SOURCE: The St. Petersburg Times
DATE: Issue #1173 (39), Tuesday, May 30, 2006
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TITLE: Iran’s Rights Guaranteed, Says Russia
PUBLISHER: Agence France Presse
TEXT: MOSCOW — World powers are ready to guarantee Iran’s right to develop nuclear energy provided Tehran alleviates international concern over its nuclear intentions and cooperates fully with the UN nuclear monitoring agency, Russia said Monday. 
“We are prepared to guarantee Iran’s right to peaceful nuclear energy on the condition that it answers the questions that the IAEA has raised,” Russian news agencies quoted Foreign Minister Sergei Lavrov as saying in Moscow, referring to the International Atomic Energy Agency. 
Speaking at the start of a critical week of international diplomacy, Lavrov said the five permanent UN Security Council members joined by Germany were hammering out a plan for resumption of negotiations with Tehran on supervision of its nuclear activities. 
The United States suspects the Islamic republic is working secretly towards building its own nuclear weapons, using development of a nuclear power program as cover, and has accused Tehran of failure to cooperate with the IAEA. 
Iran denies these charges, saying its nuclear work is confined strictly to generating energy and insisting that it has always cooperated with the IAEA in line with its obligations as a signatory of the nuclear Non-Proliferation Treaty. 
As Lavrov spoke, Iran stressed that it would pursue the uranium enrichment work that has set off alarm bells in the United States, Europe and Israel and issued a preemptive rejection of any new proposals that would limit its right to civilian nuclear energy development. 
“Enrichment will continue on Iranian territory within the framework of Iran’s peaceful nuclear program and the IAEA,” Iranian government spokesman Gholam Hossein Elham told reporters in Tehran. 
Speaking at a meeting of the Non-Aligned Movement in Malaysia, Iranian Foreign Minister Manouchehr Mottaki said any new incentive from the European Union that did not acknowledge Iran’s right to develop nuclear energy on its own would be a non-starter. 
“The main incentive for Iran is to recognize the essential right of Iran to have nuclear technology and the ways of realizing this right,” Mottaki said. 
Lavrov’s comments however suggested that some kind of consensus among the world’s top powers on how to deal with widespread concern over Iran’s nuclear ambitions may be taking shape. 
Top diplomats from the UN Security Council permanent members and Germany were to discuss their plan in a telephone conference on Tuesday that U.S. officials said was likely to be followed up by a meeting of the countries’ foreign ministers in Europe later in the week. 
Referring to all six major world powers involved in efforts to resolve the Iran nuclear standoff, Lavrov stated: “We are ready and mutually interested in drawing Iran into full economic cooperation as well as in cooperation in regional security.” 
He did not elaborate on that comment, but foreign policy experts in Russia, Europe and the United States alike have said for months that the key to defusing the Iran nuclear impasse lies in meaningful economic incentives and practical security assurances from the West to Tehran. 
If Russia’s talk Monday about “guarantees” for Tehran was among positive incentives in a “carrot and stick” package of proposals under consideration, the United States was reportedly also moving ahead with strong dissuasive measures should diplomacy fail to make progress. 
In its Monday editions, the Washington Post said Washington is pressing Europe and Japan to impose strict banking sanctions designed to hobble the Iranian leadership financially if diplomatic efforts come up empty.

TITLE: Foreign Minister, Gryzlov Criticize PACE
AUTHOR: By Mike Eckel
PUBLISHER: The Associated Press
TEXT: MOSCOW — Foreign Minister Sergei Lavrov repeated Russia’s long-standing criticism of the Council of Europe on Monday, as Moscow hosted a top-level delegation from the council’s Parliamentary Assembly and took the reins of Europe’s leading human rights watchdog. 
Amid tension between Russia and other European nations over issues ranging from human rights to energy policy, the head of the council’s Parliamentary Assembly called on Russia to demonstrate its commitment to democracy during its stint at the helm of the 46-member organization. 
The council is the first major pan-European organization Russia has chaired, and comments from Foreign Minister Sergei Lavrov and other leaders indicated Moscow will use its presidency to try to tame the criticism it gets from the body it joined 10 years ago. 
The council and the affiliated European Court of Human Rights have sharply criticized Moscow for rights violations in Chechnya, abuses by its police forces and infringements of media, social, religious and minority freedoms. 
But Russia, the biggest financial contributor to the council, says the organization does not use the same criteria for all its members, slamming Moscow for things that go unnoticed elsewhere. 
“We cannot ignore the fact that the volume of commitments that we are requested to assume is much larger than was initially addressed to ‘the founding fathers’ of the Council of Europe,” Lavrov was quoted as saying by Russian news agencies. 
“We are not making a problem out of it, but we see a certain political subtext,” he was quoted as saying. 
The Kremlin-allied speaker of Russia’s parliament, Boris Gryzlov, singled out the European Court for particular criticism, saying: “Our task as parliamentarians is to bring attention to the fact that the European Court should solely fulfill a legal function ... and not interfere in politics.” 
Gryzlov, in televised comments, also urged the council and the European Union to press Latvia and Estonia to respect the rights of their Russian-speaking minorities, which Moscow says are persistently violated. 
Rene van der Linden, the head of the council’s Parliamentary Assembly, called PACE, said in a statement that Russia’s six-month chairmanship was an opportunity “to demonstrate that it is a full part of democratic Europe, as an equal partner.” 
“It is now up to Russia to show that it can actively contribute to building a democratic Europe, which also includes finding peaceful solution to existing conflicts on our continent,” he said. 
In a Kremlin meeting, van der Linden told President Vladimir Putin that Russia’s presidency is “an opportunity and a challenge” and stressed that “you are a member of the Council of Europe as I hope every member is — for their citizens.” 
Putin left the public criticism to others, saying: “We intend to do all we can to advance our cooperation.” 
Lavrov told the visitors that Russia’s democracy would develop at its own speed, apparently a defiant response to European accusations of backtracking on democracy. “Mechanically transferring somebody else’s model of democracy to different soil will not work,” ITAR-Tass quoted him as saying. 
After popular protests helped opposition leaders come to power in the former Soviet republics of Georgia, Ukraine and Kyrgyzstan — pro-Western leaders in the first two cases — the Kremlin accused the West of funding the upheaval and actively promoting revolutions. 
Konstantin Kosachev, a senior pro-Kremlin lawmaker and head of the Russian delegation to PACE, said the council should encourage greater cooperation in education, science and culture without distracting from its traditional mandate promoting democracy and human rights.

TITLE: Dancer’s Career Threatened by the Draft
AUTHOR: By Anastasiya Lebedev
PUBLISHER: Staff Writer
TEXT: Denis Savin, 22, is one of the Bolshoi Theater ballet’s rising stars, with several solo parts and a prestigious Golden Mask Award nomination to his name. By the ripe old age of 24, if the army has its way, his career at Moscow’s premier opera and ballet company could end.
Savin, with fellow dancers, violinists, pianists and other young talents, could be drafted if the State Duma adopts a legislative package this summer cutting service exemptions for talented artists. 
The bill is part of the Defense Ministry’s effort to expand its pool of eligible draftees by 2008, when mandatory service will be cut to one year from two years.
“For an artist, a year off is equivalent to death,” said Savin, who said ballet dancers needed three weeks to get back in shape after being sick for a week. “It’s goodbye, being in shape; goodbye, professional qualifications.”
Mikhail Shvydkoi, head of the Federal Culture and Cinematography Agency, has warned that talented young Russian men will flee the country if they lose their exemption. World-renowned pianist Yevgeny Kissin, he noted, emigrated to avoid army service.
Haik Kazazyan, an award-winning 24-year old violinist in his final year at the Moscow Conservatory, said he would definitely seek opportunities abroad.
“We’re in the phase of establishing our careers,” Kazazyan said of himself and other Conservatory graduates. “Why should I stay here if my career would be ruined?”
Besides the 800 performing artists exempted from military service yearly, another eight categories of exemptions could be scrapped, including rural teachers and doctors; men caring for disabled relatives; and those whose wives have been pregnant for under 26 weeks.
Defense Minister Sergei Ivanov famously promised in late 2004 to draft “talented balalaika players,” a derisive reference to performing musicians.
For now, there are 16 temporary and nine permanent categories of exemptions. The talented-artist exemption is actually a subcategory created by presidential decree.
If the State Duma legislative package, including four separate bills, passes, the number of temporary exemptions will drop to eight; the permanent categories will stay the same. The bills went through a first reading in late April. They are scheduled for a second, crucial reading in June.
The military has 1.1 million people. There are two drafts annually: In this year’s spring draft, between April and June, 124,000 men between the ages of 18 and 27 are being drafted; last fall, 140,900 were drafted.
Alexander Kolchukov, head of the Defense Ministry’s Institute of Military History, pointed out that there were no quotas for talented-artist exemptions in the Soviet era; in those days, conservatories and theaters had to petition the Ministry of Culture for exemptions for highly talented artists. 
The statutory exemption was created in 1993. Kolchukov said the current legislation package simply aimed to ensure that only truly exceptional performing artists were exempted from service. 
Dmitry Illarionov, 26, an award-winning guitarist who teaches at the Gnesin Academy of Music and was exempted from serving this year, countered that the current 800 slots set aside for performing artists were inadequate.
Illarionov added that young, male musicians were already leaving the country because they were afraid of what might happen if they weren’t exempted from service.
For now, theaters, top music schools, circuses and other cultural institutions file the names of young male artists each year with the Federal Culture and Cinematography Agency, part of the Culture and Press Ministry, or, in some cases, with the ministry directly.
A special committee at the ministry, headed by a deputy minister, reviews the candidates, decides who will be exempted, and turns over the final list to the Defense Ministry, Culture and Press Ministry spokeswoman Yelena Demchenko said in a statement. The exemption is granted for a year starting April 1. 
Boris Akimov, a former dancer and now a teacher at the Bolshoi who has spent 40 seasons there, said the Bolshoi’s current crop of dancers was very young, and that if dancers were to be drafted, the theater’s rehearsal schedule would be disrupted. 
Akimov said he had known dancers who had served in the army’s song and dance ensembles and that some were able to readjust to classical ballet after being discharged. But many could not return to ballet after performing folk dances in boots, he said.
Nor is it clear that all dancers actually get to dance in the military.
Marina Yashchenko, the choreographer for the army’s Red Star Chorus and Dance Ensemble, said members perform Russian, Cossack and other military-themed dances. She added that the 90-member ensemble included just 20 conscripts. 
This fall, she said, the ensemble would have room for five new soldiers to replace those who would be discharged.
Victor Vlasov, a deputy rector at the Gnesin Academy, said that while musicians who played wind instruments and were drafted would be able to play in military brass bands, other musicians, such as violinists and pianists, would have no ensembles to join. 
“All the parents’ efforts, teachers’ efforts, all the school expenses — all of it wasted to get one poorly trained private,” Vlasov said.
Natalya Gilyarova, a deputy rector at the Conservatory, said she fully supported the military, but added that musicians shouldn’t be drafted.
“The boys wind up very limited,” she said, referring to musicians who had served. 
“They get used to following orders, and for a performer, the mentality of following orders is no good.”
Igor Kostyshin, a Defense Ministry spokesman, said not all 800 artists would necessarily be drafted immediately. The goal, he said, was for the army to have a bigger pool of draftees that includes fewer people without secondary education or with criminal records.
Savin, for his part, doesn’t trust the army. After his aunt and uncle were told that his cousin would not be sent to Chechnya, the young draftee was sent there and wounded, he said. 
“I can’t believe it — the life of the theater would stop,” Savin said of the proposed exemption change. 
“The Bolshoi is the face of Russia to the whole world. It would be like taking away Red Square. There would be a hole there.”

TITLE: "Normal" Russians Seek Prey
AUTHOR: By Anastasiya Lebedev
PUBLISHER: Staff Writer
TEXT: MOSCOW — One of the victims of the violence that broke out at Saturday’s aborted gay rights march had the misfortune of simply being the wrong color.
While walking down Tverskaya Ulitsa with a female companion, the dark-skinned man, who did not give his name, was attacked by ultranationalists looking for prey.
As he was overtaken by some of the mob, the man was knocked to the ground and punched and kicked. The young woman, a Russian, tried to shield him with her body.
An onlooker tried to tear away one of the attackers, and five or six of the assailants fled just before police officers arrived, ushering the man and woman, both in their twenties, into a squad car. None of the thugs who had attacked the man were detained.
What became clear at the march Saturday was that the ultranationalists, Orthodox Church protesters and other opponents of gay rights were not only fighting gay rights — they were protesting anything they deemed un-Russian. Whether it was South Asians or Westerners or anyone who collided with their nostalgia for a closed, imperial Russia, everyone on “the outside” was a potential target. 
One young man who only gave his first name, Alexei, happily admitted that he had taken part in the beating of a German lawmaker, Volker Beck.
 “I punched him in the face myself because I’m a normal Russian guy,” Alexei said, grinning.
Using a widespread Russian expression, Alexei said he and others came to protest the march to “combine the pleasant things with the useful things” — hanging out with his friends while physically beating people he considers perverts. 
Kirill Frolov, head of the Moscow chapter of the Orthodox Citizens’ Union, passed out flyers to passersby saying that European officials involved in the march were seeking to instigate an Orange Revolution-style overthrow of the government in Russia. The flyers also said that the bird flu sweeping the globe was God’s punishment for homosexuality.
Frolov added that the union had worked closely with law enforcement agencies.
Alexei Gozhgo, 19, marched with the Cossacks, who, he said, came from the Tula region. He said he opposed gays and lesbians because they would not do anything to boost Russia’s shrinking population.
Not far away, on Tverskaya Ulitsa, two women holding hands voiced support for the display of gay solidarity.
“This is a necessary and effective action,” one of the women, Yekaterina Shavyrina, said. “We’re also a part of society.”

TITLE: Gay March Marred by Violent Protestors
AUTHOR: By Anastasiya Lebedev
PUBLISHER: Staff Writer
TEXT: MOSCOW — Activists attempting to hold Moscow’s first-ever gay rights march Saturday were overwhelmed by militant Orthodox Christians and ultranationalists throwing smoke bombs.
A handful of activists were injured, including a German lawmaker. The Bundestag member, his face streaked with blood, was detained by police.
Pedestrian movement was blocked for a few hours as riot police cordoned off a square around a monument to Prince Yury Dolgoruky. And traffic was briefly stopped when smoke bombs — resembling flares and emitting large plumes of smoke — were thrown at the intersection across the street, across from the Kremlin.
More than 100 gay rights activists and some of their most vocal foes were arrested by police. Mayor Yury Luzhkov had banned the parade, and on Friday a city court upheld the ban. 
Among the first to be arrested were Nikolai Alexeyev, the march’s chief organizer, and Philippe Lasnier, an aide to the mayor of Paris. Alexeyev spent the day in custody; Lasnier was briefly detained. 
Alexeyev said Sunday that the event had been a great success, despite the low turnout. “A hundred people were not afraid to go out and protest homophobia and fascism,” he said.
 One French observer at Saturday’s event said police had detained the German lawmaker, Green Party member Volker Beck, to prevent him from being further pummeled.
Several hundred ultranationalists descended on central Moscow to protest the march. Some of them wore camouflage. Others sported facemasks or hid their faces in their shirt collars.
Organizers had hoped the parade would be the capstone of a two-day conference bringing together gays and lesbians from Russia, Europe and the United States.
The conference, called Moscow Pride ‘06, was described as disorganized by gay web sites not affiliated with the event, which included a lecture given by Merlin Holland, grandson of Oscar Wilde. 
The British author, widely known to have been gay, was convicted of gross indecency in 1895 and sentenced to two years of hard labor.
Organizers of Saturday’s march had called for gays and lesbians to lay flowers at the Tomb of the Unknown Soldier, and then gather at the monument to Prince Yury Dolgoruky, which faces City Hall, to picket the ban. The time and place of the march were announced just hours before the event.
But police blocked the entrance to the Alexander Gardens, where the tomb is located.
When the marchers arrived at the gated entranceway to the garden, they were met by women holding icons and wearing long skirts and headscarves. A small group of men in Cossack dress was on hand to protest the march, among others.
As the activists laid their flowers at the gate, protesters stomped on them and threw eggs and tomatoes at the activists. And as the protesters’ chants — “Death to fags!” and “Fags out of Russia!” — grew louder, and as the tenor of the confrontation grew uglier, OMON riot police formed a chain to pry the crowd away from the gate. 
The icon-bearing women added to the chorus, chanting “Moscow is not Sodom.” Many sang psalms, mostly from the traditional Easter service.
One woman protesting the march accused police officers who were attempting to contain the mob of siding with homosexuals, prompting one officer to point to the cross around his neck.
Conference participants, most of them foreigners, observed the goings-on with concern and confusion. 
A couple stood under rainbow-colored umbrellas. The six-color rainbow is an international gay and lesbian symbol that apparently was not recognized by protesters, who did not attack people holding the umbrellas.
After the confrontation at the entrance to the Alexander Gardens, some parade organizers began moving toward the monument. The parade’s protesters walked in that direction, too. 
The steps of the monument had been occupied by a large swarm of ultranationalists, including Alexander Belov, head of the Movement Against Illegal Immigrants, and Konstantin Krylov, head of the Russian Public Movement.
State Duma Deputy Nikolai Kuryanovich, of the ultranationalist Liberal Democratic Party, in a speech at the foot of the monument lashed out at the “gay mafia” for promoting ideals he called suited for “rotting America and dying Europe.”
Kuryanovich also recalled that homosexuality was once a crime in Russia and defended the neo-Nazi salute. He then led the crowd in a chant of “Gays and lesbians to Kolyma,” the notorious Soviet-era labor camp.
Riot police tried to block more people from gathering near the monument but did not make an attempt to interrupt Kuryanovich’s speech.
Kuryanovich’s web site offers condolences to the family and friends of Dmitry Borovikov, a founder of a violent extremist group killed by police in St. Petersburg earlier this month while resisting arrest. 
A few gay rights activists eventually arrived at the monument but were unable to hold their rally.
Yevgenia Debryanskaya, a leader of the lesbian rights movement in Russia since the 1990s, tried to give a speech but was doused with water as protesters laughed at her. She was dragged away by police.
Alexeyev said participation would have been greater if the event had been permitted by authorities.
Organizers did not want to put a large number of people at risk by inviting them to take part, Alexeyev said, so no notices were posted on gay-themed web sites and no mass mailings were conducted.

TITLE: State Report Slams Federal Troops Over Beslan Crisis
AUTHOR: By Anatoly Medetsky and Carl Schreck
PUBLISHER: Staff Writer
TEXT: MOSCOW — Federal troops fired grenades into the Beslan school while hostages were still inside, a State Duma report found.
What’s more, the commandos’ actions may have prompted the bloody firefight that killed 331 hostages, more than half of whom were children, the report found.
The report, part of which was presented Thursday by Rodina Deputy Yury Savelyev to a panel investigating the September 2004 attack, sharply contrasts with earlier investigations.
Those investigations, conducted by the panel and the Prosecutor General’s Office, asserted that troops neither used excessive force nor instigated the calamitous conclusion to the three-day standoff.
The account mapped out by Savelyev, the lone dissenting member on the panel, is in line with those offered by eyewitnesses, who said troops armed with grenade launchers fired projectiles at the school, causing a ball of fire to erupt upon impact. 
Witnesses have further contended that the projectiles launched by troops could have set fire to the roof of the gym, where most of the hostages were clustered, and caused the roof to collapse. Most of the casualties occurred in the blaze.
Some witnesses to the Sept. 1-3 attack provided accounts that corroborated Savelyev’s during the trial of Nurpashi Kulayev, the only known surviving terrorist. Kulayev was on Friday sentenced to life in prison. 
Kulayev and witnesses asserted that snipers positioned outside the school shot a terrorist in the gym, which caused one of the many bombs inside the building that had been rigged by the terrorists to go off.
In a separate report in November, Stanislav Kesayev, a regional legislator from North Ossetia, hinted strongly that it was shelling of the school from outside that led to the final, deadly confrontation.
Alexander Torshin, who heads the investigating parliamentary panel, and the Prosecutor General’s Office have argued that it would have been impossible for snipers to take aim at the terrorists because the school’s windows were made of tinted plastic.
Savelyev is still working on the report, said Lidia Mikhailova, a Rodina spokeswoman. The report is expected to include seven parts, and Savelyev has submitted the first three parts, which encompass 520 pages. 
The Duma panel has 10 days to decide whether to incorporate Savelyev’s findings in its final report, Mikhailova added. It is unclear when the other four parts will be debated by the commission.
Savelyev has refused to speak publicly about the inquiry. Calls to his office have gone unanswered.
Mikhailova said Savelyev was likely to make his report public if the commission ignored its findings.
Torshin said Friday that he and other members of the investigating panel had agreed not to comment on Savelyev’s study until they had reviewed it, said Valeria Shatunova, Torshin’s spokeswoman.

TITLE: Ivanov Opposed To Use of Force Against Iranians
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran — Security Council chief Igor Ivanov said Sunday that Russia opposed any use of force against Iran over its controversial nuclear program, Iranian state television reported. 
“Unlike the U.S., Russia believes Iran’s nuclear program needs to be resolved only through dialogue. Any use of force will further complicate the issue and will cause tension in the region,” Ivanov was quoted as saying. 
Ivanov arrived in Tehran late Saturday to discuss Iran’s nuclear program.

TITLE: Pill-Popping Russians Lure Foreign Producers
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Sales of pharmaceutical products in Russia have more than tripled since 2000 making the country one of the fastest-growing European markets. Sales will keep increasing by around 10 percent a year between 2006 and 2010, PricewaterhouseCoopers said in a report on the pharmaceutical market released last week.
The federal government has increased healthcare funding to $3.6 billion this year, an 89 percent increase on 2005 figures. Russia has experienced six consecutive years of economic growth, which contributed to an increase in living standards.
Rising incomes, larger government expenditure and improvements in distribution stimulated market growth, PwC experts said.
“With more money available to the population, there is a growing demand for improved healthcare. While the infrastructure does not yet provide the necessary support for the complete healthcare package, need for more effective medicines is increasing,” said Simon Friend, global pharmaceuticals leader at PwC.
“Given the current pressure in the main pharmaceutical markets, where growth is sluggish, Russia’s untapped potential will be a target for foreign companies,” he said.
According to the PwC report, poor health and the high mortality rate increase demand for medication, especially treatments for high blood pressure, cardiac conditions, cancer, AIDS and diabetes.
Russia imports up to 60 percent of all its pharmaceutical products, primarily from Western and Eastern Europe, the U.S., Canada and Japan. 
Experts noted that potential for branded generic producers and for Western manufacturers operating at the top end of the market is greater than the initial picture might have suggested.
“The Russian pharmaceutical market has grown faster than the markets of the developed world since the start of the millennium and it should not be overlooked as a source of growth for foreign players,” said Alina Lavrentieva, director of pharmaceuticals group at PwC Russia.
A foreign producer was also optimistic in its expectations. During the next three years Russia will become the fifth largest market in Europe for German drugmaker Shering and by 2008 Shering hopes to earn 100 million euros ($120 million) in Russia annually.
Shering increased drug sales in Russia from 0.5 million euros 15 years ago to 70 million euros last year, with the country providing 4.5 percent of the company’s total sales in Europe, according to Markus Baltzer, European regional director at Shering AG.
“Today in Russia we are doing a little bit more than what we are doing in Switzerland,” he said.
At the moment, however, Russia lags behind 20 other European countries in terms of consumption of Shering products. However, despite its low average income, Baltzer sees Russia as a very interesting market. Shering’s portfolio of products in Russia is exactly the same as in other countries, with its drugs positioned as premium price products. 
Among obstacles to entering the Russian pharmaceutical market, PwC experts indicated the under-funded state healthcare system, insufficient per capita income, the risk of political interference and a weak administrative and legal system.
“Red tape is the biggest barrier cited by foreign pharmaceutical companies thinking of setting up production facilities in Russia,” PwC experts said.
In order to provide a favorable business environment, national pharmaceutical companies develop cooperation through professional associations.
On Tuesday last week, leading CIS pharmaceutical companies signed a declaration defining the cooperation of Pharmsodruzhestvo association members.
“The goal of the project is to create a unified sphere of information for pharmaceutical companies in Russia, Ukraine, Belorus and Kazakhstan to communicate, share experience, develop strategies of interaction with governments and contribute to the forming of a civilized pharmaceutical market without counterfeits,” Interfax quoted Aidar Ishmukhametov, chairman of Remedium group, as saying Tuesday.
This year the Russian pharmaceutical market will grow more slowly than its 40 percent in 2005, he said. “The state’s role in developing the industry will be significant thanks to its national project ‘Health’,” Ishmukhametov said.

TITLE: Sobchak’s New Cause: ‘Freedom’
AUTHOR: By Francesca Mereu
PUBLISHER: Staff Writer
TEXT: MOSCOW — The launch of Ksenia Sobchak’s youth movement on Thursday was ultra-Sobchak — hip, self-possessed and just a bit over the top, including Shakespearean actors, a scrumptuous buffet and denim-print wallpaper.
Sobchak, the wealthy socialite and hostess of the “Dom-2” reality show, said the new movement, called “Vse Svobodny” (or “All Are Free”), would teach young Russians how to be free.
“I want to do something good, a good deed,” Sobchak, 24, said at the movement’s two-story headquarters on the Arbat. “I want to gather free and individualist and self-confident young people in our movement.” 
Sporting a fashionable orange blouse and jeans, she added: “I want to teach them how to be free and how to fight for their rights. I’m ready to help any one of them in case they have problems. I’m ready to go to court with them ... if necessary.”
Jeans, Sobchak explained, are the symbol of youth and freedom. Hence the wallpaper. 
At the movement’s offices, jeans-style wallpaper, replete with oversized buttons, plastered the walls. A buffet featuring melon with prosciutto ham, cherry tomatoes with mozzarella, smoked salmon, Italian wine and Russian vodka had been laid out for reporters.
Adding some depth to the movement was Alexander Politkovsky, one of the hosts of the perestroika-era cult television program “Vzglyad,” which provided thoughtful analysis of current events.
And, of course, there was the Shakespeare — a team of actors from the second-tier Spesivtsev Theater performing “Romeo and Juliet” on the Arbat.
“I want to offer concrete help to young people. I can afford it. I dress well and I can afford a lot of things,” she told reporters.
Sobchak said she was financing the youth movement out of her own pocket.
She said the idea for the movement came to her while working at “Dom-2.”
“Thanks to ‘Dom-2’ I had the chance to meet different young people and to know their problems,” she said. “I understand what these people need and what to give them.”
“Dom-2,” which is broadcast daily at 9 p.m. on TNT television, follows a group of single young women and men as they build a house. Participants vote one person off the show every week. The goal of the participants is to fall in love. The completed house goes to a happy couple picked by viewers at the season’s end.
Even though Sobchak grew up in a family of politicians— her father, former St. Petersburg Mayor Anatoly Sobchak, was once the boss of then-Deputy Mayor Vladimir Putin — she said the new movement would avoid politics.
After losing a bid for re-election in 1996, Anatoly Sobchak became the target of a relentless corruption investigation. He died in February 2000.
“We have a lot of political youth movements, but I think they are kind of fake,” Ksenia Sobchak said. “At home, people don’t discuss politics.”
But what about that orange blouse? After Ukraine’s Orange Revolution in late 2004, democratic activists from Belarus, Moldova and elsewhere in the former Soviet Union began donning orange as a sign of protest.
Asked by a reporter whether she planned a jeans revolution, Sobchak looked at her blouse and quickly explained that it wasn’t “really orange. It’s reddish.”
To date, the Vse Svobodny movement has no members, but Sobchak said she would start officially registering people on Friday. 
Youth movements have sprung up across the country in the past few years, with political parties creating their own groups and the Kremlin launching the Nashi movement. The Kremlin movement was meant to stymie a youth-based uprising similar to that in Ukraine from taking place in Russia.

TITLE: Student Beats Out Twins For Miss Chechnya Title
AUTHOR: By Timur Aliyev
TEXT: Special to The Moscow Times
GROZNY — A 15-year-old high school student danced and baked her way to the title of Miss Chechnya on Saturday, beating out twin sisters for the grand prize of a sleek Toyota sedan.
Zamira Dzhabrailova beat a total of 19 contestants to take the crown at the first beauty pageant held in Chechnya since 1988. 
The Chechen administration organized the pageant as part of its efforts to show that calm has returned to the war-scarred republic.
“The vote was unanimous,” said Satsita Israilova, a pageant judge and director of Grozny Public Library. “We are happy about the choice, and we can proudly present our winner to all of Russia.”
Dzhabrailova, a brunette with a broad smile, said she was excited about the opportunity to represent Chechnya at the Miss North Caucasus pageant later this year and, if she wins, the Miss Russia pageant.
“I want to be a model,” said Dzhabrailova, who dances with a folk group, Vainakh.
Wearing a flowing, yellow traditional Chechen dress, Dzhabrailova celebrated her victory with a dance onstage at the Grozny Central Concert Hall. 
The first and second runners-up were 15-year-old fraternal twins Fatima and Dzhanora Khazuyeva, who each took home a Zhiguli. Both are also high school students.
Zaira Dudayeva, 17, who placed fourth, also won a Zhiguli, while fifth-place finisher Kheda Dadayeva, 16, will go on a trip to Europe. 
Both Dudayeva and Dadayeva are students at Chechnya State University. 
Ilona Chachayeva, a 22-year-old student in Moscow, won a VAZ-2107 for her sixth-place finish.
Contestants had to demonstrate their ability to dance, read poetry and cook — by baking cakes — and they recorded videos for the judges in which they spoke about their lives. To show their poise, they also fielded general-knowledge questions from the judges.
All the girls wore traditional Chechen costumes, and there was no swimsuit competition.

TITLE: Local Frims to Generate A Fair Share of Interest
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: The Russian Trading System (RTS) stock exchange on Monday started trading the ordinary shares and preference shares of the Petersburg Generating Company and the Kolskaya Generating company, which are to merge with the Territory Generating Company N1 (TGC-1) by the end of the year.
“The trading of these regional generating companies’ shares will provide intermediate liquidity and the opportunity for investors to receive a stake in TGC-1 in the future,” Interfax quoted a statement issued by TGC-1 on Thursday last week as saying.
Previously, managers of Unified Energy Systems have said that through 2006-2008 TGC-1 and other subsidiaries of UES would start the extensive sale of additional shares, which they regard as the main source of investment in the power industry.
“The sales would be run in favor of private investors in the case of the generating companies and heating plants, and in favor of state stakeholders in the case of hydro-generating companies,” UES said in a statement last month.
A fund market expert said that TGC-1, which will unify the Petersburg Generating Company, Kolenergo and Karelgeneratsia, could be a very attractive asset for investors.
“It is based on several factors: St. Petersburg’s proximity to the European border, which allows the exporting of energy at attractive tariffs; the large contribution of hydro-generating capacities that reduce production costs; and an experienced foreign strategic investor, Fortum, providing high-quality management,” said Mikhail Zak, head of analysis department at Veles Capital investment company.
“Demand for shares should be high, but no one really major will appear to invest in TGC-1 because Fortum, in fact, already controls this company,” he said. 
At the moment Fortum owns about 30 percent in TGC-1.
Last year TGC-1’s net profit amounted to 587 million rubles ($21.7 million), its revenue — 5.45 billion rubles ($201.5 million).
Zak said that by separating the power generating, distribution and network management companies, the reform should make the power industry more transparent, which is a plus, but companies will lose their monopoly and consequently their ability to dictate terms to consumers.
After the merger with regional generating companies, the UES stake in TGC-1 will be 55.6 percent. The merger will be completed by Dec. 1.
The capacity of the power generators to be managed by TGC-1 will exceed 5,700 megawatts. Hydro-electric stations will account for around 50 percent of the total capacity. 
According to the head of UES, Anatoly Chubais, the company is in negotiations with several foreign investors including the German concern EON, Italian company Enel and Finnish concern Fortum about acquiring the generating companies’ shares on offer to the market.
These investors are “evidently interested,” RIA Novosti cited Chubais as saying earlier this year.
Among Russian companies Chubais indicated Gazprom as an example of a large company most likely to invest.
By July a 12.5 percent stake in the Petersburg Generating Company will be offered for sale at auction.

TITLE: Busy Senator Stripped Of His Seat
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — In an unusual and contentious vote, the Federation Council on Friday expelled Senator Alexander Sabadash for being engaged in business activities while in office.
Council Speaker Sergei Mironov tried to remove Sabadash and three other senators earlier this month, but Sabadash and the legislature in his home region, the Nenets autonomous district, had balked. 
Mironov on Wednesday then called for the vote, accusing Sabadash of carrying out business in Russia and abroad, even though senators are supposed to steer clear of such activities.
Many senators have links to big business, and commentators have called the Sabadash case a publicity stunt meant to show the public that the Kremlin is getting tough on corruption, among other things.
Pressure had been growing for Sabadash to step down. 
Prosecutors searched the Sabadash-owned Liviz distillery in St. Peterburg on Wednesday and Thursday and seized financial documents, Vedomosti reported. 
On Friday, prosecutors detained Liviz’s director and chief accountant on suspicion of tax evasion. 
A deputy head of the Federation Council’s procedural committee, Oleg Panteleyev, said Sabadash held a U.S. green card and earned about $438,000 in the United States in 2004. 
 Authorities also arrested Nenets governor and Sabadash ally Alexei Barinov and charged him with fraud and abuse of office on Tuesday.
Only after the arrest did Sabadash, who became a senator in 2003, submit his resignation. 
No charges have been filed against him. 
The Federation Council also voted Friday to expel Boris Gutin, who represents the Yamal-Nenets autonomous district, and Igor Ivanov, of the Primorye region in the Far East. 
A vote on whether to expel the fourth senator, Arkady Sarkisyan of Khakasia, is scheduled for this week.

TITLE: IN BRIEF
TEXT: Capital Move
ST. PETERSBURG (SPT) — The St. Petersburg-based Baltisky Bank will be reregistered in Moscow by July 15, the bank said in a statement Friday.
In becoming an open joint stock company, Baltisky Bank will offer up to 25 percent of shares to a new strategic investor.
At the moment Baltiisky Bank is a closed joint stock company having 26 regional offices, 16 of them outside the Northwest region. Seven new offices will open by the end of 2007.

Flowing Tax
ST. PETERSBURG (SPT) – Baltika brewery paid out 1.8 billion rubles ($66.5 million) in taxes to St. Petersburg’s budget last year, a 20 percent increase on 2004 figures, RBC reported Monday.
From 1997 until 2005 Baltika paid over 9.8 billion rubles ($362.4 million) in taxes to the local budget. Last year Baltika also paid out over 8.4 billion rubles ($310.6 million) to the federal budget, compared to 5.7 billion rubles ($210.8 million) in 2004.
.
Nuclear Building
ST. PETERSBURG (SPT) — Construction of the second Leningrad Nuclear Power Plant will start by mid-2007 in the Sosnovy Bor area in the Leningrad Oblast, Interfax reported Monday.
The state concern Rosenergoatom will invest $6 billion into the new plant that will replace the defunct capacities of the existing plant. Leningrad Nuclear Power Plant generates about 28 billion kilowatt-hours of energy annually. 
The plant consists of four units each of 1,000 megawatt capacity. The first unit started operating in 1973, the last unit in 1981. 
The new two-unit plant will start operating by 2012-2013, 500 meters from the existing plant.

TITLE: A Steely-Eyed Abramovich
AUTHOR: By Yelena Kokhanovskaya
PUBLISHER: Reuters
TEXT: MOSCOW (Reuters) — Roman Abramovich, Russia’s richest man and the owner of English soccer champions Chelsea, is in talks to buy a stake in steelmaker Evraz Group, a company official said on Monday.
An industry source and the Russian media said about 40 percent of shares in Evraz, Russia’s largest steel maker by volume, could change hands in a deal worth nearly $3 billion that could be announced as early as this week.
The Evraz official, who spoke to Reuters on condition of anonymity, did not give any details of the deal.
An industry source said earlier: “Big events can happen this week. It could be ... about 40 percent.”
The news comes just three days after European steel giant Arcelor said it had agreed to buy Russia’s Severstal to create the world’s largest steel maker in a deal that would thwart Mittal Steel’s bid for Arcelor.
Analysts and industry officials have said that deal could trigger consolidation in the global steel sector.
Vedomosti business daily said Abramovich had suggested that Alexander Abramov, who owns 59 percent of Evraz, sell his shares last year. Another large Evraz shareholder is Alexander Frolov, with about 28 percent.
In an interview with Reuters on Friday, Abramov said the Severstal-Arcelor deal would accelerate consolidation in the sector, with local firms getting together and Russian firms continuing to expand abroad.
He said the owners of Russia’s major steel companies were already in talks with each other.
UralSib investment bank said the purchase of the Evraz stake might be followed by more mergers and acquisition activity led by Abramovich.
Among possible targets, UralSib mentioned assets held by New-York listed steel maker Mechel and Alisher Usmanov, co-owner of Russia’s Metalloinvest company.
Usmanov told Reuters on Friday he had held talks on consolidation with Evraz’s Abramov and Vladimir Lisin, owner of NLMK, Russia’s most profitable steel maker.
Vedomosti quoted Usmanov as saying he was also in talks with Abramovich.
Abramovich is no novice in the metals sector, having gathered aluminum assets into industry giant RUSAL before selling out to partner Oleg Deripaska in 2004.
Rated by Forbes magazine as the world’s 11th wealthiest man with $18.2 billion, Abramovich sold his 72 percent stake in oil company Sibneft last year to Russian gas monopoly Gazprom for more than $13 billion.
Analysts said that, after the Sibneft deal, Abramovich had more than $10 billion in liquid financial assets.
Aton brokerage said Evraz could follow the corporate development model of Sibneft, which it said meant high operating efficiency and large dividends.
“The flip side of the Sibneft business model is a generally lukewarm stance toward minorities, who historically benefited from their Sibneft investment only when the interests of the controlling shareholder coincided with theirs,” Anton said in a note.

TITLE: GM, Volkswagen Deals
AUTHOR: By Lyuba Pronina
PUBLISHER: Bloomberg
TEXT: MOSCOW — General Motors, the world’s largest carmaker, is scheduled to sign an agreement with Russia’s Economy Ministry on building a new plant, Monday’s second accord by a foreign carmaker seeking tax breaks under current rules.
The GM agreement was signed in Moscow at 7:30 p.m. local time by Carl-Peter Forster, president of General Motors’ European division, the ministry said, without providing details.
The announcement follows one by Wolfsburg, Germany-based Volkswagen AG, Europe’s largest automaker, that Interfax news agency said Monday would involve a 370 million-euro ($472 million) investment.
Detroit-based General Motors will be expanding from a vehicle-making joint venture with AvtoVAZ, Russia’s biggest carmaker. The agreements come as Russia negotiates terms of joining the World Trade Organization.
“This is the last opportunity for these companies to sign assembly agreements before Russia enters the World Trade Organization,’’ Kirill Chuiko, an analyst at Uralsib Financial Corp. in Moscow, said in a telephone interview. 
Pending the WTO entry, the Russian government will stop giving new tax breaks to carmakers, he said.
Other foreign carmakers with factories in Russia or plans to build facilities include Toyota Motor Corp. and Ford Motor Co., the world’s second- and third-biggest auto manufacturers;  Nissan Motor Co., Japan’s second-largest; and Renault SA, France’s second-biggest.
Russia's SeverstalAvto has signed licensing agreements with Fiat, Ssang Yong and Isuzu, while AvtoVaz and General Motors are producing the Chevrolet Niva 4WD. 
Russian Economy Minister German Gref said May 19 that the country’s entry to the WTO will probably take place in 2007, though it may come as early as this year. 
Russia and the United States are in “very intensive discussions’’ to resolve “four or five’’ issues hindering Russia’s membership, he said.
Irina Kalashnikova, a spokeswoman for General Motors in Russia, said Monday that she wasn’t aware of the signing ceremony planned by the ministry. 
“Negotiations continue,’’ she said.
 The Volkswagen plant in Kaluga, about 160 kilometers (99 miles) southwest of Moscow, will eventually have capacity to make 115,000 vehicles a year, initially assembling Volkswagen and Skoda cars from kits in the second half of 2007. Car-body construction and painting will be added by 2009.
The Skoda division’s Octavia model will be the first vehicle made at the Kaluga plant as the Czech Volkswagen unit seeks to triple yearly sales in Russia to 30,000 vehicles, Skoda said in a statement Monday.
President Vladimir Putin said Monday he hoped that both plants  would be a success. 
"I hope the projects will be a success," RIA Novosti quoted Putin as saying to a government session.

TITLE: Polish Refiner Snaps Up Yukos’ Mazeikiu
PUBLISHER: Combined Reports
TEXT: MOSCOW — Pipeline monopoly Transneft questioned whether Russia’s oil producers would supply Lithuania’s Mazeikiu Nafta refinery after it was bought on Friday by PKN Orlen, Poland’s largest oil refiner.
But PKN Orlen said it had secured sources, and Lithuania’s government also said the Polish company had received several offers of supplies. If necessary, the refinery could receive oil by sea rather than via pipeline. 
Political relations between Warsaw and Moscow are strained. Moreover, the Polish firm beat Russian rivals to acquire Mazeikiu from Yukos, which has been crushed by back tax demands from the Kremlin – leading some observers to say Russia may halt supplies. 
“We really don’t know who they [PKN Orlen] are,” said Sergei Grigoryev, vice president of Transneft, which now supplies all of Mazeikiu’s crude. “I suppose they should talk to Russian producers about supplies and then only come to us. 
“We know their rivals – LUKoil, TNK-BP and KazMunaiGas. We have met them many times. But we have never met PKN or Russian producers who are willing to supply them with crude.”
PKN Orlen will pay Yukos $1.49 billion for its 53.7 percent stake in Mazeikiu. Lithuania’s government will sell its 30.7 percent stake to Orlen for $851.8 million, once the Yukos sale is approved by EU regulators and Lithuania’s parliament.
 A U.S. bankruptcy court on Thursday lifted an order blocking Yukos from carrying out the sale. 
Mazeikiu was crippled in the 1990s by interruptions to its supply of crude oil after Lithuania sold control to Williams Cos. of the United States, rejecting an offer from LUKoil. 
The Polish company has a plan to ensure oil supplies for Mazeikiu and may use a Baltic Sea coast terminal if supplies from Russia are cut off, said Orlen deputy chief executive officer Cezary Filipowicz. He declined to provide further details.
PKN has said in the past that its present crude suppliers, which include units of Rosneft and Polish-based trading firm J&S, have guaranteed enough oil to supply Mazeikiu. 
The transaction with Yukos should be completed by the first quarter of 2007, Orlen said. The Lithuanian government has a five-year option to sell an additional 10 percent stake to Orlen for between $278 million and $284 million.
Should Mazeikiu have five consecutive years of losses, the owner will have to sell its stake, Lithuanian Economy Minister Kestutis Dauksys said. The government would then have the right of first refusal to buy the stake, he said.
The government could also take back the stake if more than $200 million in Mazeikiu assets are collected as part of the Yukos bankruptcy procedure or if an investor who threatens the national security of Lithuania takes control of Orlen.

(Reuters, Bloomberg)

TITLE: Hochtief In Airport Upgrade
PUBLISHER: Combined Reports
TEXT: MOSCOW — Hochtief, Germany’s biggest construction company, won a $300 million contract to upgrade a terminal at Sheremetyevo Airport, which is trying to revamp its Soviet-era design as passenger numbers increase.
Hochtief, based in Essen, Germany, was chosen Thursday from five bidders to upgrade Terminal 2 at what was once Russia’s main airport, Sheremetyevo’s management said Friday in an e-mailed statement. The other bidders were France’s Vinci, South Korea’s Lotte, Austria’s Schtrabag and Turkey’s IC, the statement said. 
The reconstruction will enlarge the terminal’s size to 240,000 square meters and will include a link to the future Sheremetyevo 3 terminal.
Sheremetyevo 2, built for the 1980 Olympic Games, has never had a major upgrade and has lost tenants, including British Airways, to Moscow rival Domodedovo. Domodedovo served 13.9 million passengers last year, 16 percent more than in 2004, surpassing state-owned Sheremetyevo.
“We need to upgrade Sheremetyevo 2 to attract new airlines and passengers, and we have prospects to develop as a hub,’’ Sheremetyevo spokeswoman Anna Zakharenkova said by telephone, adding that the upgrade would not affect airlines or passengers.
Hochtief will begin work immediately and finish by the end of 2007, Zakharenkova said. The terminal will be able to serve 18 million passengers when the work is completed.

(Bloomberg, AP)

TITLE: AvtoVAZ to Boost Profit
TEXT: MOSCOW (Bloomberg) — AvtoVAZ, Russia's biggest carmaker, expects to more than quadruple profit this year to about 6.3 billion rubles ($233 million), Interfax said, citing Board Chairman Vladimir Artyakov.
Revenue may rise 10 percent from the 130 billion rubles achieved last year, Artyakov said in Togliatti, Russia, where AvtoVAZ is based, the news service reported. The company will seek to reduce inventories and cut costs as it renegotiates contracts with suppliers, Interfax said.
AvtoVAZ wants to continue its venture with General Motors Corp., Interfax said, citing AvtoVAZ Chief Executive Officer Igor Yesipovsky. There’s a “clear understanding’’ the venture will continue to develop, the news agency cited Yesipovsky as saying.
The venture, GM-AvtoVAZ, had its output of Chevy Niva sport-utility vehicles drop 28 percent in the first quarter after a dispute between the partners over supply pricing forced it to halt output for about a week in February. 
Russia’s state-run arms exporter Rosoboronexport took over AvtoVAZ in December.

TITLE: Motorola Gears Itself for Unusual Legal Battle
AUTHOR: By Maria Levitov
PUBLISHER: Staff Writer
TEXT: MOSCOW — Motorola is gearing up for a legal battle with RussGPS, whose allegations of patent infringement have mired the world’s No. 2 cell phone maker in an unusual criminal investigation. 
Motorola will file a defamation suit “in a matter of days,” Sergei Kozlov, the head of Motorola in Russia, said Friday. The allegations of patent infringement are “absolutely false,” he said.
Satellite navigation technology company RussGPS, which says its client roster includes the Russian military, has maintained that seven types of Motorola cell phones violate its patent for a “mobile communications terminal.”
 In an unprecedented development for the telecoms industry, RussGPS has sidestepped the arbitration court and turned directly to the Interior Ministry, which opened a criminal investigation into the case.
RussGPS presented another complaint about a second patent when the companies met at the Prosecutor General’s Office last week, RussGPS manager Pavel Panov said Friday. “We own many more patents that Motorola is violating,” he said, adding that complaints might be filed regarding more than 10 others.
The Prosecutor General’s Office could not provide any immediate information on Friday. Calls to the Interior Ministry’s high-tech crimes department went unanswered Friday.
The patent dispute coincides with the seizure in late March of 167,500 Motorola phones bound for sale in Russia and an ongoing investigation into the legality of the phones.
Eldar Murtazin, head of Mobile Research Group, said it might be part of a campaign to squeeze the American company from the shrinking mobile phone market in Russia.
The Prosecutor General’s Office has denied this. In a statement posted last Tuesday on its web site, it said that its investigators, Federal Customs Service representatives and other officials had met recently with Motorola executives about an investigation into the illegal import of cell phones by a customs certification company employee and criminal negligence by a Sheremetyevo Airport customs official. “The prosecution of certain individuals for contraband products and for negligence is not aimed at obstructing Motorola’s business in Russia,” the statement said.
Motorola was notified of the criminal investigation into the patent dispute after its shipment was seized in late March, Kozlov said. The shipment was originally impounded on suspicion that the phones were illegally imported, but Interfax reported that those charges had been withdrawn. 
Last month, police said they would destroy 50,000 of the seized phones, all C115s, saying the amount of radiation emitted exceeded acceptable levels. 
Kozlov, who denied that Motorola phones were a health hazard, said he could not speculate on whether his company’s troubles in Russia were related to the patent-infringement allegations. “This is the first patent dispute in all the 13 years that Motorola has been working in Russia,” he said.
Murky disputes such as this one contribute to uncertainty on Russia’s mobile phone market, which reached $5.2 billion in 2005 but was expected to shrink by 30 percent this year, Murtazin said. 
Because prices have risen roughly 30 percent since last summer’s crackdown on illegal imports of electronics, users of mobile phones now tend to buy new models less often, he said. 
In this environment, a protracted legal battle may take a serious bite out of Motorola’s business in Russia, where the American company is the largest market player after South Korea’s Samsung. 
Kozlov declined to say whether Motorola had been forced to halt shipments of any of its phone models because of the investigation. He also declined to say whether Motorola was incurring any losses because of the affair, citing a quiet period ahead of next month’s publication of second-quarter financial results.
There is nothing unusual about patent disputes, which “go hand in hand with technological advancement,” Kozlov said. But they are not normally handled by the prosecutor’s office because they require a great degree of technical expertise, he said.
There has been only one instance of Article 147 of the Criminal Code on infringement of inventors’ and patent rights being used to pursue a patent dispute, and that was in the construction sector, said Vladimir Dementyev, head of the intellectual property division at law firm Gowlings in Moscow.
The punishment for violating Article 147 ranges from a fine to several years of imprisonment, he said. 
Panov said RussGPS went directly to the prosecutor’s office because it did not want the case to drag on for years in an arbitration court. The aim was to get Motorola to sign a license agreement for using the patents or to buy the patents from RussGPS, he said. Panov estimated that the two already under investigation, patent No. 31183 and patent No. 34300, had a combined value of $67 million.
Kozlov said Motorola, which is preparing the defamation suit, expected to resolve the dispute in the near future.
To win the suit, Motorola would need to prove that the information disseminated by RussGPS was false and that it hurt Motorola’s business reputation, according to Dmitry Ragulin of Dmitriyev, Ragulin and Partners law firm.

TITLE: Pressure Mounts on Secretive Google
AUTHOR: By Chris Gaither
PUBLISHER: The Los Angeles Times
TEXT: MOUNTAIN VIEW, California — Google evolved from a tiny start-up to the shining star of American enterprise in less than a decade by bringing knowledge to billions of people.
There’s still one thing almost no one knows: How Google works.
“It’s somewhat of a paradox,” said Jordan Rohan, a financial analyst at RBC Capital Markets. “Google’s whole purpose is to make information easier to access — unless, of course, you want to know information about Google.”
The Internet giant’s business model sounds simple. It attracts audiences through search and other Web services, displays targeted ads and charges marketers only when their ads are clicked on.
All that depends on imponderably complex mathematical formulas, a sophisticated accounting system, an aloof corporate culture and a growth strategy secret to all but the upper echelon of the company — making Google one of the most mysterious companies of this century or last.
Although Google playfully reveals how much chicken and coffee its engineers consume every month, as it did during Google Press Day last year, the company won’t disclose much potentially helpful information about its core business, such as how many search queries it returns, how many companies advertise through Google and whether ad prices are increasing or decreasing.
Google’s unwillingness to disclose little more than the legally required basics of how it does what it does — and where it’s headed — has left advertisers puzzled, partners confused, competitors nervous and investors frustrated. Even seasoned Wall Street analysts are left scratching their heads at precisely how Google posted $6.1 billion in revenue last year.
So far, Google’s secrecy doesn’t appear to have put too much of a damper on the leading search engine’s financial or investment prospects. Google in March performed 49 percent of all U.S. Web searches, up from 47 percent the previous year and more than double its nearest competitor, Yahoo, according to research firm Nielsen/NetRatings. Marketers continue to increase their ad spending, as evidenced by Google’s 93 percent year-over-year revenue growth in 2005. And, even after a bit of a slump in the last month, its shares have risen 53 percent in the last year.
But pressure is mounting on Google to be more forthcoming. The very secrecy that helped the company vault to the top of the media-industry pyramid — its $112-billion market value is almost as much as those of Time Warner Inc. and Yahoo combined — could backfire if advertisers and technology partners begin to support its rivals.
Google “is the big kid in the schoolyard,” said Andy Beal, chief executive of Fortune Interactive, an online marketing firm that works with Google. “It makes the rules, and it reserves the right to change the rules. But there’s only so long it can continue to do that before the other kids say, ‘We’re not going to play with them anymore.’”
All search companies are secretive. But as the largest and most idiosyncratic, Google has drawn the most scrutiny.
Google executives say they are trying to operate more transparently.
“Google’s concluded that our interests as a company are better served by being more open about what we are doing, and what we aren’t,” Elliot Schrage, Google’s vice president of global communications and public affairs, said at the start of the company’s annual meeting for media and analysts May 10.
“Of course,” he quickly added, “there are limits.”
He and other Google executives acknowledge that there is much internal debate over where to draw that line. How does Google shake the mantle of being so mysterious without giving an edge to competitors and those trying to game the search rankings?
“It’s a very good question,” Google chief executive Eric Schmidt said. “I don’t know how to answer it.”
After all, Google has some very good reasons for keeping parts of its business secret. A top ranking in the search results has become such valuable online real estate that an entire industry has sprung up to try to boost web sites. But Google’s popularity depends on its ability to deliver relevant search results. Bogus results could drive away users. So Google has kept its ranking formula — which the company says includes more than 200 signals — more secret than the recipe for Coca-Cola.
Google also is locked in a battle with deep-pocketed competitors, including Yahoo and Microsoft, which would be happy to use Google’s secrets in their own favor.
It was discretion that allowed the company a few years ago to sneak up on those Internet giants, whose executives had little idea how profitable search-related ads could be until 2004, when Google’s decision to go public forced it to begin revealing its finances.
Consumers had already been dazzled by Google’s search engine for years, with little idea of how it worked. Its founders have remained vague to keep people from artificially raising their sites’ rankings. “You don’t want to give the game away,” said Danny Sullivan, editor of SearchEngineWatch.com, an industry newsletter. “At the same time, your lack of talking causes people to mistrust you. Perhaps it’s the culture of search — you’ve got these enemies all around you.”

TITLE: Top Manager Finds Success in Active Growth
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: Tatiana Modeyeva, head of the St. Petersburg branch of Intercomp, gives the impression of being a real person of action — having started her career as a laboratory, she changed job over seven times in nine years before finally finding success as a top manager.
Born in Ukraine in 1973, Modeyeva, whose parents were originally from St. Petersburg but traveled a lot on business, spent most of her childhood in Ukraine and Poland. In the latter she graduated from high school and only then came back to Russia. 
“Although I used to spend some time abroad, most of my family has always lived in St. Petersburg and I’ve only associated myself with this city,” she says.
As a child, Modeyeva dreamed of becoming a biologist and, in 1990, entered the Biology Faculty at St. Petersburg State University. Although she got a job as a senior laboratory assistant in the Scientific-Research Institute of Genetics, she studied at the university for just one semester before realizing that she had made a mistake and that it was time to rethink her chosen profession. 
Modeyeva decided to follow the family tradition (her parents’ work was connected with ship- building and navigation safety issues), and in 1991 entered the faculty of economics, finance and law at St. Petersburg State University of Water Communications. She said that she never regretted this new direction, even though it turned out she was susceptible to sea-sickness. 
“I am the only one in my family who has such a problem,” she said, smiling. “However, it’s sufficient that I use all the in-depth knowledge I got during my years of studies on land.”
In 1996, she received a graduate residency at the Northwestern Shipping Company but was soon looking to continue her career at a Western company. Work as a secretary at a German holding company soon proved not to be the challenge she was looking for. 
“Although I worked as a secretary for only two months, it was really an invaluable experience,” she said. “Now I know what hard work it is and have always tried to support the secretaries I’ve worked with.”
In April 1997, Modeyeva got a job that for the first time corresponded with her education. She was recruited as an economist by the advertising agency at LLC “RPP Neva-Sport.” Four months later, she was invited to head the finance division at one of the companies in the holding. 
“At that time our business was developing quickly and there were many possibilities to build a successful career within the company,” she said.
After working there for three years, Modeyeva took a break to give birth to her daughter. 
“But I soon realized that I couldn’t just be a housewife and, when my daughter was almost a year old, I started looking for a job,” she said. 
“I didn’t want to go back to my previous job and applied to companies operating in a different sphere.” Soon she was offered a post as an accountant at one of the leading international IT companies at the time — Artificial Life. Her new start didn’t last long, however — two months later the company went bankrupt and Modeyeva had to find another new place of work. 
Luckily for her, one of the new owners of the company, Swiss Daraut Service, offered Modeyeva a position as chief accountant and then auditor. 
“With the exception of Intercomp, it was one of the best companies I’ve worked with,” she said. “They had the best management team and the business itself (the building of the business centers) was very interesting to me.”
She worked with Daraut Service for three years until, at the end of 2003, she received an offer to join Norwegian holding “Ross-Nor,” which specialized in shipping equipment. 
“It was a big challenge for me as a financier to accept the offer. Only top-class financial specialists work for industrial companies. My education corresponded with the company profile and the experience I got was extremely useful.” 
In 2004, Modeyeva graduated from the Presidential Program that trains Russian managers and civil servants. She had a two-month internship in Norway where she worked as deputy chief financial officer at another industrial firm. 
“My thesis involved a comparative analysis of the economic systems of Russia and Norway. It was a very positive experience that proved useful in my future work.”
In 2005, a few months after finishing her studies in Norway, she felt what she called “one of the biggest disappointments in my life.” 
“Suddenly I realized that my active and enthusiastic approach to work was incompatible with the company’s slow advance,” she said.
Having gained much practical work experience, Modeyeva began looking for a position with a broader range of responsibilities, a demand met by the American outsourcing company Intercomp Technologies when they suggested she head their St. Petersburg branch. Intercomp provides services in accounting, tax consulting, pay roll calculation, personnel leasing, outstaffing and HR administration for more than 350 companies in Russia.
At the new company Modeyeva said she efficiently combines her professional financial background with managerial skills. 
“Now, I feel like the right person in the right place,” she said. 
“Tatiana takes to work like a duck to water,” said Olga Kapralova, PR and marketing specialist at the St. Petersburg branch of Intercomp. 
“She can always provide the clients with all the professional assistance they need, be consulted on complicated issues and provide an expert’s point of view. 
Modeyeva loves communicating with others and said that she is a real team player — social cooperation is the most interesting aspect of her work. 
“I am definitely not an individualist or a dictator, I believe that you can win in business only if you have a good team.”
Although Modeyeva says that she tries to balance work and family, she admits that she might work 14-hour days in a bid to succeed. 
“I think you need to work hard and just have a bit of luck in order to achieve success,” she said. “I strongly believe that slow and steady wins the race.”

TITLE: The Folly of Renationalization
AUTHOR: By Anders Aslund
TEXT: Something strange is happening in the Russian economy. Since 1999, it has delivered stellar growth numbers of almost 7 percent per year, with virtually all of the growth coming from the private sector, which has been led not only by the recovery in the oil and metals sectors, but also by retail and construction. It only took off a few years after privatization, because other market reforms were lagging and new owners needed to consolidate their ownership.
The state, in contrast, has learned little, and continues to fail. Most branches of the state, including law enforcement, the armed forces, public health care and education, the bureaucracy and public infrastructure, are patently flawed. The common denominator in all of these problematic sectors is public ownership.
Under these circumstances, a rational and accountable government should pursue two related courses: accelerated privatization and comprehensive reforms in the public sector. Sensibly, the government was doing so until 2003. But the last three years have brought a halt to all reforms, and this situation is expected to continue until President Vladimir Putin has left office.
Incredibly, underperforming state corporations are swiftly gobbling up successful private firms on a major scale. According to the European Bank for Reconstruction and Development, the share of gross domestic product created by private companies fell from 70 to 65 percent last year.
The most spectacular renationalizations have been in the oil industry. From 1987 to 1996, the old state-owned corporations managed to halve output in Russia’s oil industry through mismanagement and pervasive criminalization. Fortunately, insiders successfully privatized the LUKoil and Surgut oil majors, allowing for some economic recovery. In the other companies, however, the situation remained dire. The Russian government realized that drastic measures were necessary, and succeeded in privatizing several of the most criminalized companies in sales to young outside businessmen.
By 1999, 90 percent of the oil industry was in private hands and, over the next five years, oil production rose exponentially, at an average annual rate of 8.5 percent, as foreign technology and expertise were brought in to revive Russia’s old brownfields. Meanwhile, international oil prices rose, allowing the government to fill its coffers by means of ever-higher taxation of the oil companies.
By 2000, Yukos was paying $6 billion in taxes, far more than anybody would have considered it worth when it was privatized in 1995, proving that legalization and a sensible taxation policy generate much larger state revenues than nationalization. Corporate governance improved in parallel. The stock market favored the newly privatized companies and was waiting for the promised privatization of Rosneft and Zarubezhneftegaz.
Although the privatized economy was booming as never before, renationalization began in 2003. It wasn’t failure or illegality that exposed the private oil industry to this danger, but its success and transparency. The first notable renationalization was Rosneft’s purchase of a small oil company, Severnaya Neft, in early 2003. Remarkably, Rosneft paid $600 million for assets that had been bought for $7 million only a couple of years earlier.
The biggest renationalization has been Rosneft’s seizure of Yukos, which is still being completed. It started in the summer of 2003, when the government began systematically destroying the company through lawless persecution and confiscatory taxation. Rosneft will soon pick up the remaining morsels of Yukos.
In a very different renationalization in September, state-owned Gazprom purchased Sibneft from Kremlin-friendly businessman Roman Abramovich, who wisely lives in Britain. Gazprom paid a high market price of $13 billion for Abramovich’s controlling stake.
Since government persecution made it impossible for the Yukos management to run the company effectively, its investment and output levels began to plummet. Likewise, the long delay in Sibneft’s sale reduced its output. Rosneft, in turn, invested little in its operations, because it was spending all of its cash on acquisitions. The remaining major private producers — TNK-BP, LUKoil and Surgut — realized the danger of investing too much or boosting production excessively, so they moderated their production increases. In 2005, the increase in oil output growth dropped to 2.7 percent, with all of the growth coming from the three big private companies. This year, the government forecast growth of just 2 percent, but after four months output had risen by an annual rate of only 1.7 percent, and stagnation appears to be approaching.
The government could easily and swiftly bring a halt to this ongoing damage through renewed privatization. In particular, Russia needs private companies to develop the difficult new fields where state companies have long failed. Instead there is talk that Rosneft plans to purchase another private company, Surgut. Poorly performing Rosneft is preparing an international IPO to raise billions to repay loans, while the company’s management will be handsomely remunerated in stock options.
Another key sector damaged by renationalization has been banking, in which five big state-owned banks are buying up smaller competitors. Their raids are sometimes accompanied by smear campaigns, bank runs and accusations of money laundering. As a consequence, the banking sector remains state-dominated, and the ratio of the broad money supply to GDP is about 10 percentage points lower than in less-developed Ukraine, where private banks dominate and flourish.
At Russia’s current stage of development, its automotive sector should be taking off, but this will require major investment from international companies. Despite announcements by major manufacturers that they are opening production plants in the country, their projects are being impeded. Meanwhile, Rosoboronexport has taken control of yet to be restructured giant AvtoVAZ, which will receive huge state subsidies that will continue to block the modernization of Russia’s automotive industry.
Some heavy machinery companies, notably Uralmash, have recovered, but last year its mother company, OMZ, was sold to Gazprom for inexplicable reasons. Another decent private corporation, Siloviye Mashiny, was similarly sold to Unified Energy Systems, thus diverting the latter from its core activities.
In the oversized Russian aircraft industry, a few small private companies have recorded success, but they are now to be merged with the big dying state enterprises into a huge AIRUnion corporation, with three-quarters of its shares in state hands. There is no doubt that the big bad state companies will crowd out the promising upstarts with the help of state subsidies.
Transactions like these are proliferating throughout Russia’s big business sector at an ever-increasing speed. Some owners are friendly with the Kremlin, and are well-paid. Others, having neglected their relations with the Kremlin, are paid little, but sell in any case because they fear ending up like poor Mikhail Khodorkovsky.
As all of these examples demonstrate, structural effects are of no interest to the government. Renationalization is being driven by the interests of state officials looking to extend their power and wealth. The government does not even promote these moves until they have already happened, and there is no apparent socialist ideology behind nationalization.
In January, at his annual press conference, Putin said: “We have about 10 relatively large private oil companies. ... Nobody is going to nationalize them; nobody is going to interfere with their activities. They are going to develop according to market conditions, like private companies. I think that this kind of balance is better for the Russian economy today, and this includes active participation from our foreign partners and shareholders.” Meanwhile, a new draft law has named 39 strategic industries that the Kremlin wants to dominate, and renationalization proceeds on course.
Indeed, if no good argument can be found for renationalization, no positive effect is likely to materialize.

Anders Aslund is a senior fellow at the Institute for International Economics in Washington.

TITLE: The Rise and Fall of the Mysterious Sabadash
AUTHOR: By Anna Shcherbakova
TEXT: Last week Alexander Sabadash, the legendary entrepreneur and corporate raider, retired from the Federation Council while his St. Petersburg-based enterprises were investigated by law enforcement bodies. It might be an appropriate time to recall some of Sabadash’s adventures. 
As far as I can remember the press was invited to meet him only once — in the spring of 1999 Alexander Sabadash held a news conference at one of St. Petersburg’s five-star hotels. At that time he was known as one of the region’s biggest producers of vodka, owning the oldest alcohol factory, Liviz, but outsourced production to offshore-zones called ZATO, or closed territories, which existed in Russia at that time. 
None of the factories located in the zones were liable to pay city taxes, and it was Ilya Klebanov, then vice governor responsible for the economy, who accordingly blocked Liviz’s distribution. This was easy for Klebanov since his committee allocated excise marks to all producers. 
Addressing the media was perhaps Sabadash’s last stand in the conflict, and it did not help him much. Nor did the cemetery garland that, rumor has it, he sent to Klebanov’s apartment. 
Since then Sabadash has had a few new adventures. In the autumn of 1999 he was beaten up by the workers of Vyborg Pulp and Paper Mill but then entered the enterprise several months later victorious. Although Sabadash lost control of an aluminum factory in Volkhov after a conflict with his partners, he also purchased a half-ruined factory in the suburbs of St. Petersburg which started to produce vodka, and had plans to build a brand-new aluminum factory on the same site. At the same time Sabadash failed to acquire stakes in both the Astoria hotel and in Baltiysky Bank. 
Many of Sabadash’s deals, whether successful or not, remained hidden from the business community. However, his strategy was clear — as a real corporate aggressor he looked for cheaper or abandoned assets and did everything he could to acquire them. And among his key competitors were not only the most sophisticated and brilliant lawyers but also those who tend to speak with their fists. 
In 2003, Sabadash became a senator in the Federation Council. His new position gave him legal immunity but ruled out many of his entrepreneurial activities. Officially Sabadash delegated the running of his business interests to others, but in fact these activities became more concerted than ever, running up against even stronger competitors. 
For instance, Liviz initiated conflicts with two mighty vodka producers — Kristall and Roust — over their trademarks. Sabadash’s allies, forever covert, tried to appropriate a plot of land in one of Moscow’s prestigious suburbs. Which of these activities forced him to retire and led the police to investigate his enterprises? Whom did he offend to such an extent that even the old tax sins of Liviz were put under scrutiny? 
The Chairman of the Federation Council, Sergei Mironov, claimed that Sabadash had illegitimately stayed in business and — another fault — has an American green card. What a surprise! Unlike a lot of the entrepreneur’s activities, that fact was well known even in 1999, during his first and last news conference. It’s interesting to note that the photos taken there, seven years ago, were again the ones used by the newspapers last week. I think they will remain the only images of a businessman and former senator now set to seek refuge in the U.S. 
Although there is probably little political background to this story, the dangerous case of Khodorkovsky is still fresh in the memory. 

Anna Shcherbakova is the St. Petersburg bureau chief of business daily Vedomosti.

TITLE: A Presidential Transfer of Hubris
AUTHOR: By Jim Hoagland
TEXT: The fallout from United States President George W. Bush’s crash-and-burn approval ratings does not stop at the water’s edge. Foreign leaders — in particular, Russia’s Vladimir Putin — oppose U.S. goals and policies abroad more directly and forcefully as Bush’s support and his time left in office fade away together.
Vice President Dick Cheney’s recent speech criticizing Putin’s record on democracy caught the headlines, but the real news in U.S.-Russian relations is the reversal of fortunes that has made Putin the confident, overbearing leader and Bush the transitional figure who heads a divided nation.
The spirit of hubris that was so palpable in the early Bush years has migrated from the White House to Putin’s Kremlin, Hugo Chavez’s Miraflores presidential palace and other oil- and gas-rich precincts. The petrocrats ride high on undreamed-of revenues, while Bush manages an increasingly defensive foreign-policy agenda and unwieldy budget and trade deficits. That was the unspoken subtext of Cheney’s “hold on there, Vladimir” speech in Vilnius, Lithuania, on May 4.
This reversal may turn out to be temporary. But even as a flash in the pan, it is a costly factor for U.S. prestige and power abroad. And not only for U.S. prestige and power: Lame-duck leaders in London, Paris and Tokyo struggle to keep their nations on the march, while divided coalitions are more or less in power in Berlin and Rome. Iran’s Mahmoud Ahmadinejad, Venezuela’s Chavez and others know that the only time to kick their foes is when they are down.
The comfort Putin feels in reviving the Sinatra Doctrine at the Kremlin — doing it his way — came home to me on three fronts recently.
The first was hearing Dmitry Trenin, a clear-eyed Russian scholar and deputy director of the Carnegie Moscow Center, describe at a Washington seminar the Kremlin’s satisfaction at how well the war in Chechnya is going, at least from the Russian point of view. The conflict has essentially been Chechenized, according to Trenin and diplomats in Moscow, with Russian forces standing down as local forces stand up.
But the diplomats also report that removing Chechnya from the East-West chessboard of big-power politics seems to be intensifying — rather than moderating — Putin’s aggressive determination to make sure that Russia is no longer treated “like part of the furniture” in foreign-policy terms.
The second, and most significant, example of the new assertiveness came when U.S., European and Russian negotiators met in New York two weeks ago to discuss stopping Iran’s drive to enrich uranium. In a previously undisclosed move, Russian Foreign Minister Sergei Lavrov proposed that Iran be allowed to conduct an experimental research and development program of enrichment if Tehran gives up its plan for full-scale development of nuclear reactors.
This was one big step backward. Russia had previously agreed with the U.S. and European insistence that Iran be allowed no access to any type of enrichment, a key step to possessing a nuclear weapon. The Russian plan “would put us on a slippery slope. It is a red line we do not accept being crossed,” said one U.S. official.
Russia’s control over natural gas supplies to Europe — even though much of that gas originates in former Soviet republics in Central Asia, and then passes through Russian pipelines — has also emboldened Putin in his determination to keep Ukraine and Georgia from moving rapidly along the path to NATO membership. Political turmoil in Ukraine has given the Kremlin new relief on that third political front.
Cheney’s speech marked a growing concern within the Bush administration about Putin’s unhelpfulness in foreign affairs rather than an attempt to roll back Putin’s power at home. After all, as Trenin noted, the Russian president’s 72 percent approval rating is more than double that of Bush’s in U.S. polls.
The G8 summit that Putin will host in St. Petersburg in July is now only weeks away. Time is growing short to reach an understanding on political disputes that could spoil Putin’s moment on the world stage. That was Cheney’s essential message — a last effort to caution the Russian president against overplaying his hand.
That is good advice at any time from anyone. But it is particularly credible coming from the Bush-Cheney White House, which five years ago was not sure it had to take Russia, a country with a gross domestic product equal to that of Denmark, into account in big-power politics. Who should know better that hubristic failure is still failure, writ large?

Jim Hoagland is a columnist for the Washington Post, where this comment first appeared.

TITLE: Destabilizing the Situation
AUTHOR: By Yulia Latynina
TEXT: The authorities often accuse journalists of destabilizing situations. A couple of weeks ago, I did the opposite: I honestly tried to debunk some myths about Dagestan.
It all began when I got a call from a foreign journalist. He asked me to comment on the end of democracy in Dagestan, using as an example the Dokuzpara district, where police had fired on protesters who were accusing the head of the local administration of corruption.
I tried to explain that, in Dagestan, there are two ways to oust a local leader. One is to hire a sniper. The other is to stage a demonstration. People who used to choose the first option now prefer the second. This was seen first in the Kumtorkala district. Men serving under the head of the local administration fired on a rally, which dispersed in terror. This was copied in the village of Dokuzpari, where both sides were sprayed with gunfire.
“But the cops fired at a peaceful demonstration!” the caller said in consternation. 
“Don’t worry about them,” I replied. “The peaceful demonstration fired back.”
The second call came a couple of days later. This time, I was asked to comment on the situation in Kizilyurt.
The situation in Kizilyurt is complex. The head of the region, Abdurakhman Gadzhiyev, is in jail on charges of attempting to kill Makhach Magomedov, the head of the Gergebil district. Gadzhiyev’s arrest involved his plane being surrounded by armored personnel carriers right on the airport tarmac as he was returning from the hajj. “I asked the police not to get involved,” Magomedov said afterward. “I told them that we could settle it ourselves.”
“Do you mean the situation concerning Gadzhiyev?” I asked the caller.
“No, not Gadzhiyev,” he replied. “I’m talking about the special operation to destroy two warlords there. The situation in Dagestan is clearly being destabilized.”
“Could the Red Brigade destabilize the situation in Italy?” I asked, rhetorically.
The thing is that Islamic extremists in Dagestan are marginal figures. True, when a rebel fighter is surrounded in an apartment building, he’s never going to surrender. And true, there is a good chance that reckless actions on the part of the police forced him into the situation. But the majority of Dagestan’s Muslims are from the traditional Sufi branch, and are eager to see the more radical Wahhabis go.
“So what is the situation like in Dagestan?” 
“It’s nuts,” I replied.
Imagine appointing a president who doesn’t take bribes. For 15 years, Mukhu Aliyev was the speaker of the Dagestani parliament and lived in an ordinary apartment. Now, when people come to him to purchase some official position, he asks: “Should I simply throw you in jail, or should I try you first?” And this is in a republic where every position has been sold at least twice over. The old elite can only hope to prove that the president can’t handle the job. In Dagestan, this is what counts as a worsening or exacerbation of the situation.
After the call, I turned on the television.
I saw that two men had indeed been taken out — Ibragim Ibragimov and Abdulmazhid Kabashilayev. They were killed using armored personnel carriers and grenade launchers. One member of the special unit involved was killed and 14 were wounded. After that kind of shootout, it’s a little awkward to announce that two rank-and-file rebel fighters had been killed. So we were told they had been planning to attack a school in Kizilyurt.
But here’s the question that should spring to mind: After all of this, how is the president of Dagestan going to explain to investors that Dagestan is a stable republic, but just has some, well, special national traditions?
After each gun battle, after it has taken over half the day to kill one rebel, the dead man is turned into an emir, the right hand of Osama bin Laden and the organizer of a plan to take schools hostage in an Islamic republic. Tell me, who would you say is destabilizing the situation?

Yulia Latynina hosts a political talk show on Ekho Moskvy radio.

TITLE: Bleak House
AUTHOR: By Chris Floyd
TEXT: It’s a familiar image: the U.S. president followed by an aide with the “football,” the ever-present attache case that holds the codes for launching a nuclear attack. But for years, these supposedly supreme commanders-in-chief did not have the slightest idea which targets would actually be hit at their order. This occult knowledge was reserved for a small circle of Pentagon officers who called themselves the “guardians of the arsenal” and kept the true attack plans secret from the civilian leadership.
The first civilian to see the plans, during the Kennedy administration, was, ironically enough, Daniel Ellsberg — the Pentagon consultant who later leaked the “Pentagon Papers,” revealing the disastrous lies behind America’s war in Vietnam. What Ellsberg found was moral insanity almost beyond imagining. The only plan proposed by the “guardians” was an all-out nuclear strike on every city in the Soviet Union, as well as on China and the Warsaw Pact nations, with a deliberately low-balled estimate of 400 million people killed immediately. There were “no intermediate steps, no flexibility and no warnings” incorporated in the plan, which could be triggered by a range of non-nuclear provocations, some posing no direct threat to the United States at all. What’s more, the high priest of the nuclear cult, General Curtis LeMay, reserved the right to launch this genocidal fury on his own, as a first strike, if he suspected the Soviets were preparing to attack.
Civilian control of the military was thus exposed as an empty myth; the center of power in the U.S. government had shifted from the decisions of democratically elected leaders to the imperatives of procurement and militarist paranoia emanating from the five-sided fortress raised up in a Virginia wasteland known as Hell’s Bottom.
This is just one of the many chilling stories recounted in James Carroll’s important new book, “House of War: The Pentagon and the Disastrous Rise of American Power.” Carroll, an acclaimed novelist — and son of a top Pentagon official — provides a devastating inside history of the military state-within-a-state that usurped the Republic and now reigns unchallenged in Washington. 
It is a grim and dispiriting tale indeed. For more than 60 years, the vast, institutional engines of the Pentagon have permeated and skewed U.S. society toward a harsh, fearful and fearsome militarism. In almost every case, the inhuman scale of this gargantuan war machine has infected those who sought to master it. Even the officers and officials who entered its service with the best intentions — and Carroll provides many such instances — were inexorably driven toward the worst instincts of our human nature by the blood-and-iron logic of a system based ultimately on violence, terror and the world-murdering power of nuclear weapons.
Opened in January 1943 as a supposedly temporary concentration of military bureaucracies, the Pentagon quickly became the locus of the inevitably brutalizing effect of war, now magnified a thousandfold by the new technologies of mass destruction, especially air power. Although U.S. commanders at first denounced the British practice of “terror bombing” civilians in enemy countries, by 1945 they had embraced it with a vengeance. LeMay, with his young, number-crunching assistant, Robert McNamara, directed a firebombing campaign against Japanese cities that killed 900,000 civilians in just a few weeks. With this level of civilian slaughter already accepted as deliberate policy, it was hardly a great moral leap to cross the nuclear threshold against Hiroshima and Nagasaki — or, later, to plan for killing 400 million people at a single stroke.
This savage ethos, forged in the dehumanizing crucible of total war, has prevailed against all the many attempts to change it. Even Ellsberg’s discovery did little to return the Pentagon, and the nuclear arsenal, to civilian control. The “whiz kid” McNamara, who by then had become Pentagon chief, demanded a more “humane” attack strategy. But his call for greater precision in targeting required a whole new generation of deadlier, more sophisticated weapons. The Soviets, who had only four — four! — intercontinental missiles when Kennedy took office, felt pressured to respond in kind to the sudden U.S. buildup. This in turn fueled more “countermeasures” by the Pentagon and its procurement partners. Far from easing tensions, the world moved even closer to nuclear conflagration.
The end of the Cold War made no difference to the Pentagon’s corrupting dominance of U.S. policy. The expected “peace dividend” following the Soviet collapse never materialized; the Pentagon simply found new enemies to stir the same public fears and feed its own paranoia: Saddam Hussein, “rogue states,” Islamic extremism. Today, with the never-ending “war on terror,” the Pentagon has completely devoured the state, bending the entire government to its will and commanding limitless sources of corporate patronage and political muscle. The Bush regime has unleashed the “nuclear priesthood,” discarding arms-control treaties, building a new generation of deadlier nukes and once more pressuring Russia, still in the crosshairs of thousands of U.S. warheads, to respond with a new arms race.
Thus we come to the bitter irony at the heart of the story: the Pentagon ethos — which enthrones “national security” as a supreme value for which the “guardians” are willing to sacrifice millions of innocent lives, the nation’s civil liberties, even the planet itself — has, at every turn, only made America less secure.
This brief look at Carroll’s masterful history hardly does the book justice. It should be read in full by anyone who wants to understand how America has reached its present degraded condition — and how daunting the prospects are for real change in the crippling militarism that holds the nation in thrall.

TITLE: On the Verge of a Crisis
AUTHOR: By Mike Eckel
PUBLISHER: The Associated Press
TEXT: SARATOV — Vitaly is the face of Russia’s AIDS epidemic, epitomizing many of its most troubling characteristics. 
The 23-year-old furniture maker, a former intravenous drug user, tells few people that he carries the virus that causes AIDS, fearing harassment and discrimination. Should his immune system fail, it is likely he will not get the drugs needed to keep him alive. 
“It’s considered a dirty disease. People are afraid of it. It’s become a joke for many. No one wants to deal with people who are infected,” said Vitaly, who asked that his last name not be used. 
Critics say neglect of AIDS victims by authorities and callous treatment by regular Russians are part of a culture of denial that has helped place the country on the verge of a public health crisis, as HIV infections spread. 
Russia has 334,000 officially registered HIV- or AIDS-infected people — but the UNAIDS agency puts the figure at nearly 900,000, and many others say the real number is likely well over 1 million, around 1 percent of the population. 
Critics believe the epidemic will deepen amid the country’s decrepit health care system, plummeting health standards, a rising tide of illegal drugs and ubiquitous discrimination. 
As hundreds met in May at a major AIDS conference in Moscow, health experts warned that Russian officials have been too slow to react to a problem moving beyond the core of at-risk people — drug users, gay men and prostitutes — into the wider population. 
Without dramatic policy decisions, experts warn, Russia will be overwhelmed. 
“Russia’s policies on AIDS will be misguided and contentious until its leaders and public believe that they face a threat worth fighting,” Celeste Wallender, an expert at the U.S.-based Center for Strategic and International Studies, wrote in a policy paper in December. 
Russia’s AIDS/HIV prevalence rate was about 1.1 percent of the population in 2003, according to the United Nations’ AIDS program. By comparison, the United States recorded a 0.6 percent rate, France 0.4 percent and the African country of Botswana 37.3 percent. 
There are mixed signals as to whether attitudes, at least officially, are changing. Last month, President Vladimir Putin pledged a 20-fold increase in federal funding to fight the disease, and the issue tops the agenda for the Group of Eight summit in St. Petersburg in July. In his annual state-of-the-union address this month, however, Putin made no mention of the disease, instead focusing on the nation’s sharp population decline. Russian Orthodox Patriarch Alexy II recently called Western-funded nongovernmental organizations doing AIDS work immoral, and the city legislature in Moscow — which has the highest rate of HIV infection in Russia — accused foreign NGOs of fueling the epidemic. 
Provincial population centers such as Vitaly’s home region of Saratov, 700 kilometers southeast of Moscow, also face a broadening epidemic. 
Authorities in the region are working with the Global Fund to Fight AIDS, Tuberculosis and Malaria to help lower the costs for anti-retroviral therapy — drugs that can help manage AIDS’ immunity-debilitating effects. But a lack of funding still means only about 10 percent of people who need the treatment receive it. 
Lyubov Potemina, director of the regional AIDS center, said the number of HIV-infected infants born to infected mothers has been cut dramatically, and that more and more people are being tested as a matter of routine. 
Yet, she says, nearly two-thirds of all new HIV cases last year were due to sexual transmission — a symptom of how the disease is spreading into Russia’s heterosexual, non-drug-using population. In another indication of how dire Russia’s epidemic is becoming, younger people are becoming infected, she said. 
The country’s top AIDS official, Vadim Pokrovsky, says 1 percent of Russia’s 18 to 24-year-olds are infected, and at least 100 Russians become infected with HIV every day. 
With the government slow to respond to the problem, NGOs such as Lyudmila Borisenko’s Megapolis youth organization have largely been at the vanguard of anti-AIDS efforts. But a new law threatens to hamstring NGO efforts by creating onerous bureaucratic regulations. 
Borisenko, whose organization educates youth about HIV/AIDS, said the disease remained highly stigmatized. People responded negatively when she first started her work 10 years ago, after Saratov recorded its first HIV infection: “Doctors, parents said ‘Why are you doing this? You’re burying your children,’” she said. “Now we tell them, we’re saving our children,” she said.
Photos by Mikhail Metzel / AP.

TITLE: U.S. Army Road Accident Sparks Fatal Afghan Riot
PUBLISHER: Reuters
TEXT: KABUL, Afghanistan — Thousands marched angrily through Kabul on Monday after at least seven people were killed and 40 were wounded following a riot sparked by a fatal traffic accident involving a U.S. military truck. 
A U.S. convoy came under attack from a crowd hurling stones and smashing vehicle windows in the Afghan capital when one of the convoy’s trucks crashed into a dozen vehicles, killing at least one person, according to a U.S. military statement.
One of the besieged U.S. vehicles appeared to fire in the air, according to the statement. Afghan police also opened fire when they came to the assistance of the U.S. troops, and it was unclear who was responsible for shooting into the angry crowd. Some eyewitnesses blamed the U.S. troops, others blamed the police and some said both.
“There are indications that at least one coalition military vehicle fired warning shots over the crowd,” a statement issued by the U.S. military said, adding that an investigation had begun.
U.S. military spokesman, Paul Fitzpatrick, said no U.S. troops had been hurt. A Reuters reporter at the scene saw one man shot dead and several wounded people being taken away.
At least seven civilians were killed during the protest, said Karim Rahimi, a spokesman for President Hamid Karzai. A public health ministry official, who requested anonymity, said at least 40 wounded people had been admitted to hospitals.
“A number of our citizens have been martyred and a number of them have been wounded,” Yunus Qanuni, president of the lower house of parliament, told the assembly. He urged people to exercise restraint.

TITLE: Quake Kills 5,000 in Indonesia
PUBLISHER: Agence France Presse
TEXT: BANTUL, Indonesia — Indonesia is struggling to cope with the scale of  an earthquake that struck Saturday, declaring a state of emergency as hospitals overflowed with injured and heavy rains lashed thousands of homeless survivors. 	
The death toll rose to nearly 5,000 on Monday and exhausted troops and emergency teams, who have clawed through debris since Saturday in central Java, continued to find bodies which families carried away for burial in makeshift graves.
Power blackouts and overnight rain hampered rescue work and heaped misery on some 200,000 people made homeless in the disaster, many of whom faced spending a third night out in the open under tarpaulins.
On the road to Bantul, the district hardest-hit by the quake, young men lined the roads, carrying signs reading: “requesting aid” and “please give aid.”
Wooden beams from collapsed houses stuck up from the ground like toothpicks, and broken ceiling tiles and bricks littered the ground.
Survivors, too terrified to return home as hundreds of aftershocks rattled the region, hung out washing on lines strung between trees, or spread what little clothing they had left on blue tarpaulins they used for shelter.
Adding to their fear, Mount Merapi — a volcano north of the quake’s epicenter — continued to simmer after weeks of seismic activity that saw 20,000 people evacuated from their homes amid a major eruption alert.
Vice President Yusuf Kalla said the government had declared a three-month emergency period in the quake zone and allocated $8 million for emergency relief.
International rescuers flew into the devastated region, including a 20-strong search and rescue team from Taiwan and an 87-member Malaysian rescue team which headed out of Bantul in a convoy.
“I heard there are no more bodies trapped in the rubble,” team commander Ahmad Zailani said, explaining that his team hoped to help construct temporary housing for survivors or clear some of the rubble.
Paris-based aid charity Medecins sans Frontieres sent a surgical team to the quake zone, centred on the lush green farming belt south of the ancient city of Yogyakarta.
“We have to get to the outlying areas, where the dead and injured have not yet been counted,” said Vincent Cauche, Indonesia coordinator for Medecins du Monde.“We presume that the injured there have not had access to health care facilities, as their wounds have prevented them from traveling.”
Hospitals overwhelmed with five times their normal patient load begged for more medical staff and supplies to treat the thousands of injured who overflowed from their wards, raising fears of disease.
“Waste management in the hospitals is now critical. There is human waste everywhere. The situation is quite serious,” said UNICEF spokesman John Budd. 
The quake was Indonesia’s third major disaster in 18 months, following the 2004 Asian tsunami catastrophe that killed 168,000 in Sumatra and another quake that killed more than 600 people in Nias in March last year.

TITLE: Colombia’s Uribe Re-Elected
PUBLISHER: The Associated Press
TEXT: BOGOTA, Colombia — Conservative President Alvaro Uribe became the first incumbent to win re-election in Colombia in more than a century, beating his nearest rival by more than 40 percentage points with pledges to continue fighting crime and reducing poverty. 
In what was Colombia’s least violent election in more than a decade, Uribe won a second term on Sunday with 62 percent of the vote — a landslide victory over his closest rival, Sen. Carlos Gaviria, of the leftist Alternative Democratic Pole party.
The win by Uribe, 53, interrupts a series of election triumphs by leftist candidates in South America, which now has left-leaning governments in numerous countries, including Venezuela and Bolivia. Colombia’s legislature last year approved a constitutional amendment allowing Washington’s staunchest ally in Latin America to seek a second term.
Despite finishing far behind, Gaviria captured 22 percent of the vote, a record for the left in this decidedly conservative country. Horacio Serpa of the centrist Liberal Party trailed in third place with just below 12 percent.
With a brutal campaign behind him, the key challenges facing Uribe, who begins his second term August 7, will be those that have dominated daily life in this South American country for decades: poverty, civil war and drug trafficking. Colombia is the world’s largest cocaine producer and Uribe is a key U.S. ally in the war on drugs.
Speaking at a downtown hotel in Bogota late Sunday, the bespectacled leader acknowledged the difficulties of the road ahead.
“All Colombians must improve and I must improve,” he told supporters, some of them wearing blue hats with the victorious campaign slogan “Adelante Presidente” — or “Forge Ahead, Mr. President.” “We must work for our fatherland to achieve the enduring goodness our people and future generations of Colombians deserve.”
He can likely count on a supportive Congress after legislative elections in March gave pro-Uribe parties control of 70 of the Senate’s 102 seats. A friendly Congress will be crucial for what many predict will be a necessary round of belt-tightening following a near-doubling of defense spending and 25 percent increase in troop strength during Uribe’s first presidency.
He’ll also have to complete the demobilization of 30,000 far-right paramilitary fighters, even as evidence mounts that some of the militants have rearmed and their leaders continue to wield power in and out of the areas they once controlled.

TITLE: Factions Offer Hopeful Signs Amid East Timor Strife
PUBLISHER: The Associated Press
TEXT: DILI, East Timor — East Timor President Xanana Gusmao on Monday urged warring factions to end the violence surging through the country’s capital, while ex-soldiers whose rebellion triggered the mayhem offered peace talks. 
Gusmao, the most respected figure in East Timor, addressed a crowd of demonstrators outside government offices in Dili where Prime Minister Mari Alkatiri and his Cabinet held emergency meetings to find a way to end the crisis.
Witnesses reported mobs setting more houses ablaze Monday, though the situation eased since the weekend, when gangs armed with machetes, clubs and spears rampaged through the city in violence that has threatened to tear the young country apart. At least 27 people have been killed in the past week.
Major Agosto De Araujo, a leader of the disgruntled soldiers, said a rebel envoy on Sunday had delivered a pledge to Gusmao that they were willing to join peace talks.
“We are ready to be called back to the negotiating table at any time,” De Araujo said.
The unrest was triggered by the March firing of 600 disgruntled soldiers from the 1,400-member army. After staging deadly riots last month, the sacked troops fled the seaside capital, setting up positions in the surrounding hills and threatening guerrilla war if they were not reinstated.
The dispute has since spread to the general population, with rival gangs battling each other and attacking neighborhoods despite patrolling by Australian peacekeepers. Initially tentative Australian troops seemed to be getting tougher Monday, rounding up gangs of youths and arresting ringleaders.
Australian Defense Minister Brenden Nelson said the troops needed stronger powers if they were expected to break up a repeat of the violence that has flared in recent days.
“The situation is better now," Gusmao said after a cabinet meeting. “We will continue to discuss it.”

TITLE: "Brangelina" Have Baby In African Seclusion
PUBLISHER: The Associated Press
TEXT: WINDHOEK, Namibia — It looks like Angelina Jolie and Brad Pitt got what every parent wants — a healthy baby. 
While Namibian officials declined Sunday to give any details on the birth Saturday of Shiloh Nouvel Jolie-Pitt, a doctor at the hospital said there were no complications and the mother and daughter were doing well.
“She is a healthy baby,” the doctor said, speaking on condition of anonymity because he was not authorized to release information.
Police ringed the hospital with tight security Sunday, refusing to admit journalists and photographers. 
Pitt’s publicist Cindy Guagenti announced the birth Saturday night, but said no other information or photographs would be released.
Samuel Nuuyoma, the governor of the Namibian region of Erongo, confirmed the birth at the Welwitschia Clinic in Walvis Bay and seemed to hint that key details would be released shortly.
“Any information relating to the birth of the baby will be made available to the public soon,” said Nuuyoma, who has become friends with the celebrity couple.
The government has gone to extraordinary lengths to protect the privacy of Jolie and Pitt, who came to Namibia to avoid photographers in the weeks leading up to the birth of their first child.
Namibia put tight security around their hotel and the hospital, set up large green barriers to protect their privacy from photographers and refused to grant visas to any foreign journalists unless they had written permission from Jolie and Pitt to cover the birth.

TITLE: Irish Independence Film Wins Top Prize
PUBLISHER: The Associated Press
TEXT: CANNES, France — British director Ken Loach’s “The Wind That Shakes the Barley,” a saga set amid Ireland’s struggle for independence in the early 1920s, won top honors Sunday in an unanimous vote at the Cannes Film Festival. 
It was the first time veteran filmmaker Loach won the main prize after seven earlier entries in the main competition at the world’s most prestigious film festival.
“The Wind That Shakes the Barley” stars Cillian Murphy as an Irish medical student who takes up arms against a reign of terror by the Black and Tans, British troops sent in to quell calls for independence. 
Loach, who previously won the third-place prize at Cannes with 1990’s “Hidden Agenda” and 1993’s “Raining Stones,” said he hoped the film would be a small step encouraging the British to “confront their imperial history. And maybe, if we tell the truth about the past, maybe we tell the truth about the present.”
Prizes for best actor and actress went to ensemble casts. Penelope Cruz and her five key cast mates in Pedro Almodovar’s “Volver,” including Carmen Maura, Yohana Cobo and Lola Duenas, shared the actress prize. The film, a comic drama about women making do without men, also won the screenplay honor for director Almodovar. 
“It’s such an honor to be able to share this award with all these amazing women,” Cruz said. “I think this award really belongs to Pedro, the master. ... Thank you so much, Pedro, for what you do for women.”
The men of Algerian director Rachid Bouchareb’s World War II saga “Days of Glory,” about North African Muslims who volunteered in the fight to free France from the Nazis, received the best-actor honor. The cast included French stars Jamel Debbouze, Samy Naceri and Sami Bouajila.
In accepting the award, the “Days of Glory” cast joined in on an anthem sung by French colonial soldiers during World War II.
Mexican filmmaker Alejandro Gonzalez Inarritu won the directing prize for “Babel,” which featured Brad Pitt and Cate Blanchett in a multicultural drama about loosely linked families around the globe. 
Inarritu said more than 1,000 people contributed to the production of the film and that “I’m receiving this award on behalf of all of them.”
The grand prize for second-place film was given to French director Bruno Dumont’s “Flanders,” a stark drama following soldiers from dreary farm country through a grisly tour of duty in the Middle East.
The third-place jury prize went to British filmmaker Andrea Arnold’s “Red Road,” a somber tale about a Scottish woman carrying out surveillance on a man responsible for tragedy in her past.
“Only about five hours ago I was in London, so this is very strange,” first-time director Arnold told the Cannes crowd. “It means that maybe more people will see my film, which is very important.”
The award for best film from a first-time director went to Romanian filmmaker Corneliu Porumboiu for his Christmas drama “A Fost Sau N-A Fost?”
On Saturday, Chinese director Wang Chao’s “Luxury Car,” about a retired teacher searching for his lost son, won top honors in a secondary Cannes competition called “Un Certain Regard.”
The main competition’s three high-profile American films — includingSofia Coppola’s “Marie Antoinette,” starring Kirsten Dunst as the 18th century French queen — were shut out. “Marie Antoinette” earned praise for its style and visual panache but was criticized as a superficial treatment of the Austrian aristocrat who became a symbol of extravagance preceding the French Revolution. 
The other U.S. entries were Richard Linklater’s consumer satire “Fast Food Nation,” which had a lukewarm reaction, and Richard Kelly’s darkly comic tale of apocalypse “Southland Tales,” which received a scathing response from critics who scorned it as self-indulgent nonsense. 
The nine-member jury that chose Cannes winners was headed by Hong Kong director Wong Kar-wai and included actors Samuel L. Jackson, Helena Bonham Carter, Tim Roth, Monica Bellucci and Ziyi Zhang. Wong said the decision for the top prize was unanimous.

TITLE: IN BRIEF
TEXT: Swan Swoons For Boat
BERLIN (Reuters) — A swan has fallen in love with a plastic swan-shaped paddle boat on a pond in the German town of Muenster and has spent the past three weeks flirting with the vessel five times its size, a sailing instructor said Friday. 
Peter Overschmidt, who operates a sailing school and rents the two-seat paddle boat on the Aasee pond, said the black swan with a bright red beak has not left the white swan boat’s side since it flew in one day in early May.
“It seems like he’s fallen in love,” said Overschmidt. 
“He protects it, sits next to it all the time and chases away any sail boats that get anywhere nearby. He thinks the boat is a strong and attractive swan.”
Overschmidt said the swan will figure it out sooner or later but hopes he won’t be too heartbroken.
“I’ll wish him all the best and hope that he doesn’t make the same mistake again,” said Overschmidt.”

Jackson Thanks Fans
TOKYO (AP) — Michael Jackson made his first public appearance since being acquitted on child molestation charges, choking up as he thanked Japanese fans at an award ceremony Saturday. 
“I’m honored to be in Japan again and I’m very happy to be among the Japanese people because I love them very much,” Jackson said in a brief appearance at MTV Japan’s “Legend Award” ceremony at Yoyogi Olympic Stadium. “Thank you for your loyalty.”
The pop star was to visit orphanages, tour Tokyo and meet with businessmen during his trip to Japan, according to Broderick D. Morris, chief executive of Positive Productions Yokohama, an entertainment promotions company.
Jackson arrived Friday night with his three children and will stay through Wednesday on the first leg of a swing through Asia that will include stops in Singapore, Shanghai, China and Hong Kong.

Box Office Record
LOS ANGELES (AP) — “X-Men: The Last Stand” stormed to an estimated $107 million three-day opening, the largest ever for Memorial Day weekend and the fourth-biggest in box office history.
Preliminary estimates were released Sunday for the third installment of the series featuring a cast of mutants with names such as Storm (Halle Berry), Wolverine (Hugh Jackman) and Mystique (Rebecca Romijn). 
The 20th Century Fox film opened in 3,690 theaters and grossed a whopping $28,997 per theater.
“People had such a huge awareness of the movie that it just translated into these huge numbers,” said Paul Dergarabedian, president of box-office tracker Exhibitor Relations.
The film benefited from a huge base of fans who had seen the first two “X-Men” films, plus great marketing and solid reviews, Dergarabedian said.

TITLE: Ukraine Readies For World Cup Debut
PUBLISHER: The Associated Press
TEXT: KIEV — Ukraine was the only team headed to the World Cup that looked like it may be ready for the tournament to begin in a series of weekend friendlies. 
Despite missing the injured striker Andriy Shevchenko, Ukraine easily beat Costa Rica 4-0 Sunday in a warmup match between World Cup teams.
Serhiy Nazarenko, Andriy Vorobei, Maxim Kalinichenko and Olexiy Belik scored for Ukraine, which will make its World Cup debut in Germany.
In other games involving World Cup teams, Croatia and Iran tied 2-2 and Ecuador lost to Macedonia 2-1. Also, Estonia and Turkey drew 1-1, and Mali beat Morocco 1-0.
Nazarenko gave Ukraine the lead in the 29th minute in Kiev by knocking in a rebound off goalkeeper Wardy Alfaro.
Vorobei scored in the 35th off a pass from Vladyslav Vashchyuk, and Kalinichenko made it 3-0 in the 40th. Belik scored the final goal in the 56th with help from Andriy Husin.
Ukraine, playing in Group H at the World Cup with Spain, Tunisia and Saudi Arabia, was without Shevchenko, who hurt his knee May 7. He is expected to recover in time for the team’s first match against Spain on June 14.
Costa Rica, which is in Group A with Germany, Poland and Ecuador, will face the hosts in the World Cup opener on June 9 in Munich.
In Osijek, Croatia, Marko Babic converted a penalty kick in injury time.
“It’s not a bad test. We dominated and could have scored many more goals,” Croatia coach Zlatko Kranjcar said.
Ali Karimi put Iran ahead in the 22nd, but Dado Prso equalized nine minutes later after Niko Kranjcar flicked a cross into his path.
Substitute Arash Borhani appeared to have given Iran a late winner in the 82nd, but Babic converted from a penalty kick in injury time after Ivica Olic was brought down in the penalty area by goalkeeper Ebrahim Mirzapour.
“We were close to winning even though there are still some things we need to work on,” Iran coach Branko Ivankovic said. “I am satisfied with the way my players performed in this tough game against a tough rival.”
At the World Cup, Croatia will face Brazil, Australia and Japan in Group F, while Iran takes on Portugal, Mexico and Angola in Group D.
Ecuador took the lead against Macedonia in Getafe, Spain, in the 18th minute when Carlos Tenorio beat several defenders and scored with a deft shot. But Macedonia equalized 10 minutes later when Goran Maznov took advantage of some defensive uncertainty.
Tenorio left the field with an injury in the 64th minute and Igor Mitrevski converted a penalty eight minutes later, after Ivan Hurtado committed a foul.
Ecuador kicks off its second World Cup appearance against Poland in Group A on June 9, and then meets host Germany and Costa Rica.

TITLE: Bonds Outruns Babe Ruth
PUBLISHER: The Associated Press
TEXT: SAN FRANCISCO — Now there’s only Hank Aaron. Barry Bonds hit his 715th home run Sunday to slip past Babe Ruth and pull in right behind Aaron, whose long-standing record of 755 may prove even tougher to crack. 
So let the debate begin: Can Bonds hold up to break it?
“If you keep playing long enough anything is possible,” he said.
This one played out exactly the way the Giants’ slugger wanted — he hit it at home, in front of the fans who adore him.
It just took him a little longer than he had hoped. The historic home run came eight days after he tied the Babe for second place on the career chart.
“For the fans of San Francisco, it can’t get any better than this — even though I made them wait longer than I have in the past,” Bonds said, wearing a new 715 shirt and cap. “Age ain’t catching up with me.”
But at 41, Bonds has been slowed by health problems. He underwent three operations on his right knee last year that limited him to 14 games, and also has bone chips in his left elbow.
And many believe his rapid ascent up the home run ranks was fueled by performance-enhancing drugs — though he has always denied knowingly taking steroids.
Bonds’ latest milestone — a mightier homer than No. 714 — was a 445-foot, two-run shot to center before a sellout crowd. His seventh homer of the season came on the last day before the Giants began a road trip to Florida and New York.
Bonds’ teammates toasted him with champagne in the clubhouse after the Giants’ 6-3 loss to the Colorado Rockies.

TITLE: Mavs Takes Charge of Finals
PUBLISHER: Reuters
TEXT: NEW YORK — Dirk Nowitzki had 28 points and 17 rebounds to lead the Dallas Mavericks to a 95-88 win over the Phoenix Suns in Game Three of the Western Conference finals on Sunday. 
Josh Howard added 22 points and 12 rebounds for the Mavericks, who regained home court advantage after losing the series opener in Dallas and winning the next two games. 
The Mavericks are trying to reach the NBA Finals for the first time and Dallas coach Avery Johnson has stressed the importance of strong defense. 
“Teams are so evenly matched at this time of year,” Johnson told reporters. “It comes down to will. This team is very resilient.”
Dallas trailed 52-47 at halftime but then tightened up considerably, out-scoring the Suns 25-16 in the third quarter to take a four-point lead into the fourth.
The winners meet the winners of the Eastern Conference final between Miami and Detroit for the NBA championship.
Game Four takes place on Tuesday in Phoenix.
The Miami Heat withstood a fourth-quarter barrage to beat the Detroit Pistons 98-83 on Saturday and take a 2-1 lead in the Eastern Conference finals.

TITLE: Bribe Claim Made Against Basso
PUBLISHER: Reuters
TEXT: MILAN, Italy — A stunning accusation from rival Gilberto Simoni cast a shadow over Ivan Basso’s victory at the Giro d’Italia on Sunday.
The 28-year-old Italian from the CSC team won the three-week Giro by more than nine minutes from Spain’s Jose Gutierrez, with Simoni third at 11:59.
But earlier in the day Simoni had accused Basso of asking him for money to let him (Simoni) win Saturday’s 211-km 20th stage to Aprica. 
“Five kilometers from the finish of the stage Basso asked me for money in exchange for him letting me win,” said Simoni, Giro winner in 2001 and 2003.
When told of the accusation, Basso denied asking Simoni for money. “I don’t know why Simoni said such nasty things,” the Italian said.
Basso won Saturday’s tough mountain stage after he and Simoni had broken away from the rest of the pack, Basso going clear in the last four kms to beat his rival by 77 seconds. Italian television tried to persuade the two compatriots to shake hands but Simoni refused.
“Basso deserves his Giro win but he doesn’t exist for me any more,” said Simoni. The Italian Cycling Federation is to open a formal investigation into the accusation.

TITLE: IN BRIEF
TEXT: Sharapova Lashes Out
PARIS (Reuters) — An angry Maria Sharapova accused French Open organizers of putting ticket sales ahead of players’ interests after she limped into the second round on Sunday. 
The Russian fourth seed was forced to play on the opening day of the claycourt Grand Slam despite requesting a late start after aggravating a right ankle injury in training. 
But with organizers keen to put their more marketable players on court in what was the first Sunday start at a Grand Slam, Sharapova was left with no choice. 
“I put in the request Thursday... and after the MRI [on Friday], I called them and I asked them if I could play later,” Sharapova said after she scrambled past American Mashona Washington 6-2 5-7 7-5. 
“The answer was, ‘You’re playing Sunday fourth match.’ Obviously, it’s not in their best interest. 
“It doesn’t make you feel great when you know that the French Federation, all they’re thinking about is selling tickets, making money and about their players. I can't be too happy about that.” 
Despite the injury, Sharapova showed typical steel as she saved three match points in the third set, coming from 5-2 down in the decider to reach round two. 
“I was calling British Airways in the third set,” joked Sharapova. 

Advocaat Deal: ‘Rumors’
ST. PETERSBURG (SPT) — As fans of FC Zenit St. Petersburg eagerly wait to know who will replace former coach Vlastimil Petrzela, news sources reported that Zenit has signed South Korean coach Dick Advocaat to the post.
South Korean, Dutch and Scottish newspapers reported at the weekend that Dutchman Dick Advocaat, who is leading the South Korean national team to the World Cup starting June 9, had signed a $4 million contract on Friday.
But Zenit dismissed talk of Advocaat having already signed the deal as “rumors.”
“Dick Advocaat is only one of the candidates,” Zenit press attache Fyodor Pogorelev said Monday, adding that the club will announce its plans fully after June 8.

CSKA Superleague Win
ST. PETERSBURG (SPT) — The final of the Russian basketball Superleague was a quick affair after CSKA Moscow won the first three games in a best of five series against BC Khimki Moscow Region. The third game Saturday ended with a 81:75 victory for CSKA. The first two games respectively ended 82:59 and 81:65.
In the third place playoff Dynamo St. Petersburg is level with UNIKS Kazan with each team winning two home victories.