50 percent of votes, and the traditional opposition never more than 15 percent. There is plenty of room for a “third force.” Currently, that role is being played by the head of the Social Democratic Party, Alexander Kazulin, the former rector of Belarus State University. That he concentrates most of his fire on others in the opposition suggests he may be a relay runner for Lukashenko, while his robust Russophilia suggests the possibility of Kremlin support. Parliament Deputy Sergei Gaidukevich stands in reserve to play Vladimir Zhirinovsky’s role as jester-cum-hired gun in the political middle. Russia may, however, find its influence limited, as there is little room for players outside the regime to use political technology in Belarus. 
In Belarus, moreover, real politics takes place elsewhere. Lukashenko’s speciality is playing divide and rule not so much with the local opposition as with the local nomenklatura. Bureaucrats are never allowed to settle into cozy sinecures. Yegor Rybakov, the former head of Belarussian state television, was sentenced to 11 years this February for grand larceny. Galina Zhuraukova, former head of the presidential administration’s property management department, got four years in 2004. Institutions are also set against one another: the Interior Ministry versus the KGB, the KGB versus Lukashenko’s personal security service.
In Russia, however, political technology seems to be alive and well. Cloning opposition parties to create a Kremlin-controlled imitation of partisan politics seems to be the likely option for 2007. This may occur via three or more pet parties spun off from United Russia’s more than ample ranks: a Kremlin “liberal” party instead of Yabloko, a Kremlin “nationalist” party capable of drawing away the more mainstream politicians from the likes of Rodina, and a Kremlin “state-socialist” party to draw supporters away from the Communists. 
And clearly the next election cycle may see more dramaturgia than drama. One can already discern the outlines of various forms of “perevod strelki” — “switching the points,” or passing the buck. These strategies are designed to shift responsibility and agency. The authorities often blame extreme nationalists or the Islamic threat for all of society’s woes, as the Putin era is now too advanced to blame the old regime or the West. Another related strategy involves the artificial polarization of choice, the threat of “aprÏs moi, le deluge”: democracy in danger or scarecrow nationalists taking power. And the “lesser evil” ploy often works if a convincing-enough other evil can be found.
The political technology industry is far from dead. Constitutional changes in Russia — the abolition of elected governors and single mandate races, and the establishment of a single nationwide election day — may narrow the market. But others — in particular the 7 percent barrier for Duma representation — will make television campaigning even more important. More fundamentally, in the system of directed democracy, political technologists do the directing. Without them, democracy would either no longer be directed, which still seems to be a prospect most post-Soviet elites are reluctant to face, or would be directed more crudely: The siloviki do not have their own brand of technology.

Andrew Wilson is senior lecturer at University College in London and author of “Virtual Politics: Faking Democracy in the Post-Soviet World.” He contributed this comment to The St. Petersburg Times.

TITLE: Defending Russia Used as Pretext for Mistreating Others
AUTHOR: By Vladimir Kovalev
TEXT: Numbers are always the best way of studying tendencies and changes in a country, whether they are in the economic, political or moral sphere. Numbers do not lie if the person who assembles them can count and sticks to the rules of mathematics.
Yury Levada’s Analytical Center really looks like a rare credible source for those studying the changes in Russia. The organization is far from making attempts to say that two times two is five.
It would be even better if the number representing the percent of the population who support the idea of “Russia for Russians,” in other words, fascism, were only five.
The problem is that this slogan has 58 percent support, according to a recent survey conducted by Yury Levada Center, a figure that is shows how deep the country has sunk into the bog of nationalism in the last few years.
A total of 31 percent of those who support the slogan say that to them it means restrictions on the rights of non-Russian people to live in cities and the relocation of some nationalities, such as Caucasians and Chinese, from “originally Russian territories.”
Isn’t this scary? Does anyone in the Kremlin understand where this leads and does anyone among the responsible authorities notice any parallels in modern world history, in particular, with the German experience?
Of course not. Even worse, the Kremlin does all it can to support nationalistic movements that openly and loudly declare something that it strongly believes in — that Russia has enemies and should fight them.
The Nashi youth movement, which was set up with the direct support from the Kremlin and is getting strong assistance of Russian authorities and ideologists from the presidential administration, also believes this.
This summer, Nashi activists will gather in a camp in the Tver region to undergo sport and ideological training on how “to stand up to enemies of Russia.” The activists look forward to lectures given by Sergei Markov, Vyacheslav Nikonov and Andrei Parashev, as well as a visit from Defense Minister Sergei Ivanov, Kommersant reported.
Human rights advocates and representatives of liberal political circles see this organization as a reflection of a looming dictatorship coming to the country, and often compare Nashi to the Hitler Youth.
Surprisingly enough, Vasily Yakemenko, head of the Nashi movement, has not been afraid to declare that he sees positive aspects of the Hitler Youth and other similar organizations that are close to Nashi in their form.
“I am against such a comparison, but if we look at this in a mechanical way the Hitler Youth had strong tourism programs. The Red Guards in China were fighting against incompetent officials. The Komsomol was a perfect starting base for a career. We have all of this, but that is where the similarities end and serious ideological differences begin,” Kommersant cited Yakemenko as saying.
The activists are also inviting TV commentator Mikhail Leontyev to their camp, who, I am sure, will tell them a lot about the “threats” Russia faces, from abroad in particular.
“They [Nashi] are too relaxed,” Leontyev said in the same report. “They should be more disciplined … Russia has many enemies and I want to help this youth to stand up to the enemies in a commensurate way.” 
The standing up to enemies has already begun with the most recent victims those who died in a fire in a store in Ukhta on Monday. At least 25 people died. They were suffocated in the smoke or burned after unidentified arsonists threw bottles containing a burning liquid at the store. 
The attack was reportedly orchestrated by “important Slavic businessmen who were released from a jail in Ukhta and have for quite a while been dreaming about pushing Caucasian traders out” of the city, according to police quoted in the media.
In my view this is not just a criminal case affecting certain business interests, but mainly a reflection of these stunning numbers collected by the polling company, of ideology being used as the reason for existence of youth organizations organized by the Kremlin. 
This is how the policy “Russia for the Russians” is developing like a snowball on “originally Russian territories.”

TITLE: Funky fortress
AUTHOR: By Matthew Brown
PUBLISHER: Staff Writer
TEXT: If Nevsky Prospekt is the spine of St. Petersburg, the Peter and Paul Fortress (Petropavloskaya krepost) is its beating heart. That will be more evident than ever this week when the fortress plays host to the Third International Peter and Paul Jazz Festival, a Bastille Day concert and even a sand sculpture competition.
The fortress mirrors the city built around it in its sometimes gruesome past and now wildly eclectic present. Within its thankfully now defunct bastions and fortified walls lies a motley collection of museums and the magnificent cathedral where the Romanovs are buried. Outside the walls on the shores of Zayachy Ostrov there are grassy lawns and, famously, an urban beach that was there long before the French decided to pile sand on the banks of the Seine to entertain city-bound Parisians in the summer. The beach is the focus for this weekend’s events, with the Fourth International Sand Sculpture Festival running Monday through Thursday.
The jazz festival runs Friday through Sunday and features some of the world’s most acclaimed jazz musicians including U.S. bass guitarist Marcus Miller and his Marcus Miller Band, drummer Dave Weckl and vocalist Mark Murphy who will perform with local jazz pianist, Andrei Kondakov, the musical director of the festival. 
Befitting the fortress’ 19th century role as the “Russian Bastille” where political prisoners opposed to Tsarist oppression were locked up without mercy, it has also been decided to hold Bastille Day celebrations at the fortress. 
Bastille Day, the French national holiday, actually fell on Thursday and celebrations at the fortress Friday coincide with the opening of the jazz festival (see page x).
The event, organized by the French Institute on the beach of the fortress, kicks off at  9.30 p.m. and, in true White Nights style, continues until 3 a.m. The jazz festival will meanwhile open in the newly renovated Atrium performance space in the Commandant’s House inside the fortress.
“This change is not going to affect anything: we have the same set of musicians, and everyone who wants to attend the performance will be able to do so,” the festival’s general director Innokenty Volkomorov said, adding that the concerts on Saturday and Sunday will take place at the usual spot on the beach.
Moscow bassist Alexander Rostotsky and guitarist Pavel Chekmakovsky kick off the festival at its gala opening at 7 p.m. with what is promised on the festival web site as “a new ethno fusion project.” Later U.S. saxophonist Jesse Jones will perform for a V.I.P. audience. 
A key theme of this year’s festival is the introduction of “surprise” guests into familiar lineups. For example, the Lithuanian-Russian-German combo the Vysniauskas-Volkov-Kugel Trio will perform with St. Petersburg trumpeter Vyacheslav Gaivoronsky. 
“In a collaborative project masterminded by Andrei Kondakov and Dmitry Kolesnik, these two will be joined by New York luminaries, resident musicians of the famed Smoke jazz club, sax player Eric Alexander and trumpeter Jim Rotondi, as well as the Moscow/
St. Petersburg drummer Alexander Mashin,” organizers write on the web site. “Paris-based vocalist, Afro-Greek diva Elisabeth Kontomanou, will regale the festival with her elegiac singing.”
Dutch veteran guitarist Jan Akkerman is scheduled to appear on Saturday. 
The festival has established a partnership with one of the best known and well established events on the international jazz calendar, the North Sea Jazz Festival in the Hague in the Netherlands. Some of the biggest names in this year’s event were contacted through this inter-festival link.
“For the first time we are having the big names here as opposed to last year and the year before when the festival started,” said jazz singer and DJ Jennifer Davis, a member of the St. Petersburg Ska-Jazz Review, which is also appearing this year. “It is definitely a huge step forward. This is much more of a real international jazz event.”
If successful, the festival will soon attract even more famous names and may even evolve into something more diverse, Davis believes.
“If you look at international jazz festivals happening right now — the popular and successful ones like that in Montreux, Switzerland — then you see that 50 or even 70 percent of the music is not actually traditional jazz,” Davis said.
Miller is undoubtedly this year’s main draw at the festival.
“No stranger to out-of-body experiences, the highly chameleonic and influential Miller has played an integral role in the careers of no less than Miles Davis, Luther Vandross, David Sanborn and many other legendary artists,” reads the festival’s web site.  
“Jazz has no preordained boundaries; I, for one, am unable to dwell entirely within the bounds of any single music philosophy, and that’s exactly what advances my sense of musical harmony and helps me, as a performer, to remain my own self,” the musician has said.
Volkomorov, general director of the festival, explained that arranging Miller to perform in St. Petersburg was bedeviled by a unhappy mishap. 
Along with many of the foreign guests of this year’s festival, Miller was approached through the  organizers of the North Sea Festival. His agent, who single-handedly prepared Miller’s European tour, died about a month ago, leaving nothing written down, which left the tour’s logistics to collapse, Volkomorov said.
“The man had everything in his head, and with his sudden death the tour was at risk of being canceled,” Lukomorov said, adding that almost a quarter of the concerts had to be struck off the list.
But Miller himself emphasized to organizers that his St. Petersburg performance was a high priority, Volkomorov said. “He hasn’t been to Russia yet and told us he is very willing to present his new CD here,” he added.
The three-day festival will feature St. Petersburg and Russian jazz acts in the afternoon such as Dmitry Serebrov’s and Vadim Lebedev’s Bossa Nova CCCP, Moscow’s Pyotr Ivshin with the SPb Funk Alliance, Daniil Prokopiev’s DP Band, Fun2Mass, the Alexander Berenson Quintet, Irina Zubareva and Yulia Bamm with their group Silk Stocking Jazz. Classic jazz is boosted by a bit of ska on Sunday when club act St. Petersburg Ska-Jazz Review takes to the festival stage. 
A novel idea has been borrowed from popular jazz festivals in Europe at this year’s festival: its own currency. Festival goers will convert rubles to “jazziks” (one jazzik is equal to 30 rubles) and throughout the event, everything from food and drink, to catalogues and CDs can only be purchased for jazziks.
The organizers say that this year they have paid particular attention to the food stalls so that festival-goers can choose from a wide range of national cuisines — “from sushi to tandoori.”
“The important thing is to make it a well organized, comfortable and exciting event for everyone, where everything runs smoothly and things start on time, and people can enjoy a nice day outside,” St. Petersburg Ska-Jazz Review’s Davis said. “The location itself is a really wonderful, beautiful and inspiring place. It is nice to spend a day sitting on the beach of the Peter and Paul Fortress — even when there is no live music — but to be able to go there and relax sitting outside on a blanket and listen to good music is always a great pleasure.”
Tatyana Pchelyanskaya, an art historian heading the marketing department of the fortress, said jazz events fit its 300-year-old walls best. Classical music sounds somewhat gloomy in its foreboding environs, while rock concerts, which used to be held at the site, were even banned by museum authorities after complaints from residents living nearby.
“The spectators made a lot of noise and left piles of garbage, while the jazz audiences are elegant and quiet,” Pchelyanskaya said. 

Additional reporting by Galina Stolyarova.

The Third International Peter & Paul Jazz Festival, Friday through Sunday at the Peter and Paul Fortress. 
www.jazz-festival.spb.ru

TITLE: Trotsky trophy
PUBLISHER: The Associated Press
TEXT: MEXICO CITY, Mexico — One of history’s most famous murder weapons, the ice pick used to kill Russian revolutionary Leon Trotsky, has resurfaced after being lost for decades, just weeks before the 65th anniversary of his Aug. 20, 1940, assassination.
But tests that could prove the weapon’s authenticity have been delayed by a dispute between the ice pick’s owner, who is shopping it around, and Trotsky’s descendants, who want it donated to a revolutionary museum — proving that the struggle between socialist ideals and capitalism still goes on.
The ice pick is now in the possession of Ana Alicia Salas, whose father apparently removed it from an evidence room while serving as a secret police commander in the 1940s. She is toying with the idea of selling the foot-long, sawed-off ice ax, though she says she hasn’t decided how much it’s worth.
Just a few blocks away, Trotsky’s grandson, who keeps the revolutionary flame alive by maintaining Trotsky’s home as a museum, says he wants the pick. Trotsky helped lead the Bolshevik Revolution in St. Petersburg in October 1917, but split with dictator Josef Stalin and fled to Mexico in 1937, accusing Stalin of having betrayed the revolution.
Stalin is widely believed to have arranged Trotsky’s murder, in which a young man posing as a sympathizer sneaked up behind Trotsky and sank the ice pick into his skull.
The murder weapon has become infamous, inspiring even the indie rock band “Trotsky Ice Pick,” whose songs included “A Little Push At The Top Of The Stairs” before they stopped recording in the mid-1990s.
The weapon in Salas’ possession still has faint, reddish-brown stains visible on its gleaming surface. But there’s only one sure way to prove whether those stains are Trotsky’s blood, and Esteban Volkov, Trotsky’s grandson, holds the key: his DNA.
“Looking at it objectively, this is a piece of history,” Volkov said at the home in the leafy Mexico City district of Coyoacan where Trotsky was killed, just blocks from where Salas, the ice pick owner, also spoke out. “It should be in the museum.”
Volkov, 79, has offered to give a sample of his own DNA for comparison to whatever material can be recovered from the pick, but only on the condition that Salas donate the artifact to the Trotsky museum here.
“If it is for commercial purposes, I refuse to participate in this kind of thing,” Volkov said with a disdain echoed in the volumes of Trotsky’s revolutionary writings on display in the museum’s library.
Salas, 50, refuses to consider such a donation, saying people only value the things they pay for.
“Sometimes people don’t value things that are given away,” Salas said.
In a country where police misconduct is legendary, Salas is quick to paint her father, Alfred Salas, as a model secret service agent.
She said that Alfred Salas, who retired in 1965 and died in 1985, had been granted permission by superiors to keep the ice pick in order to put together a “museum of criminology.”
He withdrew the pick from the museum and kept it among his personal possessions after someone tried to steal the artifact from a criminology display.
While she has said in the past that she is seeking “some financial benefit” in exchange for the pick, she hedges when asked if she is selling the piece.
“I think this instrument is valuable. It is a piece of world history,” Salas said as she displayed the pick, wrapped in flannel and kept in an old cardboard box labeled “Kenmore Electric Heating Pad.”
Asked how much she thinks it is worth, she says “I don’t know, because I don’t know who’s interested in it.”
The one thing she’s sure of? “It certainly doesn’t belong to Mr. Leon Trotsky.”

TITLE: Chernov’s choice
AUTHOR: By Sergey Chernov
TEXT: The summer’s last big festival weekend begins Friday. The busiest location will be the Peter and Paul Fortress, where two major events are taking place.
The French Institute will promote its annual Bastille Day festival on the fortress’ beach, with music from Les Tetes Raides, a band that performs a combination of Anglo-Saxon rock and punk and French traditional music styles. Translated as “stiff heads,” the eight-member band led by singer and accordion player Christian Olivier includes elements of theater and circus in its act. See box, page x.
The three-day, five-concert Peter and Paul Jazz Festival will be held at the same location on Friday through Sunday. American veteran jazz singer Mark Murphy, a six-time Grammy nominee, is among the headlining acts. See article, page i.
Dance festival Stereoleto’s fourth and final party will be held at the once-secret former Soviet governmental residence, the K-2 Governmental Dacha on Krestovsky Ostrov, on Saturday. It will be headlined by German electronic band Telepopmusik and British up-and-coming glam-rock act Pink Grease.
Meanwhile on the club scene, a Kicker Tournament will be held at Fish Fabrique at 3 p.m. on Sunday. Rock musicians, the people work in underground clubs and the public will compete at Kicker (table football) for prizes that included mobile phones and bicycles last year. The event will be crowned with a free concert by local “metal-dub” band Skafandr at 9 p.m.
After that comes what local promoters call the “dead season.” Although some promising club events are on the horizon, no concerts by big international acts are planned. Posters in the street now advertize events to take place in September and October. But local promoters for a concert by  Depeche Mode have broken the record by already advertizing the British band’s concert scheduled for March 2006.
There are no posters, however, for arguably the most promising event of the autumn, the first ever Russian concerts by Patti Smith.
Smith announced she would perform two concerts in Russia in early September on her web site. The seminal singer and songwriter, whose John Cale-produced debut “Horses” is frequently listed as one of rock’s most influential albums, made news this week as she received France’s top cultural honor. 
On July 10, at a ceremony in Paris, French culture minister Renaud Donnedieu de Vabres decorated Smith as a Commandeur of the Order of Arts and Letters, the Associated Press reported. 
The honor is the highest that can be bestowed on eminent artists and writers who have contributed significantly to furthering the arts in France and throughout the world. The ministry, in a statement, noted Smith’s appreciation for 19th century French poet Arthur Rimbaud, and praised her as “one of the most influential artists in women’s rock ‘n’ roll.” 
Smith is scheduled to perform in Gaza Palace of Culture in St. Petersburg on Sept. 2 and B2 Club in Moscow on Sept. 3.

TITLE: Back to the future?
AUTHOR: By Yuriy Humber
PUBLISHER: Staff Writer
TEXT: The business of winning film festival prizes often falls to the more palatable avant-garde works that provoke shock as much as thought and recast what is known as virginal. 
Alexei Uchitel’s tame “Kosmos Kak Predchustviye” (which translates as “Space as Anticipation” although the film is known as “Dreaming of Space” in English), lauded with the top prize at the 27th Moscow International Film Festival last week, does not fit into that category. 
The director behind the popular, low-budget comic meander through St. Petersburg, “Progulka” (“The Stroll”), has this time made a film about the lives of ordinary people in Murmansk at the start of the Space Race, the late 1950s, starring the ever-present Yevgeny Mironov and the lead actress from “Progulka,” Irina Pegova.
The brutal fact is, “Kosmos,” which premiered in St. Petersburg last Thursday, will need the stardust of the Moscow prize. 
It has no car chases and little sex; guffaw moments are sparse, as is any sense of suspense. While it is superbly acted and well shot, “Kosmos” will not change anyone’s world, not even a little. 
Movie industry politics clearly had a hand in awarding the prize, as they always do.
The country’s self-proclaimed movie-tsar Nikita Mikhalkov had backed Uchitel’s previous film “Progulka,” which opened the Moscow festival two years ago, although it was not included in the  competition. This year, after again hearing positive comments on his latest work from Mikhalkov, Uchitel decided to pull out of Sochi’s Kinotavr film festival to enter the one in Moscow.
With Uchitel’s version of the life of emigre writer Ivan Bunin, “His Wife’s Diary,” selected by Russia as its nominee for the Best Foreign Language Film Oscar in 2000 (it didn’t, in fact, make the shortlist), movie world mathematics predicted that prizeworthy recognition for Uchitel was in the offing.
Mikhalkov’s admiration of Uchitel’s works blossomed as far back as the turn of the century, about the time that one of the actors from “Diary,” Andrei Smirnov, wrote a very favorable review of Mikhalkov’s then much-slated “The Barber of Siberia” (1999). That Smirnov’s sister, Dunya Smirnova, has been a regular scriptwriter for Uchitel (“Progulka” being one of her pieces) neatly completes the circle.
In “Kosmos,” playing safe with the movie community and toeing a useful political line, Uchitel presents a film that chimes with an in-vogue, sardonic retrospection on Soviet reality. If it worked for Pavel Chukhrai, for example, whose “Voditel Dlya Veri” (A Driver for Vera) got reasonable box office returns in 2004 and is now a popular rerun on TV, why not give it a go?
The implicit claim that such films make — even just by being made — is that Russia today has become much freer, more transparent. If “Kosmos” is to be believed, the Soviet era was a time for naifs. Only characters such as the simpleton Konyok, played by Mironov, could fit in because they accepted the political and social situation without questioning.
“How can you work so near to food and not pinch a bite for yourself?” asks Pegova’s character Lara, a waitress at the same small-town restaurant where her boyfriend, Konyok, works as a cook.
“It’s near. That’s why I can’t,” quips Konyok.
In the Soviet ear of Uchitel’s film, scripted by Alexander Mindadze, people take part in sports competitions, drink tea, and dance to the smooth voices of crooners. The period is spartan. Those that know of “The Outside World” of the West, and of Soviet repression, are no longer naifs and cannot tolerate life in the country anymore.
German, an ex-boxer with a shady (read: political) background is one who dreams of escape. He purchases a radio from Norwegian sailors, keeps an Anglo-Russian phrasebook hidden, and while shaving tries time and again to remember how to say in English: “I seek political asylum.”
The film’s storyline seems to revel in placing parallel the bright ideals of Soviet daily life with their chiaroscuro, menacing outlines. 
Konyok befriends German at the sports club, through sparring, being sporty and “keeping in shape, just in case the country calls.” Later we learn that Konyok was “told to keep an eye on the new guy” by a local apparatchik, though it’s clear that Konyok is far too simple to comprehend the weight of the task and for him German becomes a friend and an idol.
What the film excels in is recreating details of the period. Posters, clothes, especially during crowd scenes, are collected with meticulous attention. In places, even the film quality reduces to the grainy resolution of the late ’50s.
All such details make the film seem like a professionally visualized postcard from an earlier time. Many might say it even evokes nostalgia. But what the film’s luscious shots, scenery, costumes, and expected jabs at Soviet naivety mainly do is recreate a Soviet Union for those not old enough to have known the era, as well as for those outside Russia — audiences that believe they are familiar with Soviet reality, if only because they have read George Orwell’s “1984.”
Subtly and vividly, “Kosmos” does nothing less than reawaken Soviet stereotypes. The “truth” is never so appealing as when you think you know it already.

TITLE: Reading the tea leaves
AUTHOR: By Robert C. Toth
PUBLISHER: Special to The St. Petersburg Times
TEXT: “Every country has the government it deserves,” a Frenchman named Joseph de Maistre said two centuries ago. In Soviet-era Russia, complicity between the rulers and the ruled was standard fare, most vividly captured in satire by the novelist Vladimir Voinovich. The mantra under the communists summed it up: “We pretend to work; they pretend to pay us.”
Now, courtesy of President Vladimir Putin and without any great objection from the masses, Russia has descended into “managed democracy.” That is the way Marat Gelman, once a key adviser to Putin, describes the system of government for Peter Baker and Susan Glasser in their excellent new book, “Kremlin Rising: Vladimir Putin’s Russia and the End of Revolution.” Democracy in Russia, as the subtitle indicates, has been vastly diminished, if not extinguished, by Putin over the past five years. 
 “Managed” is an accurate if inadequate modifier for a putative democracy with a rubber-stamp legislature, corrupt judiciary, cooperative tax inspectors, supine prosecutors and muzzled media. These attributes, coupled with events of the first half of the Putin era, from television network takeovers to the sidelining of the country’s governors to the jailing and exiling of oligarchs, show that Russia may well be aimed at a full restoration of its authoritarian past. Indeed, in one of Baker and Glasser’s many revealing anecdotes, Putin is quoted as telling 300 generals from the former KGB and its successor agency, the Federal Security Service, at a Lubyanka ceremony celebrating his first election in 2000: “Instruction number one for obtaining full power has been completed.”
Russia is not a totalitarian state. Yet. “In any case, it won’t be dictatorship like Stalin,” a resigned Russian woman tells Baker and Glasser. And the authors, who recently completed nearly four years as Washington Post correspondents in Moscow, are understandably cautious in their conclusion: Whatever Putin’s aspirations, they write, the political system is still too weak to allow anyone to exert the kind of full control that not long ago landed Russians in the gulag.
As a former Moscow correspondent for the Los Angeles Times, I would like to be able to say that nothing is recognizable from the bad old days. To some degree, I can. 
In 1960, hostility to foreigners was palpable. Our stories, usually dealing with ideological conflict and geopolitical competition, had to pass censorship. Little was known about how Soviet citizens actually lived, although NBC correspondent Irving R. Levine described what was available in “Main Street, U.S.S.R.,” the first in a line of era-defining books by Moscow-based journalists. 
In the 1970s, we were harassed for meeting with and reporting on dissidents, mainly Jews who wished to emigrate, but also democratic reformers like Andrei Sakharov. The Soviet “organs” were forever working to prevent “state secrets” from being passed to us by these “traitors.” Rather than state secrets, dissidents were exposing the wretched features of everyday Soviet life — rich material not only for newspapers, but for the next generation of books, including New York Times correspondent Hedrick Smith’s 1976 bestseller, “The Russians.”
“Kremlin Rising” is the first comprehensive account by U.S. journalists of the Putin presidency so far, the product of diligent day-to-day reporting backed up by hundreds of recent interviews. Its 44 pages of endnotes, which identify who-said-what-when, are perhaps more than is necessary for the general reader, but any inconvenience is compensated by the credibility and authority they add to the narrative.
There have been huge improvements in Russia over the past 25 years, particularly for Moscow correspondents. Harassment has ended. The Kremlin no longer cares as much what is written for foreign readers, focusing almost wholly on controlling stories — on television, especially — for audiences at home. For me, the access the authors enjoyed to officials close to Putin is particularly striking. Not all of these officials remain in high positions today, but some do. And most of them, along with private individuals, allowed themselves to be identified and their words to be quoted. Remarkable, compared to the past. 
At the same time, the book points to disturbing signs that some old ways of thinking have survived. One is Russia’s resistance to acknowledging its totalitarian history as the source of many of its present difficulties. Another is the return of the classic Russian paranoia that blames foreigners for homegrown problems. In the 1970s, Russian kids threw well-gnawed chicken bones over the wall at our kids and called them sons of spies, or worse. Now, Putin believes that the United States deliberately sends Russia inferior chickens. He even brings it up at the highest level.
“I know you have separate plants for chickens for America and chickens for Russia,” Baker and Glasser quote him as complaining to U.S. President George W. Bush in May 2002. “Vladimir, you’re wrong,” Bush replied. “My people have told me this is true,” Putin insisted.
But “Kremlin Rising” is not just about the Kremlin. It also deals with a wide range of issues in contemporary Russian life, both promising and distressing: the booming oil-fed economy; the fragile beginnings of a middle class; the arrival of drugs and AIDS; the scandalous brutality toward recruits in the armed forces; and, not least, the corrosive effect of the war in Chechnya and the terrorism it has visited on Russia.
Baker and Glasser are at their best, however, both in pace and information, when they turn to Putin and politics. They are scalding in their description of his rise from a mere KGB apparatchik to Boris Yeltsin’s handpicked successor and, through his two questionable elections, to the rank of unchallenged leader. They draw a devastating catalog of his handling of crises, from his inept response to the Kursk submarine disaster, when he accused Boris Berezovsky’s Channel One of hiring two “whores” to portray dead officers’ wives, to his attempt to cover up Russia’s bungled rescue efforts in the wake of the Chechen attacks on Moscow’s Dubrovka theater and a school in Beslan.
When it comes to his relations with the United States, though, Putin knows which buttons to push. After discovering Bush’s soft spot for religion, he brought the family crucifix to a G8 summit. And, despite his relentless rollback of democracy, the Russian still appears to have the American conned. “The Russian people are not ready for democracy,” Putin’s former chief of staff, Alexander Voloshin, is quoted as saying. It seems certain that Putin believes the same. 
The image that emerges is of a cold and ruthless man, quick to learn but without depth, grace or humor; easy to anger and liable to take offense at criticism; loyal to his former employer, the FSB; and probably intent on resurrecting the Russian empire. It seems likely that his first five years will have serious consequences for Russia and the world. The continued deterioration of the rule of law, as seen in the prosecution and recent sentencing of oil tycoon Mikhail Khodorkovsky, is bound to reduce the attraction of Russia to Western investors. 
In the meantime, there are three years left to the Putin era — eventful years in all likelihood, since people who are paranoid tend to behave unpredictably — and perhaps even more, if Putin decides to change the rules to permit himself another term, or two or three. 

Robert C. Toth first reported from Moscow in 1960 and was the Los Angeles Times bureau chief from 1974 to 1977.

TITLE: Saddam Trial To Begin Soon
AUTHOR: By Qassim Abdul-Zahra
PUBLISHER: The Associated Press
TEXT: BAGHDAD, Iraq — Saddam Hussein could go on trial as early as next month for his alleged role in a massacre 23 years ago, a top judge said Wednesday. He said the ousted dictator could face the death penalty. State Raid Juhi, chief judge of the  Iraq Special Tribunal, said the investigation into the July 8, 1982 massacre in Dujail, a predominantly Shiite village 50 miles north of Baghdad, is complete.
Juhi said four other former senior officials would stand trial in the Dujail massacre, in which Saddam’s security agents allegedly shot dead at least 50 people after a plot to assassinate him was uncovered.
Juhi said the trial would begin “in August or September, but we would like it to begin before that.” Saddam and the others could be sentenced to death if convicted, Juhi said.
Iraqi officials have announced the imminent start of Saddam’s trial before, only to have the proceedings delayed. The Americans privately have urged caution about rushing into a trial, saying Iraq must develop a good court and judicial system first.
U.S. officials say there are also concerns a trial could interfere with the important process of writing a constitution and inflame sectarian tension. The Iraqi government must finish a draft by mid-August so it can hold a referendum on the charter ahead of December elections for a full-term government.
Iraqi Foreign Minister Hoshyar Zebari said last month he hoped the trial would take place “sooner” than the end of the year. Zebari said investigators already have “an abundance of evidence of the crimes of Saddam. ... We don’t need any further evidence.”
Saddam, 68, has been jailed under American control at a U.S. military detention complex near Baghdad airport.
In an interview with The Associated Press in Brussels, Belgium last month, Justice Minister Abdul Hussein Shandal said he was confident Iraqi investigators would wrap up the case against Saddam by the end of the year.
Shandal accused the United States of trying to hinder the Iraqi investigation of Saddam’s regime, saying “it seems there are lots of secrets they want to hide.”
Saddam is also expected to face charges for his alleged role in the 1987-88 campaign to drive Iraqi Kurds from wide areas of the north and for crushing the Shiite revolt in the south after U.S.-led forces from Iraqi invaders from Kuwait in 1991.