SOURCE: The St. Petersburg Times
DATE: Issue #1106 (72), Tuesday, September 20, 2005
**************************************************************************


TITLE: Legal Wrangling Holds Up Tycoon’s Appeal
AUTHOR: By Catherine Belton
PUBLISHER: Staff Writer
TEXT: MOSCOW — Mikhail Khodorkovsky on Monday won a day’s reprieve for his election campaign as the Moscow City Court for a second time adjourned proceedings in his appeal.
The three-judge panel pressed Khodorkovsky to have two junior lawyers and Anton Drel, a senior lawyer on his team, represent him in the appeal and ordered all three to sit at the defense table in the court in a bid to start proceedings. The only lawyer authorized by Khodorkovsky to defend him in the appeal, Genrikh Padva, was hospitalized last week due to poor health and has so far been unable to appear.
After Khodorkovsky categorically refused to be defended by the lawyers urged on him by the judges, the judges agreed to give him more time to select a lawyer and said the court would reconvene Tuesday.
Yukos founder Khodorkovsky and his business partner Platon Lebedev were found guilty of fraud and tax evasion in May after a highly politicized trial and sentenced to nine years in prison.
The day’s breathing space could give Khodorkovsky slightly more hope of registering to run in a December by-election for the State Duma. 
Drel told reporters Monday that the judges had tried again to speed up the appeal to ensure Khodorkovsky could not register as a candidate in the election. If Khodorkovsky’s appeal is rejected, he will not be allowed to run.
“The authorities have ordered the Moscow City Court not to allow Khodorkovsky to be registered, and this explains everything,” Drel told reporters after the hearing was adjourned.
Khodorkovsky’s campaign manager, Ivan Starikov, said that prison officials sent Khodorkovsky’s application to take part in the election to the district’s election commission last week. 
But as of Monday, it was not clear whether his documents had reached their destination. An election commission official said Monday that his application had not yet been received, Interfax reported.
Starikov said his team would hand in other application documents Monday and said they expected to start collecting signatures for Khodorkovsky’s registration Wednesday.
Khodorkovsky told the court he had been unable to choose a new lawyer to replace Padva in time for Monday’s hearings because his cell had been quarantined since late last week, preventing him from meeting with his lawyers. 
An inmate ill with an infection had been deliberately held in three cells on his floor, including his and Lebedev’s, after which all three cells had been quarantined, he said. 
Drel said the tactics used to keep Khodorkovsky from talking with his lawyers were akin to those “in the Middle Ages.”
State prosecutor Dmitry Shokhin again accused Khodorkovsky of dragging out proceedings and called for an immediate start. 
After judges granted Khodorkovsky time during a recess to consult with Drel, Denis Dyatlev and Yelena Levina, the tycoon said a document presented to the court by Shokhin saying Padva would be incapacitated for at least a month was false. 
He said the lawyers had been in contact with Padva and that he had said he could be ready to come to the court by the end of the week.
If “extreme circumstances” ruled out Padva defending him, then the only other lawyer capable of doing so, Khodorkovsky said, was Yury Shmidt, another seasoned and experienced lawyer.
Khodorkovsky reiterated Monday that none of his other lawyers — including Drel, Levina and Dyatlev — were ready to conduct his defense as they had not been given enough time to acquaint themselves with the case in its entirety. Instead, he said, each of them had only had time to look at different parts of the trial record.
At one point during Monday’s hearings the judges appeared intent on making sure the three lawyers represented Khodorkovsky, stating before a brief recess that none of the participants in the hearings, including Khodorkovsky, had any objection to the lawyers defending him.
Khodorkovsky told the judges after the break that he refused to have the three lawyers represent him. “I did not give my consent for them to participate and I refuse their services in this appeal,” he said.

TITLE: Family Gets Evicted, Sets Precedent For Debtors
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: A St. Petersburg family became the first to be evicted from its apartment for failing to pay for communal services under the new housing code.
The city authorities moved Lyudmila Sokolovskaya and her son, 23, whose debt for their three-room apartment since 1996 amounted to 48 thousand rubles ($1,689), to a 15 square meter room in a communal apartment on Sept. 8.
The district authorities first demanded that the family pay their debts in 1999, and a second time in 2001. When the family failed to pay up, the authorities took them to court, where there eviction was ordered. 
Sokolovskaya appealed against that initial ruling, and it was overturned.  However, in August of 2004, the court again ruled that the Sokolovskaya family be evicted, and this time the family did not appeal. 
“Until the very last moment Sokolovskaya did not believe they would move them out,” said Viorika Safryuk, head of the legal department at the Kirovsky district Housing Agency.
On the eve of the eviction, Soko-lovskaya collected 30,000 rubles to pay off a portion of the debt, but the authorities said it was too late, Moi Rayon newspaper reported.
On the day of the eviction Soko-lovskaya drank some alcohol and apologized to journalists, who had been invited by the authorities to cover this landmark case, for not being sober.  
“What else can I do if something like this is happening?” Sokolovskaya said, Moi Rayon newspaper reported.
The new Housing Code stipulates that people who don’t pay their communal-services bills for six months can be deprived of their apartment and moved to smaller accommodation, with each person having the right to a minimum of six square meters.
At present there are about 440 thousand families in St. Petersburg which have run up debts for communal services. 
In total, that amounts to about four billion rubles, said Anatoly Ksenzov, head of the legal department at the city’s Housing Committee, the Khronika newspaper reported.
Authorities usually bring actions against residents whose debt has reached over 15,000 – 20,000 rubles. At present, 113 such cases have been taken to court. 
Safryuk said, however, that while the case is being processed, debtors have the right to pay off what they owe. She said that Sokolovskaya had at least a year after the court ruling on her eviction to pay off the debt, but she didn’t do so.
Safryuk said that such rulings could only be made against debtors that have not privatized their apartments. 
She said that Sokolovskaya had been awarded the apartment by the state in 1986, but that she had not privatized it. 
“If she had, she would have been able to sell the apartment or exchange it for a smaller one to get the money to pay the debt,” Safryuk said.
Safryuk said that the family had little chance of getting its apartment back, and that it would be given to a family on the city’s waiting lists for housing. 
The Kirovsky district has already taken seven similar cases to court, but in each one the debtors managed to pay off their debts, Safryuk said.
Irina Klimachyova, a bailiff who took part in the eviction of the Sokolovskaya family, said that evicting families was psychologically trying.
“These people had every chance to pay their debt but Sokolovskaya is out of work, she drinks, and she didn’t get a move on in time to solve the problem,” she said. 
Sokolovskaya could not be reached for comment.

TITLE: Inmates Ready To Enter Local Election Race
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — With bids that threaten to thoroughly discredit the race, a motley group of prisoners at the Matrosskaya Tishina detention facility are drawing up plans to run against fellow prisoner Mikhail Khodorkovsky for a seat in the State Duma.
Even if Khodorkovsky were to end up withdrawing, voluntarily or involuntarily, the other prisoners may refuse to follow suit, embarrassing federal and city authorities who appear keen on keeping Khodorkovsky from winning at all costs.
The race officially kicked off Monday, and candidates started registering with the elections committee in Moscow’s Universitetsky district, an affluent white-collar neighborhood in southwestern Moscow.
Khodorkovsky’s campaign chief, Ivan Starikov, said Monday that he would soon submit Khodorkovsky’s income and property declarations and a copy of his university diploma to the committee, Interfax reported. Khodorkovsky mailed his application to the committee last week.
But if and when he is approved as a candidate, Khodorkovsky may find himself running against at least six fellow prisoners. 
Of them, two are charged with robbery, two are charged with fraud, one is charged with child molestation and one is charged with rape, said the chief of Moscow prisons, Vladimir Davydenko, Izvestia reported.
Other criminal suspects might also enter the race, with nationalist organizations pushing for the candidacies of Alexandra Ivannikova, Eduard Ulman and Vladimir Kvachkov, according to media reports.
Ivannikova is awaiting a retrial on charges of killing an Armenian taxi driver in 2003. She said the driver tried to rape her and she killed him in self-defense. Ulman, a captain in the military’s intelligence directorate, is awaiting a retrial on murder charges stemming from the deaths of six Chechen civilians in 2002. Kvachkov, a retired colonel in the military’s intelligence directorate, is accused of organizing an attack on Unified Energy Systems chief Anatoly Chubais in March.
The emergence of the criminal suspects appears to be a Kremlin ploy aimed at discrediting Khodorkovsky’s bid and ensuring high voter turnout, political analysts said.
“The Kremlin will use this parade of characters to reshape public perception about the poll: Its major theme will no longer be about a man fighting against the authorities from behind the bars. Instead, the air will be filled with indignant lamentations about criminals trying to seize power in the country,” said Alexei Makarkin of the Center for Political Technologies. 
By removing Khodorkovsky from the race, the Kremlin runs a high risk of voter apathy and an invalid election due to low turnout, said Vladimir Pribylovsky of the Panorama think tank. A turnout of 25 percent is needed to validate the vote. 
In addition, the removal of Khodorkovsky would prompt loud, critical protests from his supporters, which the Kremlin does not want, Pribylovsky said.
“To attract enough people to come to the ballot boxes and to get a valid poll, there needs to be intrigue in the race,” he said. “But this intrigue should not be Khodorkovsky. That is why rumors are swirling about the participation of famous criminal suspects.”
So far, none of the celebrity suspects has confirmed any intention of running.
Ivannikova’s husband, Oleg Muravyov, said by telephone that he had learned about his wife’s possible bid from journalists. “No one ever approached us with such an idea,” he said. “Quite frankly, we are not going to worry about it. We are not ready to be Duma deputies.”
Alexander Belov, leader of the nationalist Movement Against Illegal Migrants, and Konstantin Krylov, leader of the nationalist Russian Public Movement, denied reports in Izvestia that an Ivannikova bid was their idea, saying it was the brainchild of Internet bloggers.
Belov, however, said his group could help Ivannikova run if “sufficient” money was invested in her campaign. He said his group would need $1 for every household visited in the district by campaign activists.
A total of 560,000 voters are registered in the district, including President Vladimir Putin, his family and other high-level federal officials. 
“Against the background of Khodorkovsky and the others, Ivannikova, an intellectual Muscovite who stood up for her dignity against a Caucasus migrant, would attract sympathy as a ‘one of us’ candidate,” Belov said.
Ulman’s lawyer Roman Rzhachkovsky expressed surprise when he learned that his client had been tipped as a candidate. “Treat this information as a rumor and nothing else,” he told Izvestia. “Eduard doesn’t know anything about it.”
Earlier this month, Kvachkov’s lawyer Alevtin Morshansky said his client — also an inmate in Matrosskaya Tishina clink — did not want to run for fear that it would make him look guilty. Duma deputies receive immunity from prosecution, and Kvachkov has maintained he had nothing to do with the Chubais attack.
However, a group of major nationalist groups announced Sunday that they would nominate Kvachkov for the race. The groups included the Russian National Unity, the Union of Officers, the National Imperial Party of Russia and the Military Imperial Union.
As of Monday afternoon, the district’s election committee had received five requests for registration in the by-election, Interfax reported. None of them was from criminal suspects, including Khodorkovsky.
The committee will register candidates until Oct. 19. The vote is scheduled for Dec. 4. 
If the Moscow City Court rejects Khodorkovsky’s appeal before Oct. 19, he will be thrown out of the race.
Central Election Commission chief Alexander Veshnyakov said last week that if the ruling came after Dec. 4 and Khodorkovsky won, Duma deputies would have to vote on whether to lift or retain his immunity from persecution.
Khodorkovsky, once Russia’s richest man, was sentenced to nine years in prison on fraud and tax evasion charges in May. The case is widely seen as Kremlin punishment for his political and business ambitions.

TITLE: Russia Seeks UN Delay Over Iran
AUTHOR: By Paul Taylor
PUBLISHER: Reuters
TEXT: UNITED NATIONS — Russia asked the European Union on Monday to delay a move to report Iran’s nuclear program to the U.N. Security Council for possible sanctions and EU ministers were receptive, participants said. 
Russian Foreign Minister Sergei Lavrov made the appeal at a meeting with EU foreign ministers on the sidelines of the U.N. General Assembly, saying it was vital to maintain the unity of the international community to put pressure on Iran, two European participants told Reuters. 
They said he did not rule out backing a referral later. 
The three main EU powers — Britain, France and Germany — agreed with the United States on Sunday to submit a resolution to the board of the International Atomic Energy Agency to report Iran to the highest U.N. body after its president vowed to press ahead with making nuclear fuel that could be used for weapons. 
Diplomats said the United States was pressing behind the scenes for a quick IAEA vote to send Tehran to the Security Council, but European ministers emerging from the meeting with Lavrov said there was time for more diplomacy. 
“A resolution is the last option we have if nothing else helps, then we all agree that there of course is this possibility of the Security Council, but we are not yet there,” Swedish Foreign Minister Laila Freivalds told Reuters. 
EU External Relations Commissioner Benita Ferrero-Waldner said: “I think we all will try to have some united position.” 
Another European participant who asked not to be identified said Lavrov had not ruled out the possibility of taking Iran to the Security Council, which has the power to impose sanctions, but only at a later stage. 
“Lavrov said there were two possible scenarios: first, to go to the Security Council and see whether Iran blinks; second, to keep working at the IAEA and try to concentrate our efforts there and keep the consensus. 
“Since we don’t see a clear threat coming from Iran at the moment, we prefer to concentrate on the second option for now,” he quoted Lavrov as telling the meeting. 
He said British Foreign Secretary Jack Straw and EU foreign policy chief Javier Solana, who have been negotiating with Iran, had responded that they shared Lavrov’s view but wanted to keep open the possibility of a Security Council referral if Iran did not cooperate.

TITLE: Second Hazing Case Win for Conscripts
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Six St. Petersburg navy conscripts have won a second case against hazing after the Baltic Fleet garrison court gave recruit Ulasby Adilkhanov a four-year suspended sentence for physical abuse and bullying.
In August, six St. Petersburg navy recruits, who had won a hazing court case in Kronshtadt in June of this year, were again involved in a violent incident in their new garrison in Baltiisk, Kaliningrad region.
“The recruits contacted us to complain about new brutal attacks just a week after their relocation to Baltiisk,” said Ella Polyakova, head of the local office of the Soldiers’ Mothers human rights organization in a telephone interview on Friday. “They sounded shocked and terrified.”
The verdict drew a mixed reaction from the Soldiers’ Mothers organization.
“The verdict is a clear sign that the prosecutor’s office has acknowledged the problem, and it should serve as a warning to other hazers,” Polyakova said. “But naturally we are not so naive as to believe that Adilhanov alone was responsible.”
Anatoly Lobsky head of the Baltic Fleet press service and an aide to the fleet’s commander, said the fight was provoked by a St. Petersburg recruit. As a result of the fight, eight conscripts ended up in the garrison’s hospital with severe bruises and various other injuries.
In an interview with The St. Petersburg Times last month, Lobsky stressed that one of the St. Petersburg sailors, Mikhail Gordienko, is a former drug-addict and skinhead, bearing a large tattoo of a swastika on his torso. 
“Witnesses said he was walking with his shirt off, exposing this outrageous fascist symbol and behaving in a provocative way,” Lobsky said in a telephone interview. 
But St. Petersburg lawyer Yelena Filonova, who represented the conscripts during the Kronshtadt case, sees the attacks as a form of revenge against the recruits, who shamed the navy by revealing its problems to the public.
This view is shared by Ella Polyakova. “Adilkhanov wouldn’t have dared to act so brutally if he didn’t have the consent of the officers,” Polyakova said. “Somebody let him loose on the boys and the court hasn’t established who ordered the beatings.”
The six recruits’ problems began in April, when, along with six other sailors, they deserted their military detachment in Lomonosov and contacted the Kronshtadt garrison prosecutor’s office complaining about bullying and persistent physical abuse. 
During the investigation that followed forensic experts found bruises and further evidence of beatings on the bodies of seven conscripts. The case reached the Kronshtadt garrison court in June, and the sensational verdict declared two navy recruits guilty of beating other sailors, giving them jail sentences. 
Ivan Arsakov, 20, was sentenced to 3 1/2, while Viktor Fyodorov, 21, received a one-year suspended sentence. Arsakov was also sentenced to pay 19,372 rubles ($680) in compensation for physical and mental damage to his victims, while Fyodorov had to pay them another 6,000 rubles. 
Filonova said the sailors, who filed the suit, were deemed snitches by many of their fellows. 
“They complained that they were despised by the fellow recruits for criticizing their navy unit and exposing the truth about hazing,” Filonova said in a telephone interview on Friday. “The abuse was seen as an internal matter, and the boys who deserted in protest were branded traitors.” 
Following the last court case, Gordienko has been sent home without having to complete the rest of his term in the navy. The Soldiers’ Mothers organization asked for the other five recruits to be released, but the naval authorities rejected their appeal.
Polyakova was infuriated by the navy authorities drawing attention to Gordienko’s past as a skinhead. “There are no blameless recruits in the army, and a tattoo is certainly not an excuse to beat anybody senseless,” she said. “Misha is an orphan, and his life has been very difficult, but his past isn’t a strong enough shield to cover blatant violence and abuse of human rights.”
Filonova said that another related case may go to court in the near future. At least one of the five ill-fated conscripts has already reported being abused since the delivery of the verdict in the second case.

TITLE: Lithuania Refuses to Hand Over Pilot
AUTHOR: By Liudas Dapkus
PUBLISHER: The Associated Press
TEXT: VILNIUS, Lithuania — The Lithuanian government has denied Moscow’s requests to hand over a Russian pilot whose fighter jet crashed in the NATO member’s territory after violating its airspace, saying it must first complete an investigation. 
Defense Minister Gediminas Kirkilas said NATO investigators also would study the Su-27 fighter’s flight recorder, or black box, to determine the cause of the crash. 
“We will not hand the pilot and the black box of the crashed plane over to Moscow until the investigation is completed,” Kirkilas said Friday. 
The plane, which had been en route from St. Petersburg to the Russian exclave of Kaliningrad, crashed near the village of Ploksciai, 190 kilometers northwest of Vilnius, on Thursday. 
The pilot, Major Valery Troyanov, ejected to safety and was not hurt, officials said. 
After questioning Troyanov for six hours, prosecutor Mindaugas Duda said the pilot was no longer a witness but a suspect, and that they had opened a case against him on suspicion of “violating international flight regulations.” He did not say why Troyanov’s status had been changed. 
If charged and convicted, Troyanov, 36, could face up to two years in prison. 
Troyanov’s jet flew in a convoy with other Russian aircraft that had been given permission to fly through an agreed upon “corridor” over the Baltic states of Estonia, Latvia and Lithuania, Lithuanian officials said. The other aircraft reached Kaliningrad safely. 
Troyanov was examined overnight in an undisclosed hospital before being taken to Vilnius on Friday for questioning. 
On Thursday, Moscow requested that Troyanov and the plane’s flight data recorder be handed over to Russian officials. 
Major General Valdas Tutkus, commander of Lithuania’s armed forces, said he believed the pilot did not intentionally violate Lithuanian airspace and that the crash was likely caused by a technical problem. 
“We knew its precise route and did not feel it posed any threat,” Tutkus told the Baltic News Agency. 
He said Troyanov sent an SOS signal before crashing that was also picked up by Air Force traffic controllers in neighboring Belarus, who contacted Lithuanian officials on a special hot line. 
The Interior Ministry said it would issue visitors’ visas to Troyanov and a Russian delegation that planned to visit the crash site. 
Kirkilas said Lithuania lacked experts who could examine the black box and would turn to its NATO allies for help. 
The alliance, which has four F-4 fighters stationed at an air base in Lithuania, scrambled two of its fighters to intercept the Russian plane. 
Major Karl Heinz Smuda, a spokes-man for the German NATO contingent currently policing Baltic skies, praised the response time. 
“According to regulations, we have 15 minutes to fly to the conflict zone,” Smuda said. “Our pilots did it in eight minutes, and we are proud of it. When they arrived, the Russian pilot had already ejected and the fighter was nose-diving to the ground.”
The Russian Defense Ministry apologized for the crash and promised to pay for any damage it caused. 
On Saturday, Lieutenant General Sergei Baynetov, head of the air safety service of the Russian Defense Ministry, said the Su-27 had been carrying four air-to-air missiles, Interfax reported. 
At the time of the crash, the Defense Ministry had said the jet had no weapons aboard. 
The incident was the latest in a series of recent airspace violations by Russian planes in the region. In May, Finland complained that Russian military aircraft had repeatedly violated its airspace over a period of several months. The violations took place in Finnish airspace over the Gulf of Finland in the Baltic Sea as the jets flew to and from Kaliningrad. 
Similar alleged violations by Russian planes have been reported in Estonia, Latvia and Lithuania.

TITLE: Putin Says Won’t Resume Cold War Rivalry
AUTHOR: By Henry Meyer
PUBLISHER: The Associated Press
TEXT: MOSCOW — President Vladimir Putin said Sunday that it was impossible for Russia to resume it Cold War rivalry with the United States. 
“We are not adversaries. We are partners in many areas of international activities,” he said in an interview broadcast by the U.S. broadcaster Fox News. 
But Putin reiterated his opposition to a U.S.-European push to refer Iran to the UN Security Council for consideration of sanctions over its nuclear program. He also said the United States should pull its troops out of Iraq within two years. 
Putin was in New York last week for the UN world summit and talks with President Bush. He gave the taped interview Friday but it was not broadcast until Sunday. A transcript of the interview was posted on the Kremlin’s Web site. 
On the sensitive subject of Iran, where Russia is building an atomic power plant despite U.S. concerns that Iran may be trying to build nuclear weapons, Putin rejected calls to have the International Atomic Energy Agency seek sanctions against the Tehran regime. 
“Today, the Iranian side is working sufficiently in cooperation with the IAEA and (IAEA chief Mohamed) ElBaradei has told us so. So, let’s proceed from today’s realities,” Putin said. 
The 35-nation board of the UN nuclear watchdog agency is to discuss Iran’s nuclear program at a meeting opening Monday at the IAEA’s headquarters in Vienna, Austria. 
Putin, whose government fiercely opposed the war to oust Iraqi dictator Saddam Hussein, said the U.S.-led coalition’s military presence in Iraq is fueling the insurgency and urged that a deadline be fixed for the withdrawal of foreign troops. 
“In our opinion, the fact of their presence there pushes the armed opposition to perpetrate acts of violence,” Putin said. 
The Russian president acknowledged that fledgling Iraqi security forces need time before they can take over from U.S.-led forces but said a timetable for a pullout is essential to “make everybody move in the right direction.” 
“I believe it should be within just over a year, or within two years, something like that. It will all depend on the situation in that country,” he said. 
Putin also used the Fox interview to warn against trying to lecture Russia on democracy. 
“I am convinced that democracy cannot be exported from one country to another. Just as you cannot export revolution, you cannot export ideology. We’re not prepared to listen to teaching or tutoring. That is inadmissible,” he said. 
Putin is often criticized in the West for rolling back democratic freedoms by imposing state control of national broadcasters and scrapping elections for regional governors. 
He repeated his pledge not to change the Russian constitution to allow him to run for a third consecutive term in the 2008 election. 
“Under no circumstances am I prepared to change the constitution,” Putin said. 
Putin began the interview by offering condolences over Hurricane Katrina. 
“We sincerely grieve with the American people regarding all those victims,” he said.

TITLE: Putin Hails Unity Against Terror Threat
AUTHOR: By Rebecca Santana
PUBLISHER: The Associated Press
TEXT: BAYONNE, New Jersey — A monument designed by Zurab Tsereteli to honor victims of the Sept. 11, 2001, attacks will stand as a vital symbol of Russian-U.S. unity against the threat of terrorism, President Vladimir Putin said. 
“Four years ago, the perpetrators believed they would bring America and the rest of the world to chaos,” Putin said. “But they were mistaken.”
Putin spoke at a groundbreaking ceremony Thursday evening. 
The monument will be the centerpiece of a 0.8-hectare park along the Bayonne waterfront opposite lower Manhattan, where the World Trade Center towers once stood. 
The 32-meter-tall bronze and steel sculpture will feature a teardrop hanging in the middle of a rectangular structure. The granite base where the monument will stand has 11 sides, and the names of 9/11 victims as well as victims of the 1993 World Trade Center bombing will be engraved on the base. 
During the ceremony Thursday, officials unveiled a temporary monument that will stand until the permanent structure is finished. The permanent structure was shipped from Russia in August and is currently being pieced together. Officials hope to unveil it by Sept. 11, 2006, the fifth anniversary of the attacks. 
Putin said the Russian people felt a special bond with the United States because Russians too had been subjected to terrorist attacks. 
“I couldn’t but support the initiative of citizens of Russia and America to erect this memorial,” Putin said. 
“Not only because of the fact that in Russia, like nowhere else, people will be able to feel compassion and understanding with you. But also because of the fact that this monument will always be a vivid embodiment of our unity in combating this threat,” he added.
Security was tight at the ceremony, with police boats patrolling the water and snipers stationed on nearby buildings. Also in attendance were U.S. Senator Jon Corzine; state Commerce Secretary Virginia Bauer, whose husband died on Sept. 11, 2001; Bayonne Mayor Joseph Doria Jr.; and Frank Perucci, chairman of Bayonne’s 9/11 memorial commission. Twelve Bayonne residents and five former Bayonne residents were killed in the terror attacks. 
The Sept. 11 monument was originally intended for Jersey City, but officials there decided to pass on it after complaints from residents that it was too big and from the artistic community that it was not aesthetically pleasing. But at the ceremony, many in attendance commented that Jersey City’s loss was Bayonne’s gain. 
“Art is in the eye of the beholder,” said Doria, who described it as a wonderful work. “So you can argue about what you like and what you don’t like.”
That thought was echoed by Mary Tokar, a native of Bayonne. “It looked like the building itself was crying. … I thought it captured the feeling beautifully,” she said. “So when Jersey City said they didn’t want it, I thought ‘Why?’”

TITLE: Iran Slams ‘Nuclear Apartheid’
PUBLISHER: The Associated Press
TEXT: UNITED NATIONS — Iran’s president proclaimed his country’s “inalienable right” to nuclear energy and offered foreign countries and companies a role in his nation’s uranium enrichment program to prove Tehran is not producing nuclear weapons. 
In a fiery speech to the UN General Assembly on Saturday, President Mahmoud Ahmadinejad rejected a renewed offer from the European Union, backed by the United States, to halt uranium enrichment in exchange for economic and other incentives. 
He claimed that Iran continued to abide by the Nuclear Nonproliferation Treaty and accused some “powerful states” — an apparent reference to the United States and European countries — of engaging in “nuclear apartheid” by discriminating against access by treaty members to material, equipment and peaceful nuclear technology. 
A senior U.S. State Department official called it “a very aggressive speech” that appeared to go beyond European “red lines.” A British Foreign Office spokesman called it “unhelpful.” 
The United States and the Europeans have threatened to refer the Tehran nuclear dossier to the UN Security Council, which could impose sanctions, if Iran does not stop enriching uranium. Washington has led efforts to line up support at Monday’s board meeting of the UN nuclear watchdog, the International Atomic Energy Agency, for a referral to the council.

TITLE: Ramstore Plans 10 Outlets
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: By the end of 2006 Turkish retailer Ramenka will have 10 supermarkets and hypermarkets operating under the Ramstore brand in St. Petersburg, the company said Friday, opening its third Ramstore in the city.
Ozgur Tort, deputy director of Ramenka, said the company will invest $60 million in the expansion during this year, adding two more stores. The Turkish retail plans to spend more than $160 million on expanding the chain in St. Petersburg, aiming for a 10 percent market share.
“This is our first investment in our own property,” Tort said, noting that the city’s third Ramstore is located in a shopping center built by the Ramenka. Previously, the company rented space for its stores.
The latest Ramstore hypermarket, occupying 6,600 square meters in a 42,000 sq.m. shopping center on Kolomyazhsky Prospekt, will be one of 50 center tenants, which also include Karo cinema.
The project has had $31 million pumped into it, with Tort predicting a four-year return on investment period. Victoria Grankina, a senior analyst with Troika Dialog brokerage, saw this as the standard investment amount, with supermarkets generally requiring between $20 million to $30 million.
Grankina noted that the feasibility of Ramenka expanding quickly in St. Petersburg largely depends on whether the chain has made prior agreements to secure property rights for new sights.
“The market is growing fast, but remains unsaturated, which makes its easier for companies to have a profitable investment,” Grankina said. “While discounters enjoy slightly higher profitability now, supermarkets and hypermarket will have the advantage in the future when wages increase,” she said.
At present, most retail chains target middle-class consumers, with average grocery shopping bill being $20 to $25, said Irina Anisimova, executive director of Astera real estate agency.
The growth of the market allows for new chains opening in the city to “gain in market share from non-chain street retailers,” without pressing on direct rivals, Anisimova said. She forecasts saturation on the retail market only in two to three years.
Earlier this year, two Moscow retailers, Sedmoi Kontinent and Marta holding, which operates under the Grossmart brand, declared expansion plans for St. Petersburg, Vedomosti business daily reported.
Ramenka’s Tort named Moskovsky and Krasnoselsky districts as the next spots for Ramstore supermarkets. Meanwhile, Grankina said that if Ramenka follows a similar strategy to the one it has for Moscow, the chain will look to cover districts outside of the city center, but not as far out as the outskirts.

TITLE: Reka Rubber Plans Plant To Service Auto-Makers
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Finnish producer Reka Rubber Ltd. will construct a technical rubber plant in Vyborg targeting among others local auto-makers as its clients, the firm’s deputy director for Russia, Oleg Ivanov, said Monday.
Given the presence of some major automobile manufacturers in St. Petersburg and the Leningrad Oblast area, such as Scania and Ford, and the expected arrival of Japan’s Toyota, experts said Reka Rubber had chosen a good time to capitalize on the area’s growing auto sector.
Initially, Reka Rubber’s St. Petersburg will supply the company’s existing “international clients,” Ivanov said in a telephone interview.
With time, the Finnish firm hopes to attraction Russian producers too, supply local auto-making firms and white goods producers, that should merit several million dollars in annual revenue, Ivanov said.
The company declined to name the investment amount or the dates for factory construction, saying only that it would put in “a few million euros” into the project. “Investment will grow as demand from local producers picks up and our client base expands,” Ivanov said.
Reka Rubber expect the plant to turn in profit within a year of operating, he said.
Victor Nikitin, logistics manager at Scania Peter, the local subsidiary of Swedish auto-maker Scania, said Reka’s arrival will benefit local auto-makers by increasing competition among technical rubber producers.
Other benefits will come from a “higher product quality requirements that is especially important for Russia-based foreign car assembling plants trying to localize supplies,” Nikitin said.
Foreign manufacturers of household appliances may take longer to switch suppliers, and pick a factory based in the region.
“At first, the considerable part of necessary materials will be produced by our own plants [outside of Russia],” said Maria Nenakhova, PR manager for BSH Bosch und Siemens Hausgeraete, a German household appliances maker opening a freezer plant near St. Petersburg in 2007.
“After some time, possibly we will widen cooperation with local suppliers,” she said, adding that it is hard to predict how soon this may be.
Reka Rubber is a part of Reka group that also includes a cable production company and a real estate management firm. The group works mainly on the Scandinavian, Baltic and Russian market, although the rubber plant will be the group’s first manufacturing facility in Russia.
The company has plants in Finland, Poland and at the Far East. Last year, the turnover of Reka Rubber reached 15.4 million euros ($18.7 million).

TITLE: Bankers: Western Banks Agree To Loan $12Bln to Gazprom
AUTHOR: By Elif Kaban and Guy Faulconbridge
PUBLISHER: Reuters
TEXT: MOSCOW — Western banks agreed a record $12 billion loan to gas giant Gazprom to acquire Roman Abramovich’s Sibneft oil firm, in a deal that would give the Kremlin control over a third of Russian oil, senior bankers said Monday. 
Bankers said Gazprom secured the loan at meeting in Moscow with a consortium of Western banks. “We have agreed ... It’s all going ahead,” said one banker who participated in the meeting. No pricing details were given. 
Another banker added: “We expect to get credit committee approvals by the end of this week.”
On a visit to Paris, Gazprom’s chief executive declined comment on the loan. “We are negotiating with Sibneft; it’s part of our strategy. The issue of acquiring petroleum assets fits completely with our strategy,” Alexei Miller told reporters. 
The financing package, the largest ever for a Russian firm, will be in four portions, including a one-year bridge loan of at least $5 billion, bankers said. 
The remainder would be made up of a syndicated loan in three tranches of 18 months, three years and five years, to be refinanced partly via a bond sale. 
The group of Western banks comprised ABN AMRO, Dresdner Kleinwort Wasserstein, Citigroup, Morgan Stanley, Goldman Sachs and Credit Suisse. 
Bankers said the financing would pave the way for Gazprom to bid for Russia’s No.5 oil producer Sibneft. President Vladimir Putin revealed in July that Gazprom had held talks to buy Sibneft and said he had no objections to a deal. 
Sibneft’s shareholders on Sept. 12 voted a bumper $2.3 billion dividend for 2004, draining cash from the company in a move widely seen as a precursor to a sale. 
Abramovich, Russia’s richest man according to Forbes magazine, controls 72 percent of Sibneft with his partners via holding company Millhouse Capital. 
There was no immediate word on details of the underlying transaction but Interfax news agency reported last week that Gazprom and Sibneft were close to a deal. 
It said Gazprom was offering half of the seller’s asking price of $14 billion for Millhouse’s stake. Gazprom and Sibneft have declined to comment. 
“It seems that everything is in place for the deal to take place,” said Jacques von Polier, a fund manager at Atria Advisors in Moscow. 
“Gazprom was bargaining about the price and Sibneft’s shareholders didn’t want to sell too cheaply and the negotiations are probably still going on. The only catch is if they don’t agree on the price.” 
At market prices Millhouse’s 72 percent stake in Sibneft is worth $11.9 billion. 
Sibneft shares were up 1.9 percent while Gazprom gained 2.9 percent to an all-time high of 126.3 rubles ($4.44), valuing the company at $105 billion based on its local shares. 
Gazprom’s London-listed proxy shares, equivalent to 10 ordinary shares, were also up 4.1 percent to $59.14. 
The latest loan comes hot on the heels of a $7.5 billion financing deal agreed last week to fund Russia’s acquisition of a 10.7 percent stake in Gazprom, securing state control over the gas giant and paving the way for curbs on foreign ownership of its stock to be lifted.
The complicated package envisages the short-term bridge loan to provide relief to Gazprom until it receives payment for the shares towards the end of this year from Rosneftegaz, the special purpose state entity, which borrowed the $7.5 billion. 
Rosneftegaz will in turn recoup that cash from the proposed initial public offering of a minority stake in its only asset, state-owned oil firm Rosneft, Russia’s No.3 crude producer. 
“This is financial engineering the Russian way. Only the Russians could come up with such convoluted deals,” said one Western banker in Moscow.

n Gazprom increased its investment plan for 2005 by 43 percent, partly to build a pipeline that will cross the floor of the Baltic Sea to carry fuel to Germany, Bloomberg reported Monday.
Investments for 2005 were raised to 305 billion rubles ($10.7 billion) from 212.6 billion rubles, Gazprom said Monday in an e-mailed statement.

TITLE: Toll Road to Be Started Next Year
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW — Construction will begin in 2006 on the country’s first major toll road, which will link Moscow to St. Petersburg, Deputy Transportation Minister Alexander Misharin said last week.
The new 650-kilometer road will have up to five lanes going in each direction, and with a speed limit of 150 kilometers per hour, it will enable motorists to get from one city to the other in less than five hours for a fare of just over $20.
The project will take five years to complete and will require 150 billion rubles ($5.3 billion) in investment to cover construction costs, in addition to 20 billion rubles needed to buy land, Misharin said at a news conference.
Half of the funding is expected to come from the state, while the remainder will be covered by private funds, including international banks and companies. 
The Transportation Ministry also plans to apply for funding from the government’s infrastructure investment fund, which was created earlier this year by divesting part of windfall revenues stored in the stabilization fund. The investment fund has now accumulated $2.5 billion and will become operational next year.
As the number of cars continues to soar, both financing and construction works on Russia’s highways should be given a top priority, said Misharin. The capacity of the country’s roads increases by only 1.5 percent per year — in stark contrast to the volume of cars, which rises by 10 percent.
“One-third of [the country’s] roads are operating at over-capacity. If we continue at the same pace until 2015, we will have traffic jams everywhere,” Misharin said.
Insufficient infrastructure and the poor quality of existing roads cost the state about 500 billion rubles ($17.7 billion) in lost profit each year — roughly double the amount the state allocates for road maintenance and construction.
Several international investors and banks have already expressed interest in taking part in the construction.

TITLE: Timber Exporters Battle for Time
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: More than a half the local firms trading in timber do not meet export documentation requirements, the state body monitoring the industry said last week.
Of 41 timber exporters checked in August, more than a half had “documents that could not even be accepted for a review,” Interfax cited the regional head of the state service responsible for inspecting the condition of the timber, Nikolai Shirokov, as saying.
“We have ceased the previous practice of issuing timber export certificates just any old how. According to the law we have 25 days to conduct the necessary expertise and five days to prepare a response. It would be unreal to make it faster,” Shirokov said.
Industry insiders see the situation in a different way.
“It’s more about like a promotional action for both sides,” said Denis Sokolov, executive director of the Northwest Confederation of Timber Processing Companies.
Timber exporters complain about bureaucratic delays in getting the necessary trading permissions, while state authorities, in their turn, accuse the companies of law violation, Sokolov said.
“The state controlling body for the industry decreased its staff following administrative reforms. Meanwhile, they created commercial companies that now conduct the same services,” he said.
“Now, if at the state body you spend 15 days to obtain the necessary documents, in those commercial agencies the same [documents] could be received in a day — only for a higher price,” Sokolov said.
With the state body’s service pressing by any means the timber exporters to turn instead to commercial companies, the only result is a hiking of costs for timber products, which will be passed on to customers, Sokolov said.
In contrast, Yury Murashko, PR manager for the Northwest Timber Processing firm said his company had not been hampered by the delay in document processes. “Current legislature doesn’t hamper anybody’s work,” he said.
Independent experts, however, said the problem had significant repercussions for the business environment.
“Bans and sanctions imposed on timber companies have little use, because they violate international agreements. Meanwhile, there is a serious lack of clear-cut bilateral procedures for timber export and import,” said Irina Lyanguzova, head of the consulting department at BDO Unicon North-West consultancy.
“And the violations will occur anyway until fines are multiplied to the level where they exceed the expected income from criminal activities,” she said.
Lyanguzova noted that environmental movements in Scandinavia are traditionally strong and Russia could join in their efforts to decrease illicit timber exports to neighboring countries by asking for backing from non-government organizations.

TITLE: Oil Majors Pledge To Cap Domestic Prices
AUTHOR: By Henry Meyer
PUBLISHER: The Associated Press
TEXT: MOSCOW — Russia’s major oil producers agreed Monday to freeze their domestic gasoline prices until the end of the year, the Interfax news agency reported citing the Industry and Energy Ministry. 
The oil companies made the decision at a meeting with Industry and Energy Minister Viktor Khristenko, Interfax quoted ministry spokesman Stas Naumov as saying. 
“The result of the meeting was a voluntary decision by the management of Russia’s largest oil companies; prices won’t rise any further on the domestic market until the end of the year,” the official said according to Interfax. 
Record world oil prices have sent gasoline prices soaring in Russia, provoking a chorus of criticism from Kremlin-loyal politicians who argue that Russian gasoline should be more accessible to citizens of the world’s second largest oil exporter, after Saudi Arabia. 
Last week they shot up to more than 18 rubles ($0.63) per liter (0.26 gallons), after rising by one ruble in the space of just a week. 
The Industry and Energy Ministry could not immediately be contacted Monday. 
The biggest Russian crude oil producer, LUKoil, on Monday announced a unilateral cap on gasoline prices with immediate effect. 
Another major oil company, TNK-BP, which is a 50-percent joint venture with British oil giant BP, declined to confirm the price freeze, but said it would make an announcement Tuesday. 
“We support the government’s efforts to ease up tensions on the fuel market,” TNK-BP spokeswoman Marina Dracheva said. 
Prices in Russia are approaching that of gasoline in the United States, where the devastation wrought on U.S. oil facilities by Hurricane Katrina sent gasoline prices to well over $3 a gallon. 
In a statement, LUKoil blamed high mineral resource taxes that are pegged to world prices as well as under-investment in domestic refineries. 
A LUKoil spokesman said the company’s prices would not rise above Monday’s level. He was unable to provide the current average price. 
In neighboring Ukraine, an acute fuel crisis erupted in May after the government imposed a gasoline price freeze, accusing Russian oil companies who control 80 percent of the market of collusion over a sharp rise in gas prices. 
The measure caused filling stations to run dry as major Russian oil exporters reduced supplies to Ukraine. 
Ukraine, in response, lifted the price caps and canceled duties on imported gasoline and diesel fuel, allowing Ukrainian authorities to pay higher prices for oil without increasing the cost of fuel to consumers.

TITLE: Gref to Double Aid to Far Eastern Regions
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — Economic Development and Trade Minister German Gref has pledged to double federal aid to the Far East next year and said he would welcome it if half of the new $2.5 billion state investment fund flowed to the neglected region, Interfax reported Monday.
Gref is on a six-day visit to the Far East, where he has been joined by Transportation Minister Igor Levitin and Natural Resources Minister Yury Trutnev.
On his whistle-stop tour through the impoverished region, Gref is exploring ways of closing the development gap between European Russia and the Far East.
At a meeting of regional heads of the Far East Federal District in Vladivostok on Friday, Gref said that next year the government plans to channel 17.4 billion rubles ($612 million) into the Far East,  more than double the 7.8 billion rubles of budget funds earmarked for 2005, according to Interfax.
Gref also expressed the wish that half of the planned 70 billion ruble ($2.5 billion) infrastructure fund would be spent on investments in  the Far East.
“I would be very happy if half of the entire fund would be spent in the Far East,” Gref said at the meeting, the news agency reported.
The investment fund, due to become operational next year, will be funded by oil revenues and money saved on foreign debt servicing through early repayment. It aims to provide funding for projects like roads and bridges.
Alexei Makrushin, an economist with the Center for Economic and Financial Research, voiced skepticism about Gref’s promises.
“The very process of money distribution, especially in the framework of federal programs ... is extremely nontransparent,” he said.
Since 1996, the Far East has been the beneficiary of a federal development program that has been extended for five years, to 2010. Under that program, 937.9 million rubles  ($32.9 million) will be sunk into the region by the end of the year.
Despite the federal aid, residents of the Far East are leaving the region in drove because of poor economic prospects.
“The outflow of the population is leading to the shrinking of the economic space,” said Nikolai Petrov, a regional analyst with the Carnegie Moscow Center.
Over the weekend, Konstantin Pulikovsky, President Vladimir Putin’s envoy to the Far East Federal District, said the government should lower transportation and energy rates to help develop the region.
“We’ve often tried to revive the industry of the Far East without significant financial inflows from the federal budget ... But whatever money we got - all these funds were eaten away by natural monopolies,” Pulikovsky said, Interfax reported.

TITLE: IN BRIEF
TEXT: Toyota to Pick Builder
ST. PETERSBURG (SPT) — Toyota Motor Manufacturing Russia, the local subsidiary of Japan’s auto-maker, will pick the constructor for its factory in Shushary by summer next year, Vice Governor Yury Molchanov told journalists on Monday, Interfax reported.
“Until spring 2006, Toyota will be carrying out work to clear the land plot, after which the company will choose a construction firm,” Molchanov said.
The Tokyo-based auto-maker said earlier it aims to have the factory complete and ready for production by the middle of 2007.

Japanese Firms Sighted
ST. PETERSBURG (SPT) — Two major Japanese companies will announce their investment projects for St. Petersburg in the next year, the city’s Vice Governor Yury Molchanov told journalists on Monday, Interfax reported.
“Next year two or three companies will announce their investment projects, which will be in the infrastructure sector,” Molchanov said.
The vice governor said he “felt an interest from Marubeni and Sumitomo.” Construction tenders for the Western Speedway, which will be held before the end of 2006, could also see participation from Japanese firms, he said.
Another project that might tempt Japanese companies is the overland express, which has already attracted Canada’s SNC-Lavalian.
“In the 2006 budget about 80 million rubles are set aside for the financing of that project, and we will inform the Japanese side about this,” Molchanov said, Interfax reported.

New Shopping Mall
ST. PETERSBURG (SPT) — A large underground shopping mall is to be built under St.Petersburg’s Ploshchad Vosstaniya, Interfax quoted Vice Governor Yury Molchanov as saying Monday.
In October, City Hall will examine the plans and the architectural details of the new shopping mall,” he said.
Russian architects have already produced several designs for the center that feature two trading levels, a third level for parking and a subway entrance, Molchanov said. 
He declined to estimate the cost or investment requirements for the mall, saying that nothing like it existed in Russia and that plans would rely on Western experience.

PSB to Aid Businesses
ST. PETERSBURG (SPT) — The St. Petersburg branch of Promsvyazbank has joined a European Reconstruction and Development program and will offer loans to small and medium-sized businesses, Interfax reported Monday, citing a bank statement.
Aimed at enterprises employing no more than 200 people, the program is to cover up to $20 million per year with a limit on any loan of $1 million. Promsvyazbank’s contract with the EBRD will result in it receiving funds of $30 million for 5 years, the report said.
“This will allow the bank to realize additional financing of investment projects by small and medium-sized enterprises and broaden the range of loan products,” the statement was quoted as saying.

Lenta Looks South
ST. PETERSBURG (SPT) — St. Petersburg-based grocery retail chain Lenta will open its first regional shopping center in Astrakhan, Interfax quoted the company as saying in a statement.
The center is to cost $15 million and will cover 11,500 square meters, of which 6,800 square meters will be retail space. Lenta is to receive the right to rent 3.4 hectares as part of its investment contract. Construction is to begin in the fall with the center to open in the second half of 2006, the report said.
Lenta also has plans to open stores in Yekaterinburg, Samara and Rostov-on-Don.

TITLE: IT Boss Sees Business Development as a Moral Test
AUTHOR: By Olga Kalashnikova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Information technology, or IT, is just one method of management that has been used by people for a long time, says Igor Bukhshtab, director of Lynx BCC Company, one of the city’s leading IT firms. "It’s just changed a little," he adds. 
Part of the way IT has changed in Russia and changed Russia, as the country aims to become a global competitor on the market for IT outsourcing, is reflected in Lynx, a firm that rose from a local start-up to be one of IT giant Sun Microsystems’ closest Russian partners, working on system integration. 
Founded in 1997 by Bukhshtab and Vitaly Kuzmichyov, on the base of local IT firm Business Computer Center, Lynx set its goals to cover the niche for the projects using technology for the UNIX operation system. The motivation for the company, however, was far less connected with securing a tidy market niche and more to do with "my professional knowledge and practicality," Bukhshtab said. 
"I never wanted to be a businessman; never wanted to be a director. The fact is, we had some technological ideas and the only way to realize them was to create a company," he said. 
Since graduating from the Leningrad State Electrotechnical college, Bukhshtab had worked as an engineer-constructor at Svetlana IT innovations center. It was during this time, in the mid ’90s, when the business idea originated, to reflect the way "life generally turned to accommodate business," he said. 
The change to commercial thinking required more than a simple organizing of people and offices. For Bukhshtab the transformation meant a moral dilemma. 
"There exist certain ethical rules, but in business people [happen to] break them to achieve results. Afterwards no one asks how things happen: in business winners are not judged," he said. "It changes a person, their psychology. And this worries me. I think about it a lot." 
Whatever the complications, however, the business must go one. As one of the founders of Lynx and its director, Bukhshtab knows that his position requires leadership. "What is an enterprise — it’s taking responsibility and achieving set goals," he said. 
One of Bukhshtab’s main goals was growing Lynx to be a reliable business partner for the world’s largest IT companies. Since 1997, the company has opened office in Moscow, and become a leading provider of IT solutions for UNIX operational systems. 
In 2003, the firm’s biggest partner Sun Microsystems, set up its Russian UNIX Competence Center on the base of the St. Petersburg firm Lynx. UNIX technology center, used for solving complex computing tasks, cost more than million dollars. The center acts also as a showroom for clients to test the technology before purchasing it. In addition, it accommodates a study center to coach staff and research new technologies. 
Over the years, Bukhshtab can point to having picked up a number of sizeable clients. These range from state institutions such as the St. Petersburg Administration Information-Analytical Center, the city’s power monopoly Lenenergo, transport firm Pulkovo Express, the local branch of the Central Bank, as well as major industrial enterprises: Elektrosila, the Leningrad Metal Works plant (LMZ), and ship-builder Baltiisky Zavod, among others. 
One of Lynx’s vendors, American Power Conversion, or APC, which is a manufacturer of uninterruptible power supplies (UPS) and surge protection products, says it picked the St. Petersburg firm largely because of Bukhshtab’s character and business approach. 
"Igor’s reputation within the IT sector could be called legendary. He is keen on new ideas, democratic, witty. He has the ability to adapt to the requests of the market. That’s a work-ethic that’s close to ours," said Maxim Ivanov, head of APC representative office in Russia and the CIS. 
Besides business, however, Bukhshtab states there are other ideological goals he wants to achieve. His "mission," as Bukhshtab calls it, is to help Russia to become a world leader in the IT sector. For that, he said he is willing to invest in supporting the sciences and the country’s culture. 
"Business is a basic branch [of life], but there are a number of moral principles too. There’s a wish for our children to live in civilized country. The government can’t do it. We can talk a lot about solving social problems and the improvement of society, but it is only when every citizen of this country begins to act, do whatever he can at his own level, that something can change," he said. 
Lynx support the state’s higher education institutes, IT students, competitions for up-and-coming programmers, and invite those studying IT to come in for internships. 
"This is not missionary work. [I think that] if you can — help, lend a hand," Bukhshtab said. "I am just paying back the debts, giving back to the educational system something in return for what I got out of it. 
"If only the government provided some support, maybe by offering some kind of release from tax obligations, there would be less problems in our schools and universities, and more finances available to buy furniture, books, to increase teacher salaries."

TITLE: E-Learning From Scratch
AUTHOR: By Nikita Savoyarov
PUBLISHER: Special to The St. Petersburg Times
TEXT: Most small and medium-sized businesses in Russia lack literacy in information technology due to insufficient consultation avenues and state support, said representatives of an EU-sponsored project that will present its findings this week
Project “E-skills for Russian Small and Medium-sized Enterprises,” which was launched by a consortium of international management consultancies in November last year, plans to showcase findings and analysis from the first stage of its work on September 23, at the city’s Popov museum.
The consortium, led by Frankfurt-based Integration management consultancy, has worked with small and medium-sized businesses in the Northwest district since last year, said Vladimir Golovanov, a director of studies at the project and a representative of French consultancy Ikesol, which is part of the European consortium.
The foreign consultancies have sought to act as a bridge between businesses and the state, bringing on-side the State Academy of National Economy and the Interdisciplinary Centre of St. Petersburg State University, as well as international investment funds, Golovanov said.
The aim of the project has been not only to examine and advise small and medium-sized Russian businesses on how to improve their use of IT technology, but to train local consulting firms in the modern applications of Information Communication Technology (ICT), he said.
Furthermore, the project leaders said they would look to disseminate the knowledge of best ICT practices to other Russian companies and stakeholders.
Sergei Vesnov, deputy Director of Small and Medium-sized Business Association in St.Petersburg acknowledged the project could be useful for smaller enterprises working in retail, especially when supplying from larger supermarkets-wholesalers.
With major consultancy firms like Deloitte, Ernst&Young, KPMG, and Pricewaterhouse Coopers focusing mainly on big business, the package offered by SME could bring a balance to the corporate community, Vesnov said.
Natalya Solovyova, spokeswoman from ICT solutions company Softbalance, which operates a license to promotes 1C software used by the SME project, said the main aim of the EU-backed scheme had been to give smaller businesses practical programs and knowledge that could be applied immediately.
She said the 1C accounting software offered to small and medium-sized businesses had already met with approval from the federal tax inspectorate. “The SME scheme gives businesses not only an IT product, but also acts as a consultancy and training tool,” Solovyova said.
The level of ICT solutions offered by the project’s consortium is determined by the level of computer literacy the company has at present, she said.

TITLE: Extra Mobile Services Leave Most Subscribers Indifferent
AUTHOR: By Ilya Shatilin
PUBLISHER: Special to The St. Petersburg Times
TEXT: Additional mobile services are used regularly only by a third of cell phone subscribers, according to a poll by telecom industry analytical agency Sotaweek.ru.
To be more representative, emphasis was put on the word “regularly” when the poll was conducted. Otherwise the figure would have been unrealistically high; many people have tried out some service or other, but that does not mean that they are fans of it or that they will generate any kind of serious income for operators.
The poll’s No. 1 rated “extra” service was no surprise — it was SMS messages. It seems as if everyone has either sent or received an SMS at least once. However, only 18 percent of respondents used them regularly. The users of this service are mainly those aged between 12 and 25 years old. Sixty-two percent of SMS users were female. Older people used SMSs rarely, but among them more males preferred the service.
The second most popular services were personalized screen photos, ring tones and games. About 8 percent of respondents had done this, most of whom were aged between 18 and 25. There were no gender differences in the users of this service.
No. 3 was mobile Internet access. Four percent of respondents regularly used the Internet using their mobile phones either through their computer or using the WAP protocol. Ninety-six percent of those who do so are men. Respondents who access the Internet are aged from 20 to 45, with slightly more users in the younger age groups.
The fourth most popular service was the MMS: a total of 2.6 percent regularly send multi-media messages. The users of this service are mainly aged 20 to 25 and the majority of them are men. The low interest in this service is likely to be because it involves having a MMS-capable handset that preferably includes a camera, since people like to send each other snapshots rather than digital pictures and melodies, Sotaweek.ru analysts said.
Handsets allowing MMS technology are rather expensive, as is the service itself — four times the cost of an SMS message. Due its high price this technology is rarely owned by young people, and yet it is the younger audience that is the most savvy in the latest mobile phone innovations.
In fifth place came “other services,” which included redirecting, voicemail and services that determine location. About 1.7 percent of respondents used these services. 
The sixth popular were inquiries and entertainment services — matchmaking, consultations, ordering tickets, SMS games, SMS polls, voting and the like, yet they attracted just 1 percent of respondents. Interactive SMS appealed to children up to 18 and above all to girls.
Nonetheless, the most frequent response to the poll was: “I do not use additional services regularly” —67 percent of respondents. The total percentages add up to more than 100 because some regular users of additional services use several at once.

TITLE: Why Tymoshenko’s Figures Didn’t Add Up
AUTHOR: By Anders Aslund
TEXT: This has been a miserable year for the Ukrainian economy. Last year, Ukraine enjoyed economic growth of no less than 12.1 percent, but that declined to 3.7 percent during the first seven months of 2005. Moreover, output has been declining almost every month, as has industrial production, which fell by 2.4 percent in July compared to July last year. Construction and investment are falling even faster. A huge trade surplus last year has been eliminated in the last months. Ukraine is clearly on the way toward growth of a mere 2 percent to 3 percent this year. Only the budget balance is positive, as the Finance Ministry has pursued a conservative fiscal policy.
This economic deterioration has been caused by domestic economic policy. The dominant concern has been a wide-ranging discussion about reprivatization. Another problem has been a sharply increased tax burden of 5 percent to 6 percent of GDP, which was needed to finance very large increases in social transfers and public wages. A third issue has been far-reaching government intervention in the economy, including attempts to regulate the prices of petrol, meat and grain, and to reinforce state monopolies. A doubling of railway tariffs for metal freight has also harmed the economy. The government has operated like a profit-maximizing state holding company oblivious of the effects on the private sector.
Meanwhile, this government has not undertaken any of the many promised and badly needed liberal reforms. The only positive step has been the late adoption of half the World Trade Organization-related legislation that was necessary for Ukraine’s accession to the WTO this year. So far, no significant deregulation has occurred, despite much talk. There have been no tax cuts. No financial legislation has been adopted, even though Ukraine still does not even have a law on joint-stock companies. 
In short, this government has been an unmitigated disaster of socialist populism. On top of everything, it has maintained a revolutionary discourse of vehement public attacks against individual businessmen and politicians, including members of the government. It was therefore a great relief when President Viktor Yushchenko reasserted his authority to put an end to this public mismanagement. Sensibly, Yushchenko also let go several big businessmen who helped finance and manage his campaign, as their aspirations to make money on their positions have been another worry.
This government change marks the end of the Orange Revolution. Tymoshenko and her loyalists have now marched out of the government, and Tymoshenko has declared that her political bloc will stay independent of Yushchenko’s. The question now is where various politicians and businessmen will go. One old oligarch, Alexander Volkov, and what is probably the second-largest oligarch group, Privat Group in Dnepropetrovsk, have been with Tymoshenko for a long time. More than 20 businessmen in the parliament have recently joined her faction. Sensationally, former President Leonid Kuchma’s former chief of staff, Viktor Medvedchuk, and his Social Democratic Party are suddenly favoring Tymoshenko, as is Ukraine’s first president, Leonid Kravchuk. Curiously, the real agitators of the Orange Revolution and some of the more disreputable oligarchs appear to be coming together in Tymoshenko’s bloc.
Meanwhile, others are joining Yushchenko. Anatoly Kinakh and his liberal faction of industrialists are already behind him. Speaker Volodymyr Lytvyn appears to be throwing his support behind Yushchenko as well. Embattled oligarch Viktor Pinchuk and his Labor Ukraine faction support Yushchenko. The big businessmen who have stood behind Yushchenko all along — notably Petro Poroshenko, David Zhvania and Yevgeny Chervonenko — are staying loyal to him. Kuchma has expressed his support for Yushchenko. Thus, Yushchenko’s old liberal, Western and moderate nationalist supporters are likely to stay with him, while the centrist oligarchic factions will probably join him. Oddly, the Socialist Party wants to stay in government and thus supports Yushchenko, although they have so far been much closer to Tymoshenko.
The biggest unanswered question is where the the Party of the Regions, which includes former presidential candidate Viktor Yanukovych and Ukraine’s leading oligarch, Rinat Akhmetov, will go. Akhmetov has long seemed to want to make peace with Yushchenko, while Yanukovych sounds as if he is leaning toward Tymoshenko.
A swift split in Ukrainian politics is taking place among the leaders of the Orange Revolution, and the two opposing leaders are Yushchenko and Tymoshenko. Both are mobilizing substantial forces that contain big businessmen. In the ideal scenario, a U.S.-style political party, resembling the Republican Party, could form around Yushchenko, and a somewhat populist faction along the lines of the U.S. Democratic Party could form around Tymoshenko. The small Socialist Party and the even smaller Communist Party would stay independent. The worst-case scenario would be the sort of party fragmentation that occurred in Poland in 1990-91.
The litmus test will come very soon, with the formation of the government of Yury Yekhanurov and the parliamentary vote on his candidacy. The assumption is that he and Yushchenko will do what it takes to get a majority for the new government, and they already seem to have secured enough votes. 
In this heated political situation, it is difficult to imagine a more suitable prime minister than Yekhanurov. As chairman of the State Property Fund from 1994 to 1997, he carried out successful mass privatization in Ukraine, leaving him in high repute. As first deputy to then-Prime Minister Yushchenko in 2000-01, he made sure that the government worked well. Since 2002, he has been one of the leaders of Our Ukraine in parliament, and as committee chairman he has shepherded substantial economic legislation through parliament. In spite of many years in politics, he has virtually no enemies. Yekhanurov should be able both to hold the Yushchenko loyalists together and make the government start working ahead of the parliamentary elections scheduled for March.
There is every reason to welcome the change of government in Ukraine, and the restructuring of Ukrainian politics. It is how voters react to it that remains to be seen.

Anders Aslund, a senior associate at the Carnegie Endowment for International Peace, advised the Russian government from 1991 to 1994.

TITLE: New Tax Inspectorate Could Be a Cosy Neighbor
AUTHOR: By Tom Stansmore and Maria Andreeva
TEXT: St. Petersburg has recently earned the distinction of being home to an Interregional Tax Inspectorate. But being closer to the taxman may not be such a bad idea, and could yet result in a real investment stimulus.
The Ministry of Finance decided that the status of “major taxpayer” deserves special attention. Consequently, in conjunction with the State Tax Inspectorate, the ministry has over the last few years created eight “Interregional Tax Inspectorates” each charged with a specific industry. They are: Oil, Natural Gas, Alcohol and Tobacco, Power, Metallurgy, Transportation Services, Communication Services, and most recently Transportation Manufacturing. All but the last are located in Moscow. There are, however, fundamental issues concerning the legality of the whole concept.
The controversy concerns the very existence of the institution stems from the law that the Ministry sights to support its creation, namely the first part of Article 83 of the Tax Code. The section is devoted to registration requirements for both people as well as legal entities, the governing principal being that they should register where they and their property are located. The last sentence of the section, however, is the subject of different interpretations. It reads: “The Ministry of Finance of the Russian Federation shall have the right to determine the specific features of the order of registration of major taxpayers.”
In summary, the Ministry of Finance has taken the position that “specific features of the registration” are grounds to establish a separate and distinct body that will have the authority to collect and process tax returns for major taxpayers. Those on the other side of the fence are of the position that the spirit of the law requires that location be the determinative factor and that regional registration is the intent of the law. The right to “determine the specific features of the order of registration of major taxpayers” refers to the procedural activities of the tax inspectorate in the registration process, but not to the obligations to the taxpayer.
There is also a very strong constitutional element to the controversy. Although there are instances where the legislator may delegate some powers to the Executive, this is not one of them. The wording of the law puts it within the prerogative of the Executive to define the registration (procedure) for large taxpayers but may not impose any additional obligations on them. 
The intention behind the creation of the Interregional Tax Inspectorate, although not debated in court, is at the heart of the matter. Those in favor hold that a group of processionals specializing in a particular industry are more likely to enforce the Russian Tax Code uniformly and consistently. Those opposed fear that the institution will attempt to generate more revenue from already overburdened taxpayers. 
What is clear, however, is that whatever reading one takes, the creation of the Interregional Tax Inspectorate will not relieve the taxpayer of the requirement to register locally. On November 25, 2004 Russia’s Supreme Court of Arbitration ruled that the obligation (and the right) to register regionally was specified in the Tax Code and could not be changed by registering with the Interregional Tax Inspectorate. Therefore major taxpayers were to be registered both at the place of their location as well as with the Interregional Inspectorate. 
Recently, the Finance Ministry issued a degree confirming dual registration.
The procedure for submitting tax returns to the two bodies has also been going through an evolutionary process. Until very recently, those against the Interregional Tax Inspectorate pointed to the gross administrative inconvenience of submitting two sets of rather large tax returns and supporting documents. Anyone who’s ever spoken with a tax specialist will testify that if you ask two tax specialists the same question, you’ll be lucky if you get three different answers and the risk of double jeopardy was on everyone’s mind. 
Current practice, however, indicates a degree of cooperation between the Regional Tax Authorities and the Interregional Tax Inspectorate. Documents need be submitted only once, the portions concerning Federal Tax going to the Interregional Tax Inspectorate, and the portion concerning regional and local taxes filed locally. Moreover, the risk of a large taxpayers being subjected to two separate audits was mitigated by the fact that the Tax Code protects the taxpayers against audits being conducted by multiple authorities of the same level. 
For those of us who have been watching the evolution of Russia’s tax system, however, the introduction of these Inspectorates fit a pattern of consolidation of Federal power (anything “interregional” is Federal). It doesn’t seem that long ago that I was writing an article describing the New Profits Tax Chapter of the Tax Code and the limitations placed on the ability of the regions to grant investor tax concessions. Simply stated, the Federal Government’s argument at that time was that the regions had been competing amongst each other by granting more and more concessions to investors (and turning to the Federal government when they couldn’t make up their budget shortfalls). Likewise, the creation of these Interregional Tax Inspectorates can be viewed as a means for the Federal government to oversee and check up on the region’s enforcement of the tax laws to ensure that they are raising all the revenue that they can. 
As always there is a very strong element of politics to the creation and location of Federal Instructions. There have been a number of rumors concerning the “relocation” of Russia’s Duma or Constitutional Court to St. Petersburg. None of these have materialized, some would say for the better, and point to the necessity of all three branches being in the nation’s capital.  The location of the Eighth Interregional Tax Inspectorate in St. Petersburg may be partially political, but as it is intended to oversee large industries in the transportation manufacturing sector, (Toyota being the latest to officially announce their arrival in the area) there is also a practical rational. 
The legality of these institutions, however, is still pending with a case scheduled to go before the Constitutional Court this fall. The plaintiffs, large oil companies from Bashkortostan, are arguing that the Tax Code itself needs to provide the provisions laying out the criteria for belonging to the category of “large” taxpayer and the registration procedure, not the Executive Branch. In response, it is rumored that the Ministry of Finance is preparing amendments to the Tax Code that will do just that, and if enacted, may well circumvent the constitutionality challenge. 
Despite the ongoing debate, there is a good chance that the Interregional Tax Inspectorate will continue to develop and evolve. One can take heart, however, in the knowledge that there are large taxpayers that hold that the creation of such a Federal Body does indeed provide a degree of stability and predictability in a system that is often accused of being arbitrary and inconsistent. In fact, some companies are actually pleased to work with the industry specialists of the Interregional Tax Inspectorate. If the Eighth Interregional Tax Inspectorate can develop a reputation for enforcing Russia’s Tax laws fairly and being selective in the tax lawsuits it brings against taxpayers, its location in St. Petersburg has the potential of doing more for the investment climate than tax concessions ever could.

Tom Stansmore is the head of Pepeliaev, Goltsblat & Partners office in St. Petersburg and Maria Andreyeva heads the office’s tax department.

TITLE: Gazprom Finalizes Shtokman Shortlist
AUTHOR: By Valeria Korchagina and Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW — Gazprom on Friday narrowed down the list of potential partners for developing the Shtokman gas field to five companies: Statoil and Hydro of Norway; France’s Total; and Chevron and ConocoPhillips of the United States.
The gas extracted at the giant Arctic gas field — which has reserves that could meet the world’s demand for more than a year — will be turned into liquefied natural gas, or LNG, and shipped primarily to North America.
Gazprom will need another four to six months to pick two or three finalists from the list, Gazprom CEO Alexei Miller told reporters. The winners will then form a consortium, in which Gazprom is to have a 51 percent stake.
“So far, there hasn’t been any decision on how to divide up the shares among foreign participants,” Miller said. He also said that Shtokman could be developed under a production sharing agreement, but that the decision on the project status had not been made.
Other foreign contenders to work on the Shtokman project included Sumitomo and Mitsui of Japan, Royal Dutch Shell and ExxonMobil.
The main criteria for selection of the shortlisted companies were past experience with LNG and marketing capacities, Miller said, and not the ability to provide funding for the project, which could end up costing as much as $15 billion. Miller did not provide more details on why individual companies had been selected.
“I don’t think Gazprom makes decisions based only on the sound of a company’s name,” said Kakha Kiknavelidze, an oil and gas analyst with Brunswick UBS. 
But without more information, he added, it was hard to say why Total stayed on the list and Shell was dropped.
Most market watchers said that the choice of companies made perfect sense, as the two Norwegian companies had vast experience in working on fields in hostile environments, while Chevron and Conoco would help market the gas at home.
The choice of Total is not too surprising, either, as it offers balance to the shortlisted firms and makes political as well as economic sense, analysts said. 
The French company backed out of plans to buy a 25 percent stake in Novatek, after Russia’s second-largest natural gas company launched an IPO in London against Total’s wishes this summer. Furthermore, Total is “very active” in LNG projects around the world, including in Brunei, Qatar and Nigeria,” said Stephen O’Sullivan, oil and gas analyst at UFG.
Shtokman, located under the Barents Sea, contains proven reserves of 3.2 trillion cubic meters of gas and 31 million tons of gas condensate. The project’s costs, which include the construction of special LNG facilities, are estimated at up to $15 billion.

TITLE: IN BRIEF
TEXT: Norilsk Strikes Gold
MOSCOW (Bloomberg) — Norilsk Nickel, Russia’s biggest mining company, will pay as much as $285 million to buy three Siberian gold-field permits from the nation’s state-run diamond miner, beating a bid by Celtic Resources Holdings.
Polyus, Norilsk’s gold arm, made an initial payment of $115 million to OAO Alrosa, Polyus said Monday in an e-mailed statement. The fields may hold 875 tons of gold, comparable to Russia’s biggest untapped gold field, Sukhoi Log, Polyus said. Dublin-based Celtic, which already owns half of one of the fields, had agreed in April to buy the licenses and on Sept. 8 asked Russia’s government to speed up that purchase.
“We acquired unique assets and made a crucial effort for reaching our strategy’s key goal, to create a true Russian international gold major,’’ Polyus Chief Executive Evgeny Ivanov said in the statement.
Norilsk, a $15.8 billion company that is the world’s biggest nickel and palladium producer, is competing against miners such as Celtic, Barrick Gold Corp. and Bema Gold Corp. to buy Russian gold assets after the precious metal rose 60 percent in the past four years.
Norilsk plans to spin off Polyus and list its shares in Russia by April before a possible offering abroad in May of depositary receipts.

Aston Villa Takeover?
LONDON (Bloomberg) — Aston Villa football club said it received an approach from an unidentified potential bidder. The shares surged to a five-year high.
Weekend press comment about the future ownership of the club “is inaccurate and unfounded,’’ Birmingham-based Villa said in a Regulatory News Service statement today. The Sunday Mirror said a group of Russians may make a 60 million-pound ($109 million) bid.
The shares, which have advanced 34 percent in 2005, climbed as much as 28 percent to 475 pence in London, valuing the club at 54.2 million pounds. The unidentified Russians may offer as much as 580 pence a share, the Mirror said.
Villa, controlled by 81-year-old Chairman Doug Ellis, is the latest English takeover target after U.S. billionaire Malcolm Glazer bought Manchester United earlier this year and Russian tycoon Roman Abramovich purchased Chelsea in 2003. Ellis, who had a heart bypass in June, owns 39 percent of the club.

Severstal to Offer GRDs
MOSCOW (Bloomberg) — Severstal-Avto, Russia’s third-largest auto producer, started offering shares in global depositary receipts as it aims to attract international investors and considers a listing on an exchange outside the country.
The GDRs, offered through Deutsche Bank AG outside the U.S., equal one common share each, Severstal-Avto, based in Cherepovets in southern Russia, said in a statement on its web site Sept. 15. The company on Sept. 14 received government permission to have as much as 20 percent of its shares trade internationally.
“We are very optimistic about broadening the range of our potential investors and increasing liquidity of our shares through the depositary receipts,’’ Vadim Shvetsov, general director of Severstal-Avto, said in a separate statement by Deutsche Bank.
Severstal-Avto can have 6.85 million shares trade as depositary receipts, the nation’s market regulator said in a statement Sept. 14. The company has 34.3 million shares outstanding.

TITLE: Leaving Kaliningrad
AUTHOR: By Georg Gafron
TEXT: Excited by the television pictures of the 750th anniversary celebrations of Kaliningrad, which admittedly until 60 years ago was called Koenigsberg, my son and I visited the Russian city in former East Prussia. We did it without any wariness because the visit by German Chancellor Gerhard Schroeder and President Vladimir Putin to the exclave had given the impression of friendly normality between Germans and Russians. We drove from Lithuania over the Curonian Spit to the Kaliningrad region. We passed the little-used border crossing at Nida without any difficulty. What I did notice there was that vehicles with Lithuanian or Latvian licence plates were being processed extremely slowly. There appears to be little love lost for the neighboring EU countries, I thought. After three days in the city of Kaliningrad, with the most varied of experiences, this assumption was confirmed.
Guidebooks advise that when one wants to leave the region for Poland, one should expect to wait a long time.  Therefore we set out at noon for the Russian-Polish border crossing at Mamonovo. A few kilometers before the border there was a sign that read “Waiting-Lines?” Already there were hundreds of autos with Polish licence plates in a huge parking lot. Their occupants sat around on benches with stubborn, gloomy expressions. We were handed a piece of paper allowing us to go forward and we were directed into a lane leading out of the lot. Soon after we encountered a kilometer-long line of Polish vehicles. Next to the autos, garden chairs had been erected and small camps set up. Things were not looking good. At a police checkpoint we had to show our passports. A merry police officer said “Nemtskiye, O.K,” and with a movement of his head indicated that we should cross into the lane intended for Russians. The line in this lane was only about 1 kilometer long. There were already many vehicles with German licence plates waiting in it. Two things occurred to me: Some cars with a wide range of licence plates were driving at speed in the oncoming lane toward the border. And all around were strange people who were talking with drivers and constantly speaking on their mobile telephones.
After about an hour — during which we had moved forward about 100 meters (the Polish line had not moved at all) — a man wearing an old army uniform crept up beside our auto. He looked around him and whispered in broken German: “If you don’t want to wait 7 to 10 hours, I can help you. If you give me 200 euros, you will be at the border in 10 minutes.” I thought his amount was unashamedly high, but decided to pay it because the scene I have described was making me grit my teeth. The man got on his telephone. He then told us that in exactly 10 minutes we should drive forward and say the password Zayavka at the Russian border post. He told me about the other vehicles that had driven past: “They made the same deal as you.” That’s rather smart, I thought. They let huge lines build up here and — a perfect system of corruption — they cash in at the border.
After 10 minutes the man gave us the signal to drive off. We passed the line and a huge gate that gave the impression of a sorry-looking symbol of former Soviet times. We were then halted by a Russian border guard, a lean man in his mid-30s. What did we want? I tried to make eye contact with him and whispered conspiratively three times the word zayavka.Uncomprehendingly, the Russian looked at me before beginning to roar. He held a red trowel in front of my nose and made it clear we should turn around immediately. We did so, returning to the back of the line. Of course, at this point our friendly helper in the old army uniform was no longer to be seen. Apparently the man had quarreled with the border guards because others who had paid 200 euros were going forward at speed and passing through without problems. Slowly, very slowly, we crept forward in the line. There seemed to be movement only in the “Russian” line. The traffic light at the front of the Polish line stayed red for hours. In the meantime it was 7 p.m. I started to worry that we might not get over the border before midnight, when our visas would expire. 
When we reached the front of the line at about 9:30 p.m., a Russian officer came out — the men on duty had now changed — and waved two Russian vehicles in front of us over the border. We’ve made it, we thought. When the man saw our German passports, however, he began to shout and to wave his arms, indicating that he wanted us to reverse. I asked him why in Russian: all other German vehicles in this lane had been permitted to pass. He roared back that we had no right to question him. “What happens on the border of the Russian Federation, we alone decide!” After that all he had to say was davai, davai. I tried again to explain to him that we had already waited 9 hours, that we had been told to enter the lane we were in and that our visas expired at midnight. The border guard didn’t care. His only response was to roar even more loudly davai, davai. I remembered the tales my parents told me about the arrival of the Red Army in Germany. My son and I were perplexed. What should we do? The guard wanted us to join the Polish line where we could expect to wait at least 30 hours. We felt humiliated and totally tormented. This was an arbitrary regime, like the one many Germans experienced in the era of the transit treaty between East and West Germany when traveling on transit routes through the state controlled by the East German Socialist Unity Party.
I decided to go to the Curonian Spit as quickly as possible and to go back to Nida. It was about 80 kilometers away over bad, unlit roads without road signs. In Kaliningrad City I asked a taxi driver to guide us to the border. The man immediately understood our plight. “$100.” I pressed a 100-Euro note into his hand and said a friendly thank-you. Through the dark night the man guided us all the way to the border barrier. A police officer awaited us: “The border is closed.” I knew that the Nida border crossing was open round the clock, and invited him to raised the barrier. Another 100 euros changed owners. The barrier was raised. Now we were only about 10 kilometers from the border.
At 12:28 a.m. we drove up to the Russian checkpoint. We were the only vehicle. An officer who spoke excellent German demanded the papers for our auto and our passports. Then he invited us to follow him. He checked the passports and the visas, looked at me, and said: “You have illegally remained on the territory of the Russian Federation. You have a big problem.” I tried to explain our situation to the man. However, I didn’t manage to. After only a few words, the officer interrupted me. “Nein, nein, nein. Those are your problems, not mine.” After a long moment of silence he looked at us and said. “You will have to pay a fine.” He would telephone and summon some other people. He then ordered us to sit in our auto and under no circumstances to leave it. We couldn’t have done so because an armed border guard kept watch on us.  
We waited a long time. Then the officer came back. He turned to me and said: “Because your professional status means that you have a long-term visa for the Russian Federation, you didn’t need a visa for Kaliningrad. Therefore you have no case to answer. You can cross the border.” By this he meant that I could go on foot with my suitcase in my hand. He simultaneously told us that my son must drive back to Kaliningrad city and report to the police there.  I told the officer that I would not follow this instruction under any circumstances because of concerns for the safety of my son. With the words: “Please note that only good Russian people live in Russia,” he turned around and disappeared inside the checkpoint building. I told my son that he would now be arrested or worse. 
About two hours later we crossed the border into Lithuania. Exactly how we did this, I do not want to say so as not to harm a third party. In Lithuanian Nida we rang the doorbell of the first bed and breakfast and asked for accommodation. We were not ready to sleep. We were still too wound up although exhausted at the same time. We sat silently opposite one another and drank, completely out of keeping with our normal behavior, a bottle of vodka. 

Georg Gafron is a Berlin-based entrepreneur and journalist.

TITLE: Opening Up the Market for Drinkers
AUTHOR: By Vladimir Gryaznevich
TEXT: Next year will see the coming into force of amendments to the federal law “On state regulation of the production and trade of ethylene spirit, alcohol and spirit-based products.” These amendments are aimed at liberalizing the rules of the game and removing administrative barriers introduced, once upon a time, in the heroic struggle against illegal alcohol. In the opinion of the Economic Development and Trade Ministry they now merely add yet another layer of bureaucracy to a market already snowed under by paperwork. You could even argue that these barriers are, in fact, just another reason to enter the “shadow” economy. 
The latest round of reforms has drawn wildly conflicting responses from specialists and analysts. Some are predicting a total breakdown in the state-control system, and a series of dire consequences – shops, cafes, restaurants and kiosks will soon be submerged in illegal wines and spirits, often of very poor quality. Others brush such gloomy forecasts aside, believing the amendments to be a revolutionary step forward towards liberalization. They see the reforms as entirely justified, whatever minor problems they may encounter along the way. 
At first glance, these conflicting views could be seen as the result of a broader ideological divide between those that support a stiffening of state control over the black market for alcohol, and those that believe that a free market for entrepreneurs in the drinks business is the key priority. In even broader terms, it’s a conflict that has divided this government right across the board. Nevertheless, for three years now, a battle has raged between the Agriculture Ministry and the EDTM about the best way to regulate this particular patch in the market. The Agriculture Ministry, firmly on the side of the firm state control, has been backing a total crackdown, or perhaps even a state monopoly. The reformers at the EDTM, meanwhile, are asking for a complete freeing up of the market. In reality, however, the current tiff between the two warring ministries largely misses the point. 
In defending their positions, both those backing “big” government intervention on the one hand and the liberal market reformers on the other, are getting their priorities mixed up. Those favoring a strong state would achieve their goals far more effectively by using the “white,” legal businesses in the alcohol market, rather than cracking down on the wrongdoers. 
The key point here is that illegal alcohol is cheap, and that is the real thorn in the side of those legally producing and selling alcoholic beverages. Operators from the shadow economy are depriving law-abiding entrepreneurs of income – they are sworn enemies. Here, cunning use of the principle of “divide and rule” by those in the government favoring a strong state could prove the most effective option. Such an approach would also require a lot less effort. They just need to adjust their priorities – stop fighting crime, forget about introducing a wasteful state monopoly, and start giving some real support to the legal operators in their fight against the shadow economy. 
The game rules, then, should promote liberalization of the market — the liberals, unsurprisingly, back this — but not for all the players on the market. At the same time, the conditions for those working in the shadow economy should be considerably toughened up. That will allow a civilized market to develop and, in the process, will bring the conflicting sides in the government closer. 
The Economic Development and Trade Ministry’s current victory in this battle could prove Pyrrhic. Strengthening liberal reforms without making life tougher for those working on the black market, will only result in the latter providing even more competition for those prepared to legally play the game – instead of a civilized market, we’ll be returning to the darkest ages of the black market. And that will inevitably lead to an adverse reaction. The pendulum will briskly swing back in the opposite direction — something of a tendency in Russia — and we’ll end up with a drastic crackdown in the sector, with the clumsy enforcers sent in to do their work. 
And we’ll keep on flying from one extremity to the other until the bureaucrats learn to handle their tasks with a little more subtlety – it’s a lesson that could  be learned in the handling of a vast number of issues on these shores, from the government’s lending policies, right down to the street cleaning in St. Petersburg. 

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: The Enablers
AUTHOR: By Chris Floyd
TEXT: Four years ago, the United States was hit by a terrorist attack. Three days later, the U.S. Congress signed away the people’s freedom, writing a blank check for tyranny to a ludicrous little man installed in office after the most dubious election in American history. Last week, the poisonous after-effects of this abject surrender took yet another sinister turn, as Bush factotums in the courts once again upheld the Leader’s arbitrary power over the life and liberty of his subjects.
The joint House-Senate resolution of Sept. 14, 2001 — approved by a combined vote of 518-1 — gave President George W. Bush the most sweeping powers ever granted an American leader. Bush was authorized to use “all necessary and appropriate force” against any organization or individual that he alone declared was somehow connected to the Sept. 11 attacks. His arbitrary will would be the sole deciding factor. This timorous resolution was, in effect, a repeal of the Magna Carta: the nobles of the land giving back hard-won rights to a harsh, incompetent despot.
 A few critical voices at the time — this column among them — noted the dangers of this panic attack among the political elite. “We must now trust that this man who can’t hold his liquor will be able to hold near-absolute power without getting drunk on it,” we wrote on Sept. 21, 2001. There was of course no basis for that trust, and it was immediately betrayed. The Bush Faction seized upon the congressional resolution as an “Enabling Act” justifying a broad range of unconstitutional measures, including torture, kidnappings, mass roundups, secret hearings, secret prisons, arrests without charge, indefinite detention, kangaroo courts, “extrajudicial killings” and, finally, aggressive war.
In a series of secret “executive orders” and Justice Department memos, the Bush Faction overturned the Constitution and established a new authoritarian principle of state: The president, they said, was not bound by any domestic or international law in his prosecution of the “war on terror.” And this “war” — an inchoate, amorphous concept covering a multitude of sins — was founded upon the carte blanche of Sept. 14.
With Congress in headlong retreat from its responsibilities, the last bulwark against the floodtide of junta rule is the federal courts. But these, of course, are now packed with Bush Family retainers and Reaganite reactionaries, eager to serve the Leader. Last week, for the second time in three months, a Bush judicial minion under consideration for a Supreme Court post issued a key ruling upholding the president’s dictatorial powers, The Washington Post reports.
First it was chief justice nominee John Roberts, who was already interviewing for a high court seat when he pleased his masters by ruling that Bush had the arbitrary power to create his own parallel justice system — the “military tribunals” for his Terror War captives — and run it as he sees fit. Now comes Judge J. Michael Luttig, appointed by Bush I and one of Bush II’s leading candidates for the other open Supreme slot. Luttig has authored an appeals court decision that strikes even deeper at the dying hulk of American liberty, ruling that Bush can imprison U.S. citizens indefinitely without charge or trial. All the Leader need do is make a bald assertion of evildoing, which the defendant is not allowed to challenge or dispute; indeed, the captive is not even allowed to appear in court.
This was the infamous case of Jose Padilla, the Chicago street punk seized in a blaze of publicity about a “dirty bomb” plot in 2002. When the “dirty” scenario was exposed as Bushist fantasy by U.S. intelligence, the feds then accused Padilla of vague plans to blow up apartment buildings somewhere. Whatever. Luttig, perhaps with judicial Valhalla in his sights, ruled that Bush could keep Padilla — and any other American arbitrarily designated an “enemy combatant” — in prison, without charges or trial, for the duration of the “war on terror.” And how long might that be? Vice President Dick Cheney told us in October 2001 that the war “may never end, at least not in our lifetime.” And the Leader himself declared on Aug. 7, 2002: “There’s no telling how many wars it will take to secure freedom in the homeland.” Not just indefinite but infinite detention, in other words.
So where did Luttig find the “authority” for this breathtaking despotism, which far outstrips any power held by King George III, the oppressor whose depredations sparked the American Revolution? Not in the legal code. Not in the Constitution. Certainly not in the Magna Carta. No, he cited the trusty Enabling Act of Sept. 14.
Let’s not forget one salient point. The federal government already possessed sufficient powers to find and punish all those involved in the Sept. 11 attack. (Indeed, so draconian were the government’s existing powers that Republican leaders spent the 1990s rightly resisting Bill Clinton’s attempts to expand them.) Just a few years before, the government had tracked, arrested, tried — in open court — and convicted an international band of Islamic extremists who had bombed the World Trade Center. And for decades, U.S. presidents have launched an endless series of military incursions in the name of defending American security.
Thus, the Sept. 14 resolution was not necessary for the government to respond with “all necessary and appropriate force” to Sept. 11. However, it was necessary — indeed, indispensable — for an unpopular, illegitimate regime to put its radical agenda of military aggression, unrestricted corporate predation and elitist rule into practice. No doubt we’ll see this Enabling Act invoked more and more as the unpopular Bushist Faction faces a rising tide of public dissent and dissatisfaction. Padilla may soon have plenty of company in his infinite legal limbo.

For annotational references, see Opinion at www.sptimesrussia.com

TITLE: Ropsha Ruins Await Reconstruction and Renovation After Years of Neglect
AUTHOR: By Yekaterina Gerasimova
PUBLISHER: Special to The St. Petersburg Times
TEXT: It was once a great palace surrounded by a beautiful park. Many of the finest architects and interior designers of the era, including Bartolomeo Rastrelli, Luigi Ruska and Yury Felten, worked there in at one time or another. 
The estate, about 50 kilometers  southwest of St. Petersburg, was a favorite place of rest, hunting and fishing for Peter the Great’s daughter Elizabeth — the gravestones of her beloved pets can still be found on the banks of a large pond within the park.
Today, the area is still famed for its underground springs, healing mineral waters and ponds. Water from the Ropsha Heights — 135 meters above sea level — still feed the Peterhof fountains, and the park is unique in the scale of its interlinked artificial lakes, channels and islands. In the fall, the trees in the park are ablaze with a vivid range of autumnal colors.
But its history is tainted.
“Ropsha is not to be mentioned again,” said Catherine the Great wrote in a letter printed in “The Putsch of 1762. Writings and correspondence of its conspirators and contemporaries,” published in 1908. 
 “The mention of Ropsha is unpleasant,” echoed the censors of her day in official documents, mentioned by Yury Duzhnikov in his book “Ropsha,” published in 1973.
Catherine the Great — as German princess Sophia Augusta Frederica von Anhalt-Zerbst — married Peter III and conspired in his murder at the Ropsha Palace in 1772. She appears to have remained ashamed and embarrassed by the regicide for the rest of her life although she became one of the most prominent Russian tsarinas.
Following the murder, the name of Ropsha fell into oblivion, but the palace survived. Looking at the abandoned ruins of the Ropsha Palace and park today, it’s hard to believe that a mere 26 years ago it still served as a home to a military unit.
Its columns can barely be made out through thick bushes and even trees that now grow both outside and inside the building, which is bereft of its roof and open to the wind, rain and snow storms. 
The park is also overgrown and wild, but its outline can still be traced. In front of the main faÍade of the palace there is still the wide expanse of the front lawn, which was used as a bowling green.
Locals blame the neglect of the palace on the chaos of perestroika, saying that when the last military inhabitants moved out, no other authorities were in a hurry to take it over. It is now listed as a Federal monument, but the state protection appears to have done little to prevent deterioration.
Before the Bolshevik Revolution, the palace was one of a number of imperial estates around the capital, including Tsarskoye Selo, Peterhof, Gatchina, Pavlovsk, Oranienbaum and Strelna.
In 1710, having won the battle of Poltava in the war against Sweden, Peter the Great presented his outstanding retainers with “dachas” or land plots, (the word is derived from the verb “to give,” which is “dat’”). The best suburbs, however, such as Strelna, Peterhof and Ropsha, he kept for himself.
The  residence for Peter the Great, made of wood, was completed in 1713. It was the first royal estate to be erected on the outskirts of St. Petersburg.
It was a favorite place for Peter to rest and recuperate, and its design was so successful that the architect Domenico Trezzini drew standardized blueprints for a modal suburban estate based on it. However, by 1780 the original building  had become so dilapidated that it had to be demolished. Its ruins can still be found in the park.
Construction of the current Rophsa Palace was begun in 1715 by First State Chancellor Count Mikhail Golovkin, husband of the daughter of  Prince Feodor Romodanovsky, chief of the Tainy Prikaz or counter-intelligence service. Russian architect Pyotr Yeropkin designed it. Golovkin, however, was a political enemy of reigning Empress Elizabeth who sent him into exile and expropriated his home for herself. 
From the reign of Paul I, the palace was remodelled in classical styles at various times by famous architects including Felten, Ruska, Sergei Bernikov and Yegor Sokolov.  When Elizabeth came to power, Rastrelli was charged with the reconstruction of the mansion. He kept the central part of the palace almost intact. Elizabeth loved hunting, fishing, picnics and outdoor entertainments and this influenced the overall appearance of the estate.
The luxurious suites of the Ropsha Palace were decorated with mosaic floor tiles, paintings and stucco molding. It was furnished with porcelain stoves, furniture, and porcelain and bronze statues created by leading artists such as Ruska, Giovanni-Battista Skotti, Fridolino Toriccelli, Barnaba Medici, and Friedrich David. 
The famous Ropsha greenhouses, built in the 18th century, where peaches and pineapples were grown, survived into the reign of the last emperor, Nicholas II. A range of fish species were bred in the lakes, fishing lodges appeared on the shoreline, and the woodland was stocked with deer, making it ideal for hunting.
A few changes were introduced in 1881 by the architect Yevgraf Gan, but the composition of the palace barely changed in the 19th century. 
Not only the composition of the architectural ensemble was preserved from Rastrelli’s time, but also the lay-out of the park, with its ponds and islands, where even today one can find a memorial to Catherine’s favorite pets — a cat, a dog and a horse.
Until the Bolshevik Revolution, Ropsha remained a glittering place. Here Grand Duke Alexander Mikhailovich (a grandson of Nicholas I) and his wife Ksenia (daughter of Alexander III) spent their wedding night in July 1893.
However, yet more bloody events returned to Ropsha and during the Russian Civil War it was the scene of fierce battles. The White General Nikolai Yudenich took it over twice in 1919 in battles with the Red Army.
The Bolsheviks nationalized the estate and most of the artworks were looted, though some items survived and were moved to other Russian museums. The famous hunters’ dining service, with its green frog emblem is now kept in the Peterhof Palace’s archive and often used for exhibitions.  
In the autumn of 1941, the palace itself, strategically located on high ground, was captured by the Germans. An old cellar where Peter the Great’s first palace had once stood, was used by them to hide their largest caliber long-range artillery during the Siege of Leningrad.
The Ropsha Heights were one of the key points where Soviet forces succeeding

TITLE: Kremlin Allies Dismiss Ex-Prime Minister’s Bid
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: Federation Council Speaker Sergei Mironov and other Kremlin allies accused former Prime Minister Mikhail Kasyanov on Thursday of plotting a foreign-backed coup with his announcement that he would run for president.
Liberal politicians, who have been rallying behind Kasyanov since he started publicly lashing out at the policies of President Vladimir Putin early this year, cautiously cheered the bid, while the Communist Party said it wanted nothing to do with it.
Kasyanov said on Ekho Moskvy radio late Wednesday that he would seek the presidency in 2008, when Putin’s final term ends. He also said that he would participate in December’s Moscow City Duma elections and other upcoming polls and that he was working to unify democratic-minded parties.
Mironov on Thursday flatly dismissed Kasyanov as unfit for the presidency. 
“Before making the announcement, Kasyanov held consultations overseas. I am absolutely sure, and my colleagues would agree with me, that the future president of Russia, of a great country, cannot be a man who turns to the United States of America for consultations before making such a political decision,” he said, Interfax reported. The last known trip that Kasyanov made to the United States was in December, when he gave a speech to the Council on Foreign Relations in New York. 
Iosif Diskin, a political analyst who co-authored a 2003 report that warned about “a creeping oligarchic coup,” said Kasyanov was looking to make a deal with the Kremlin. “By saying yes for now, Kasyanov is inviting the Kremlin to negotiations about his personal fate,” Diskin said. “Anyone who is literate understands this.”
Kasyanov, a career bureaucrat who served as prime minister from 2000 to 2004, was fired by Putin after he became critical of the legal assault on billionaire Mikhail Khodorkovsky. After months of silence, Kasyanov resurfaced in February to sharply criticize Putin’s government and hint about a presidential bid. In July, the Prosecutor General’s Office opened an investigation into the legality of Kasyanov’s acquisition of a villa. 
Yury Sharandin, chairman of the Federation Council’s Constitutional Committee, called Kasyanov’s announcement a political ploy for the moment that had nothing to do with the presidential election campaign, which does not kick off for two more years.
Sergei Markov, a Kremlin-connected political analyst, agreed, saying Kasyanov was waist-deep in corruption allegations, had no experience running for office and was regarded as too close to the oligarchs to be elected.
“But if his real aim is an anti-government mutiny similar to the Orange Revolution in Ukraine, then Kasyanov’s announcement yesterday was not the false start of his presidential campaign but a pretty rational move,” Markov said.
Markov predicted that Kasyanov would test “orange” strategies in the upcoming Moscow City Duma elections. 
Nikita Belykh, leader of the liberal Union of Right Forces, or SPS, party praised Kasyanov’s decision as “remarkable,” but said Kasyanov had not yet approached the party with an offer to help consolidate liberal groups behind him, Interfax reported. 
However, Interfax, citing an unidentified source, also reported that Kasyanov had spoken with former SPS leader Boris Nemtsov and Yabloko leader Grigory Yavlinsky.
Kasyanov could become a strong candidate should the social situation deteriorate due to poorly implemented reforms, said Tatyana Stanovaya, a political analyst with the Center for Political Technologies. 
Kasyanov would also have a chance if he were to abandon his pro-Western and pro-democratic stance in favor of a leftist, socially oriented platform or if Putin’s preferred successor were rejected by the business and political community, Stanovaya said. 
“He must begin playing on Putin’s field. His agenda must compete with Putin’s and not simply criticize it,” she said.

TITLE: Watchdog Mulls Iran’s Nuclear Program
AUTHOR: By Louis Charbonneau
PUBLISHER: Reuters
TEXT: VIENNA — Key members of the UN nuclear watchdog meet Monday as the European Union’s three biggest powers prepare for a showdown over Iran’s atomic program that could lead to UN sanctions against Tehran.
Two years after France, Britain and Germany began a diplomatic drive to persuade the Islamic republic to abandon nuclear technology that can produce atom bomb fuel, EU officials said their patience ran out after a defiant speech by Iran’s new hardline president to the UN General Assembly Saturday.
EU diplomats said they had begun drafting a resolution to submit to this week’s meeting of the International Atomic Energy Agency’s (IAEA) 35-nation board asking it to refer Iran to the UN Security Council, which could impose economic sanctions.
Although the EU trio would not seek immediate sanctions against Iran, they might consider them in the future if Iran remained defiant, EU diplomats said.
International pressure on Iran has been mounting since it broke IAEA seals and resumed work at a uranium processing plant at Isfahan last month. Work there had been suspended under a November deal with the three EU powers — the Paris Agreement.
But Russia, China, Brazil, most of the non-aligned nations on the IAEA board and IAEA director Mohamed ElBaradei strongly oppose an immediate referral of Iran’s case to the UN  Council.
Faced with a split, EU diplomats said they might not insist that the IAEA board vote on the resolution at this week’s meeting, despite U.S. insistence that they go for a quick vote.
Of the 14 IAEA board members belonging to the Non-Aligned Movement (NAM), only two—Singapore and Peru—have said they will back a UN referral. The rest would vote against it or abstain, diplomats in Vienna said.
“The only diehard pro-Iranian countries at this point are Russia and Venezuela,” an EU diplomat said. Brazil could also be counted on to vote against a UN referral, he said.
The haggling over the final text of any resolution will be long and difficult, and EU diplomats said there was no guarantee it would win a majority when put to a vote. This was why they were in no hurry to force a hasty vote at this week’s IAEA board meeting.
Some EU negotiators agree with the Americans and would prefer to vote this week, before the 2005–2006 IAEA board takes office. “When the new board takes over soon, there will be more NAM countries and it will be even harder,” an EU diplomat said.
EU diplomats said the Iran issue had split the 35 IAEA board members into two camps—the developed West including the EU, the United States, Japan and Australia against states like India, China, Brazil, South Africa and Russia.
Western countries accuse Iran, which hid its enrichment program from the IAEA for 18 years, of covertly developing nuclear weapons. They say Tehran’s secretiveness meant it had forfeited its right to technology that could be used both for civilian purposes and for bombs.
Tehran says its program is aimed solely at the peaceful generation of electricity and insists it must be able to produce its own nuclear fuel. Many developing states back Iran’s right to a full nuclear program  and accuse the West of trying to deprive poor nations of independent atomic programs.

TITLE: Gaza Pullout Vexes Sharon
PUBLISHER: Reuters
TEXT: NEW YORK  — Israeli Prime Minister Ariel Sharon headed into a battle for his political survival Monday after collecting diplomatic dividends at the United Nations for a pullout from the Gaza Strip.
Before boarding a plane for Israel late Sunday, Sharon launched his fiercest attack yet on opponents, led by former prime minister Benjamin Netanyahu, eager to remove him as leader of the right-wing Likud party he founded three decades ago.
Sharon, 77, complained in a speech to U.S. Jewish leaders he had “lost the majority of my own party” ahead of a meeting next week of the Likud’s hard-line Central Committee that could set the stage for an early national election.
He said “radical extremists” in the Likud opposed to quitting Gaza after 38 years of military occupation were trying to force a parliamentary election.
Critics of the first removal of Jewish settlements called the withdrawal, a surrender to Palestinian violence.

TITLE: New Zealand Result Unclear
PUBLISHER: Reuters
TEXT: WELLINGTON — Jockeying for potential coalition partners began Sunday after New Zealand Prime Minister Helen Clark’s ruling Labor Party pipped the National opposition by one seat in a nail-biting election.
Clark is poised to become the first Labor leader ever to win three straight terms after she finished ahead of former central bank governor Don Brash’s National Party.
Labor had 40.7 percent of the vote compared with 39.6 for conservative National when initial vote counting ended late Saturday, although around 10 percent of the ballots have yet to be counted.
That would translate into 50 seats for Labor in a 122-seat parliament, down one from the previous parliament, compared with National’s 49. Results will be declared official Oct 1.
The close result, with both parties short of an outright majority, means at least two weeks of political horse-trading with the six key minor parties who won seats, in a bid to create a workable coalition government.
Brash has refused to concede defeat but Clark, who remains caretaker leader, appears to have the most potential allies.

TITLE: Dementyeva Helps Russia Win Fed Cup
PUBLISHER: Reuters
TEXT: PARIS — France captain Georges Goven did not hesitate when asked the reason for his team’s 3-2 defeat by Russia in the Fed Cup final at Roland Garros. 
“Yelena Dementyeva,” he told reporters. 
The combative baseliner was indeed instrumental, winning both singles matches before teaming up with Dinara Safina to beat Amelie Mauresmo and Mary Pierce in the decisive doubles. 
“She’s Superwoman,” Goven said of the pony-tailed 23-year-old, who held her nerve throughout the weekend to inspire Russia to their second successive final win over France. 
The elegant Russian was the nearly woman of tennis last year, losing in the French and U.S. Open finals to compatriots Anastasia Myskina and Svetlana Kuznetsova. 
This weekend, however, she did everything right, unlike Myskina, who had been the key to Russia’s triumph last year but lost both singles matches at Roland Garros. 
“Nastya [Myskina] may have lost but if she had not beaten Venus Williams [in the semi-final], we wouldn’t have been here,” Dementyeva said. 
“It’s not my victory. It’s a team effort. All the girls played their part.” 
With a formidable line-up in former world number one Mauresmo and Pierce, a finalist at this year’s French and U.S. Opens, and the support of a partisan crowd, the home team were full of hope. 
“Amelie and Mary did not fail but the Russians were just too strong,” Goven said. “They knocked us out in the final round.” 
As well as underlining Russia’s strength-in-depth, the Paris final provided a welcome boost to the women’s game with record attendances and a fantastic atmosphere. 
All 15,000 center court seats were packed both days. 
“The fans were unbelievable,” Dementyeva said. 
“Of course they were supporting France but I never felt they were against me. 
“When you look up and see 15,000 people watching you and having fun, it’s just sensational.” 
The tie would have been even more glamorous had not world number one Maria Sharapova turned down an invitation to play for Russia this year. 
“It’s the best players’ duty to play for Russia,” Russian captain Shamil Tarpishchev said. “We have an agreement with Maria Sharapova for 2006. We will see.” 
Sharapova, however, is not a clay court specialist and Russia had enough strength in depth to make light of her absence. 
“They’re amazing,” Goven said of the Russians. “It’s surprising because they don’t have the structures we have and their federation is not as well organized as ours. 
“The difference may be that more youngsters there choose tennis to achieve their goals in life instead of trying to become lawyers or doctors. 
“Our teenagers find it hard to decide to concentrate on a tennis career. In Russia, you have 13-year-old girls focusing only on tennis. 
“We have a great team with a fantastic spirit and a competent staff but we have five or six players to choose from while Russia have 20.”

BEIJING — Rafael Nadal cranked up his game after losing the first set, beating Guillermo Coria 5-7 6-1 6-2 Sunday to win the China Open on a noisy, festive night for his 10th title this year. 
Nadal, the French Open champion, also defeated Coria in the finals at Monte Carlo and Rome this season. 
In the first set, Nadal lost his serve twice before surging ahead 5-0 in the second against the second-seeded Argentine. Coria had double-faulted on break point, putting the top-seeded Spaniard up 2-0. Nadal turned up the pressure with booming serves and crushing shots down the line. 
“In the second and third sets, I played a little bit more aggressively,” Nadal said. “I think that was the decisive thing. ... When I play well, it’s important for the confidence.”
(AP)

TITLE: Driver Killed in Rally, Peugeot May Pull Out
PUBLISHER: Combined Reports
TEXT: Peugeot co-driver Michael Park was killed during the Wales Rally GB on Sunday after his car went off the course and hit a tree. 
The 39-year-old Englishman sustained fatal injuries during the 17-mile, 15th stage, organizers said. The Estonian driver, Markko Martin, was not injured. 
Peugeot said Martin struck a tree on the right side of the car. 
Park had been Martin’s co-driver since 2000 and the pair had won five world rallies together. 
Organizers canceled the remaining two stages. Citroen’s Sebastien Loeb had been leading the race, but decided to take a time penalty which gave Petter Solberg the victory and delayed Loeb’s winning the series title. 
“The 10 points for Loeb’s victory would have been enough to seal a second consecutive drivers’ title for the French Citroen driver, but he was understandably keen to avoid this situation,” organizers said in a statement. 
“As a result, he deliberately opted to check in to the final time control late to incur a two-minute penalty which dropped him to third overall behind Citroen teammate Francois Duval and Solberg.” 
Peugeot’s Marcus Gronholm pulled out of the race as a mark of respect for Park, who was survived by his wife Marie and two children. 
Competitors returned to Cardiff to a subdued victory ceremony, where the traditional champagne-spraying ceremony was canceled and a minute’s silence was held. 
Peugeot, already due to pull out of rallying at the end of the season, could leave earlier after Park’s death.
The French team has been deeply shocked by the accident.
“We will now consider the remainder of the season. The championship is nothing compared to this,” team boss and former driver Jean-Pierre Nicolas told Eurosport television.
There are four rounds of the world championship remaining — Japan, Corsica, Catalunya and Australia.
Loeb has 99 points with four rounds remaining, 34 clear of Norwegian Petter Solberg, Sunday’s nominal winner in a Subaru. Gronholm is 38 behind the Frenchman.
Citroen lead Peugeot, their stablemates within the PSA group, by 20 points in the manufacturers’ championship.

TITLE: Minister Slams Terek’s Putin Appeal
AUTHOR: By Gennady Fyodorov
PUBLISHER: Reuters
TEXT: Sports Minister Vyacheslav Fetisov said Friday that a Chechen football club had overstepped its boundaries by appealing to President Vladimir Putin to save it from relegation. 
Last week, Terek Grozny, which is bottom of the Russian Premier League, wrote an open letter to Putin asking for help. 
Terek accused Russian referees of staging a biased campaign against the team to ensure it is relegated. 
“It is annoying that the fate of a whole nation is decided by referees,” the letter said. “Vladimir Vladimirovich [Putin], we ask for your intervention in the situation.” 
But Fetisov, a former ice hockey defenceman whom Putin invited to head the country’s sports movement in 2002, thinks the Chechens have gone a bit too far. 
Asked to comment on the situation, Fetisov, who captained the Soviet Union to two Olympic and seven world titles in the 1970s and 80s, said: “This case is out of my jurisdiction. 
“In the past, we’ve been accused by the media of interfering in the affairs of our sports federations, such as the Russian Football Union (RFU),” added Fetisov, who earlier this year forced long-serving RFU chief Vyacheslav Koloskov out of office. 
“I don’t think we’re doing the president a favor by asking him to get involved in football matters. I think it’s a job for the football authorities to sort everything out.” 
The RFU and the Russian Referees Association (KFA) dismissed Terek’s protest as unfounded. 
“The attempt by Terek to put the blame for its poor showing this season on referees does not have any basis in fact,” said the RFU and KFA in a joint statement. 
The RFU also said that by appealing to Putin, Terek had violated FIFA’s principles. The world governing body prohibits government officials from interfering in football matters. 
The club, run by pro-Kremlin officials, has asked for protection because its survival in the top flight would boost peace efforts in the volatile Caucasus region. 
“Today, Terek is more than a team for the Chechen Republic. In reviving the team in 2000, the president of the Chechen republic, Akhmad Kadyrov set a goal — through sport, through culture to bring peace to the Chechen land,” the letter said. 
After being disbanded in the 1990s because of war, the club was resurrected five years ago by pro-Moscow Kadyrov. 
After Kadyrov was assassinated in May 2004, his son Ramzan took over as club president. 
Terek has been seen as a political tool to improve Moscow’s image in the region. 
Putin met the team last year after it won the Russian Cup, an honor normally reserved for the country’s national teams. 
Terek plays its home games in Pyatigorsk — five hours’ drive from Grozny — because there is no suitable ground in their home city following a decade of war.