SOURCE: The St. Petersburg Times
DATE: Issue #1114 (80), Tuesday, October 18, 2005
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TITLE: United Russia Sweeps To Victory
AUTHOR: By Francesca Mereu
PUBLISHER: Staff Writer
TEXT: United Russia grabbed 53 percent of the vote in Belgorod legislative elections, leaving other parties in the dust as voters apparently recoiled at the involvement of a company controlled by Moscow Mayor Yury Luzhkov’s wife in the race.
United Russia’s victory in Sunday’s vote was a gain of 20 percentage points from the 33 percent it claimed in State Duma elections in 2003, the Central Elections Commission said. The Communist Party placed second, with 18.5 percent, a gain of 2.5 percentage points from 2003.
The “against all” option on the ballot collected 7.1 percent, just ahead of the 6.75 percent garnered by the ultranationalist Liberal Democratic Party.
LDPR leader Vladimir Zhirinovsky denounced the results as falsified, Interfax reported.
“We know that every second resident voted for LDPR. These were not elections but a comedy, a farce,” said Zhirinovsky, who ran against Belgorod Governor Yevgeny Savchenko for the post in 1999.
Central Election Commission chief Alexander Veshnyakov declared the elections fair. He also noted that turnout was 57 percent, 14 percent higher than the last local legislative elections.
Candidates ran for the regional legislature in party lists as well as single-mandate districts. Interfax reported that United Russia would get about 70 seats, the Communists would get four seats and LDPR would get two seats. 
LDPR went into the vote with the support of Inteko, the Moscow-based company controlled by Luzhkov’s wife, Yelena Baturina. 
Inteko is embroiled in a very public dispute with Savchenko, who ran at the top of the United Russia ticket in the elections. 
“The conflict between the regional administration and Inteko played a big role in the election campaign,” said Alexei Titkov, an analyst with the Institute of Regional Studies. “The governor is very popular in the region, while LDPR was perceived as being a pro-Moscow party.”
The dispute is connected to 100,000 hectares of farmland that Inteko has bought in the region since 2003. Inteko has not been able to register ownership rights for 70,000 hectares and has accused Savchenko of being to blame for its difficulties.
Apparently in an attempt to defend its interests in the region, Inteko had several employees run as LDPR candidates.
The regional elections commission in September refused to register the list over a technicality, but the Supreme Court on Friday overturned the decision.
Earlier last week, two Inteko employees were beaten in separate attacks that the company has linked to the land dispute and the elections. One of them, lawyer Dmitry Shteinberg, later died.
Inteko has urged Putin to dismiss Savchenko.
However, “in most regions, governors do what they want, and Belgorod is no exception,” said Yury Korgunyuk, an analyst with the Indem think tank. “Savchenko has the same power in Belgorod that Luzhkov has in Moscow.”
Luzhkov is a leader of United Russia.
Korgunyuk said the Belgorod results reflected what voters thought about Moscow. “People thought, ‘What does Moscow want in our region?’ This is why many voted for United Russia and for the popular Savchenko,” he said.
Savchenko was made governor by presidential appointment in 1993. He received more than 50 percent of the vote to win election over Zhirinovsky in 1999, and he was re-elected in May 2003 with 61 percent of the vote.
In other elections on Sunday, Udmurtia voters picked municipal council members for 311 new districts. The elections are part of a self-rule reform that creates a two-tier system of municipal government that should provide a rigid delineation of powers among federal, regional and local authorities. 
The Duma recently delayed the reform from next year until 2009, but many regions had already organized elections.
In the city of Nizhny Novgorod, incumbent Mayor Vadim Bulavinov collected more than 70 percent of the vote for a new term, while Vladimir incumbent Mayor Alexander Rybakov also won re-election, by about 60 percent.

TITLE: Basayev Claims Attack
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: Chechen warlord Shamil Basayev on Monday claimed responsibility for coordinating a series of “botched” attacks in Nalchik last week, and local authorities deliberated whether to turn over the bodies of militants killed in fighting to relatives. 
Basayev said Thursday’s attacks, which left well over 100 people dead, most of them militants, were a failure and that a traitor in the militants’ ranks had tipped off authorities about a bigger raid he had planned in Kabardino-Balkaria’s capital.
Basayev’s version of the events, made in a statement posted on a rebel web site, corresponded with accounts given by Interior Minister Rashid Nurgaliev and Defense Minister Sergei Ivanov on Sunday. Both said the militants had carried out a spontaneous raid after realizing that law enforcement officials were close to capturing them.
“In fact, the bandit underground initiated its actions because we were already chasing them,” Nurgaliev said late Sunday on state-run Channel One television.
He called attacks “an act of desperation.”
Nurgaliev also said that several Islamist militants were detained in Kabardino-Balkaria in early October and that they had admitted in interrogations that possible terrorist attacks were in the works.
He said he ordered an extensive manhunt for militants in the republic last Monday. 
In Nalchik, scores of people continued to wait outside the main city morgue on Monday in hope that authorities would hand over the bodies of suspected militants. Up to 92 militants have been reported dead, and about 50 of them remained unidentified Monday, Interfax said, citing an unidentified regional law enforcement official. Most of the dead were local residents, ethnic Kabardins and Balkars, the official said.
Authorities are barred from giving the bodies of terrorists to relatives under a law adopted after the 2002 hostage-taking raid on a Moscow theater by the Chechen rebels.
Kabardino-Balkarian President Arsen Kanokov acknowledged on Monday that it would be difficult to separate the bodies of militants from those of innocent bystanders.
“I believe that according to the law on terrorism, the bodies of wanted persons who were involved in grave crimes would not be handed over,” Kanokov said, Interfax reported.
He added, however, that “people who were used as cannon fodder” could be among the bodies. 
“For this category, we could accomplish an act of humanity so that cruelty would not engender cruelty,” Kanokov said.
Muslim rites demand that the dead be buried as soon as possible, and local traditions make proper burial the collective duty of the family.
Kanokov met with senior local law enforcement officials Monday to discuss what to do with the scores of bodies. It was unclear late in the day what, if anything, they had decided.
Citing relatives of some of the dead, Izvestia and Gazeta reported that police planted ammunition on some civilians killed in crossfire and then declared them terrorists, apparently to inflate the militant death toll. The reports could not be independently verified.
Kanokov, in an interview published Monday in Kommersant, conceded that a brutal crackdown on Muslim believers had played a role in Islamist insurgency in the republic. “Indeed, there was a certain overkill on the part of law enforcers,” he said. 
The Kremlin named Kanokov, a Moscow-based businessman, as president last month, and he is the first North Caucasus leader to publicly acknowledge a link between police brutality and religious extremism. Under Kanokov’s predecessor, Valery Kokov, authorities shuttered mosques where independent-minded Muslims were gathered and detained scores on suspicion of extremism.
“It will get only worse if we continue to forbid them to pray, close their mosques and force them underground, where it is harder to control them,” Kanokov told Kommersant. “This will only harden them. And what is banned always seems to be right to people.”
Basayev said in his statement that the militants had not targeted Kanokov because he had ordered the mosques reopened.
Kabardino-Balkarian Prime Minister Gennady Gubin on Monday reiterated earlier official denials that Basayev had played a role in the attacks. “There is no information that Basayev participated in this raid, even indirectly,” he said.
The oppression of independent-minded Muslims across the North Caucasus is forcing them to consolidate into a region-wide network of violent insurgents, said Sergei Markedonov, a Caucasus specialist with the Institute of Political and Military Analysis.
“This will develop further if the state’s policy toward religion remains limited to unequivocally supporting loyal muftis and sending the police after anyone who disagrees,” Markedonov said.
Channel One showed footage Monday of a detained suspect being interrogated in Nalchik. The man, who appeared to be in his early 20s, denied he had fought in the name of religion and said he had been offered $2,000 to participate.
Substantive evidence points to the contrary, however. Eyewitnesses and reporters have said many of the dead fighters had the trademark beards of Wahhibis, followers of a violent strain of Islamism. 
A woman who was held hostage by three attackers for 24 hours told The Associated Press that they frequently spoke of their faith and that those who died in the raid would go to heaven.
Contradictory reports were issued Monday about the number of dead militants. Basayev put the figure at 41, Kanokov at 70 and Deputy Interior Minister Andrei Novikov at 92. Earlier reports said 94 had died.
The head of Kabardino-Balkaria’s forensic bureau, Azret Mechukayev, said the bodies of 85 attackers remained in Nalchik’s morgue on Monday, Interfax reported.
Interfax reported late Monday that 35 law enforcement officials had also died and that the civilian death toll had been revised from 12 to nine.

TITLE: Jewish Cemetery Vandalized a Third Time
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: In the latest in a series of attacks, unidentified vandals destroyed another 60 gravestones at St. Petersburg’s Jewish cemetery on Saturday night. Mark Grubarg, head of the city’s Jewish Religious Community, said on Monday.
“The repeated character of several recent attacks against the Jewish cemetery makes us believe that they were not simple acts of vandalism, but that these actions could be nationalist and extremist in nature,” Grubarg said.
“We would prefer to think it was just an act of vandalism but when such attacks take place twice within the last 10 days, it raises more serious concerns,” he said.
Representatives of the local Jewish community gathered on Monday to discuss the situation, and decided to take the issue to the head of the city’s police, to collect money for a fence around the cemetery, and introduce additional guards to the cemetery, Grubarg said.
The city prosecution opened a criminal case under article 214 of the Russian Criminal Code, which covers vandalism.
On Oct. 6 unidentified vandals destroyed more than 40 tombs at the Jewish cemetery.  
A few days before that, the Jewish restaurant Sholom  suffered a second attack, when its windows were broken.
Grubarg said police were investigating the crimes but had so far come up with no leads. 
No anti-Semitic grafitti was left at the cemetery or the restaurant, he said.

TITLE: Suspects Say They Were Tortured
AUTHOR: By Maria Danilova
PUBLISHER: The Associated Press
TEXT: MOSCOW — Three men recently acquitted of terrorism charges, including two former Guantanamo Bay prisoners, accused law enforcement agencies on Friday of torturing them to force confessions. 
A jury in Tatarstan in September acquitted Timur Ishmuratov, Ravil Gumarov and Fanis Shaikhutdinov of charges of involvement in the January explosion of a gas pipeline in the Tatarstan city of Bugulma. 
The acquittal was a rare case of suspects being acquitted of terrorism charges in a country that has been hit by a string of devastating terrorist attacks. Prosecutors said they would appeal the ruling. 
Ishmuratov and Gumarov are among seven Russian men who were released from Guantanamo last year and returned to Russia. After being briefly held in jail in southern Russia, they were freed after investigators found no evidence of their involvement in the Taliban movement. 
The pipeline exploded on Jan. 8, but it caused no casualties. Citing initial police reports, rights groups claimed the blast was caused by technical problems, not criminals. 
But the three men were arrested on suspicion of involvement in the explosions.
They said at a news conference Friday that law enforcers had severely beaten them, deprived them of food and sleep and tortured them with gas masks. 
Shaikhutdinov said he spent the first five days of his detention without any sleep, one wrist handcuffed to the bars of his jail cell so as to prevent him from sitting down. 
“At night we would stand and during the day they allowed us to sit down, telling us meanwhile to admit that we had acquired explosives,” he said. 
Shaikhutdinov said regional police and security officers had beat him several days in a row, trying to get him to confess involvement in the pipeline explosion and accuse his comrades. 
“Then I fell and they continued beating me as I was lying with their hands and legs, aiming at my kidneys and groin and stomach,” Shaikhutdinov said bitterly. 
He also said law enforcement officers had put a gas mask on him, periodically turning off the flow of oxygen and making him breathe cigarette smoke, which caused him to suffocate and vomit. 
“Gas masks and electric shock are common in Tatarstan,” said Gumarov, who also said he was tortured.

TITLE: Deputies Balk at Kremlin Bill
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — In a rare flash of defiance from the usually docile State Duma, the Security Committee late last week refused to rubber-stamp a Kremlin-sponsored bill on parliamentary investigations complaining that it would unfairly limit the legislature’s powers.
Committee members raised many criticisms of the bill and agreed to endorse it on Thursday only after they tacked on a handful of proposed amendments, Pavel Shakurov, a spokesman for the United Russia-controlled committee, said by telephone on Friday.
Despite the opposition raised by the committee, the Duma, which is also dominated by United Russia, will probably pass the bill without any major changes, just as it has approved Kremlin-sponsored bills in the past, said Yury Korgunyuk, a political analyst with the Indem think tank.
One of the bill’s provisions that came under fire would bar the parliament from investigating cases that are also before a court of law. 
“Thus, the Beslan tragedy could not be an issue of an independent parliamentary investigation,” Viktor Ilyukhin, a Communist and deputy chairman of the Security Committee, said Thursday.
A commission comprised of Duma deputies and Federation Council senators is investigating last year’s Beslan hostage-taking, while the North Ossetian Supreme Court is trying the only suspected Beslan attacker known to have survived.
Security Committee members also complained that the bill would make it difficult to create an investigative commission and to endorse its findings, Shakurov said. 
In approving the bill, the committee issued a warning that the legislation would not allow the Duma to investigate issues related to state security, he said.
The Constitution and State Affairs Committee is expected to review the bill on Tuesday before sending it to the assembled Duma, Shakurov said. 
The Duma may consider the bill in a first reading on Oct. 21, Shakurov said.

TITLE: Household Goods Seized To Pay Bills
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: At least two St. Petersburg families had their television sets seized on Friday after they failed to pay their bills for communal services. With outstanding debts for communal services in the city amounting to around 3.7 billion rubles ($130,000,000), St. Petersburg’s housing authorities are warning that these seizures are only the first of many to come.
Court bailiffs of the city’s Admiralteisky district seized the first television sets from the Studitsky family, who owed 9,000 rubles ($315) in service charges for their one room in a communal apartment at Ulitsa Ruzovskogo.
The Fyodorov family, which lives on Ulitsa Mozhaiskaya, owed 20,000 rubles ($700) for its three rooms in a communal apartment, and was deprived of its flat-screen television, music center and computer.
“In our district, it was the first time that court bailiffs seized the residents’ property for not paying their communal bills,” said Lyudmila Murzinova, deputy director of the State Department Housing Agency of the Admiralty district in a telephone interview with the St. Petersburg Times on Monday.
Journalists from a variety of Russian mass media were invited to cover the events.
The Studitskys failed to pay their communal bills for 2003, and the Fyodorovs haven’t paid for the last two years.
The district was forced to resort to these measures when firms threatened to limit their provision of communal services to the whole district, Murzinova said. 
As of September this year, the district owed $8.6 million for communal services, and earlier this year the city’s electricity monopoly Lenenergo sent a warning to the Housing Agency of the Admiralty district that if the debts for their services were not paid they would limit the heating of the district by 25 percent.
“There are more and more people who just don’t pay their communal bills, and just warning them doesn’t get them worried about it,” Murzinova said. 
She said that three weeks before the seizure of the property, both the Studitskys and the Fyodorovs received a warning from the bailiffs.  
According to the warning, they were to pay the debt within five days, but they failed to do so.
The debtors can have their property returned if they pay off their debts within five days of the seizure, until when the property will be kept in storage. 
“Seizure of property is the only measure which can be used against homeowners who don’t pay their communal bills,” said Elmira Nafigina, the district’s bailiff, Interfax reported.
The Studitskys and the Fyodorovs could not be reached for a comment Monday.

TITLE: St. Petersburg To Become Prized Destination for Poles
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Tensions may be running high between Russia and Poland on a diplomatic level, but travel industry professionals are making optimistic forecasts for a boom in Polish tourists coming to St. Petersburg.
The city was once a favorite for Polish tourists, with every fourth foreign visitor to St. Petersburg coming from Poland, according to official statistics from the Soviet era. 
A large group of Polish tour operators visiting the city last week, on a trip sponsored by the Russian Tourism Industry Union (RST), said that Poles are again keen to visit Russia.
Dariusz Wojtal, president of the Intourist Warszawa travel agency and one of the visit’s organizers, said the renaissance of Polish tourism to Russia will begin in St. Petersburg.
The enthusiasm, however, is tempered by memories of the Soviet era. Lech Kaczynski, a presidential candidate in Poland, recently said in a speech televised on the Russian channel NTV “Russia has a rich cultural legacy; I love [Bulat] Okudzhava, Vladimir Vysotsky and [Anton] Chekhov — but I would demolish that architectural nonsense,” referring to an imposing Stalinist building in Poland.
St. Petersburg may be unlikely to attract tourists on a nostalgic search of their Soviet past, but a new generation of Polish tourists is keen to explore the country, said Tatyana Demeneva, deputy head of the Northwestern branch of RST.
“The class showing the highest interest is made up of yuppies, who have already discovered most of Western Europe, and would like to see more exotic places,” Demeneva said. “St. Petersburg is high on their list.”
“Poland’s tourism industry is on the rise, this is one of the most rapidly developing markets in Eastern Europe,” said Alexei Zhukov, director of the Aktis travel agency in St. Petersburg.
During their week-long stay, the delegation of 40 representatives from Poland’s largest tour operators and travel agencies visited the major cultural sights in the city as well as new hotels and restaurants. 
“A series of contracts have been signed immediately, and the first group of 100 tourists will arrive in town next month,” said Andrzey Serakowski, chairman of the Association of Representatives of National Tourism Organizations in Russia.

TITLE: Religious Extremism Finds Fertile Ground
AUTHOR: By Simon Saradzhyan
PUBLISHER: Staff Writer
TEXT: MOSCOW — The indiscriminate suppression of “unofficial” Islamic organizations in Kabardino-Balkaria combined with poverty and historical grievances have created fertile ground for a virulent strain of religious extremism, as manifested by Thursday’s violent raids.
The coordinated attacks in the republic’s capital, Nalchik, ended a relative lull throughout the North Caucasus region since last year’s horrendous hostage-taking drama in Beslan and demonstrated a lasting commitment to trying to  destabilize the region in the hope of wresting swathes of it from Moscow’s control.
“Unfortunately, this seems to be a continuation of the tactic of staging attacks to destabilize an increasingly number of areas in the North Caucasus,” said Alexei Malashenko of the Carnegie Moscow Center. 
In the past year, networks of insurgents and terrorists have staged almost daily, smaller-scale attacks on police and other officials in Dagestan, Ingushetia, Chechnya and other ethnic republics of the North Caucasus.
Several hours after the launch of the daring multipronged assault on key government facilities in Nalchik, the web site of these networks posted a statement claiming they had been led by the Kabardino-Balkaria-based group Yarmuk. 
Yarmuk comprises the Kabardino-Balkaria part of the North Caucasus network of Islamic militants who are often, but not always correctly, referred to in Russia 
as “Wahhabis.” Yarmuk, which has claimed responsibility for most of the attacks on police in the republic since 2004, coordinates it actions with Shamil Basayev, the most notorious terrorist of the North Caucasus. 
Thursday’s claim of responsibility was confirmed by Deputy Prosecutor General Vladimir Kolesnikov, who accused Anzor Astemirov, a Yarmuk leader, of having organized the Nalchik attacks.
Much of the responsibility for the rise of Yarmuk must be borne by the longtime leader of Kabardino-Balkaria, Valery Kokov, who tolerated no political or religious dissent in the mostly Muslim republic. Using a tactic employed by other strongmen running North Caucasus republics, he labeled all alternatives to the local branch of the Spiritual Board of the Muslims of Russia as Wahhabis and harassed them. 
Kokov resigned in September and was replaced by Arsen Kanokov, a pro-Kremlin State Duma deputy and businessman.
The 15 years of Kokov’s strong-handed rule radicalized “unofficial” Muslim organizations to such a degree that some of their members have gone underground and taken up arms to fight the local regime in alliance with the insurgent and terrorist networks operating across the North Caucasus, experts on the region said.
“Kokov had been applying strong pressure, indiscriminately harassing even the moderates. The situation would not have become so explosive if the authorities had established a dialogue instead,” said Akhmet Yarlykapov, senior researcher at the Russian Academy of Sciences’ Institute of Anthropology and Ethnology. 
Yarlykapov singled out the Jamaat of Kabardino-Balkaria as a showcase of how a moderate alternative to official Islam had been marginalized and pushed underground. The jamaat, which was registered under the name Islamic Center in 1993 and then renamed in 1997 after failing to renew its registration, united those unhappy with the Spiritual Board of Kabardino-Balkaria, which operates the only officially open mosque in Nalchik. 
The organization did not preach violence and its leaders even managed to convince the most radical followers to refrain from the use of arms, Yarlykapov said. But mounting pressure forced its leader, Mussa Mukozhoyev, to go underground, while several dozen of the local radicals slipped away to fight on the Chechen rebels’ side in the second Chechen war. They also reportedly trained in late Chechen warlord Ruslan Gelayev’s camp in Georgia’s Pankisi Gorge and then formed the Yarmuk organization in 2002, according to Kabardino-Balkaria’s Interior Ministry. 
Yarmuk, which consists mostly of ethnic Balkars, launched its first attack in Kabardino-Balkaria in August 2004 when it ambushed policemen in the republic’s Chegem district. Its most devastating attack was carried out in December 2004, when Yarmuk members seized an office of the drugs police in Nalchik, killing four and seizing caseloads of guns and ammunition. 
Basayev maintains such close ties with Kabardino-Balkaria extremists that he has trusted them with his life, slipping into the republic’s town of Baksan to rest for more than a month in 2003. Failed Chechen suicide bomber Zarema Muzhakhoyeva lived in Nalchik in the house of local Wahhabis before setting out to detonate a bomb in downtown Moscow in the summer of 2003. In addition, former Nalchik resident Murad Shuvayev housed the alleged organizer of the Rizhskaya metro station bombing in Moscow last year.
The leader of Yarmuk, Muslim Atayev, was killed during the storming of an apartment in Nalchik in January 2005, but his organization has continued to operate, periodically staging attacks under the leadership of his successor, Rustam Bekanov. 
Local police claim to have killed seven members of this organization since the beginning of 2005 and uncovered several of its caches of guns and explosives, but it continues to attract recruits.
Both Kabardins and Balkars participate in the local insurgency, but it is mostly the Balkars who fill the ranks.

TITLE: Hostage Tells of Souvenir Store Ordeal
AUTHOR: By Fatima Tlisova
PUBLISHER: The Associated Press
TEXT: NALCHIK — As Zurida Shenkao was crossing a central street in Nalchik, she caught sight of men in full combat gear firing guns at the regional Federal Security Service headquarters right in front of her. 
“I saw men in fatigues, flak jackets and ski masks firing volleys at the building of the Federal Security Service. I got scared and ran to a souvenir shop nearby. Two wounded gunmen ran into the store right after me,” said Shenkao, 24, who told the story of her 24-hour ordeal as a hostage in a telephone interview from her hospital bed. 
When Shenkao got into the store, she found two sales clerks and two other women who had also sought shelter. 
The raiders, heavily armed with grenades and other weapons, forced the women to bandage their wounds, including a gunshot wound to the hip that Shenkao dressed. Several hours later, a third wounded militant crawled into the store. 
Shenkao recalled that when she asked militants, all 20-something men, why they had launched the raid, one answered: “We are fighting for our motherland, and if we die in that fight, we will get to heaven.”
“We must kill all those who wear a police uniform and serve the government. The more of them we kill, all the more certain we will get to heaven,” she quoted them as saying. 
Fierce fighting continued to rage in the streets, and when the gunmen saw some of their fellow militants fall in battle, they said, “Thank God, he’s getting to heaven,” Shenkao said. 
Shenkao was one of nearly 20 people militants held hostage in various buildings during their assault on government and law enforcement offices in the capital of Kabardino-Balkaria on Thursday.
Chechen rebels claimed involvement in the attacks that terrified the city of 240,000. 
But local officials said that more than two-thirds of the more than 100 militants in the attacks were from Kabardino-Balkaria, which is named after the two main ethnic groups there.
Shenkao said one of the militants in the store was Kabardin and that another was Balkar. The third was from the nearby republic of Ingushetia. 
Several hours later, the militants traded three of the hostages for three bottles of mineral water. 
Shenkao said she had managed to control her fear. 
“I collected all my courage. I was only feeling great concern for my mother, my other relatives and my cat,” she said in an even voice, seemingly untouched by emotion. 
The militants used Shenkao’s mobile phone to conduct talks with officials and demand safe passage out of the city. 
When the women told their captors that they feared being killed during the escape, they answered: “No matter how you die now, you will get to heaven,” Shenkao said. 
When troops began storming the building at around 9:30 a.m. Friday, about 24 hours after Shenkao’s ordeal began, the militants were so weak they could barely offer any resistance, she said. 
Troops fired gas grenades into the building to further incapacitate the militants, and then stormed in, freeing Shenkao and another female hostage. 
“I barely remember what was going on at that point, as I lost consciousness after one of the explosions,” she said. 
Doctors told Shenkao’s relatives that she and the other hostage were suffering from the effects of an unspecified gas, but said that it would not inflict any serious damage to their health.

TITLE: Spats and Boasts: The Response to Calamity
AUTHOR: By Jim Heintz
PUBLISHER: The Associated Press
TEXT: MOSCOW — The violence that terrified Nalchik late last week was the latest example of how officials respond to calamity with slippery rhetoric, unsupported statements, confusion and what appear to be attempts to play down the seriousness of events. 
The flow of information is far more open than during the Soviet period, when officials simply refused to report disasters such as airplane crashes or, as in the 1986 Chernobyl nuclear plant explosion, admit to them late and underplay their severity. 
But the hostage-takings, submarine sinkings and other troubles in recent years all were marked by contradictory and incomplete reports that added to the events’ anxiety. 
When a mini-sub became disabled in August, Navy spokesmen at first tried to minimize the incident, saying reporters should not dramatize it — even as authorities were contacting Britain and the United States to get emergency help.
The first annoucement that Nalchik was under control came less than three hours after militants launched coordinated attacks on police and security 
facilities. It was by Nikolai Lyapin, Kabardino-Balkaria’s deputy press minister.
“There is silence in the town. Calm pervades the government building,” he said, Itar-Tass reported. “Militants have not seized a single building or school.”
Technically, this may have been true because the fighters were not in control of the buildings they had invaded, but clashes at several locations were continuing. 
The “under control” assertion was repeated by Dmitry Kozak, the presidential envoy to the Southern Federal District, and then by Deputy Interior Minister Alexander Chekalin. 
Chekalin proclaimed that the siege would end within an hour — a full day before officials announced it was finally over. 
Chekalin also sidestepped questions on whether there were civilian casualties, saying, “I would have known if we had any.”
The Emergency Situations Ministry said Friday that 18 civilians were among the more than 100 dead. 
Kozak was the first official to state publicly that militants were holding hostages in the police building. But when asked about Kozak’s statement, regional Interior Ministry spokeswoman Marina Kyasova denied that there were hostages. 
On Friday, it became clear that at least 18 people were taken hostage — and some officials said that an unspecified number of children were among them. 
Other conflicting official statements also were pronounced Friday. Around noon, the republic’s prime minister, Gennady Gubin, announced that “all points of active resistance have been put down.” 
Some 90 minutes later, the regional president’s chief of staff, Oleg Shandirov, said militants remained holed up in the prison’s administration building. 
The delayed announcement that there were child hostages darkly resonated with last year’s seizure of the Beslan school. In that case, officials sharply understated the number of hostages for more than a day, before stating amid increasing complaints from local residents that more than 1,000 people were being held. 
What accounted for the conflicting statements in Nalchik could be just the confusion that naturally afflicts any outburst of violence. 
But critics of the government point to what they call an endemic lack of responsibility among authorities, especially regarding the conflict-torn North Caucasus region.

TITLE: Legal Spat Sheds Light On Kidnap
AUTHOR: By Stephen Boykewich
PUBLISHER: Staff Writer
TEXT: MOSCOW — A legal dispute stemming from the 2002 kidnapping of a Dutch aid worker in Dagestan is shedding light on how the ordeal ended, including courtroom testimony that the Federal Security Service guaranteed his release for a ransom of 1 million euros ($1.2 million).
The testimony came from the former Dutch Ambassador Tiddo Hofstee, one of the key witnesses in the case the Dutch Foreign Ministry has brought against the humanitarian organization Medecins Sans Frontieres, or Doctors Without Borders, in connection with the ransom.
Dutch doctor Arjan Erkel was working for MSF in Dagestan when he was kidnapped by three unknown gunmen in Makhachkala in August 2002. He was released in April 2004 after a 20-month-long diplomatic effort by the Dutch Foreign Ministry and a fierce press campaign by MSF — both of which accused the Russian government of inaction.
“We certainly were very critical of the Russian authorities because we wanted them to do far more than they were doing,” MSF president Rowan Gillies said by telephone. “At one point the case was closed for months; the investigator was put in jail and not replaced. Every week [Erkel] was in captivity, the greater the chance was of him dying.”
But until last week’s testimony in Geneva Civil Court, it was unclear how Erkel’s release had been secured.
Hofstee testified that he received a telephone call from a colonel in the Federal Security Service, or FSB, on April 8, 2004, during which he was told Erkel would be released if 1 million euros in cash were delivered to Dagestan within 24 hours, Kommersant reported. Hoftsee testified he also met an FSB colonel that day who told him the same.
After relaying the information to MSF, Hofstee secured the money and delivered it to Valentin Velichko, head of Veterans of Foreign Intelligence, an organization of former KGB and FSB agents available for hire that initially said no ransom had been paid. Velichko took a chartered plane to Dagestan on April 9, and Erkel was released on April 12.
“In the night, I was blindfolded and put in a car,” Erkel testified on Tuesday, according to comments published by Kommersant. “Then, in the mountains, I was put in another car. I was brought to a building, and when the blindfold was taken off, I saw that I was in the office of the local FSB branch.”
As of Sunday, the FSB had not responded to a request faxed earlier last week for comment on its role in the release.
Velichko, who was summoned to testify in Geneva, declined to appear before the court, saying he would answer questions only in written form.
The Dutch Foreign Ministry and MSF were at odds during the 20-month kidnapping, with MSF resorting to media pressure and the ministry preferring behind-the-scenes negotiations. After Erkel’s release, the tensions boiled over.
The ministry filed suit against the Swiss section of MSF in June 2004, claiming that it had a verbal agreement from the then-director of MSF’s Swiss branch, Thomas Linde, to refund the ransom money paid by Hofstee. Linde denied in court he had made the promise.
“Mr. Linde was in no position to make such a guarantee, as only the board of MSF could make that decision,” MSF spokesman Aymeric Peguillan said by telephone from Geneva. “What he said was that money should not be an obstacle and the matter would be discussed later.”

TITLE: Origin of Fake Books Sought in Ukraine
AUTHOR: By Peter Finn
TEXT: The Washington Post
KIEV — At open-air markets in Kiev this summer, devotees of Dan Brown, the best-selling author of “The Da Vinci Code,” came upon what looked like an unexpected treat, a sensational new novel exploring a deep Vatican secret.
Its title, “The First Merovingian,” referring to a Dark Ages European dynasty that according to myth descended from Jesus, hinted of a classic Brown story line. The book was written in response to a request that Pope John Paul II had made just before his death, a blurb on the jacket said. On the back of the attractively bound 511-page volume was a photo of Brown.
But when readers opened the hardcover book, they were sorely disappointed. A crude cut-and-paste job, it contained lengthy excerpts from histories of Christianity and the Inquisition interspersed with selections from a 14th-century anthology of short stories.
“This wasn’t an ‘honest’ pirate edition,” said Nikolai Naumenko, editor in chief at Brown’s Russian publisher, AST, which also publishes such American authors as John Grisham and Michael Connolly. “I cannot even describe it as a book. It’s trash.”
For years, Moscow publishers who dominate Russian-language publishing across the former Soviet Union have complained that their books were being illegally copied by a thriving underground industry in Ukraine. But this year, the pirates have gone one step further, patching together bogus works and attaching the names of well-known authors.
In the last year, these fakes have appeared in Ukrainian cities under the names of popular Russian authors such as Polina Dashkova, Darya Dontsova, Alexander Bushkov and Boris Akunin, according to publishers in Moscow.
“It’s a painful issue for me,” said Grigori Chkhartishvili, who, under the pen name Akunin, has written 11 historical crime novels featuring the detective Erast Fandorin and set in late tsarist Russia. Four of his books have been translated into English, and Akunin is gaining a large following in the West.
Now comes a counterfeit Akunin novel, “The Rook,” bound in almost exactly the same kind of black-and-white jacket as legitimate Akunin books.
“Just by looking, it’s very difficult to tell the difference between the fake one and a real one — until you start reading,” said Irina Bogat, general director of the Zakharov publishing house, which publishes Akunin in Russian. “When I first got a copy I was afraid it might be a good novel, but it’s an absolute fake. Terrible. The beginning has nothing to do with the end.”
Instead of the usual tsarist setting of a Fandorin novel, the action in “The Rook” takes place in present-day Russia and features a descendant of Fandorin as a main character.
Chkhartishvili said in an interview that a Ukrainian journalist told him that large parts of the novel appear to be lifted from an obscure Ukrainian novel published six or seven years ago. It merely substitutes Fandorin’s descendant for one of the original characters.
“Some readers were saying that Akunin has no shame and he’ll write anything for money,” Chkhartishvili said. “I couldn’t bring myself to read it ...  My wife read it. It was just awful. There were also pornographic episodes which I would never write.”
The books bearing the names of Brown and Akunin cite Pheonixcher Press as the publisher, with an address in St. Petersburg. But when the writers’ publishers investigated, they found that it was the location of a student hostel and that there was no such publishing house in either Russia or Ukraine.
They believe, however, that the books are being printed in Ukraine.
There have been similar problems in China with fake Harry Potter novels. In 2002, a Chinese publishing house issued  “Harry Potter and the Leopard-Walk-up-to-Dragon,” which was in fact a translation of JRR Tolkien’s “The Hobbit” with Potter and some other characters added to the mix. The publishers of the real Potter series eventually obtained an injunction stopping distribution.
Publishers here say the Ukrainian authorities are doing nothing to stop the illicit trade, despite requests, and they note bitterly that most if not all printing presses in Ukraine are state-owned.
“As Sherlock Holmes would say, this is a one-pipe mystery,” said Chkhartishvili. “In the time it would take to smoke one pipe, you could solve it. You just trace the books back to the source.”

TITLE: Indian Air Force Mortar Lands Close to Russian Defense Minister
PUBLISHER: Reuters
TEXT: MOSCOW — An Indian mortar landed just meters from Defense Minister Sergei Ivanov and his Indian counterpart while they watched joint military exercises Sunday in western India. 
The mortar, parachuted from an Indian aircraft, was shown on Russian television as it approached the ground near the platform where Ivanov and Indian Defense Minister Pranab Mukherjee were sitting. 
Journalists and soldiers were shown running for cover, but Ivanov, a former spy and close friend of President Vladimir Putin, and Mukherjee remained seated. 
Ivanov later brushed off the incident and praised the Indian Air Force for such accuracy. 
“Today an artillery system of India’s airborne forces landed right between two sand dunes, which is the ideal concealment from the enemy. So I raise my hat to Indian pilots,” Ivanov said. 
“Nothing terrible happened, we all saw that, and we all had sufficient time to react. Thank God we are not blind.”

TITLE: Grocery Shop Barred From Change
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: The fate of the Yeliseyevsky shop, an elite property on the Nevsky Prospekt, was left uncertain as the city government slammed attempts to convert the space into anything other than a grocery store.
Last Friday the authorities effectively barred a move by the current Yeliseyevsky tenant, Parnas holding, to sell the rights to rent the space to perfume chain Arbat Prestizh.
The Moscow-based chain had agreed in June to buy shares in Yeliseyevsky Magazin, a company registered as having a 49-year tenant agreement with the city authorities to rent the main hall and the front facade of the Yeliseyevsky building.
However, chairman of the St. Petersburg committee for state property management, Igor Metelsky, said Friday that the “selling of Yeliseyevsky Magazin shares is totally out of the question,” Kommersant business daily reported Monday.
“Yeliseyevsky will remain a grocery shop,” Tatiana Prosvirina, press secretary of committee for state property management, said Monday in a telephone interview.
Prosvirina said that the central 900-meter hall, which has an entrance onto Nevsky Prospekt, is considered to be “an architectural monument of federal importance.”
Should a tenant try to change the original function of the property — grocery trade — Metelsky said the city would break off the long-term rent agreement.
Yeliseyevsky Magazin, being in trust management by Parnas holding, initially rented a 3,250-square meter space in the Yeliseyevsky building and later bought it out, with the exception of the central hall.
Although Parnas could arrange the space it owns in the property in any way, the city has barred it from altering anything in the rented area, Prosvirina said.
The city’s stance will hardly affect Arbat Prestizh’s expansion plans. At the moment the company has three shops in St. Petersburg with a fourth opening this month, said Svetlana Ivanova, head of the advertisement department at Arbat Prestizh.
Earlier the chain announced plans to open 10 shops in St. Petersburg.
Parnas, on the contrary, faces difficulties in selling its non-core business.
Yury Shcherbakov, vice-president of Parnas, said Monday that no grocery chain could operate efficiently at Nevsky Prospekt due to high the rent rates and a low average customer check: 70 rubles ($2.5).
The last two food retailers on the Nevsky — a bakery and a fish shop — folded in the last few years, Shcherbakov said.
“Closing Yeliseyevsky is difficult in the current situation, when the city governor personally has interfered in the conflict,” Shcherbakov said.
Experts agreed with the statement only in part.
“Maintaining and managing a shop in a building of historical importance in the city center is more expensive than one in the suburbs. In the central streets of Moscow there are practically no grocery shops,” said Alexander Bragin, leader of consumer business group at Deloitte.
“All centrally located shops aim to operate in the premium and upper middle segment,” he said, naming French elite grocery chain Fushon and Globus Gurme outlets as the few exceptions.
Selling Yeliseyevsky to a grocery chain would satisfy both the city authorities and Parnas. Experts saw this as feasible.
Alexei Krivoshapko, a consumer goods analyst with UFG, said supermarket chains Sedmoi Kontinent, Perekryostok, and Ramstore among others could be interested in buying shop space in the city center.
However, he considered the shop overpriced at $10 million, a figure quoted in the local media.
“For a food retailer, $5 million to $6 million is a proper price for a 900 square meter shop,” he said.
Bragin agreed that “potentially Moscow grocery chains could be interested in Yeliseyevsky building, but they need the proof of the local citizens’ purchasing power and customer flows.”
For Yeliseyevsky, this could be the main stumbling block, as Shcherbakov said it is unlikely that the space could be transformable into an elite grocery.
The shop lacks parking place and despite occupying a large area, its interior is organized inefficiently, he said. Parnas will continue to discuss the future of shop with the city authorities, Shcherbakov said.

TITLE: Stockmann Plan $132M Department Store in City
AUTHOR: By Yevgenya Ivanova
PUBLISHER: Staff Writer
TEXT: Finnish retailer Stockman Oyj will invest up to 110 million euros ($132 million) in construction of a major department store in the center of St. Petersburg, the company said Monday.
The company signed an agreement with the city government last week to build a department store and retail center on Nevsky Prospekt, which will open in 2008, the committee for economic development, industrial policy and trade reported on its web site.
Stockmann’s multistory retail complex will take up at least 45,000 square meters and feature among anchor tenants a full-scale Stockmann department store, the Finnish firm said.
“Stockmann wants to build a modern, world-class shopping center where its own department store will be an anchor tenant, and lease the rest of the premises to other potential operators,” Jussi Kuutsa, Stockmann’s director of international operations, said Monday in an e-mail.
Kuutsa said the mall’s location — planned to be beside the underground station on Ploshchad Vosstaniya and in the immediate vicinity of the Moscovsky railway station — was picked for its large space, allowing further expansion. It also allows for decent parking facilities, she said.
Stockmann has operated in St. Petersburg since 1993 and has long been on the lookout for a suitable department store location in the city. In 2003, the Finns had to cancel a preliminary lease agreement on the Nevsky site due to difficulties with arranging financing.
In the first year of its department store’s operations, Stockmann have set a 50 million euros sales target. The Finnish firm estimates its St. Petersburg sales to develop strongly, in step with a growth in disposable income, the company said.
Analysts saw the sales target as realistic, given the fact that the local retail market in the middle to high-class segment is still undeveloped.
Sergei Fedeyev, an independent retail market analyst based in St. Petersburg, said Stockmann has virtually no competitors in its segment since the city does not yet have a single western-style department store.
“If they are to repeat their Finland and Moscow experience in St. Petersburg, the project will be successful. At the moment there is no one [in St. Petersburg] to tailor to their client,” Fedeyev said.
Kim Gorschelnik, an analyst with FIM Securities brokerage in Finland which follows Stockmann’s business, said the St. Petersburg project was quite a big investment for the company. He expressed doubts regarding Stockmann’s decision to take the operations of the shopping center in its own hands.
“It does not seem likely that Stockmann will manage the shopping center in the long run,” Gorschelnik said Monday in an email. “Finding partners should not be difficult when the project moves ahead,” he added.

TITLE: Yukos to Face Further Sales
PUBLISHER: Combined Reports
TEXT: The remaining assets of the shattered Yukos oil company could be sold off to repay the more than $7 billion in back taxes that it still owes, the court marshals service said Friday. 
Sergei Sazanov, deputy head of the Federal Court Marshals Service, said last week that Yukos had so far paid $14 billion of its bills, some of which still must be upheld by a court before they can be collected.
“A decision might be made to sell its assets,” Sazanov said. While a trickle of payments continued to come from Yukos — whose Russian assets and accounts are frozen by multiple court orders — these were “comparatively insignificant” Sazanov said. 
Sazanov said Yukos owed about 200 billion rubles ($7.4 billion), including $475 million to a group of foreign banks, Interfax reported.
If the situation does not change, the process of selling off assets could be started, he said, noting that this could take three months.
(AP, Bloomberg)

TITLE: Foreign Lenders Surf Wave of Syndicate Loans
AUTHOR: By Tom Miles
PUBLISHER: Reuters
TEXT: MOSCOW — Foreign lenders are queuing to finance a boom in syndicated borrowing by Russian firms, with no shortage of takers for several large deals in the energy sector in particular, bankers said Monday.
“2005 has in every regard been a mega-year for financing in Russia,” Steven Fischer, head of corporate finance at Citigroup in Russia, told a conference in Moscow. In the biggest deal, gas giant Gazprom has agreed to borrow $13.1 billion from a consortium of Western banks to fund its takeover of oil firm Sibneft . 
The six banks — ABN AMRO, Dresdner Kleinwort Wasserstein, Citigroup, Morgan Stanley, Goldman Sachs and Credit Suisse — will take the debt onto their balance sheets except for $2.5 billion, which they will start syndicating soon. 
One banker said a roadshow could begin within the next few days, but a source close to the situation said demand was so strong that there may be no need to drum up business. 
The banks might simply sell the debt, divided into two equal tranches with maturities of 3 years and 5 years, to those who have already shown interest, offering tickets of varying size in a one-stage syndication. 
“I don’t expect it to be a hard sell,” the source said. 
One banking source said he expected the ticket size to be “$100 million plus,” with up to about 20 banks in the syndicate. 
Of the remaining $10.6 billion debt, Gazprom will pay back $5 billion by the end of the year and the rest within 18 months. 
The apparent rush to buy up Gazprom’s debt follows similar interest in a $7.5 billion loan raised by Rosneftegaz, a holding company that the Russian state is using to buy back shares of Gazprom and partially privatize state oil firm Rosneft. 
A banking source said that deal was well oversubscribed and would close soon, with banks rushing for tranches of debt that came in tickets of $500 million, $300 million and $150 million. 
Although the biggest deals were in oil and gas, other sectors were also taking advantage of the appetite for Russian debt, especially in quasi-sovereign borrowers such as Russian State Railways (RZD). 
Telecoms, transport and power firms are also widely tipped to keep the supply of loans flowing. 
However, some bankers warn investors against irrational exuberance and say Russia’s mix of state intervention and corruption can make for a difficult environment, while a lack of borrowers defaulting makes it hard to predict how a default would affect the market.

TITLE: Airbus to Lift Production Outsourcing in Russia
PUBLISHER: Reuters
TEXT: FRANKFURT — European planemaker Airbus plans to outsource more of its aircraft production abroad to help it achieve higher growth, Airbus Chief Executive Gustav Humbert was quoted as saying in German newspapers on Monday.
Humbert plans to outsource up to 70 percent of production and may give contracts to countries such as China, Russia and India to expand in new markets with potential for future orders, German daily Handelsblatt reported.
“A 30 to 33 percent share [of the value chain] suffices, when we still hold the core competencies in our own hands,” Humbert said on the weekend in Toulouse, France.
The group would be following the strategy of rival Boeing, which is outsourcing 30 percent of the production of its new 787 Dreamliner to Japan — a market where Airbus has so far failed to gain a significant foothold. 
The outsourcing has helped Boeing secure nearly $10 billion in orders for the plane from Japanese carriers. Japan also assumed via government loans a portion of the roughly $7 billion in development costs for the 787.
Airbus intends to outsource about 5 percent of the production of its A350 aircraft, which will compete with the 787, to China, and roughly 3 percent to Russia, Humbert said. 
The planemaker is 80 percent owned by European space and defense giant EADS and a fifth owned by Britain’s BAE Systems.
Overall, Airbus expects to win between 700 and about 800 aircraft orders this year, the Financial Times Deutschland said Monday, citing comments made by management in Toulouse.
Production of its flagship A380 superjumbo, due to come into service next year, was practically booked out until 2010.
Humbert expects earnings to improve this year, to be around 10 percent, as the group benefits from an industry-wide renewal of their fleets to combat increasing fuel prices.

TITLE: World Economic Forum Gets Cosy in Moscow
AUTHOR: By Alex Nicholson
PUBLISHER: The Associated Press
TEXT: MOSCOW — International investors and politicians turned a Moscow hotel into a mini-Davos on Monday as the World Economic Forum began discussion sessions on how to tackle rampant corruption and steer the economy away from a dependence on oil exports. 
The two-day gathering is the first World Economic Forum conference to be held in Russia since the dramatic gunpoint arrest of oil tycoon Mikhail Khodorkovsky in October 2003. 
Khodorkovsky’s jailing and the partial renationalization of his oil company Yukos were seen as a vendetta by President Vladimir Putin’s Kremlin against a powerful political rival. 
Two years after Khodorkovsky’s arrest, investor sentiment is on the mend, the stock market has rallied and the national finances are rosy. But economists warn this is entirely thanks to the high price of oil on world markets rather than government policies. 
Analysts were at odds Monday about whether Russia was likely to develop into a well-integrated economy. 
Ariel Cohen of the U.S.-based Heritage Foundation spoke of the prospect of Russia relying on oil as the linchpin of its economy and becoming “little more than a raw material appendage for China,” where a wide array of manufacturing is being developed. 
“This is indeed the worst-case scenario with high levels of corruption ... I think this is a very likely scenario,” said Cohen. 
Simon Commander, director of the London Business School’s Center for Medium and Emerging Markets, envisaged “a stable but paternalistic regime with remarkably little political competition,” but with the potential for more democratic development. 
The whereabouts of Khodorkovsky, who was a panelist at the World Economic Forum’s last meeting in Russia just weeks before his arrest, are unknown. Since his transfer last week from a Moscow jail to a regional penal colony, his family and lawyers have yet to receive official notification of his location. 
The main World Economic Forum is is held in Davos, Switzerland.

TITLE: Sodbiznesbank Owner Shot
AUTHOR: By Valeria Korchagina
PUBLISHER: Staff Writer
TEXT: MOSCOW — The scandal-tainted owner of the now-defunct Sodbiznesbank was shot dead Sunday as he was commuting in a car outside Moscow, Interfax reported. His wife and 15-year-old daughter also died, while his 7-year-old daughter was injured.
The collapse of Alexander Slesarev’s Sodbiznesbank in May 2004 helped trigger a banking mini-crisis during the summer of 2004. 
The bank is also known for making the single largest corporate donation to President Vladimir Putin’s re-election campaign last year. After the bank collapsed, the Kremlin said the donation of 1 million rubles ($35,000) had been refused and returned to the bank.
Slesarev and his wife, Natalya, were traveling with their two daughters and other relatives in two cars on the Moscow-Don Highway southeast of Moscow on Sunday morning when a third car pulled up alongside and sprayed the two vehicles with automatic gunfire, police said.
Police sped to the scene after receiving an anonymous telephone call that the bullet-riddled cars, a Mercedes and a Mitsubishi Pajero, were sitting on the side of the road, Interfax reported.
Slesarev and his wife were pronounced dead at the scene, while his older daughter, Yelizaveta, died of injuries on the way to the hospital.
It was not clear how many other relatives were in the two cars or what the extent of their injuries was, if any.
Police found an abandoned, burned-out Audi A8 with a Kalashnikov assault rifle and a Makarov pistol not far from the two cars, Interfax reported.
Police investigators immediately linked the attack to Sodbiznesbank, which Slesarev acquired in 2001. 
“The murders could have been connected with the revocation of the bank’s license and a failure to fulfill the bank’s obligations,” an unidentified police official told Interfax.
The Central Bank recalled the bank’s license on May 12, 2004, accusing it of padding its books with fictitious capital and processing ransom cash.

TITLE: RuNet Lures In Capital Clients
AUTHOR: By Maria Levitov
PUBLISHER: Staff Writer
TEXT: MOSCOW — The long, cold winter is coming, but there is no need for panic: The Russian Internet is making trips outdoors less necessary every year. 
In Moscow virtually anything can now be ordered online and delivered straight to your door, provided your door is inside the Moscow Ring Road.
From $500 packs of sturgeon caviar to $1 books like “Winter — Not A Time for Illness,” millions of products can now be bought on Russian web sites. Nevertheless, paying over the Internet remains tricky.
While online retail turnover is set to reach $850 million by the end of the year — nearly double last year’s figure — cash is still the most popular payment option, Pavel Korotov, general director of the Internet consulting company Oborot.ru, said at a conference last week.
The Moscow-based supermarket chain Sedmoi Kontinent (http:// dostavka.7cont.ru), Setbook.ru online bookstore, Ozon.ru and numerous other retailers selling merchandise over the Internet accept cash upon delivery.
Since the end of the 1990s, however, consumers have also been able to pay for many products with virtual money. 
CyberPlat, E-Port and other virtual payments systems have developed along with mobile telecommunications in Russia. While originally focused on helping mobile operators manage subscriber payments, virtual money systems currently process more than $5 billion annually, said Anton Nikolsky, the managing director of the National Association of Electronic Commerce Participants, or NAUET.
Russians and foreigners alike can create accounts with these providers to pay for products at online shops, as well as utilities and cell phone bills. Yandex.Dengi and WebMoney are frequently used by individuals for Internet shopping.
However, learning the ins and outs of how to use these systems can take more time than consumers might potentially save by buying products online.
Each virtual money scheme is unique, but generally consumers are required to fill out an exhaustive questionnaire to register for the service. The actual payment platforms work through a web interface or must be downloaded as a separate program onto the individual’s computer. 
Commission fees for converting rubles into virtual money and transferring that money onto and off the Internet stay well below 10 percent. However, consumers must buy special cards to put money into their online accounts, use a bank transfer or an ATM, or employ another, even more cumbersome money conversion method. 
“People in the regions, without access to stores with the latest books or music are, mainly, the ones using these [virtual money] systems to shop online,” NAUET’s Nikolsky said.
Each Internet retailer does not accept all types of virtual currency. While some can process both WebMoney and Yandex.Dengi, for example, it helps to find out which systems are used by the retailer of your choice before pouring lots of money into a particular provider.
Not everyone, however, is interested in doing the legwork. 
Vladimir Fridman, 30, an IT professional working for Oracle’s Moscow office, does not use virtual money systems because they are “too much of a pain.” Fridman said he avoided online shopping on Russian sites, unless it was a big-name company that accepts credit cards.
“Credit cards are actively displacing all other payment methods except cash,” said Andrei Travin, spokesman for Internet research company SpyLog.
A growing number of Russians are beginning to rely on plastic. Visa said its card numbers grew by nearly 6 million over 2004, to exceed 11.8 million cards in Russia by the end of the year.
Nevertheless, the threat of fraud is delaying the credit card boom from revolutionizing the country’s e-commerce. 
“There is one factor — it’s fear,” NAUET’s Nikolsky said.
An international crackdown on peddlers of credit card information and other Internet crooks has prompted the illegal activities to shift to Russian-language web sites, said Brian Nagel, director of investigations at the U.S. Secret Service, Reuters reported last week.
However, some analysts also say that the Internet is a global phenomenon, so Russia is no more prone to online thieves than any other country.
“I am not afraid to pay with a credit card, if [the online shop] is a well-known brand,” Fridman said.
Web sites like Bolshoi.ru, which sells tickets to shows at the Bolshoi Theater, and Ozon.ru, one of Russia’s oldest online retailers and often compared to Amazon.com, process credit card payments online.
Credit card payments account for approximately 15 percent of sales at Ozon.ru, said Leonid Boguslavsky, chairman of Ru-Net Holdings, which invested in Ozon.ru two years after the site opened in 1998. However, only about one-third of these credit card payments are made in Russia, while the rest come from customers abroad, he said.
“When people get more comfortable with credit cards in Russia, they will start using them more often,” he said.
Lack of convenience is another factor that keeps some individuals from paying with credit cards. Many Russian sites require credit card information to be faxed in. 
Travel booking sites Infinity.ru and Avantix.ru, for example, accept credit card payments but do not process payments online.
“Technically, faxing credit card information is a more secure payment method,” said Pyotr Kapitsa, director of electronic sales at Avantix.ru. 
Avantix.ru plans to launch a new, fully web-based credit card payment system later this month, but the company will also accept card information by fax for those who feel more comfortable bypassing the Internet.

TITLE: Telecom Operators Tell Clients Geography Is Key
TEXT: How much does it cost for a company to get a telephone and Internet connection for their office in St. Petersburg? Under the guise of an inquiring businessman, we contacted the sales departments of the city’s leading alternative telecommunications operators to put forward some practical questions. Special to The St. Petersburg Times, Mikhail Lerman reports.
Offers from alternative line operator have always beaten those of fixed-line monopolies. However, though in recent years special offers from alternative operators on the St. Petersburg market have sprouted like mushrooms after the rain, it seems the key word in choosing your provider is location.
If the building in which your company resides has a Metrocom hub, the alternative operator will be happy to set up your connection. Otherwise, the potential client needs to look elsewhere.
Some operators offer to solve the problem by installing a special radio antenna on the office roof. The option in not without risks, however, since it requires the operator to come to an agreement with the building or business center owner, and in the long-run that often results in indirect costs such as higher rents.
For a standard telephone line Metrocom charges $170 for the installation and between $25 and $55 monthly subscription. Its cheapest Internet tariff is $41 a month for which the client receives 500 megabites (Mb) of traffic. How long it would take to get a line installed the company would not specify.
Telco giant Golden Telecom offers to connect an office for $200 and then set the monthly fee at $100, which would cover the telephone line rental and the Internet. Later, the salesman from Golden Telecom added that the tariff is based on a traffic volume of 512 Mb; for every megabite used on top of this the subscriber is charged 40 cents.
Golden Telecom promised to install the line within three weeks of receiving an order. As an alternative, the operator also offers quick Internet access with an ADSL line. This kind of broadband Internet, however, is more targeted at the private sector, or “very small business,” and the tariffs are no cheaper than those of Web Plus.
St. Petersburg-based Master IT installs a telephone line for 3000 rubles ($107) and offers two tariffs to choose from: Mestny (Local) and Delovoi (Business). The first tariff has no limitations on local calls and sets a flat monthly fee of 1,000 rubles. The second tariff obliges you to pay for local calls as well as national calls, but the flat rate is considerably lower — 300 rubles.
The company has a range of offers for the Internet. All promise free connection after the operator has performed a technical assessment of the building and the location. At 3,999 rubles ($142), the operator’s cheapest tariff allows 2 gigabites (Gb) of traffic. Above that, subscribers pay 1.6 rubles per Mb used.
Lanck Telecom asks $300 for a standard line connection. Other options include the faster fiber optic cables and radio transmission, but the prices shoot up. Lanck charges $120 for the allotting of each telephone number. The monthly line rental fee varies between $36 and $66. For 3 Gb of Internet traffic, running at 256 kilobites (Kb) a second, the client will pay $180. Hooking up to the web through Lanck takes about a month.
Peterstar’s sales office presented several options. Peterstar’s most expensive, but most flexible tariff sets connections rate at 7,800 rubles ($280) and a monthly line rental at 1,500 rubles ($53). Connection and registration takes about two weeks.
Peterstar’s spokeswoman said the firm had about 10,000 business clients in the city, a 70 percent market share.
A larger company may also take a look at the offer from Liniya 1, a subsidiary of PTS (St. Petersburg’s fixed-line provider). Liniya 1 offers national calls and 14 Gb of Internet traffic at 2 Mb per second for $900 a month. The provider gives clients 15 telephone channels.

TITLE: The Great (Pipeline) Game
AUTHOR: By Vladimir Socor
TEXT: ALMATY, Kazakhstan — The rapidly changing nation of Kazakhstan, and its despotic neighbor Turkmenistan, can help the West — in particular Europe — reduce its dependence on Middle Eastern and Russian oil and gas. To achieve that goal, these two eastern Caspian countries must be linked by pipelines to Europe, via the South Caucasus and Turkey.
Yet, at a conference of the West’s leading oil and gas companies here this week, that strategic issue is hardly a topic of discussion. These ¸rms have found and are extracting the oil and gas from these countries, while Russia holds an as yet unchallenged monopoly on the transit routes to consumer countries.
This has no precedent and no parallel in the world of energy and geopolitics. Russia, the world’s second-largest producer and exporter of oil (behind only Saudi Arabia), and global No. 1 for gas, absorbs the oil and gas produced in the eastern Caspian basin. As a result, Europe — the main potential consumer of Caspian energy — is sliding into a dual dependence on Russian supplies as well as Russian-mediated supplies from this region.
Such dependence on a single, powerful transit country is dangerous to the producer countries as well. Three of the world’s richest hydrocarbon ¸elds are in Kazakhstan. After the onshore Tengiz and Karachaganak supergiant ¸elds came on stream, the Kashagan ¸eld became the biggest offshore oil discovery anywhere in the world in the last 30 years, and is due on stream before the end of this decade. Even without taking into account possible new discoveries on Kazakhstan’s continental shelf, oil output is projected to increase from some 50 million tons annually at present to at least 150 million tons per year by 2015, on the strength of Western technology and capital investment. The export routes out of Kashagan will be chosen soon. That choice can either reinforce or break Russia’s monopoly on the transit of Kazakhstan’s oil and gas to international markets.
Energy and Mineral Resources Minister Vladimir Shkolnik, a nuclear physicist by profession, has overseen oil and gas development in Kazakhstan in recent years. He is well received in Washington and Houston. As Mr. Shkolnik explained to me here, some 20 million tons of oil annually from the anticipated output of Kashagan can be exported by tankers across the Caspian Sea to Baku and then pumped into the pipeline that carries Azerbaijani oil through Georgia to Turkey’s Mediterranean port of Ceyhan, from where it goes to the world market.
Apart from these 20 million tons, however, international oil companies and Kazakhstan expect to continue using Russian pipelines to export the lion’s share of oil from the country between now and 2015 and even beyond. The line from Tengiz to Russia’s Black Sea port of Novorossiisk is projected to increase its capacity from 28-30 million tons annually at present to 60 million tons, as soon as differences with the Russian government over tariffs and taxes are resolved. Karachaganak’s gas condensate output is scheduled to be exported partly to Russia’s Orenburg re¸nery and partly through the pipeline to Novorossiisk. And the line from Atyrau on Kazakhstan’s Caspian coast to Russia’s oil-re¸ning center in Samara, on the Volga, is due for a capacity increase from 15 million tons annually at present to 25 million tons annually before the end of this decade.
Whether these intentions are ful¸lled or not, Kashagan can make the difference in terms of opening alternative export routes out of Kazakhstan. The optimal solution would be a trans-Caspian pipeline to carry the bulk of Kashagan’s projected annual output of 50 million tons to Baku. While part of that volume could be pumped into the Baku-Tbilisi-Ceyhan pipeline, another part could be routed to Georgia’s Black Sea coast for shipment to Europe. For example, oil from Kazakhstan alone can ensure the viability of Ukraine’s Odessa-Brody pipeline and its linkup through Poland with EU oil markets.
Uzakbay Karabalin, chairman of Kazakhstan’s state oil and gas company Kazmunaigaz, told me that Presidents Nursultan Nazarbayev of Kazakhstan and Ilham Aliev of Azerbaijan plan to sign a framework agreement on trans-Caspian shipments of oil from Kazakhstan to Baku before the end of this year. At this point, the project envisages a tanker line — ¸ve tankers of the 60,000-ton class are to be built — to shuttle across the Caspian Sea, carrying up to 20 million tons of oil annually westward. That, however, is less than half of Kashagan’s anticipated output. For annual volumes above 20 million tons, a trans-Caspian pipeline becomes the most cost-effective mode of transport, according to projections in both Kazakhstan and Azerbaijan.
However, Russia and Iran have teamed up to oppose the construction of such a pipeline, just as they’ve opposed the American-initiated project of a trans-Caspian gas pipeline from Turkmenistan, whose gas export potential may almost equal Russia’s current export volume. In opposition to both of those projects, Moscow and Tehran invoke ecological arguments for public consumption. Behind that screen, Moscow resorts to political arm-twisting in order to retain a monopoly on energy transit from the eastern Caspian basin or at least the lion’s share of that transit.
It is high time, before it becomes past time, for the EU to develop a policy for direct access to eastern Caspian oil and gas. Such access is also a shared economic and strategic interest of the Euro-Atlantic community, as Washington realized long ago. The U.S.-backed East-West Caspian Energy Corridor has taken shape thus far only as a rump based in Azerbaijan.
The producer, transit and consumer countries, from the Caspian Sea to the South Caucasus to Ukraine, Poland and other EU member countries aware of the stakes involved, might together focus the collective mind of Brussels on the eastern Caspian basin.

Vladimir Socor is a senior fellow of the Washington-based Jamestown Foundation, publishers of the Eurasia Daily Monitor. This comment first appeared in the Wall Street Journal Europe.

TITLE: The Customs Heaven Is Open. But Where’s the Door?
AUTHOR: By Vilgelmina Shavshina and Natalya Nikolayeva
TEXT: What would you say if the government offered you exemption from value added tax, or VAT, and customs duties on certain imported materials? The materials would come into Russia, get processed, then leave the country without the local tax authorities asking for a cent. Sounds too good to be true?
The majority of companies which process imported materials and subsequently export finished goods from the territory of Russia are interested in what is known as the “processing on customs territory” regime. At first glance, it seems to be rather favorable from a taxation standpoint. 
This regime exempts producers from payment of import customs duties and VAT on materials imported to Russia for processing purposes — provided that processed goods are subsequently exported from the territory of the Russian Federation. In the majority of cases the goods are also exempt from export customs duties.
Unfortunately, in practice the tax consequences of processing are not so rosy. The idea of processing implies a zero export VAT rate in addition to exemption from customs duties and import VAT. Only in such circumstances does it seem lucrative. However, notwithstanding the fact that the current edition of the Tax Code includes processing on customs territory in a list of services taxed at zero VAT rate, this clause does not work in practice.
That happens because, literally, it is stated in the Tax Code that for zero rate purposes processing services should relate to goods which are shipped from the territory of Russia in the export customs regime. This leads to a mismatch with the Customs Code under which export customs regime is applicable only to Russian goods while processed goods are considered, for customs purposes, to be foreign. In practice this results in an impossibility to fulfill conditions required for the confirmation of the zero VAT rate.
Recent changes to the Tax Code (which will come into effect as of January 1, 2006) were aimed to resolve this problem. However, an amendment in the edition which broke the link between zero VAT rate and the removal of processed goods in export customs regime was excluded from the agenda of the general session of the Sate Duma and therefore was not even debated in parliament.
As a result, the literal reading of the new edition of the Tax Code again leads to the situation where zero VAT rate may not be applied to services (including processing on customs territory) which relate to goods shipped from the territory of Russia in any regime other than the export one.
Could this be a simple mistake? According to information received from the tax sub-committee of the Duma’s budget and tax committee, the wording of the new edition of the Tax Code was adopted on purpose. This confirms that a technical barrier in the application of zero VAT rate for processing services is treated by the state authorities as an intentional restriction, rather than as a formal error.
The position of the tax authorities on this matter has not yet been made public. In absence of official clarification from the tax and customs representatives, a risk that the authorities will argue the application of zero VAT rate to processing on customs territory still exists. In such circumstances only a judicial precedent may settle the issue. 
The draft law aimed at resolving the problem is planned for consideration in the spring session of the Duma. By that time producers-exporters have to make their decision whether to take the risk and benefit from tax advantages of processing on customs territory by attempting to confirm a zero VAT rate (most likely in a court) or to charge 18 percent output VAT on the total amount of processing services.
Alternatively, exporting companies may choose low-risk but usually more expensive ways of production, which implies import of raw materials with subsequent export of finished goods.

Vilgelmina Shavshina is the head of customs practice and Natalya Nikolayeva an associate at DLA Piper Rudnick Gray Cary in St. Petersburg. They contributed this comment to The St. Petersburg Times.

TITLE: CenterTelecom Back in Black With H1 Results
PUBLISHER: Reuters
TEXT: MOSCOW — Russia’s regional telecoms company CenterTelecom reported a 32 million ruble ($1.12 million) first-half net profit on Monday after a full-year 2004 loss of 918 million rubles.
This is the first time the company, which serves central Russia, has reported half-year figures to International Accounting Standards, so figures for the first half of 2004 were not available.
CenterTelecom said revenues stood at 13.59 billion rubles, compared with 26.05 billion rubles for the whole of 2004. 
Earnings before interest, taxation, depreciation and amortization (EBITDA) were 3.78 billion rubles, against 5.49 billion rubles for the whole year. EBITDA margin, an indicator of a company’s efficiency, rose to 28 percent from 21 percent. 
“We see CenterTelecom’s strategy chiefly in maintaining its competitive edge by keeping its share of traditional services and strong development of high value-added services,” General Director Ruben Amaryan said in the statement. 
CenterTelecom is mainly a provider of fixed-line services, prices for which are set by the government.
It is now pushing forward with broadband connection services where average revenues per user stand at $50-70, compared with a figure in the low teens in the mobile sector. 
CenterTelecom is one of seven regional telecoms firms that are part-owned by national telecoms holding company Svyazinvest, which the government plans to privatize.
The market hopes that the winner of the privatization auction will provide cash and expertise for the company, which competes in a market where fixed-line penetration is far lower than mobile services penetration.

TITLE: IN BRIEF
TEXT: Mechel Profit Down
MOSCOW (Bloomberg) — Metals and mining company Mechel said first-half profit fell 4.3 percent as steel prices peaked and then dropped.
Net income fell to $243.6 million, or $1.76 per American depositary receipts, from $254.4 million, Moscow-based Mechel said Monday in a statement. Revenue rose 33 percent to $2.14 billion.
“The second quarter of 2005 was a challenging time for us,” Chief Executive Vladimir Iorich said in the statement. However, we were able to react flexibly and adjust our production plans to the market environment.”

Polymetal in the Gold
MOSCOW (Bloomberg) — Polymetal, which produces more than three-quarters of the country’s silver, increased gold production in the first nine months of the year while silver output fell as ore grades declined.
Gold production rose 18 percent to 181,000 ounces while silver output fell 1.3 percent to 13.89 million ounces, Polymetal said in a statement Monday. 
Polymetal, based in the Baltic Sea port city of St. Petersburg, last year opened the Khakandzhinskoe gold and silver mine in the Far East.

VTB Names CFO
MOSCOW (Bloomberg) — Vneshtorgbank, Russia’s second- biggest bank, has hired Mobile TeleSystems’ Nikolai Tsekhomsky as chief financial officer before a planned sale of shares to the public, Interfax said.
Tsekhomsky, who has been finance chief of Eastern Europe’s largest mobile-phone company since 2002, will take up his new post next week, the news service cited Vneshtorgbank First Vice President Vasily Titov as saying.
Vneshtorgbank wants Tsekhomsky to oversee its initial public offering, Interfax said, citing unidentified bankers familiar with the situation.

2005 Grain Harvest
MOSCOW (Reuters) — The total area for this year’s grain harvest has been revised down to 42.8 million hectares from the previous 43.3 million hectares, the Agriculture Ministry said on Monday.
The total area sown with winter and spring grains for the 2005 crop was 44.39 million hectares, up from 43.44 in the previous season due to an increase in winter grain, mainly wheat and rye, and lower winter-kill losses.
Last year’s harvest area was 41.5 million hectares.
Russia officially estimates this year’s grain crop at or above last year’s 78 million tons by clean weight.

More Russian Stock
LONDON (Bloomberg) — Russia plans to let foreign-registered companies of Russian origin that sell shares abroad simultaneously list their stock as Russian depositary receipts at home, Vedomosti reported, citing Oleg Vyugin, the head of the securities market regulator.
About 75 percent of trading in Russian companies’ shares takes place in markets outside of the country, with companies citing low liquidity as the reason for selling shares abroad, Vedomosti reported.
Separately, a new draft bill requiring Russian companies to offer shares for sale in the local market before an initial public offering abroad may be approved by parliament this year, Vyugin said, according to the newspaper.

Zarubezhneft Deal
HANOI, Vietnam (Bloomberg) — Vietnam Oil & Gas, the state oil company, will sign an agreement Monday with a joint venture that includes Russia’s Zarubezhneft to build a $245 million gas pipeline, the Vietnam News Agency reported.
The Vietsovpetro joint-venture plans to construct the pipeline from offshore southern Vietnam to the Mekong Delta, the news agency reported, citing PetroVietnam, as the state-owned company is known.
The 325-kilometer pipeline, which would have annual capacity of 2 billion cubic meters of natural gas, would connect the PM3 oil and gas block to a village in Ca Mau province, the report said. The pipeline would run to a power and fertilizer complex in Ca Mau, Vietnam’s southernmost province.

Gold Plant Dusted
LONDON (Bloomberg) — Trans-Siberian Gold said a plan to build a gold-processing plant at its Veduga project in Russia was not viable because of a shortage of reserves and high power costs.
The company is looking at alternatives such as transporting gold concentrate from the project for processing at plants in the Urals, Kazakhstan and China, it said in a statement Monday.
The Veduga project would require more than $220 million to start production, according to a study by Norwegian-based Aker Kvaerner, making it nonviable, Trans-Siberian said.
Trans-Siberian operations manager Richard Watts will resign from the company at the end of October, the company added in Monday’s statement.

Billionaire In Steel Bid
MOSCOW (Bloomberg) — Billionaire Alisher Usmanov may join forces with Severstal and Smart Group to bid for Ukraine’s Kryvorizhstal, Kommersant said Monday, citing an unidentified source at Usmanov’s holding company, Metalloinvest.
Ukraine plans to sell 93 percent of Kryvorizhstal, its biggest steelmaker, in a $2 billion auction in Kiev on Oct. 24.
Severstal is Russia’s third-biggest steelmaker and Smart Group a Ukrainian steel and iron ore investment company.

Phone Stations Bombed
MOSCOW (Bloomberg) — Two bombs destroyed mobile phone base stations belonging to VimpelCom and MegaFon in Ingushetia, cutting service in the area, Interfax said, citing local Interior Ministry officials.
Both bombs detonated at about 4:30 a.m. local time and contained the equivalent of 2 kilograms of TNT, Interfax said. The transmission stations were located about 10 meters apart in the town of Yandare, the news service said.
An investigation is under way and there is no clear motive for the attacks, officials told the newswire. Three MegaFon stations have been attacked recently, Interfax said, without detailing the other two.

Kazakh to Guard Oil
LONDON (Bloomberg) — Kazakhstan approved changes to legislation that will let the authorities block sales in oil companies. The law may set back the sale of PetroKazakhstan for $4.2 billion to China National Petroleum Corp.
Kazakh President Nursultan Nazarbayev signed the law on Saturday, according to a statement posted on the president’s web site. The bill was approved by the Kazakh parliament on Wednesday, the European Press Center, which distributes information on behalf of the Kazakh government, said last week.
China National Petroleum, or CNPC, agreed on Aug. 22 to buy Calgary-based PetroKazakhstan.

TITLE: A Monarchist Solution for Russia
AUTHOR: By Alexei Bayer
TEXT: When former Soviet bloc countries shook off the one-party state and rejoined the community of nations, it seemed self-evident that they should all remain republics. Attempts in Bulgaria to restore a legitimate sovereign to the throne produced ironic sniggers in civilized quarters.
In Russia since the collapse of the Soviet Union, monarchist movements have never been anything but a fringe element, even if it has now been acknowledged that its liberal democracy has failed. Elections for governors have been abolished, and while the president and the State Duma are still elected, the process increasingly resembles Soviet-era rubber-stamping. Yet, for all the criticism of Vladimir Putin’s “power vertical,” there has never been any question about whether or not Russia should remain a republic.
Nevertheless, the restoration of a legitimate monarchy, with a sovereign drawn from one of the Romanov heirs, may hold out a solution to a variety of Russia’s problems. First and foremost, it is the question of identity that holds the key to Russia’s future. Post-communist Russia has always been an organic outgrowth of the Soviet system. Russia has never found a way to acknowledge and condemn the crimes committed by the Bolshevik regime, and it is unlikely that it will ever undergo any form of de-Stalinization. Reaching back to the monarchy, then, Russia could finally connect to its pre-communist history and turn the page on the tragedy of Bolshevism.
More importantly, ever since the October 1917 coup, Soviet rulers had trouble legitimizing their rule. Their justification was Marxist historical necessity, which quickly proved to be a sham. The legitimacy problem clearly lingers on. Today, it is a staple of official propaganda to contrast Putin’s strong, purposeful Russia with Boris Yeltsin’s chaos and drift.
Lack of legitimacy is the root of the 2008 succession problem. Having undermined liberal democracy, the Putin administration has deprived itself of the legitimacy of the ballot box. And, lacking legitimacy itself, it cannot bequeath it to a rightful heir. The next ruler will have to seek his own legitimacy — most likely, by heaping abuse on Putin and his cohorts.
A constitutional monarchy could provide the continuity that republican Russia has lacked for nearly a century. It could also be a solution for the succession issue. With United Russia dominating the Duma, there is no limit to how many terms a Prime Minister Putin could end up serving.
Today, advocating monarchy is a thankless task. Republics not only predominate among the 191 members of the United Nations, but the view that the state is better off when headed by an elected politician is probably the most widely shared political idea of our otherwise contentious age.
This state of affairs is fairly recent, however. Only a century ago, most states lived under some kind of hereditary rule. Republics were few and, except for tiny San Marino, fairly recent. British historian Edward Gibbon may have admired republican Rome, but contemporary republicans were regarded as dangerous radicals and subversives.
Not without reason, it turns out, since modern republics have a distinctly checkered record. Those in Latin America, established in the 1820s, are hardly an example to emulate. They were mostly ruled by dictators, military juntas and demagogues, attaining true democracy only in very recent years.
In Europe, the Republican Age dawned after World War I, and promptly provided overwhelming evidence that even so-called “civilized nations” do a poor job choosing their own leaders. Elections in communist Russia and Nazi Germany may not have been entirely free, but there can be little doubt that Stalin and Hitler enjoyed a clear mandate to rule. There may have been plenty of fatuous or cruel monarchs in history, but going back two millennia it is hard to find such homicidal monsters in power anywhere. Then, the young Republican Age produced two at the same time.
If anything, the 21st century promises to be even worse. The United States was the first modern republic and, to quote Abraham Lincoln, “the last, best hope of mankind.” America has been instrumental in spreading the ideas of democracy and republicanism around the world — as evidenced by a dozen variations on the Stars and Stripes motif among national flags.
History has known the occasional dud to occupy the White House, but never on the same scale of incompetence and detachment as now. Nor has America been so thoroughly despised around the world. Ironically, it is doubtful whether George W. Bush would have become president had his father not been one — a dynastic distinction he shares with other staunch republicans, such as North Korea’s Kim Jong Il, Syria’s Bashar Assad and Azerbaijan’s Ilham Aliyev.
True monarchies, by contrast, have had a rather praiseworthy run. The 19th century was dominated by constitutional monarchies and produced a long golden age of peace and prosperity. Modern constitutional monarchies in Europe are among the most enlightened and tolerant states in the world, and even in Africa, small monarchies Lesotho and Swaziland manage to do a bit better.
More to the point, after the death of Francisco Franco, Spain faced many of the same challenges as post-Soviet Russia. One of the generalissimo’s wisest acts was to restore monarchy upon his death. Under King Juan Carlos’ wise stewardship and moral authority, Spain has gone through the difficult process of reconciliation, democratization and integration into the West, overcoming the heritage of a bloody civil war, repression and isolation — something that Russia has yet to start.
Here is a telling difference. Only a miniscule proportion of people in Spain now sympathize with the aims of the attempted right-wing putsch against the king in 1981. In Russia, a recent opinion poll shows that a majority now fault Yeltsin for putting down the pro-communist parliamentary coup in 1993. 

Alexei Bayer is a writer for Vedomosti. He contributed this comment to The St. Petersburg Times.

TITLE: Half-Term Results
AUTHOR: By Vladimir Gryaznevich
TEXT: Last week marked the second anniversary of Valentina Matviyenko coming to power as the city’s governor — time for a half-time analysis, as it were.
For the first year of her rule, Matviyenko’s team was busy making promises. The second year was spent trying to make those promises a reality. The firsts results of that effort are now in. 
 Optimists pointed to the liberal beginnings at Smolny during Matviyenko’s first year. The pessimists maintained that little would change — chaotic papering over of cracks, corruption, the theft of budget resources and a wealth of empty pomp and ceremony, with much cutting of ribbons and handing out of medals and awards. 
Neither got it right. It turned out that Matviyenko simply doesn’t fit these bills.  Matviyenko is more akin to Yeltsin than Vladimir Yakovlev, her predecessor. In her actions, we can see a struggle between two well-matched elements in her character — the subconscious Soviet stereotypes and a conscious drive to fit in with the new realities. 
Matviyenko sticks to clearly defined liberal views in her declarations. Accordingly, the first major steps taken by her team were entirely liberal. During the course of any radical reform, however, the first steps always invoke powerful resistance from deeply ingrained legislation. 
In order to overcome the resistance of the naturally conservative environment in which reforms are attempted, you need specialized skills. But Matviyenko doesn’t possess these. Thus, the governor is forced to rely on her Soviet experience and all the stereotypes that go with it. Market reforms in Petersburg during their second phase, then, are skewed into administrative decisions that conflict with the principles that have been declared. Many of these decisions have been the subjects of my previous columns. 
An entirely liberal reform plan for the city’s transport system resulted in the monopoly of Passazhiravtotrans simply becoming further entrenched. The tendering system for the allocation of building plots was made too rigid to be applicable in all situations, and the number of exceptions for “targeted-use” began to multiply. As a result, Lukoil got 30 plots to build gas stations with no real tendering process having taken place, and as the plots were sold off cheaply, it was the city budget that bore the brunt of this “exception.” The allocation of 40 plots for the construction of tennis courts, on the other hands, smacks of the brazenly criminal. The reforms applied to the housing authorities ran up against the docility of the bulk of the population, resulting in shady tenders for the right to service housing (despite the legislation’s stipulation that the inhabitants should select the company). This all creates serious risks for businesses as, in accordance with the conditions of the tender, they must invest large sums in the repair of buildings — the inhabitants can get rid of the company before it’s had a chance to make its investment back. 
It would be wrong, however, to assume that all the liberal reforms in the city have come to nothing. After the failure of the first transport tender, Matviyenko initiated talks with transport firms, finding the time and energy to personally take part in them, and to the astonishment of many achieved a genuine result. This example allows us to hope that other reforms that have gone off track will be corrected and brought back into accordance with their original conception.  
And, to be fair, it should be noted that even Matviyenko’s Soviet skills can, at times, reap dividends. She’s had fantastic success at getting resources out of the federal government and Gazprom for city infrastructure projects — for the completion of the ring road and the dam, for the building of a new shipping terminal, for a program for new roads, for a tunnel under the Neva, for the reconstruction of boilers on the Petrograd Side, and so on. Using her political influence in the Kremlin, Matviyenko has managed to get strategically important projects underway, such as the building of the Toyota factory and the Chinese Baltic Pearl project. Matviyenko’s political talent as a skilled negotiator has also played a key role in bringing us Toyota, Elcoteq, Electrolux, and Bosch und Siemens, as well as new projects from Stockmann Oyj Abp, Pepsi, and Knauf. Furthermore, just a few days ago the Finnish company Technopolis announced plans to invest 220 million euros in the creation of a technology park close to the city. 
All these infrastructure and investment advances, however, fail to compensate for failure in creating civilized rules of the game, and fair conditions for business and the population at large. Without those rules and conditions, St. Petersburg will never become a modern European city. Objectively, then, taking into account all factors, we will only be able to evaluate Valentina Matviyenko’s role in the development of our city, and in improving our lot, much later. And, to a large extent, that will depend on whether the Soviet or the modern side of her character wins out. 

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: Planet Waves
AUTHOR: By Chris Floyd
TEXT: Humankind received yet another harsh message from its landlord last week. In the agony of Kashmir, in the laments of Guatemala, the planet once again laid down the hard truths of its brutal gospel: The earth doesn’t love you. The earth doesn’t need you. The earth doesn’t know you are here.
All across the Hindu Kush, spreading through Central and South Asia, an underground tsunami of stone sent tens of thousands down to Sheol — old and young, male and female, good and evil alike. On that same day, on the other side of the world, hundreds more were drowned in mud and rock when the backwash of a hurricane tumbled down on the Mayan Indians of Panabaj.
As on the day when the ocean surges and river floods destroyed America’s Gulf Coast, the blind, implacable processes of nature made short work of humanity’s pretensions to significance. All of the petty, pointless human divisions into religions, tribes, races and political factions, all the vain ambitions for power and wealth, all the private hopes for love and fulfilment, all the prayers of the faithful and the scorn of the defiant — everything of human worth and meaning — all were obliterated without mercy by the swift, iron hand.
“The situation is very, very bad,” an official in Pakistan’s North-West Frontier Province told The New York Times after Saturday’s quake. “There are bodies lying everywhere. Those who have survived are lying in the open without food, shelter or medicine. The situation has been made worse by the rain and hailstorm that followed the earthquake. There is no way we can reach out to them.”
“Entire families have disappeared,” a local aid worker in Santiago Atitlan told Reuters after Saturday’s storm-triggered mudslide buried Panabaj in 40 feet of mud. 
“In some cases, there is no one that can identify the dead. And in other cases, it is because of the state of decomposition that we are going to have to bury them without names.”
Bury them without names. The earth doesn’t know your name. The earth doesn’t care. The earth doesn’t dote on your children. The earth doesn’t tend your sick and your old. The earth neither accepts nor rejects you. You are simply one of the literally innumerable organisms battening on its flanks. For billions of years, there were none of your kind here; billions of years from now, your kind will be long gone — buried without a name — and even the planet itself will be consumed in the great slow fiery death of the sun. And the earth doesn’t care about that either. 
So where is the human factor in this vast indifferent planetary engine? Obviously, our accelerating rapine of the earth is destabilizing global weather patterns, exacerbating killer storms, bringing droughts here and floods there, quietly targeting untold millions of people living on the coastlines of rising oceans. But this, too, doesn’t trouble the earth; its mechanics grind on regardless of the particular mixture of heat and gases fed into the system. If the oceans boil, they boil; if nations starve, they starve; if the human community tears itself to pieces in a vicious war of all-against-all for dwindling resources — as even the Pentagon now predicts for the coming century, The Guardian reports — why then, so be it. The aftermath rain will still lash the survivors lying in the open without food, shelter or medicine; it won’t ask who supported the Kyoto Treaty or who voted for President George W. Bush. 
Although we’ve already passed the tipping point on global warming, we could still mitigate some of the effects, we could lessen the blow — but we won’t. Too many of those meaningless divisions bind us: too much greed, too much self-righteousness, too much ignorance and fear. And of course there is no mitigation for the tectonic plates shifting beneath the skin of the earth; they’ll continue to push on relentlessly, creating new deadly fissures, ripping open ocean floors, bringing down mountains and raising mountains up. Against this no human action can prevail.
Where the human factor shows most starkly is in the extent of unnecessary suffering in these unavoidable catastrophes. In Pakistan and Guatemala — as in New Orleans — the poor died in overwhelmingly greater proportions than the rich, who build their homes on higher, firmer ground. The rickety apartment blocks that collapsed in Islamabad caught no mine-owners or telecommunications entrepreneurs in their ruins. The poor drowned by the hundreds in low-rent Gulf Coast districts shorn of protection by ruthless commercial development, insufficient funding of levees and reclamation projects, and bipartisan, corruption-bloated political posturing, as The Washington Post showed in a devastating report.
And as in all disasters, those with political pull will benefit most from “reconstruction” aid. In Sri Lanka, poor villagers are being banned from re-settling on tsunami-hit beachfronts for “safety reasons” — yet their land is being given to developers for five-star hotels, the Guardian reports. In New Orleans, the feasting on the dead by Bush cronies has grown so brazen that Washington has now been forced to re-bid some of the early pork payoffs, The New York Times reports. This is largely a show to allay public outrage, of course; billions more will remain safely stuffed in Bushist coffers.
At every turn, human greed compounds our suffering. The urge to eat each other alive for power and profit, to consign whole sections of the common human family to degradation and exposure is a cruel mimicry of the planetary indifference that shadows us all. Of course, the earth isn’t human, it has no capacity for conscience and compassion — but what’s our excuse for cruelty?

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

TITLE: Relief Effort Uses Air To Reach Survivors
AUTHOR: By Zarar Khan
PUBLISHER: The Associated Press
TEXT: MUZAFFARABAD, Pakistan — A halt in heavy rains Monday allowed helicopter relief flights to resume across Pakistan’s quake zone, but fresh landslides hampered efforts to move supplies by road. Officials estimated the death toll could now be more than 54,000. 
Eight international medical teams took off from Muzaffarabad to outlying villages, as fears grew for millions of survivors in the isolated mountains of Kashmir, particularly for the thousands of injured who need medical treatment to ward off infections.
U.S. diplomat Geoffrey Krassy estimated that about one-fifth of populated areas had yet to be reached.
“There are seriously ill patients with infected wounds and gangrene,” said Sebastian Nowak of the International Committee of the Red Cross, after a team of its doctors landed in Chekar, about 40 miles east of Muzaffarabad, the capital of Pakistan’s part of the divided Himalayan region.
He said about 200 people in the town had not received any medical help since the 7.6 magnitude quake struck on Oct. 8, and landing choppers there was dangerous because desperate villagers rushed into the landing area.
In the town of Bagh, the bodies of six soldiers killed when their MI-17 transport helicopter crashed in bad weather Saturday were lain in simple wooden coffins for transport back to Islamabad.
On the Indian side of Kashmir, conditions were grim on Monday. Torrential rain and snow turned roads into rivers of mud, stranding trucks loaded with relief supplies for the worst-affected areas of Uri and Tangdhar, officials said.
Officials on Sunday sharply raised estimates of the dead. Abdul Khaliq Wasi, a spokesman for the local government of Pakistani Kashmir, said at least 40,000 people died there and that the toll could go much higher. Not all the bodies had been counted and the figure represented the “closest estimate,” he said.
That pushed estimates of the total death toll to more than 54,000, including more than 13,000 in Pakistan’s North West Frontier Province and about 1,350 in the part of divided Kashmir that India controls.
Confirmation of a final toll will be difficult because many bodies are buried beneath rubble. U.N. officials said that, so far, they were adhering to the Pakistani government’s confirmed casualty toll, which was 39,422.
The United Nations has estimated that 2 million are homeless.
Helicopter missions in Pakistan resumed on Monday after being grounded for most of Sunday because of heavy rain and thunderstorms, which added to the distress of the homeless across the quake zone.
Nowak of the Red Cross said one of its relief flights to Chekar had to turn back over the weekend because villagers were fighting each other for supplies.
“They had sticks and they were fighting for relief goods. There was no perimeter security and we felt threatened,” he said.
Dozens of trucks have rolled into Muzaffarabad over the past day or so, but road access further afield remains difficult. The Pakistani military said it could take several weeks to clear landslides blocking routes to several valleys.
Major General Farooq Ahmed Khan, the country’s relief commissioner, said 29,000 tents and 118,000 blankets had been distributed in the quake zone. Khan had said earlier that 100,000 tents were needed.

TITLE: Doctors Work Through Earthquake
AUTHOR: By Zahid Hussein
PUBLISHER: Reuters
TEXT: MANSEHRA, Pakistan — Delivering a baby at the moment Pakistan’s earthquake struck, Dr Nargis Jehan remembers the mother’s screams and her own faintness as the ground tremored and chunks of concrete fell. 
The boy, who has not yet been named, came into the world on Oct. 8 for a birthday that will be mourned across Pakistan’s North West Frontier Province and Kashmir for years to come.
“It was the will of God that this baby should be born at the exact moment so many people were being killed by the earthquake,” said Jehan, recalling how she had to overcome her own fears as she delivered the child in the open courtyard after fleeing the hospital building.
Hospital records in Mansehra are rudimentary at the best of times, but the ones from that morning are virtually non-existent, and Jehan’s notes record only that the mother came from Balakot, the worst-hit town in North West Frontier province.
But her own memories from that morning are vivid despite all the terrible sights she has seen in the past nine days.
Floors rocked, walls shook and plaster and masonry crashed down, as Drs Jehan and Sabahat Rauf raced the baby’s mother on a trolley down corridors to safety from the labor room where they were delivering a breech birth.
“With pieces of concrete starting to fall around us, our staff rushed her out into the open on the bed,” said Jehan.
“Even at that moment, the first thing in our mind was to complete the delivery safely. It was a high-risk case,” said Jehan, a woman in her late twenties, exhausted by the ordeal.
“We had torn bedsheets drawn around two ambulances as the whole ground shook violently and we suffered spells of faintness ourselves,” Jehan said.
“The woman was in great pain as the baby was born the other way, his legs coming out first.”
The hospital’s main building was so badly damaged that it has been evacuated, and medical staff are caring for close to 1,000 people in what little usable space they can find elsewhere in the complex.
The number of patients treated at Mansehra hospital since the quake runs into thousands, but among them were scores of women who gave birth, many prematurely and some still-born.

TITLE: Wilma Threatens Gulf Coast, Record for Storms Equalled
AUTHOR: By Michelle Spitzer
PUBLISHER: The Associated Press
TEXT: MIAMI, Florida — Tropical Storm Wilma formed Monday in the northwestern Caribbean, tying the record for the most storms in an Atlantic season and following a path that some forecasters believe could menace the Gulf Coast next week as a hurricane. 
Wilma is the 21st named storm of the season. The only other time that many storms have formed since record keeping began 154 years ago was in 1933.
By 8.a.m. local time, Wilma had reached a top sustained wind speed of near 40 mph, just above the threshold for tropical storms. It was centered about 205 miles southeast of Grand Cayman and drifting south around 5 p.m., but was expected to turn to the southwest or west within the next day.
A hurricane watch was issued for the Cayman Islands, meaning hurricane conditions could be felt there within 36 hours. A tropical storm warning, meaning tropical storm conditions are expected within 24 hours, was also  posted. The storm is expected to bring 4 to 6 inches of rain in the Cayman Islands and Jamaica, with as much as 12 inches possible in some areas, National Hurricane Center forecasters said.
Forecasts show the storm heading into the Gulf of Mexico by the weekend. Forecasters said high water temperatures and other conditions were favorable for it to become a significant hurricane.
But hurricane specialist Stacy Stewart said Wilma had shifted west of its previous path and could hit Mexico’s Yucatan Peninsula. “At this time it doesn’t appear it will be a major threat to the United States during the next five days,” Stewart said.
But Wilma is then expected to re-emerge into the Gulf and could become a threat to the southern U.S.
“Usually when a storm gets into the Gulf, it’s going to hit somewhere,” said hurricane center meteorologist Larry Lahiff. “Where, that’s too early to tell right now. Some models take it west, some take it north.”
The U.S. Gulf Coast was already battered this year by Hurricanes Katrina, Rita and Dennis.
Since 1995, the Atlantic has been in a period of higher hurricane activity. Scientists say the cause of the increase is a rise in ocean temperatures and a decrease in the amount of disruptive vertical wind shear that rips hurricanes apart. Some researchers argue that global warming fueled by man’s generation of greenhouse gases is the culprit.
Forecasters at the hurricane center say the busy seasons are part of a natural cycle that can last for at least 20 years, and sometimes up to 40 or 50. They say the conditions are similar to those when the Atlantic was last in a period of high activity in the 1950s and 60s.
The hurricane season ends Nov. 30. Wilma is the last on the list of storm names for 2005; there are 21 on the yearly list because the letters q, u, x, y and z are skipped. If any other storms form, letters from the Greek alphabet will be used. That has never happened in roughly 60 years.

TITLE: Stallone To Play Italian Stallion One More Time
PUBLISHER: Reuters
TEXT: LOS ANGELES — Sylvester Stallone is signing on to reprise his role as boxer Rocky Balboa in the sixth installment of the long-running film series, which he wrote and will direct. 
The film, titled “Rocky Balboa,” will be co-produced and co-financed by Metro-Goldwyn-Mayer, Columbia Pictures and Revolution Studios and will be distributed by Columbia Pictures.
Stallone has been trying to make a sixth movie for years and has been reworking a script. The latest version, which sources say is similar to the tone and grit of the first two movies, persuaded the studios to negotiate a deal.
“In many ways, the screenplay really took me back to the original ‘Rocky,”’ Revolution Studios founder Joe Roth said in a statement. “As a past champion, Rocky Balboa is once again a regular guy who has to find himself and deal with real life. This film brings Rocky’s story full circle.”
In the new installment, Rocky, lonely and retired in Philadelphia, comes out of retirement, intending to fight a few low-profile local fights. He’s approached to fight a match with reigning heavyweight champ Mason “The Line” Dixon, and soon his comeback ignites a media firestorm.
“‘Rocky Balboa’ is about everybody who feels they want to participate in the race of life, rather than be a bystander,” Stallone said in a statement. “You’re never too old to climb a mountain, if that’s your desire.”

TITLE: Seventy Killed in Iraq Following Referendum
AUTHOR: By Andrew Quinn
PUBLISHER: Reuters
TEXT: BAGHDAD — U.S. fighter jets and attack helicopters killed about 70 militants around the western Iraqi city of Ramadi, the military said on Monday after a landmark vote that appears to have ratified a new constitution. 
Election officials slowly counted up to 10 million ballots from Saturday’s referendum, with partial results pointing to a clear win for a charter Washington hopes will help establish Iraq as a stable democracy able to do without U.S. troops.
The violence in Ramadi, a rebellious city about 110 kilometers west of Baghdad, highlighted the challenge posed by Sunni Arab insurgents bitterly opposed to the constitution.
Few people in Ramadi voted, yet for the first time, many Sunnis elsewhere in Iraq took part in the referendum, even if a large majority of them voted “No,” provisional figures show.
A U.S. military statement said the Ramadi battle occurred on Sunday and involved U.S. jets, helicopters and ground troops.
It said at least 20 militants were killed when an F-15 aircraft bombed a group of men burying a roadside bomb — one of the deadliest weapons in the insurgent arsenal.
Another 50 insurgents were killed in a series of separate strikes, the statement added, saying military commanders had no indications of any U.S. or civilian casualties in the operation.
Bassem al-Dulaimi, a doctor, said on Sunday that his hospital in Ramadi had received 25 dead and eight wounded following the air strikes; it was unclear if any were civilians.
“The planes came and bombed us right after prayers,” one man shouted on Monday as others buried bodies in the desert near Ramadi. “What is this barbarism? This is not a government. These are innocent civilians. To hell with this constitution.”
U.S. President George W. Bush hailed the Iraqi vote, which took place amid tight security and almost without bloodshed in the absence of the insurgent attacks predicted by the U.S. military.
“This is a very positive day for the Iraqi people and as well for world peace,” Bush told reporters in Washington.
“Democracies are peaceful countries.”
U.S. officials have sought to portray the vote as a sign that Iraq is moving toward full-fledged democracy, which they hope will reduce support for the Sunni Arab insurrection and allow the eventual withdrawal of 156,000 U.S. troops.
Six more U.S. soldiers were killed in the Sunni Arab-dominated west of the country over the weekend, bringing the total U.S. toll to 1,971 since the 2003 invasion.
Iraqi electoral officials said as many as 63 percent of eligible voters cast ballots in Saturday’s election, above the 58 percent seen in January, when many Sunnis boycotted the first elections after the fall of Saddam Hussein, who is a Sunni.
Poll officials in Baghdad said they were still re-counting ballots which had been trucked to the capital under heavy security from polling stations around the country.
Adel Alami, a senior official with the electoral commission, said the process was moving forward but certified results could be days away. “It will last for several days until the results are collected from all provinces,” he told Reuters. 
Partial results released by local officials showed the measure had been passed despite high turnout in some Sunni areas where opposition to the constitution ran strongest. 
Sunnis make up just 20 percent of the population and fear the new constitution will hand control of the country and its oil resources to the Shi’ite majority and its Kurdish allies. 
According to the referendum rules, a two-thirds “No” vote in three of Iraq’s 18 provinces would block the constitution even if most Iraqis backed it. But by late Sunday it appeared that only two provinces had returned a potentially blocking “No” vote, making the chances of a veto remote. 
Most Shi’ite and Kurdish-dominated provinces were running heavily in favor of the constitution. Anbar province around Ramadi was expected to strongly reject it, as was Salahaddin province, which contains Saddam’s hometown of Tikrit. 
The contest was closer in the northern province of Niniveh around the city of Mosul, which is split between Sunni Arabs and Kurds. A senior Iraqi official said on Monday that while 424,00 of the province’s 778,000 voters said “No” to the charter, this fell short of the two thirds necessary to reject it. 
Kurdish leaders, who originally inserted the three-province veto clause to protect their own interests, have denied Arab accusations of packing Mosul with Kurdish voters.

TITLE: Poultry Slaughtered in Romania
AUTHOR: By Antonia Oprita
PUBLISHER: Reuters
TEXT: BUCHAREST — Romanian authorities slaughtered poultry and sent in doctors on Sunday after the deadly strain of bird flu was confirmed in the Danube delta, and officials elsewhere in Europe prepared for a possible pandemic. 
British laboratory tests showed on Saturday that the H5N1 strain of the disease had reached mainland Europe for the first time, identifying it in three ducks found dead in the Romanian village of Ceamurlia de Jos.
Experts fear the H5N1 virus, which has killed more than 60 people and caused the death of millions of birds in Asia since 2003, could mutate and spread easily among humans, creating a pandemic that might kill tens of millions of people.
Romanian Agriculture Minister Gheorghe Flutur said the outbreak was limited to Ceamurlia and Maliuc, 40 kilometers north. All 18,000 domestic birds in Ceamurlia were killed and culling of Maliuc’s less than 3,000 poultry was under way.
“On a 10-kilometer radius around Ceamurlia de Jos, the tests [for bird flu] are negative,” he told reporters.
Officials stepped up public health precautions although no human cases of bird flu have been reported from Romania or from Turkey, which also confirmed H5N1 among domestic fowl last week.
“We have sent more doctors to the contaminated areas, and they will go from house to house to see how many people face the risk of being infected with the virus,” Health Minister Eugen Nicolaescu told reporters at a news conference.
The Danube delta, Europe’s largest wetlands near the Black Sea, is a major way station for migratory wild birds heading from Russia, Scandinavia, Poland and Germany toward warmer winter climes in North Africa.
Despite the Romanian assurances, Britain’s chief medical officer said on Sunday his country was braced for a pandemic of bird flu that could result in at least 50,000 deaths there.
Liam Donaldson echoed previous warnings by saying history suggested the bird flu virus could combine with a human flu virus and become easily transmissible.
“Once in a while, every 10 to 40 years, the flu virus mutates into a strain which we haven’t got natural immunity to,” he told BBC TV. He said a normal winter flu kills more than 12,000 people in Britain.
“If we had a [bird flu] pandemic the problem would be the existing vaccines don’t work, we would need a new vaccine,” said Donaldson. “So the estimate we are working toward is around 50,000 excess deaths from flu, but it could be a lot higher.”
A pandemic could also break out if H5N1 mutated into a form that passed easily among humans, but without mingling with a human flu virus. This was how the 1918 flu virus developed.
In France, Finance Minister Thierry Breton said the government had earmarked 200 million euros this year to pay for preventative measures against avian flu.
EU Commission chief Jose Manuel Barroso, speaking to reporters in Stockholm, said the bloc must take “very serious precautions” but should avoid alarmism.
“What I can promise is that we will not hesitate to propose more drastic measures if at the technical and expert levels this is so demanded,” he added.
There was no immediate sign of Turkey’s outbreak spreading. Early tests on 1,000 chickens that died in eastern Turkey after being sent from the infected northwestern area did not point to bird flu, a senior veterinarian was quoted as saying. But officials stopped poultry transport in the province. 
In Romania, six southeastern counties have been cordoned off and vehicles leaving them are being disinfected at checkpoints. Poultry and pigs have been put indoors, transport of live animals from the counties banned and fairs selling animals closed across the country, officials said. 
“We acted in accordance with European Union decisions,” said Gabriel Predoi of the country’s veterinary authority. 
The European Commission asked governments on Friday to pinpoint areas most at risk and to keep poultry separate from wild birds, which carry the virus. EU veterinary experts will meet on Thursday to review the situation. 
Romanian media said up to two million vaccine doses for regular flu had been sold in the past few days, even though it protects people only against the latest strain of human flu.

TITLE: Record Rainfall in U.S.
PUBLISHER: Reuters
TEXT: BOSTON, Massachusetts — Floodwaters receded and clear skies stretched across the Northeastern United States on Sunday after a record week of torrential rain, but a blast of gale-force wind knocked out power to thousands of homes. 
Winds of up to 80 kilometers per hour uprooted trees in the saturated ground, bringing down power lines and leaving nearly 14,000 Connecticut homes without electricity and a peak of about 18,000 in the rest of New England.
By late evening, much of the power had been restored in central and eastern Massachusetts, New Hampshire and Rhode Island. About 2,600 homes there were still without electricity by 10 p.m., a spokesman for the National Grid power utility in Massachusetts said.
Emergency crews worked late on Sunday to repair damage caused by the floods that swamped cities across the Northeast, washed out roads, triggered mudslides and forced more than 1,000 people to flee waterlogged homes.
The driving rain, strong winds and floods killed at least nine people, including a 54-year-old woman whose body was found on the banks of a swollen river in Chaplin, Connecticut, on Sunday after she slipped and fell into the rushing water.
Massachusetts, Connecticut and southern New Hampshire basked in their first sunshine in more than a week, a day after clear skies opened over New York and New Jersey, where about 12 inches of rain had fallen since Oct. 7.
“The floodwaters have receded but it’s not totally over yet,” said Peter Judge, spokesman for the Massachusetts Emergency Management Agency.
The downpour soaked New York City with its wettest October since 1903, said Matthew Tauber of the local National Weather Service office. It was the wettest on record in New Jersey, Connecticut, and Rhode Island.
Emergency shelters closed and passenger rail operator Amtrak resumed services that had been suspended because of water on the tracks, including its high-speed Acela Express between Connecticut and Boston.

TITLE: Ex-Ballboy Andreyev Wins Kremlin Cup
PUBLISHER: Reuters
TEXT: MOSCOW — France’s third seed Mary Pierce beat Italian Francesca Schiavone 6-4 6-3 on Sunday to win her second Kremlin Cup title. 
It was also the second title this year for the 30-year-old Frenchwoman after winning in San Diego in August. 
In the men’s final, seventh seed and home favorite Igor Andreyev overcame knee and back injuries to beat sixth-seeded German Nikolas Kiefer 5-7 7-6 6-2 for his maiden crown in Moscow. 
The Russian was a set and 4-0 down before staging a stunning comeback to clinch his third title this year after wins in Valencia and Palermo. 
Sunday’s victory propelled Pierce to number four in the WTA Championships Race standings, ahead of compatriot Amelie Mauresmo and Belgian Justine Henin-Hardenne and guaranteed her a place in the season-ending tournament in Los Angeles. 
Pierce raced to a 5-1 lead and held off Schiavone’s spirited fightback to take the first set, then secured a decisive break in the fifth game of the second set to clinch victory after 87 minutes. 
“I have a lot of great memories of playing in Moscow. I won here in both singles and doubles on my debut seven years ago,” said Pierce, who earned her first Moscow title with wins over Venus Williams in the semi-finals and Monica Seles in the final in 1998. 
“I also played two great Fed Cup finals here, winning in 2003 and losing last year, so Moscow will always have a special place in my heart.” 
Pierce began the year winning just 12 out of 20 matches but turned her season around, winning 25 of her last 28 matches and reaching the French and U.S. Open finals in the process. 
She came to Moscow as a replacement for injured Wimbledon champion Venus Williams and had some tough matches on her way to the final. 
She produced a sensational comeback in her quarter-final against Yelena Likhovtseva, saving six match points in the final-set tiebreak. 
Pierce said winning the first set was the key to her victory on Sunday. 
“Winning the first set was very important because [Schiavone’s] level of play dropped a bit in the second set,” said the Frenchwoman, who took home the $189,000 first prize. 
Schiavone could not find the form with which she crushed three seeded players to reach the final without dropping a set. 
“[Pierce] did a great job, she put so much pressure on me and didn’t give me a single chance to come back,” said the 25-year-old Italian, still chasing her first WTA title. 
“When she hits the ball at 200 kph it’s not easy. She also was changing her tactics throughout the match,” she added. 
“This was my first final in a big tournament and I didn’t play my best as I was nervous, but I must learn from this experience.” 
Andreyev, playing with a bandaged knee, took a time-out after losing his serve in the second game of the second set. 
After taking another medical break at 1-4 in the second, Andreyev stormed back, winning the next three games to level at 4-4 before taking the tiebreak 7-3. 
He broke Kiefer in the second game of the final set and held on for victory after a battle lasting more than three hours. 
“I was a ballboy here, so it’s just a dream come true for me to play in the final and win this tournament,” said the 22-year-old Muscovite. 
Kiefer, unhappy with “some really bad line calls,” was heavily critical of the umpire. 
“It’s never easy to play a Russian in Russia,” added the German, who also lost to five-time Kremlin Cup winner Yevgeny Kafelnikov in 2001.

TITLE: Back in World Series, Chicago White Sox Party Like it’s 1959
PUBLISHER: Reuters
TEXT: ANAHEIM, California — Joe Crede broke a 3-3 tie with a two-out infield single in the eighth inning Sunday to send the Chicago White Sox to its first World Series since 1959, with a 6-3 victory over the Los Angeles Angels. 
With the Game Five victory, Chicago grabbed the team’s first American League pennant in 46 years with a 4-1 victory in the best-of-seven league championship series and earned the chance to play for its first world title since 1917.
Chicago will host the opening game of the World Series on Saturday against the winner of the National League Championship Series between the Houston Astros and the St. Louis Cardinals. The Astros lead that best-of-seven series 3-1.
The White Sox, who dropped the first game of the series before roaring back to win four straight, three of them on the road, celebrated on the field in Anaheim. They were cheered on by about 1,000 die-hard fans who shrugged off a steady rain to support a team that has not brought home a championship in almost 90 years.
“Understand that a lot of people, generations, have come and gone and not seen their team win the World Series,” White Sox general manager Ken Williams said in a champagne-soaked clubhouse.
Crede tied the game in the seventh inning on a solo home run, then drove in the game winner after Angels reliever Kelvim Escobar failed to make the final out at first base on a soft grounder by A.J. Pierzynski. 
Although the Angels’ players — who had already run off the field, believing that they had ended the inning — argued the call with umpires, television replays clearly showed Escobar tagging Pierzynski with his glove while holding the ball in his bare right hand.
Crede came up with two outs and slapped a grounder up the middle that Los Angeles second baseman Adam Kennedy attempted to stop.
But Kennedy’s throw to the plate was too late to get the streaking Aaron Rowand, who scored from second.
“It just had eyes,” Crede said of his single, adding that Angels closer Francisco Rodriguez had hung a curveball over the plate “and I was fortunate enough to get enough wood on it to get it up the middle.”

TITLE: Sports Watch
TEXT: Safin Out of Open
MOSCOW (Reuters) — Australian Open champion Marat Safin has pulled out of this month’s St. Petersburg Open and is doubtful for the Paris Masters. 
The world No. 4 said on his official website on Sunday he has yet to fully recover from a ligament tear in his left knee that has troubled him since Wimbledon and forced him to withdraw from the U.S. Open. 
“The knee is not yet ready,” Safin said, adding he would fly to Paris on Monday to resume training, hoping to be fit in time to defend the title he won in Bercy last year. 
The St. Petersburg Open, where Safin was top seed, begins Oct. 24 and the Paris Masters the following week. 
The Russian, who pulled out of this week’s Kremlin Cup, wants to play in Paris and the Tennis Masters Cup in Shanghai. 

Zenit Deadlocked 
ST. PETERSBURG (SPT) — A draw between Spartak Moscow and FC Zenit St. Petersburg on Saturday in Moscow left both teams in deadlock at third and fourth place respectively in the Russian Premier League. 
Spartak and Zenit each have 46 points after 26 games played in the March-December season, but Spartak is ahead because it has won 13 matches to Zenit’s 12.
Spartak’s Serbian defender Nemanja Vidic netted a late penalty to cancel out Zenit striker Andrei Arshavin’s goal. 
CSKA Moscow edged Rubin Kazan 2-1 to go top on goal difference from out of form champions and city rivals Lokomotiv (each on 50 points), which have let a seven-point lead slip in the last five games. Lokomotiv were held to a 0-0 draw by Shinnik Yaroslavl. 

Renault Takes Title
SHANGHAI, China (AP) — Fernando Alonso passed the checkered flag and broke into song, ending a triumphant season for the Spanish driver and his Renault team. 
The world champion captured the Chinese Grand Prix on Sunday to clinch Renault’s first constructors’ title. Alonso started from the pole in the Formula One finale and held off McLaren’s Kimi Raikkonen for his seventh title this season and eighth overall. 
The 24-year-old driver jumped on a fence and waved to his team and mechanics, a more animated celebration than the one three weeks ago in Brazil when he became F1’s youngest champion. 
“For the team it has been a fantastic season,” said Alonso, who averaged 114.502 mph for the 56 laps. “It was not crucial but quite important for the team for the motivation for next year.”

Ovechkin Keeps Scoring
TORONTO (Reuters) — Petr Sykora and Alexander Ovechkin scored in the shootout and Olaf Kolzig made 38 saves to help the Washington Capitals edge the Tampa Bay Lightning 3-2 on Sunday. 
Vincent Lecavalier and Vaclav Prospal both collected their fourth goals of the season during regulation for the Lightning, while Chris Clark and Dainius Zubrus answered for the Capitals, who won for the first time in three games.
Ovechkin added an assist on Zubrus’s second period marker, giving the rookie sensation at least one point in all seven of Washington’s games this season. 
The Russian also did his part in the shootout, beating Lightning netminder Sean Burke.