SOURCE: The St. Petersburg Times
DATE: Issue #1189 (55), Tuesday, July 25, 2006
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TITLE: Anti-G8 Detainees Prepare To Sue
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: More than a dozen detainees jailed in connection with the G8 Summit will be released this week after serving 15 days for offenses largely unrelated to the summit.
Their sympathizers say they will sue Russia in the European Court of Human Rights.
The 15 activists still to be released on Thursday represent the last batch of dozens of anti-globalists and members of opposition movements from across Europe who faced shorter jail terms, house arrest, fines, police harassment and unfair treatment during the three days of the summit and several days before the event, according to legal sources close to the activists.
Offenses that led to detention included “urinating in public places, swearing at police officers and violating traffic rules were cooked up by the police on the order of the Russian government,” Natalia Zvyagina, a co-ordinator with an advocate group that provided legal support to the Second Russian Social Forum, said.
“Even the fact that the anti-summit forum was confined within a heavily guarded stadium, tens kilometers from the summit’s venue, speaks volumes about the credibility of our claims,” Zvyagina said.
Yury Vdovin, co-chairman of the local Citizens’ Watch Human Rights watchdog and an outspoken critic of the anti-globalists’ methods of protest, said in any case that “the way the Russian government dealt with the ‘anti-summit culprits’ was typical of an authoritarian state not worthy of hosting the G8 Summit.” 
Though critical about protestors’ methods, Vdovin echoed the call to file complaints against Russia in the European Court of Human Rights if those arrested exhaust legal procedures in local courts.
“They are sure to end up in the Strasbourg Court since the rulings of Russia’s higher courts will not differ from those of the lower instances... it’s the same judicial system,” said Vdovin.
Vdovin offered advice. 
“To win their case in Strasbourg they will have to focus mainly on the Article 3 of the European Convention of Human Rights on the Right to Fair Trial,” he said, adding “there is more evidence to prove that the victims were denied the right to a fair trial than there are to prove other violations.” 
But Zvyagina believes that the reports that reached Vdovin constituted only the tip of the iceberg.
“Apart from detaining journalists, eyewitnesses and bystanders, Russian police did not even spare minors,” said Zvyagina who insisted she knew six underage onlookers who were shoved into a police van and detained for several hours.
Vlasta Pidpala, an activist from Ukraine who was jailed for two days and went on hunger strike, believes she has a strong case to file against Russia.
They include denial of the right to a fair trial, unfair treatment and torture, denial of the right of association and freedom of expression and even sexual harassment.
Like her colleagues, Pidpala does not have confidence in Russian justice, saying “complaining against an unfair trial in a different Russian court is like jumping from the frying pan into the fire.” 
Among others, Pidpala said she would complain of violent treatment by Russian police, unwarranted body searches, slander, sexual harassment by police officers and even police attempts to drive her and her colleagues to suicide. 
“They intensified their harsh treatment when we declared hunger strike and made no attempt to stop us,” said Pidpala of the prison officers.
“Nothing is directly related to the G8 Summit — starting from the alleged police harassment to the denial of a fair trial,” noted Vdovin, saying it was a well-marshaled plan by the government to avoid a negative portrayal of the summit. 
“That’s the main reason why the government resorted to preemptive arrests, detentions and imprisonment by forging ridiculous offenses not related to the summit,” Vdovin said, implying that an informal crackdown on the anti-summit activists had taken place days before the event.

TITLE: Rice Flies To Beirut For Talks
AUTHOR: By Katherine Shrader
PUBLISHER: The Associated Press
TEXT: BEIRUT, Lebanon — In a surprise visit to Beirut, Secretary of State Condoleezza Rice praised the beleaguered prime minister of Lebanon on Monday for his courage in struggling to contain the fighting between the Hezbollah militia and Israel.
Rice met with Lebanese Prime Minister Fuad Saniora, who greeted her with a kiss on both cheeks. Rice told him, “Thank you for your courage and steadfastness.”
Saniora told Rice he was glad to have her in Lebanon, adding that his government is looking to “put an end to the war that is being inflicted on Lebanon.” The two shook hands across a conference table on which there were two flags, one Lebanese and one American. Half a dozen other diplomats sat around the table.
Rice said President Bush wanted her to make Lebanon the first stop on her trip to the region, which is embroiled in a 13th day of combat between Israel and Hezbollah. It was her third visit to Lebanon and was intended to make a show of support and concern for both the Saniora government and the Lebanese people, administration officials said.
Rice also met for about 45 minutes with the speaker of Lebanon’s parliament, Nabih Berri, an ally of Hezbollah leader Sheik Hassan Nasrallah and considered friendly to Syria, which held political and military sway in Lebanon for decades before pulling out troops last year.
Going into the session at Berri’s lavish office and residence, Rice said, “I am deeply concerned about the Lebanese people and what they are enduring. I am obviously concerned about the humanitarian situation.”
Berri is an influential figure in Lebanon’s complicated and factionalized political structure. Although the United States considers Hezbollah a terrorist group and has no dealings with it, Rice has met with Berri before. She could use her discussions with him to send an indirect message to Hezbollah, and to try applying pressure on Syria.
Rice also planned to meet with members of the Lebanese parliament who have been staunch opponents of Syria’s influence in Lebanon. She was also scheduled to travel to Israel and to Rome, where she expected to meet with officials of European and moderate Arab governments.
Saniora and other Lebanese officials have been pushing Rice to call for an immediate cease-fire, something the Bush administration has resisted on grounds that it would not address the root causes of hostilities — Hezbollah’s domination of south Lebanon.
“We all want to urgently end the fighting. We have absolutely the same goal,” Rice told reporters traveling with her.
Rice and Bush have resisted pressure for an immediate cease-fire, saying that any peace agreement must come with the right conditions to ensure that it is sustainable. They particularly want to see an agreement that would help Lebanon control its entire territory, including the southern third that is dominated by Hezbollah.
Rice is also seeking more humanitarian aid for Lebanon, and is expected to announce additional U.S. financial aid. But her mission took a dramatic turn with her surprise arrival here under stringent security.
Under heavy guard, Rice flew by helicopter over the Mediterranean from Cyprus. Her motorcade sped through Beirut on the way to her meeting with Saniora.
R. Nicholas Burns, U.S. undersecretary of state for political affairs, said Monday that Rice will seek to use “our influence to see if there can be a cessation of hostilities.”
However, he told CBS’ “The Early Show,” any cease-fire would have to be long-lasting and involve a removal of Hezbollah rockets on the Israeli-Lebanese border and a return of Israeli soldiers taken captive.
En route to the region, Rice discussed the role of Syria, which the U.S. considers one of the world’s state sponsors of terror. In recent weeks, the Bush administration has blamed it, along with Iran, for stoking the recent violence in the Middle East by encouraging the Lebanese Hezbollah militia to attack northern Israel.
Rice pointed out that there are existing channels for talking with Syrian leaders about resolving the Mideast crisis when they’re ready to talk.
“The problem isn’t that people haven’t talked to the Syrians. It’s that the Syrians haven’t acted,” she said. 
“I think this is simply just a kind of false hobby horse that somehow it’s because we don’t talk to the Syrians.”
Egypt and Saudi Arabia are working to entice Syria to end support for Hezbollah, a move that is central to resolving the conflict in Lebanon and unhitching Damascus from its alliance with Iran, the Shiite Muslim guerrillas’ other main backer.
Arab diplomats in Cairo said the United States had signaled a willingness to re-engage Syria through Washington’s encouragement of the Egyptians and Saudis to lean on Damascus to stop backing Hezbollah.

(See related story on page 16)

TITLE: Kresty Prison Primed for Real Estate Deal
AUTHOR: By Evgenia Ivanova
PUBLISHER: Staff Writer
TEXT: The notorious Kresty building, the largest prison in Europe, may soon be transformed into an entertainment center, a shopping mall or a hotel, with a new prison facility being built to replace it on the outskirts of the city. 
The news about the possible conversion of Kresty was first distributed on April Fool’s Day by the London Consulting and Management Company. But the initiative — initially just an elaborate joke — has now turned out to be true in essence: the prison on Arsenalnaya Embankment’s days are numbered. 
The gloomy St. Petersburg landmark, situated on the right bank of the River Neva close to the Finland Station, is due to be sold, Russia’s Federal Service for Punishment (FSIN) confirmed Monday.
“Kresty will be passed on to an investor, who will be able to develop it into a hotel, entertainment or office center — anything that comes to the investor’s mind, as long as the building is preserved,” Alexander Sidorov, FSIN’s head of public relations, said in a telephone interview with the St. Petersburg Times on Monday. 
The developers will not be able to demolish the prison building, as the complex is under state protection and is considered to be one of the city’s “key architectural monuments,” as confirmed by the committee for the state control, usage and protection of cultural and historical monuments. 
Built at the end of the 19th century, the vast red-brick complex represents the most ambitious project in the career of prison architect Antony Tomishko, who died soon after the work was completed. 
The popular name Kresty, or the Crosses, for what is officially known as Pretrial Detention Center No.1, derives from the shape of the two main cross-shaped blocks and also reflects the architect’s concept of the impossibility of imprisonment without repentance, according to the prison’s web site. 
The prison’s developers will also have to build a new modern prison as a part of the deal.
Sidorov of the Federal Service for Punishment said a modern pretrial detention center three times larger than Kresty will be built on the outskirts of St. Petersburg to accommodate detainees in accordance with the recommendations of the Council of Europe.
He declined to disclose the possible investors’ names but said talks with investors are already in their final stages. 
The St. Petersburg office of the London Consulting and Management Company (LCMC) issued a statement Monday stating that, “the press release, sent out on behalf of our company on April 1, 2006, containing information regarding the redevelopment of Kresty was an April Fool’s Day joke. 
“Therefore, at present, the LCMC does not have any connection to the legendary St. Petersburg location.”

TITLE: Russia Shifts Stance Over Iran, Causes Strain at UN
PUBLISHER: The Associated Press
TEXT: VIENNA — Unexpected Russian opposition to key wording of a U.S.-backed Security Council draft resolution is straining international unity on how to deal with Iran’s nuclear defiance, UN diplomats said.
Particularly vexing to the United States and its allies is Moscow’s refusal to endorse language that would tell Tehran it has no choice but to freeze uranium enrichment or face potential sanctions.
Moscow had previously signaled that it was ready to support a tough line. Foreign Minister Sergei Lavrov and counterparts from the United States, China, Britain, France and Germany agreed July 12 to resume Security Council deliberations after Tehran refused requests to respond by that date to their offer of rewards in exchange for an enrichment freeze and other nuclear concessions.
With the United States, Britain and France insisting that a freeze be made mandatory, Russian reluctance could seriously dent the show of unity of the six nations and damage their efforts to persuade Iran to compromise.
The diplomats said there was no indication of what was dictating the apparent change in Russian tactics. But it could be as simple as the belief that Iran would not give up its right to enrichment. If so, any resolution telling it do so and threatening penalties would escalate the confrontation — something the Russians fear could lead to military action.

TITLE: Adamov Freed, Talks of Visiting the U.S.
PUBLISHER: Combined Reports
TEXT: MOSCOW — Former Nuclear Power Minister Yevgeny Adamov, wanted by the United States on charges of embezzling U.S. aid money, walked out of prison Friday after the Supreme Court ordered him released on bail.
As a condition for his release, Adamov agreed not to travel beyond the Moscow region. He told reporters, however, that he intended to go to the United States to attend a hearing in the case against him there. He did not elaborate.
A trip to the United States would almost certainly result in his arrest. U.S. prosecutors said their charges against him were still pending.
A smiling Adamov was greeted outside Moscow’s Matrosskaya Tishina detention center by his wife, daughter and grandson.
“I must stay with my family, my grandson now,” said Adamov, 67. “I have two granddaughters and two grandsons, and tomorrow I will have to go back to work.” He did not specify what kind of work.
Adamov was arrested at the request of U.S. prosecutors while visiting his daughter in Switzerland in May last year. He is charged with siphoning off $9 million provided by the United States to enhance Russia’s nuclear safety. Some of the money, U.S. prosecutors said, turned up in bank accounts in Pennsylvania.
Russia objected to his extradition, saying the U.S. case was intended to get leverage over Adamov and extract nuclear secrets from him. Switzerland extradited him to Russia in December after Russia said it would investigate the allegations itself.
The Supreme Court on Friday accepted defense lawyers’ argument that Adamov deserved release because he returned to Russia from Switzerland willingly and because the criminal investigation was completed, Itar-Tass reported. Prosecutors objected to his release, suggesting that he might flee.
Adamov, who has maintained his innocence, is charged with fraud and abuse of office, and faces a maximum sentence of 10 years if convicted at the trial that could begin as early as next month.
The charges are more extensive than those in the United States and are partly related to older allegations that he embezzled money from the Russian government. But they do not cover all of the charges made by the United States.

(SPT, NYT, AP)

TITLE: Correction
TEXT: Further to “Soviet summer,” an article by Andrei Vorobei that appeared in the All About Town supplement of The St. Petersburg Times on Friday, July 21, the Italian cultural attachÎ in St. Petersburg would like to point out that the correct spelling of his name is Francesco Bigazzi. Apologies to Mr. Bigazzi and his staff.

TITLE: 24 Out Of 25 Local Beaches Are Polluted
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Only one out of twenty-five officially registered beaches in and around St. Petersburg is safe for use, according to this week’s report from Rospotrebnadzor, a state consumer surveillance organization with hygienic supervision functions.
Twenty-four beaches checked by the center’s specialists were found to be contaminated. Water showed dangerous levels of toxins, contaminants or bacteria, and thus the beaches can only be used for sunbathing. Only a beach on the island of Kronshtadt has passed all tests and proved reliable and safe.
The long blacklist of places unsuitable for swimming includes the popular beach at the Peter and Paul Fortress that hosted the SWATCH-FIVB World Tour competition last week.
Swimmers were also advised to avoid two beaches at Primorsky Park Pobedy, the Bezymyannoye Lake beach in the Krasnoselsky District, Zolotoi beach in Zelenogorsk, Laskovy beach in Solnechnoye, Chudny beach in Repino, two beaches on the Izhora River in the Kolpino District, the beaches at Lisy Nos and the Belaya Gora and the Zelenaya Gora beaches in Sestroretsk.
“If people swim in the polluted waters, the very least they can expect is a severe stomach infection,” said Nikolai Borovkov, an expert with the center’s Environmental Hygiene Department. 
Borovkov said that the local water was tested for bacteria, including germs that cause dysentery, salmonella and even cholera, although experts believe the latter is unlikely to be found in the Neva River.
The center’s specialists take sand samples from all the city’s beaches once a month. They also take water samples to test for chemical contaminants such as heavy metals and sample water once a week for dangerous bacteria. On June 16, beaches were declared safe for swimmers but microbiological contamination has increased following several weeks of high temperatures, experts say.
The water pollution is also caused by pumping untreated industrial waste and human waste into the Neva River, where the water is always far from clean.
With the completion of the new Southwest Water-Treatment Plant in 2005, the local water-and-sewage monopolist Vodokanal is able to filter out 85 percent of the waste, but much more money is needed to solve the problem completely. 
There is also the problem of illegally pumped industrial waste. Dmitry Artamonov, head of the local Greenpeace office, said that many city residents are either unconcerned about the problem or unaware of the state of the water.
Illegally pumped water may contain anything from dyes and oils to various chemicals, Artamonov said, warning that polluted water may often appear clean, as much of the illegal waste disposal takes place at night.
“The Neva is fast-flowing, so if you throw something into it at night it will be far away by morning,” he said. “Even if the water looks clean, with no obvious oily patches, don’t trust your eyes — they just don’t give you the whole picture.”

TITLE: NGOs in Chechnya Told to Report to FSB
AUTHOR: By Oliver Bullough
PUBLISHER: Reuters
TEXT: MOSCOW — The Interior Ministry has slapped restrictions on aid workers in Chechnya, adding to difficulties posed by new rules that require nongovernmental organizations to produce paperwork such as the death certificates of founding members.
The new rules mean NGOs must obtain approval from the security services for their staff movements weeks in advance and report to police on their trips when they leave Chechnya.
“This is terrible. We are checking what these regulations are. They will make work impossible,” said a worker at one foreign NGO active in Chechnya, who asked not to be identified.
Meanwhile, NGOs have until mid-October to register under a new law, which sharply increased state monitoring of foreign and local organizations and sparked controversy when rushed through the parliament last year.
NGOs active in the North Caucasus were diverting resources to pulling together the paperwork required by the new law when they suddenly received the new rules about their Chechen operations. They must report to the authorities on arrival and officially accredit and check all local staff with the Federal Security Service.
The rules sent to NGOs this month, in an Interior Ministry letter dated June 2, add strict controls on movement, as well as requiring notice of all staff movements to be given in advance and reporting to the ministry on departure.
NGOs provide food, medical care, psychological help and other services to Chechens, whose homeland has been wrecked by more than a decade of armed conflict.
Other NGO workers contacted also asked not to be identified, citing the sensitivity of attempts to secure registration, but said the regulations clearly exposed the lie in Kremlin statements that the Chechen war was over.
“It seems so hypocritical that after so many statements that the counter-terrorist operations are over, such a thing comes out,” an aid worker said.
Western leaders have criticized President Vladimir Putin for allowing the liberties of rights groups and NGOs to be eroded.
An aid worker said it was necessary to provide passport details for all people on the original founding document of the NGO “and death certificates, if they are dead.”
Another aid worker described needing to have documents officially translated and repeatedly sent back and forth between their organization’s home country and Moscow. “It’s like Kafka’s wet dream. There’s this many documents,” the worker said, indicating a thick file with two hands apart.
Stephen Tull, head of UN humanitarian coordination agency, said he would raise the NGOs’ concerns with the government.
“This Monday, we had the first UN convoy in two years turned back,” he said. 
“We go in on a regular basis, but we were told on a couple of checkpoints we did not have the right papers. Our convoy leader decided to turn back.”

TITLE: Yanukovych Readies Cabinet
PUBLISHER: Combined Reports
TEXT: KIEV — Ukraine’s new pro-Russian parliamentary majority said it had nearly decided its Cabinet lineup and was ready to meet a Tuesday deadline to form a government.
Friday’s announcement puts pressure on Ukrainian President Viktor Yushchenko to speed up his decision about the bid by Viktor Yanukovych, his Orange Revolution rival, to become the new prime minister.
Taras Chornovil, a senior lawmaker in the coalition, said if Yushchenko put forward Yanukovych’s name on Monday, votes on naming the rest of the Cabinet could be held Tuesday, in time to meet a constitutional deadline. Chornovil refused to reveal the potential candidates for Cabinet jobs, noting that it would change if Yushchenko’s bloc decided to join the coalition.
Yanukovych’s Party of Regions has not given up hope that Yushchenko would not only nominate Yanukovych, but also bring his bloc into the coalition. If there is no government formed by Tuesday, Yushchenko will be empowered to dissolve the parliament. Such a move would lead to new elections. 
Yushchenko remains reluctant to dissolve the parliament, his spokeswoman said Friday. “His right to dissolve the parliament is only to be used as a final argument. He believes that sooner or later the political forces will reach agreement,” his spokeswoman Iryna Gerashchenko said at a news conference.
Yushchenko, meanwhile, said Saturday that Ukraine’s four-month-long political crisis had not dented its economic performance. “The economic performance of the country in the first half of 2006 has shown good results. The political battles did not affect economic growth,” Yushchenko said in his weekly radio address to the nation.
The president said gross domestic product growth was running at an annual rate of 5.0 percent over the first six months of this year, and 9.3 percent in the month of June.
(AP, Reuters)

TITLE: Russian, German Spies Try To Rescue Captured Israelis
PUBLISHER: Combined Reports
TEXT: Russian and German intelligence services are trying to help secure the release of three Israeli soldiers captured by Palestinian and Lebanese militants, Germany’s DPA news agency reported Friday.
Both countries’ spies have a history of dealing with Hezbollah and Hamas, and Germany’s Federal Intelligence Agency has brokered prisoner swaps between Israel and Hezbollah in the past.
A spokesman for Russia’s Foreign Intelligence Service declined to comment about the DPA report on Friday.
Spokespeople for the German spy agency and the German Foreign Ministry also declined to comment on whether the spy agency would undertake any role in the current crisis.
President Vladimir Putin said during the Group of Eight summit earlier this month that Russia was doing all it could to help secure the soldiers’ release.
Putin and German Chancellor Angela Merkel on Friday called for a united international effort to end the conflict in Lebanon. During telephone talks, the two leaders emphasized “the need for concerted efforts by the international community to normalize the situation in the Middle East and highlighted the UN Security Council’s role in the process,” the Kremlin said in a statement.
The conversation, which took place at the German side’s initiative, came a day after the Russian Foreign Ministry sharply criticized Israel for its offensive to secure the release of the soldiers and push Hezbollah guerrillas back from its border with Lebanon, saying the actions went “far beyond the boundaries of an anti-terrorist operation.”
Also Friday, the Italian government said it would host an international conference on Wednesday to discuss the possibility of a cease-fire between Israel and Hezbollah, and U.S. Secretary of State Condoleezza Rice would attend it.
The Russian Foreign Ministry stressed the urgency of the conference, saying its participants should be at the level of foreign ministers.
An Italian Foreign Ministry spokesman said neither Syria nor Iran, accused by Israel of sponsoring Hezbollah, had been invited to Rome, and no one from Israel was expected to attend.
Moscow’s statement also did not mention the three states.
Deputy Foreign Minister Alexander Yakovenko said in televised remarks that Lebanon had asked Moscow for humanitarian aid. He said there could be up to 500,000 internally displaced people in Lebanon, including around 200,000 children.
(SPT, AP, Reuters)

TITLE: IN BRIEF
TEXT: Putin Fires Governor
MOSCOW (SPT) — President Vladimir Putin on Friday fired Alexei Barinov, governor of the Nenets autonomous district, and nominated a former KGB officer to replace him.
Putin suspended Barinov in early June after the governor was arrested and charged with fraud and embezzlement. His replacement, whom the regional legislature must approve, is Valery Potapenko, the district’s former chief federal inspector.
The presidential press service said Barinov was fired after “losing the president’s trust.” This is the second time Putin has exercised his newly acquired power to fire governors. 

Corruption Tops List
MOSCOW (SPT) — A majority of Russians think the government should focus on tackling corruption and bringing down prices, a new national survey shows.
According to the survey, conducted in mid-July by the independent Levada Center, 82 percent of respondents put corruption and prices on top of their list of concerns, Interfax reported Sunday.
Asked what the government should do with the current budget windfall, 74 percent of those polled said the money should be used to reduce poverty, increase pensions and salaries for state employees and develop the welfare system.

TITLE: 4 CIS Leaders Snub Moscow’s Informal Summit
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — For the Kremlin, fresh from its public relations coup at the Group of Eight summit in St. Petersburg, the informal meeting of leaders from the Commonwealth of Independent States should have put the icing on the cake.
Instead, the leaders of Armenia, Georgia, Turkmenistan and Ukraine chose to skip the meeting, casting doubt on Russia’s role as the linchpin of the increasingly shaky alliance.
The biggest intrigue of the get-together, held in Moscow over the weekend, was Georgian President Mikheil Saakashvili’s absence. Saakashvili had actively sought a one-on-one meeting with President Vladimir Putin to discuss the situation in Georgia’s breakaway regions of Abkhazia and South Ossetia. When the Kremlin had not confirmed the meeting by last Friday afternoon, the Georgian leader canceled his travel plans.
In an apparent attempt to convince Moscow to stop interfering in the two regions, Georgia had earlier threatened to reconsider its approval of Russia’s bid to join the World Trade Organization. Last Wednesday the Georgian parliament demanded that Russia withdraw its peacekeeping forces from Abkhazia and South Ossetia.
Georgy Arveladze, Saakashvili’s chief of staff, explained that the proposed plan for the meeting was “unacceptable,” Kommsersant reported Saturday. “We’re not coming to Moscow just to watch a horse race,” he said.
Ukrainian President Viktor Yushchenko also turned down the Kremlin’s invitation, citing the tense political situation at home.
Turkmen President Saparmurat Niyazov, who attended the informal CIS summit last year on the eve of Victory Day celebrations in Moscow, offered by far the flimsiest excuse for staying away this year. The Turkmenbashi, or Father of all Turkmens, was enjoying some R&R on the Caspian coast.
The fourth no-show, Robert Kocharyan of Armenia, a staunch Kremlin ally, caught cold on the eve of the meeting and stayed home to convalesce.
For the eight leaders in attendance this weekend, the meeting began with dinner at the exclusive riverfront Prichal restaurant outside of Moscow, where they dined on meat and fish kebabs, grilled sterlet and carp, marinated mushrooms and a whole calf roast on a spit.
The heads of state washed down these delicacies with French and Italian wines. RIA-Novosti made a point of reporting that all of the wines served at Prichal had the new excise stamps required by law.
Virtuozy Moskvy, a well-known classical music ensemble, and Doctor Watson, a retro-pop group, entertained the leaders during dinner, which ended with a traditional dessert of turnovers filled with honey and apples.
The eight leaders devoted less than two hours early Saturday to a closed-door discussion. The topics included revamping the CIS. Putin himself remarked last year that the organization had been created in 1991 to ensure a “civilized divorce” of the Soviet republics.
Kazakh President Nursultan Nazarbayev, whose nation holds the rotating leadership of the CIS this year, shared his ideas for strengthening the organization after Saturday’s meeting.
“We need to make decisions that will satisfy everyone,” he said. “There should be no countries that do not agree and refuse to sign the resolutions, and therefore fail to implement them.”
Of more than 1,600 resolutions adopted by the CIS in its 15-year history, Nazarbayev said, only 10 percent have been implemented.
The Kazakh leader called for a unanimous approach in five main policy areas: migration, transportation, education, security and humanitarian assistance. Agreements on less important issues could be reached between individual states on a bilateral basis, he said.
Nazarbayev added that other leaders had called for a unified foreign policy and a common defense strategy. A formal CIS summit will be held in Minsk this October.
Putin — who was tireless in courting the press at the G8 summit — and the remaining leaders, Ilham Aliyev from Azerbaijan, Alexander Lukashenko from Belarus, Vladimir Voronin from Moldova, Ilam Karimov from Uzbekistan, Emomali Rakhmonov from Tadzhikstan and Kurmanbek Bakiyev from Kyrgyzstan, made no comments to journalists Saturday.
The summit concluded with a visit to the track Saturday afternoon. The races were also attended by Mayor Yury Luzhkov, back in the capital after his visit last Thursday to the Abkhaz capital, Sukhumi, where he took part in a ground-breaking ceremony for a new Russian cultural and business center.
During his visit to Sukhumi, Luzhkov said Russia would treat Abkhazia as a sovereign state, a remark condemned by top Georgian officials, including hawkish Defense Minister Irakly Okruashvili, who publicly branded Luzhkov a “provocateur.”
It is unknown whether the CIS leaders placed any bets Saturday. When Putin went to the races last year, it was reported that he placed a bet and won.
The smallest wager accepted at the Moscow Hippodrome is 10 rubles, and the largest sum won by a punter in recent years is 500,000 rubles ($18,500), racetrack spokeswoman Yulia Gavrova told RIA-Novosti on Saturday.
The Russian President’s Cup, held on Saturday for the third year in a row, finished in a dead heat between a Russian stallion named Satellit and Eshkia, an Azeri stallion. The owners of the two horses split a pot of 6 million rubles ($230,000).

TITLE: Russian Bank Offered International Security
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Vneshtorgbank (VTB) became the first Russian issuer of mortgage securities on the European market last week, when it offered mortgage-based eurobonds on the Irish Stock Exchange. Barclays Capital, HSBC and IFC organized the issue. 
“English investors, as well as investment funds and banks in Austria, Portugal, Greece and Germany showed most interest in the bonds,” VTB press service said in a statement on Wednesday.
The total value of the issue, which is said to secure the bank’s mortgage portfolio, amounts to $88.3 million. The securities will be in circulation for 29 years. 
Andrei Suchkov, VTB senior vice-president, said that the main goal of the issue is to attract long-term financial resources for the development of mortgages in Russia.
“Development of the mortgage securities market will make mortgages more affordable and available to the masses,” Suchkov said.
VTB eurobonds came in three tranches: volume, credit rating and profitability. The main tranche got an A1 rating from Moody’s and a BBB+ rating from the Fitch agency, which is the highest mark for Russian issuers, the company noted in the statement.
At the moment of issue demand for the eurobonds exceeded supply by three times.
“As a result, the securities were ranked towards the lower boundary of the indicated price range of LIBOR plus 100-120 basic points,” the bank statement said.
90 percent of mortgages in the portfolio are registered at VTB in Moscow, 10 percent — in St. Petersburg. The average loan is over $60,000 with an average annual interest rate of 11.1 percent. The loans’ duration varies between 62 months and 302 months.
“An absence of payments that are more than 30 days overdue is indicative of the portfolio’s high quality and its servicing,” the VTB statement said.
Denis Moukhine, an analyst in banking and currency markets at Brokercreditservice, said the event had significance for the Russian market.
“Various legal obstacles meant that the Agency for Mortgage Housing Lending, which was organized to secure bank portfolios by issuing bonds denominated in rubles for the Russian market, could not fully meet the demand for refinancing,” Moukhine said.
“VTB was the first bank to secure its portfolio independently in the European market. As far as I know, they attracted more money than they expected. This scheme will be followed by other banks in the future,” he said.
The VTB group is going to increase its mortgage portfolio from $350 million to $600 million by the end of the year and to $1.2 billion by the end of 2007, said Olga Belenkaya, analyst at FINAM investment company.
“By the end of 2006 VTB is planning to introduce a mortgage refinancing scheme for banks that are in need of long-term funds. In cooperation with VTB other banks will grant mortgage loans on special terms, defined by VTB. VTB will then buy-out these mortgages, create pools and issue debt securities,” Belenkaya said.
In Russia the scheme is a new financial tool. So far mortgages were refinanced by the Agency for Mortgage Housing Lending, Belenkaya said.
“The agency refinanced 40,743 mortgages totaling 20.488 billion rubles ($760.9 million) while the total cost of mortgages issued in Russia by Jan. 1 2006 was 52.8 billion rubles ($1.9 billion). That’s why it remains necessary to develop the system of refinancing,” she said.
Belenkaya saw the eurobonds issue as quite logical. 
“Despite their relatively small volume, which could negatively affect its liquidity, the eurobonds were in demand. Because of their long-term circulation such securities are very interesting for institutional investors,” Belenkaya said.
Moukhine said that VTB eurobonds will continue to see high demand in the future.
“Many banks have already announced interest in VTB’s procedure. They are small and regional banks mostly. Large banks could issue eurobonds on their own,” Moukhine said.

TITLE: JT Peddling Russia Expansion
AUTHOR: By Hiroshi Suzuki and Misayo Fujii
PUBLISHER: Bloomberg
TEXT: TOKYO — Japan Tobacco, the world’s third-biggest cigarette maker, plans to raise production in Russia by more than 40 percent as demand in its home market shrinks, the company’s president said.
Russia’s “economy is in full swing, and political conditions are stable,” Hiroshi Kimura said in an interview on July 18. 
“It’s not unrealistic to envisage producing 100 billion cigarettes a year, and it’s time to seriously consider capital spending” in Russia, he said.
The production plan, equivalent to a third of the Russian market size of 2004, is part of an expansion overseas by the Tokyo-based company. The maker of Mild Seven and Camel brand cigarettes forecasts a 2.5 percent decline in domestic revenue a year after increasing prices twice to cover higher taxes.
Japan Tobacco has capacity to make 70 billion cigarettes a year at its plant in St. Petersburg, Kimura said. Most are sold in Russia, with some in neighboring countries. The production increase would take place over “three to four years,” he said.
The company doesn’t disclose its cigarette sales in Russia alone, though sales in Russia and Ukraine were about 31 percent of sales outside Japan by volume in the year ended March 31.
Revenue outside Japan was 484 billion yen ($4.1 billion). 
“Increasing production as the Russian economy grows is the right direction for the company,’’ said Tokushi Yamasaki, a food and agriculture analyst at Daiwa Institute of Research in Tokyo.
“JT probably had good returns from Russia and Ukraine for the past few years, as income from those areas helped increase the company’s overseas revenue.”
In the three months that ended on March 31, Japan Tobacco’s overseas cigarette sales rose 6.4 percent by volume from a year earlier, to 52.1 billion units, the company said in April. Sales in Japan have slowed following two price increases to reflect cigarette tax increases.
“Asia, Africa and Russia can deliver economic growth,” said Yoshiyasu Okihira, an analyst at Nomura Securities Ltd. Even so, he added, “how they can sell high-priced products in mature markets is the key.”
Japan Tobacco raised domestic retail prices by as much as 30 yen (26 cents) a pack on July 1 this year, following an increase of as much as 20 yen in July, 2003.
The latest price increase is likely to contribute to a larger sales decline than the previous one, Kimura said. The 2003 increase contributed to a drop of about 6 billion cigarettes.
In a June survey of 700 Japanese smokers by a local unit of Pfizer Inc. about 35 percent said they may quit because of the increase. Pfizer conducted the survey in seven major cities including Tokyo, Osaka and Nagoya.

TITLE: IN BRIEF
TEXT: Filling Plots
ST. PETERSBURG (SPT) — Beginning on August 4 the St. Petersburg Property Fund will auction off 30 land plots for the construction of filling stations, Interfax reported Friday.
The lot starting price is 397.7 million rubles ($14.8 million). The land plots are located in Petrodvorets and Metallostroi, at Polyustrovsky prospect, Vyborgskaya and Sverdlovskaya embankments, Prospect Kultury, Magnitogorskaya and Shkolnaya streets.

Insuring Rise
ST. PETERSBURG (SPT) — In the first half of the year the Progress-Neva insurance society collected 696.66 million rubles ($25.9 million) of premiums — a 32 percent increase on the same period last year, Interfax reported Friday.
Personal insurance, with the exception of life insurance, accounted for 18.91 million rubles (one percent increase), property insurance — 443.426 million rubles (47 percent increase), liability insurance — 6.83 million (28 percent increase). 
The company paid out 307.544 million rubles ($11.4 million) to clients — a 31 percent increase on the same period last year.

City Borrowing
ST. PETERSBURG (SPT) — City Hall will borrow 7.5 billion rubles ($278.5 million) next year, Interfax reported Friday. 
In the first half of this year budget earnings (86.559 billion rubles) exceeded expenses (73 billion rubles) by 13.5 percent. 
Oil companies recently registered in the city paid out between 8 billion and 10 billion rubles to the budget.
Next year the City Hall expects a 11.14 percent budget deficit. Earnings are expected to stand at 153.762 billion rubles, expenses — at 173.037 billion rubles.

TITLE: Sistema Wants to Draw Tourists to Altai
AUTHOR: By Maria Levitov
PUBLISHER: Staff Writer
TEXT: MOSCOW — Industrial conglomerate Sistema has signed a cooperation agreement with the Altai region to develop its tourism infrastructure, a deal that may boost the picturesque region’s chances of being named a special economic zone for tourism.
In a deal signed with the Altai regional government on Wednesday, Sistema said it would help to develop hotel complexes, roads, ski resorts, transportation infrastructure and a slew of other projects. The plans could increase the region’s chances of being named a special economic zone for tourism in a tender this fall.
Sistema, which includes real estate and tourism businesses, raised $1.56 billion in an IPO last year. The group plans to develop a hotel and spa complex in Altai’s Mayminsky district that will open in 2008, company spokeswoman Olga Kuznetsova said by telephone Friday.
Sistema has also agreed to raise investment for the region’s airport, roads, telecommunications and other sectors, she said. She declined to put a figure on the investment.
Economic Development and Trade Minister German Gref has discussed the plans with Sistema chairman Vladimir Yevtushenkov and Altai head Alexander Berdnikov, according to the ministry’s web site.
“Unfortunately, Russia is not an attractive country for investment,” said Ruben Yavryan, chief of special zones investment committee at the Russian Chamber of Industry and Commerce. 
Few regions are coveted by investors as overextended utilities infrastructure, a lack of large insurance companies and aging transportation networks increase the risks of investing, Yavryan said during a round table organized by the chamber last week.
The seasonal nature of tourism makes it more difficult to find investors, said Alexander Korneyev, chairman of the investment committee at the Russian Tourism Union.
Legislation on special economic zones for tourism and recreation was passed this summer to encourage investment. The zones are to offer tax and other benefits to companies or individuals involved in construction, refurbishing or running tourist resorts and spas, according to the legislation. 
The tender to pick the tourism zones is expected in August or September, depending on how quickly the Cabinet signs off on the tender procedures, said Dmitry Nekrasov, deputy chief of the Federal Agency for Economic Zones.
While no formal framework for choosing the zones’ location has been finalized, more than 30 regions have made their pitches to become special zones, said Anatoly Ushakov, the Federal Tourism Agency’s chief of domestic tourism. As well as the Altai region — which includes the Krasnodar region and the Karelian republic — several cities along the Volga River have been tipped as strong contenders to become tourism zones.
“Only regions that have already taken serious steps toward development should be considered for special economic status,” Yavryan said.
The Altai region has more than 1 million visitors each year, with the number of tourists from neighboring cities such as Tomsk and Novosibirsk gradually increasing, said Alexander Smirnov, vice president of the Altai Region Tourism Association. Most visitors come to hike in the mountains, but there is a dearth of comfortable accommodation for other tourists, Smirnov said by telephone from Barnaul, Altai’s capital. Accommodation is unevenly spread throughout the region and opportunities for ethnographic and cultural tourism are missed.

TITLE: Hopes For Steady Rise In Ruble
AUTHOR: By Douglas Busvine
PUBLISHER: Reuters
TEXT: MOSCOW — Gradual appreciation by the ruble would be good for the economy but a lurch higher would hurt business, trade and public finances, First Deputy Prime Minister Dmitry Medvedev said.
“In the medium term, a rise in the real exchange rate of the national currency is, apparently, an inevitable process,” Medvedev told news weekly Ekspert in an interview released Friday. 
The ruble has been under intense appreciation pressure as petrodollars flood into the world’s No. 2 oil exporter. The Central Bank intervenes heavily on currency markets to stem the currency’s advance.
But, in the latest of several moves this year, the Central Bank this week did allow the ruble — convertible since July 1 — to rise by another quarter percent against the dollar-euro “basket” it uses as a policy guide. 
The ruble is up by nearly 4 percent on the currency basket this year. 
“You can raise the ruble rate sharply, but then we would be unable to avoid a slump in many sectors of manufacturing industry, we would suffer a trade deficit and there would be problems with budget revenues,” Medvedev said. 
“It is also possible to allow a gradual rise in the real ruble exchange rate, as is happening now. Then the economy has a chance to adjust to reality. This second path is significantly better.”
Medvedev, a protege of President Vladimir Putin, has been thrust into the spotlight as a coordinator of priority national projects to improve housing, education, health and farming. The 40-year-old lawyer, who also chairs Gazprom, is touted as a front-runner to succeed Putin at the 2008 presidential election. 
In recent public remarks, Medvedev has propagated economic views similar to those of key government liberals, such as Finance Minister Alexei Kudrin, Economic Development and Trade Minister German Gref and Deputy Prime Minister Alexander Zhukov.
His main rival in the — still undeclared — battle to succeed Putin is Defense Minister Sergei Ivanov, an ex-spy backed by Kremlin insiders with a security service background. 
Last month, Medvedev used a keynote speech at an economic forum in St. Petersburg to express his concern over the stability of the U.S. dollar as a reserve currency.
The country’s gold and foreign exchange reserves have surged to a record $250 billion thanks to oil exports and it has joined the ranks of China and Japan as a major funder of the U.S. current account deficit. 
Medvedev said gradual currency appreciation would help curb inflation pressures stemming from the Central Bank’s dollar-buying intervention, as well as helping manufacturers to retool by importing new equipment. “A significant share of Russian industrial companies is not effective,” he said.

TITLE: Russian-Backed Airline to Purchase 20 Airbuses
AUTHOR: By Andrea Rothman and Lyubov Pronina
PUBLISHER: Bloomberg
TEXT: FARNBOROUGH, England — Airbus won a commitment from Blue Wings, a German low-cost airline backed by Russian investors, for 20 single-aisle A320-model aircraft valued at about $1.4 billion as the carrier’s owners seek to expand flights in Russia.
The order, which will be made firm in coming months, will allow Blue Wings to build service throughout the former Soviet Union, chief executive officer JÚrn Hellwig said at a press conference at the Farnborough, England, air show.
“This is a further penetration of the A320 family into the very important low-cost market,’’ John Leahy, Airbus’s chief commercial officer, said in an interview at the show. 
Airbus is trying to retain its spot atop the $60 billion-a-year commercial-plane market as Boeing leads in orders this year. Airbus on July 17 unveiled an all-new, 250- to 375-seat A350 XWB model to compete with Boeing’s 787, which will seat a maximum 310 passengers. 
Airbus Friday won a contract valued at as much as $7.5 billion from Singapore Airlines for 20 A350 XWB-900s as well as nine 555-seat A380s.
Blue Wings was founded in February 2002 and started flights the following year from Dusseldorf, Germany. 
The airline operates vacation flights to Turkey for Oeger Tours with one of its three current Airbus planes, and the other aircraft fly to destinations in the Middle East such as Dubai, United Arab Emirates.
The airline is 26-percent owned by Hellwig, 26 percent owned by Cyprus-based NIL Investment Holding, and 48 percent owned by Alpstream, the CEO said. Hellwig is also a board member of Alpstream, a Zurich-based investment company controlled by Russian billionaire Alexander Lebedev’s Moscow-based National Reserve Corp., which owns about 30 percent of Aeroflot, Russia’s largest airline. 
National Reserve also holds a stake in Ilyushin Finance, the biggest domestic aircraft-leasing company.
Deliveries of the 20 A320s that Blue Wings committed to Friday will take place from 2009 to 2011. The A320 has seating for about 150 passengers. Blue Wings has not chosen the engines for the planes, Hellwig said.
Blue Wings will get “a few” of the A320s to “complement” its current fleet, National Reserve chief executive officer Anatoly Danilitsky said by telephone, declining to specify how many the German carrier will take. 
Other A320s will be provided to National Wings, a low-cost Russian domestic carrier that National Reserve plans to start next year, Danilitsky said.
National Reserve plans by September to buy a Russian airline from a short list of five and re-brand it as National Wings in nine months, he said.

TITLE: Fiat Extends Van Pact with Severstal-Avto
PUBLISHER: Bloomberg
TEXT: TURIN — Fiat SpA, Italy’s largest manufacturer, signed an agreement expanding a pact with Severstal-Avto to add the assembly of Ducato vans in Russia. Fiat also finalized an agreement to build trucks in China
Severstal, Russia’s third-largest automaker, will build 75,000 of the vans a year starting in late 2007, for sale in Russia and for export, Fiat said in a statement Monday. Turin, Italy-based Fiat agreed earlier this year to have Severstal build Fiat Palio and Albea cars and Doblo vans and sell other Fiat models in Russia.
Chief Executive Officer Sergio Marchionne is seeking to increase alliances to expand sales in developing countries and trim costs by jointly developing new models with other carmakers including Ford Motor Co. On Monday Fiat was expected to report its sixth straight quarter of profit as earnings from Fiat Auto gain on rising sales in Brazil and increasing European market share from demand for the Grande Punto subcompact.
“Fiat historically was a very international company,” said Eric-Alain Michelis, an analyst at Societe Generale who has a “buy” rating on Fiat shares. “It turned inward-looking for a while, but now it’s really opening up again.”
Severstal Group, Russia’s third-largest steelmaker, raised $135 million in April 2005 in an initial public offering of Cherepovets, Russia-based Severstal-Avto, less than the Russian steelmaker had expected following investors’ concern about the prospects for carmaking in the country at that time.

TITLE: Union Leader Carries Fight to Ford, Brazilian-Style
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: VSEVOLOZHSK, Leningrad Region — Since he came back from Brazil last August, Alexei Etmanov has been a man in a hurry.
In one month he recruited 1,000 workers for his small union at the Ford factory near St. Petersburg, and half a year later they won a 17 percent pay increase. Now he is setting up an independent national autoworkers’ union.
The autoworkers’ newfound confidence could be an extra headache for foreign carmakers looking to cash in on the country’s booming car market. While carmakers have faced problems with local business partners and in finding good-quality, locally produced parts, they have been attracted to Russia by low labor costs and the virtual absence of effective labor unions.
After Etmanov and a colleague traveled to a conference organized by unionized Ford workers in Brazil, he came back with “a heightened sense of social justice,” Etmanov, an energetic 33-year-old welder who exudes an easy confidence, said in a recent interview. 
There he learned that the Brazilian workers not only made better money than Ford’s Russian employees did, but they also cared for the poor and disadvantaged in the wider community.
“As a trade union, what social activities do you do?” a Brazilian union member asked Etmanov, he recalled.
“We celebrate holidays together and buy gifts for our members’ families,” Etmanov told him, an answer that puzzled his Brazilian counterparts.
“Don’t you have an orphanage nearby?” the Brazilian union member asked him.
After Etmanov returned home, he was elected the union’s president, and the first thing he did was to get the union to spend 40,000 rubles ($1,500) on winter clothes for children at a local orphanage, he said.
Compared with Ford’s Russian workers, who earned 10,000 to 17,000 rubles ($350 to $600) per month, their Brazilian counterparts earned $560 to $910 per month, Etmanov said.
Under his leadership, the union demanded a pay increase of 30 percent, and by late September membership grew from just over 100 to more than 1,100 of the factory’s 1,800 workers.
After a series of work-to-rule actions, the workers earlier this year won wage hikes from 14 percent to 17.5 percent, among other concessions. 
The union is still fighting for better conditions; during this summer’s heat wave, it negotiated extra paid breaks for the workers, Etmanov said.
For now, Ford appears to be taking the union’s more assertive approach in stride. 
“This is the first trade union at a Western company that has been so active,” said Yekaterina Kulinenko, a spokeswoman for Ford in Moscow.
The company is willing to negotiate a labor contract with the union at the factory, Kulinenko said by e-mail, without elaborating.
Ford declined a request by a reporter to visit the factory, located a short ride from Vsevolozhsk, a small town awash with greenery that sports Finnish-built houses here and there.
After tensions at the factory flared a year ago, the company appointed Etmanov as an acting supervisor, a move some of his colleagues saw as an attempt to buy him off, he said. 
With a monthly paycheck of about 30,000 rubles ($1,100), Etmanov is better off than many, but said he was fighting for the idea that “Russians are no worse than Brazilians or Americans.”
Etmanov insisted the wage increase had not changed his outlook, although he said “there are things we respect” the factory’s current director, Theo Streit, for. 
The union is now putting together a labor contract, which it hopes will spell out the workers’ rights and conditions as well as ban the hiring of casual labor. 
“The Labor Code is our bedtime reading” now, Etmanov said as he hooked his laptop up to the Internet through his mobile phone at a cafe in central St. Petersburg.
All has not been smooth sailing for Etmanov and his colleagues, however. 
In response to a go-slow this March, Ford hired about 200 temporary workers — a move Etmanov said made his members fear for their jobs — and fired four union activists. Another 40 members left the union, Etmanov said. 
Local authorities have also made their displeasure felt, with one St. Petersburg vice governor calling Etmanov and his activists “trade union racketeers,” Etmanov recalled with a smile.
But Paul Nieuwenhuis, assistant director at the Center for Automotive Industry Research at Cardiff Business School, in Wales, said foreign carmakers in Russia would just have to deal with the new union militancy, as the country was too important a market to pass up. 
Although U.S. companies “hate anything that smells of communism,” they will draw on their experience with strong trade unions back home, Nieuwenhuis said.
Last year, General Motors announced plans to close 12 factories worldwide, while Ford said it planned to close at least 10 over the next few years.
Over the course of the last 10 months, Etmanov’s union has become a beacon for labor activists at other foreign-managed factories in and around St. Petersburg — and for autoworkers elsewhere in Russia.
Now Etmanov plans to take his 1,000 members into a national autoworkers’ union, which will see the Ford workers team up with an independent union at the AvtoVAZ factory in Tolyatti and a group of workers from the Caterpillar factory in St. Petersburg, as well as workers from the now-defunct Moskvich factory.
On July 14, the day before President Vladimir Putin played host to the leaders of the Group of Eight nations in St. Petersburg, Etmanov and the leader of the independent Edinstvo, or Unity, union at AvtoVAZ, Pyotr Zolotaryov, were elected as co-chairmen of the fledgling union. Etmanov and Zolotaryov hope the Moskvich workers will help bring workers from Renault’s Avtoframos factory, located in the old Moskvich plant in southeast Moscow, and workers from the GM-AvtoVAZ joint venture into the new union.
Unlike most of the country’s highly centralized labor unions, the new autoworkers’ union will be “horizontally-structured,” Zolotaryov said by telephone from Tolyatti. 
In 2002, Ford became the first foreign carmaker to set up an assembly plant in the country. Others followed, and General Motors, Toyota and Nissan have all announced plans for factories in St. Petersburg.
Compared to many European countries, where unions are generally independent of the management, foreign companies have so far found labor unions not much of an obstacle in Russia. Laws make going on strike difficult and many workers are apathetic toward the idea of unions. 
“For 70 years, people couldn’t organize on their own,” said Canadian socialist David Mandel, who teaches political science at the University of Quebec, Montrea, and has been visiting Russia and other former Soviet republics to help workers learn more about their rights.
The shock therapy of the 1990s undercut the movement toward a stronger civil society, and the government is not interested in independent organizations, Mandel said. “My feeling is the Federation of Independent Trade Unions exists to prevent a real trade union movement from emerging,” he said, referring to the pro-government successor to the Soviet-era union federation.
In January, workers at the Ford and Caterpillar factories left the pro-government Federation of Independent Trade Unions to join a more radical umbrella group of unions called SotsProf. 
The Ford workers are one of the groups that Mandel has met with on his visits. The situation at the Ford factory is “marginal, unfortunately,” Mandel said. “The labor movement is weak, almost nonexistent.”
Union activists from other companies around St. Petersburg say the Ford workers’ example has inspired them.
“He helped break through an information vacuum,” said Andrei Semushin, a union leader at the Caterpillar factory in the nearby town of Tosno. Semushin and Etmanov were among a handful of Russian activists who participated in a labor movement conference in Detroit, Michigan in May.
Valery Sokolov, leader of an independent union at the Heineken brewery in St. Petersburg, said his workers consulted with the Ford activists when they set up their own union in January. That union now has about 200 members out of 1,000 employees at the brewery. More are thinking of joining after the company raised the unionized workers’ wages by 20 percent, to about 20,000 rubles ($750), Sokolov said.
And workers from the Ariston factory, located next to Ford’s, have recently asked for advice, Etmanov said.
Etmanov also has plans to recruit autoworkers at new foreign-run factories, such as those planned by Toyota and GM in St. Petersburg and the one planned by Volkswagen in Kaluga, southwest of Moscow.
“It had to happen sooner or later,” said Natalya Kudryavtseva, executive director for the St. Petersburg International Business Association, of the upsurge in union activity. “People are starting to value themselves.”

TITLE: Regions Get General Prosecution
AUTHOR: By Nikolai Petrov
TEXT: Vladimir Ustinov’s replacement as prosecutor general by Yury Chaika last month brought with it sweeping and — by Russian standards — rapid personnel changes at national, federal district, and regional levels. The changes were not so much a rotation as a cull, flushing some parts of the system away. Less than a month after Chaika took up his post, six deputy general prosecutors had been fired, including three section heads at the federal district level, and seven regional prosecutors replaced.
Chaika himself said 57 of Russia’s 88 regional prosecutors had been fired in recent years, while only a handful had retired. This depends on your understanding of the phrase “recent years.” Over the Ustinov era, roughly 120 prosecutors were replaced. Only around a dozen current prosecutors held their present posts when Ustinov took office in 1999. One of those was the prosecutor for Dagestan, Imama Yaraliyev, who held the post for 12 years before departing earlier this month. Ustinov’s former colleague in the Krasnodar prosecutor’s office, Anatoly Bondar, also retired — at the age of 46! — just four months after being named deputy general prosecutor for the Far East Federal District and despite a much-praised record for launching high-profile cases against Saratov’s political elite.
Both Ustinov and Chaika are from Khabarovsk, and are about the same age. Chaika, however, has much broader and more varied experience, having worked in Irkutsk Oblast, East Siberia, and the Prosecutor General’s Office up until 1999, which has provided him with a broad background and reserve of connections. Furthermore, he can call on experienced professionals that were sacked by Ustinov — like former St. Petersburg prosecutor Ivan Sydoruk (currently the deputy prosecutor general for the Southern Federal District) — and people from the Justice Ministry, some of whom he took with him when he moved from the Prosecutor General’s Office to the Justice Ministry.
The reshuffle in the Prosecutor General’s Office is all push and pull — outsiders are pushed out, while Chaika is pulling in his own people. The logic of the rotation is clear. Key figures — such as those in the federal districts, Moscow and St. Petersburg — are being replaced by the new prosecutor general’s proteges.
The list of those who have already been moved out includes Southern Federal District Deputy Prosecutor General Nikolai Shepel, Siberia’s Valentin Simuchenkov and Anatoly Bondar in the Far East.
Bondar deserves a special mention. The deputy prosecutor general in Kuban until Ustinov took over at the top, he shot to fame as Saratov prosecutor for cleaning up the local political elite, as well as for running what was effectively a training school for personnel for Ustinov. Several of his deputies flew the nest to become regional prosecutors, while Bondar himself started appointing his own men after taking over as deputy prosecutor general in the Far East — just before Ustinov left, the new prosecutor in Yuzhno-Sakhalinsk, was appointed from Saratov.
At the regional level, the last month saw the departure of Moscow’s Anatoly Zuyev, Ustinov’s brother-in-law; two members of the Saratov clique in Kursk’s Alexander Babichev and Alexander Ponomaryov in Voronezh; Sergei Yeryomin in Krasnodar and Yaraliyev in Dagestan. The posts in Buryatia and Krasnoyarsk are also now vacant after both prosecutors were promoted.
What happens next? The current wave of firings is unlikely to be the last. More deputy prosecutors general are likely to be replaced at federal district level. The most obvious candidates to go are Nikolai Savchenko — from Kuban — in the Central Federal District, and Ivan Kondrat in the Northwest. 
Some hint that this is likely can be found in that regional prosecutors subordinated to them have already been ousted. Of the five replacements at this level, two came in the Southern Federal District, where the deputy prosecutor general was also changed, and three in the Central Federal District.
We can also expect further changes at the regional level. It is hard to say where the axe will fall first, but the likeliest candidates to be unseated are a number of prosecutors in Kuban — Ustinov’s nest — Mordovia and Stavropol, as well as any of the Saratov leftovers in Sakhalin and Yaroslavl. The days are likely numbered for some prosecutors with reputations as crusaders in the Nenets Autonomous Area, Chelyabinsk, Yaroslavl and Samara. 
They may be numbered not because local political elites will be indulged by the new prosecutor, but simply because new faces will follow their boss to replace the most trusted faces from the old system.

Nikolai Petrov is a scholar in residence at the Carnegie Moscow Center.

TITLE: Property Developers Jumping Ship
AUTHOR: By Anna Shcherbakova
TEXT: The traditional driving force of St. Petersburg industry — shipbuilding— is shrinking. In the good old days, the three largest shipyards — Admiralteyskiye Verfi, Baltiysky Zavod and Severnaya Verf — were overloaded with state orders for submarines and ships, tankers and ice-beakers; even furniture, which was then in short supply. 
Another half a dozen smaller shipyards repaired vessels or built patrol-boats, cutters or even yachts. Research and development was additionally responsible for supplying modern designs. As an industry that helped secure the Soviet Union’s sea borders, it was generously supported by the state budget. 
Unfortunately, for many shipbuilding engineers and workers, the good times are irrevocably over. State orders are no longer able to support the industry. More successful are those who export their frigates and submarines to India and China. 
Most shipyards were privatized in the early 1990s and since then have undergone numerous changes in ownership. 
For instance, Almaz, a medium-sized shipyard located on Petrovsky Island, was at some point purchased by the Russian industrialist Kakha Bendookidze, who added it to his empire together with the shipyard in Nizhny Novgorod, and the machinery plants Izhorskye Zavody and Uralmash. 
After Bendookidze moved to Georgia, where he serves as a government official, the best part of his property was purchased by state-owned Gasprombank. Everything related to shipbuilding, which is distinctly less attractive than the production of nuclear equipment, was bought by the shipyard’s management. 
At the beginning of July, Almaz was sold to the local management company Nevsky Capital. The new owners announced their plans to optimize the plant’s production facilities and include Almaz in their real estate projects, which implies that the company will limit its stay in the industry. 
Experts say the attraction of Almaz lies less in its business than in the 16 hectares of coastal territory it occupies — a dream for any real estate developer. They estimate the deal between $50 million to $75 million, which is considerably more than its $10 million turnover in 2005. 
The future of Baltiysky Zavod and Severnaya Verf is also unclear. These yards, which have changed hands several times, have, since last year, been owned by OPK, a daughter company of MezhPromBank. 
According to industry rumors, the bank may sell the holding to the Russian government, uniting several enterprises in the process. Such a merger would obviously mean production be concentrated at one site, with another being used for the construction of new real estate. 
So who is guilty of selling as land plots what were originally business assets? Perhaps the state, which orders fewer and fewer military ships and only occasionally ends up paying for them. Or was it just bad management? For me it is difficult to imagine that the shipyards’ new capitalist owners were guilty of inefficiency.
Unfortunately, as shipbuilding disappears over the horizon, so real estate, both residential and commercial, is coming to the fore. 
These days any land in St. Petertsburg, but especially along the coast, is in high demand — shipyards are attracting property developers rather than researchers and developers. 

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

TITLE: Loose Nukes Need Presidential Aide
PUBLISHER: The New York Times
TEXT: President Bush and President Vladimir Putin of Russia announced two new nuclear initiatives earlier this month that could make the world safer — if the presidents keep prodding their secretive and change-averse nuclear bureaucracies to follow through. On that score, unfortunately, the record is not great. 
Declaring nuclear terrorism one of the biggest threats facing the world today, Bush and Putin began a new coalition of the willing that will share intelligence, develop better ways of securing bomb-making materials and train for the all too imaginable day when a terrorist makes off with a suitcase of plutonium or highly enriched uranium. 
Any effort that requires governments to look harder at how they are protecting nuclear materials is a good idea. That is true whether a country has tons of plutonium stored at nuclear fuel plants or a few kilos of highly enriched uranium, which can still be found in scores of poorly guarded research reactors around the world. 
The new group should develop a set of security standards for all nuclear facilities. And Bush and Putin should set the pace by being the first to sign on. 
The two presidents also announced they would negotiate a civil nuclear cooperation agreement that could allow Russia to get into the multibillion-dollar business of storing spent nuclear fuel. Washington is hoping that the promise of new cash-paying customers will persuade Moscow to finally break with an old customer, Iran, and agree to United Nations sanctions if Tehran refuses to give up its nuclear ambitions. Profit is a strong motivator. But Russian officials have a long, cozy history with their Iranian counterparts, and Bush will need to keep reminding Putin that a nuclear-armed Iran would also threaten Russia’s security. 
Making all this happen will require the sort of intensive presidential attention that neither the White House nor the Kremlin has been willing to invest in the past. Long-running American efforts to help Russia lock up its nuclear arsenal are still plagued by bureaucratic and political wrangling. According to a recent survey by Harvard experts, 15 years after the programs began, the United States has provided full security upgrades for slightly more than half of the buildings with nuclear materials in Russia’s far-flung weapons complex. 
The pace has picked up since Bush and Putin pledged to improve cooperation last year. But there are still many problems to solve, including whether Russia will accept help to secure two huge weapons assembly facilities. That decision has been made harder by Washington’s insistence it be given access to even the most sensitive sites to make sure American tax dollars aren’t wasted. 
Proliferation experts have long urged the White House to name a top adviser to oversee the dozens of nuclear security programs that stretch across the Departments of Energy, Defense, Homeland Security and State. That aide needs to have enough clout to be able to go straight to the president when a problem, either at home or abroad, needs his personal attention. It’s far past time for the White House to take that advice. And if President Bush does, maybe his friend Putin will, too.

TITLE: No Need for a Trilogy
AUTHOR: By David Bosco
TEXT: It was late in June in Sarajevo when Gavrilo Princip shot Archduke Franz Ferdinand and his wife. After emptying his revolver, the young Serb nationalist jumped into the shallow river that runs through the city and was quickly seized. But the events he set in motion could not be so easily restrained. Two months later, Europe was at war.
The understanding that small but violent acts can spark global conflagration is etched into the world’s consciousness. The reverberations from Princip’s shots in the summer of 1914 ultimately took the lives of more than 10 million people, shattered four empires and dragged more than two dozen countries into war.
This hot summer, as the world watches the violence in the Middle East, the awareness of peace’s fragility is particularly acute. The bloodshed in Lebanon appears to be part of a broader upsurge in unrest. Iraq is suffering through one of its bloodiest months since the U.S.-led invasion in 2003. Taliban militants are burning schools and attacking villages in southern Afghanistan as the United States and NATO struggle to defend that country’s fragile government. Nuclear-armed India is still cleaning up the wreckage from a large terrorist attack in which it suspects militants from rival Pakistan. The world is awash in weapons, North Korea and Iran are developing nuclear capabilities, and long-range missile technology is spreading like a virus.
Some see the start of a global conflict. Certain religious websites are abuzz with talk of Armageddon. There may be as much hyperbole as prophecy in the forecasts for world war. But it’s not hard to conjure ways that today’s hot spots could ignite.
Consider the following scenarios:
n Targeting Iran: As Israeli troops seek out and destroy Hezbollah forces in southern Lebanon, intelligence officials spot a shipment of longer-range Iranian missiles heading for Lebanon. The Israeli government decides to strike the convoy and Iranian nuclear facilities simultaneously. After Iran has recovered from the shock, Revolutionary Guards surge across the border into Iraq, bent on striking Israel’s American allies. Governments in Syria, Jordan, Egypt and Saudi Arabia face violent street protests demanding retribution against Israel - and they eventually yield, triggering a major regional war.
n Missiles away: With the world’s eyes on the Middle East, North Korea’s Kim Jong Il decides to continue the fireworks show he began earlier this month. But this time his brinksmanship pushes events over the brink. A missile designed to fall into the sea near Japan goes astray and hits Tokyo, killing a dozen civilians. Incensed, the United States, Japan’s treaty ally, bombs North Korean missile and nuclear sites. North Korean artillery batteries fire on Seoul, and South Korean and U.S. troops respond. Meanwhile, Chinese troops cross the border from the north to stem the flow of desperate refugees just as U.S. troops advance from the south. Suddenly, the world’s superpower and the newest great power are nose to nose.
n Loose nukes: Al Qaeda has had Pakistani President Pervez Musharraf in its sights for years, and the organization finally gets its man. Pakistan descends into chaos as militants roam the streets and the army struggles to restore order. India decides to exploit the vacuum and punish the Kashmir-based militants it blames for the recent Mumbai railway bombings. Meanwhile, U.S. special operations forces sent to secure Pakistani nuclear facilities face off against an angry mob.
n The empire strikes back: Pressure for democratic reform erupts in autocratic Belarus. As protesters mass outside the parliament in Minsk, President Alexander Lukashenko requests Russian support. After protesters are beaten and killed, they appeal for help, and neighboring Poland - a NATO member with bitter memories of Soviet repression - launches a humanitarian mission to shelter the regime’s opponents. Polish and Russian troops clash, and a confrontation with NATO looms.
As in the run-up to other wars, there is today more than enough tinder lying around to spark a great power conflict. The critical question is how effective the major powers have become at managing regional conflicts and preventing them from escalating. After two world wars and the decades-long Cold War, what has the world learned about managing conflict?
The end of the Cold War had the salutary effect of dialing down many regional conflicts. In the 1960s and 1970s, every crisis in the Middle East had the potential to draw in the superpowers in defense of their respective client states. The rest of the world was also part of the Cold War chessboard. From Angola to Afghanistan, nearly every Cold War conflict was a proxy war. Now, many local crises can be handed off to the humanitarians or simply ignored.
But the end of the bipolar world has a downside. In the old days, the two competing superpowers sometimes reined in bellicose client states out of fear that regional conflicts would escalate. Which of the major powers today can claim to have such influence over Tehran or Pyongyang?
Today’s world has one great advantage: None of the leading powers appears determined to reorder international affairs as Germany was before both world wars and as Japan was in the years before World War II.
True, China is a rapidly rising power - an often destabilizing phenomenon in international relations - but it appears inclined to focus on economic growth rather than military conquest (with the possible exception of Taiwan). Russia is resentful about its fall from superpower status, but it also seems reconciled to U.S. military dominance and more interested in tapping its massive oil and gas reserves than in rebuilding its decrepit military.
Indeed, U.S. military superiority seems to be a key to global stability. Some theories of international relations predict that other major powers will eventually band together to challenge U.S. might, but it’s hard to find much evidence of such behavior. The United States, after all, invaded Iraq without UN approval and yet there was not even a hint that France, Russia or China would respond militarily. 
There is another factor working in favor of great-power caution: nuclear weapons. Europe’s leaders on the eve of World War I can perhaps be forgiven for not understanding the carnage they were about to unleash. That generation grew up in a world of short wars that did limited damage. Leaders today should have no such illusions. 
The installation of emergency hot lines between national capitals was recognition of the need for fast and clear communication in times of crisis. Diplomatic tools have advanced too. Sluggish though it may be, the UN Security Council regularly gathers the great powers’ representatives in a room to hash out developing crises. 
So there is reason to hope that the major powers have little interest in playing with fire and the tools to stamp it out. But complacency is dangerous. The British economist Norman Angell once argued persuasively that deep economic links made conflict between the great powers obsolete. His book appeared in 1910 and was still in shops when Europe’s armies poured across their borders in 1914.

David Bosco is a senior editor at Foreign Policy magazine. This comment was published in the Los Angeles Times.

TITLE: The Sword and the Shield
AUTHOR: By Richard Lourie
TEXT: The Federal Security Service, or FSB, is the organization that has for all intents and purposes replaced the KGB. The linkage between the two is open and explicit on every level, from symbolic to that of institutional memory.
The KGB’s symbol in the Soviet era was a sword and a shield embossed with a hammer and sickle. That symbol, representing the workers and peasants, has been replaced by a two-headed eagle, the emblem of tsarist, and now, post-Soviet Russia. Systems change, but the sword and shield abide.
Oddly enough, even though the new Russia has reached back into its tsarist past for much of its regalia, the FSB doesn’t go that far back when writing its own history. The article “On State Security Personnel Day,” published on the FSB web site for the Dec. 20 holiday, traces its roots only to December 1917 and the founding of the Cheka, the abbreviation for the All-Russian Extraordinary Commission for Combating Counter-Revolution and Espionage. The FSB could rightfully have claimed kinship with the tsarist Okhranka, or even Ivan the Terrible’s Oprichnina, the granddaddy of them all, with its symbols of the dog’s head and broom — to sniff out treason and sweep it away.
Perhaps the FSB decided not to reach too far back because it has its hands full in defining itself in relation to its immediate predecessor. The ties are not only abstract and institutional, but involve living connections. President Vladimir Putin served in the KGB from 1975 to 1990 and was head of the FSB from July 1998 to August 1999. Less than six months later he became president. Putin’s successor, Nikolai Patrushev, who is still head of the FSB, has worked in state security organs since 1974.
The FSB’s relationship to its previous Soviet incarnation is complex. With Putin in the Kremlin it is now easier to accentuate the positive. FSB personnel point out that Soviet espionage warned Stalin of Hitler’s intentions on the eve of World War II, but Stalin ignored them. By stealing atomic secrets from the United States and Britain, the article explains that Soviet intelligence, “having created an atomic counterweight, ... prevented a third world war.” (Interestingly, the worst crimes and greatest successes are both, therefore, ascribed to the Stalin era.)
In addition to the state security agencies’ positive contributions, there is also what might be called the neutral aspect. The agencies were only a reflection of the state they served. That’s not much of a defense in a post-Nuremburg world, but historically true enough.
The FSB continues to recognize the millions of victims of the “cruel machine of state security,” but not without adding that among the number were many security people themselves. Nearly all the top leaders — Genrikh Yagoda, Nikolai Yezhov and Lavrenty Beria — were executed.
The FSB cannot be accused of showing too much contrition. The article points out that the worst excesses ended with Stalin’s death in 1953. In fact, some claim that tragedies like the massacre at Beslan in 2004 might have been avoided if the KGB people of the 1970s and 1980s had not been hounded as if they were responsible for the crimes of the Stalin era. As the newspaper Moskovsky Komsomolets quoted one journalist as saying just after the Beslan hostage tragedy: “You wanted to be rid of the KGB? Well, you’re rid of them!”
But the KGB people of the 1970s and 1980s don’t seem to be faring so poorly, considering one of them is running the country and another the FSB. The real problem is that the institutionalized paranoia of the security organs seems to have seeped from Lubyanka into the Kremlin. An Economist cover story published July 13, “Living with a strong Russia,” even calls the Kremlin’s creed “Chekism.” The question about today’s FSB is: What enemy is its sword poised to attack and just who is being protected by its shield?

Richard Lourie is the author of “The Autobiography of Joseph Stalin” and Sakharov: A Biography.”

TITLE: Craven Image
AUTHOR: By Chris Floyd
TEXT: Well, that didn’t take long. Two weeks ago, we wrote here that the “lickspittle, lock-step” U.S. Congress would scurry to give its approval to the dictatorial powers asserted by President George W. Bush after the Supreme Court struck down those claims earlier this month. And lo and behold, last week Republican Senator Arlen Specter introduced a bill that would not only confirm Bush’s unrestrained, unconstitutional one-man rule — it would augment it, exalting the Dear Leader to even greater authoritarian heights.
A more slavish piece of work can scarcely be imagined. And the implications are profound. Besides providing ex post facto cover for Bush’s clearly criminal domestic surveillance programs, the measure is a stinging confirmation that there is no crime the Bushists can commit that the craven rubberstamps in Congress will not countenance. Aggressive war, torture, rendition, “extrajudicial killing” (i.e., murder), spying on citizens — it’s all good for the corporate bagmen, gormless goobers and extremist cranks now polluting the chambers on Capitol Hill.
But the reverberations go even further. Specter’s bill also represents a message from the American Establishment, giving its imprimatur to the codification of presidential dictatorship as the new form of government in the United States, replacing the constitutional republic established in 1789. The bill embraces the core of Bush’s claim to authoritarian rule: that the president cannot be restrained by any law or court ruling in his arbitrary actions on any “matters pertaining” to national security — and of course it is the president who will decide, in secret, what pertains to national security and what does not.
As legal commentator Glenn Greenwald notes, Specter’s obsequious offering “bolsters the president’s theories of unlimited executive power beyond Dick Cheney’s wildest dreams.” And Deadeye Dick has been dreaming of Oval Office tyranny since his days as an errand boy in the pay of Beltway crimelord Richard Nixon. As you recall, Nixon went down for a technicality — covering up a two-bit break-in — rather than for, say, murdering hundreds of thousands of people in the illegal bombing of Cambodia. Yet even that narrow avenue of redress has been closed off now. Obviously, Bush, like Nixon, was never going to be brought to justice for a war crime in which the entire establishment was deeply complicit; but under the new dispensation, a renegade leader can no longer be removed even for a “lesser” infraction — like eviscerating the liberty of U.S. citizens — because the president has been placed beyond the law. Whatever the Leader does is lawful and right, no matter what the legal statutes say.
You think this is an exaggeration? Not a whit. Bush’s own legal minions have asserted this royal prerogative in sworn testimony before Congress, even after the Supreme Court decision. Last week, Deputy Attorney General Steven Bradbury told the Senate Judiciary Committee — chaired by none other than “Spineless” Specter — that “the president is always right” in his interpretation of judicial rulings. That applies even when, as in the case under discussion, Bush was lying by stating that the court’s decision had approved the establishment of his concentration camp in Guantanamo, when the justices had never addressed that issue. But who cares? After all, the “president is always right” — even when he lies, even when he breaks the law, even when he rapes a nation in an unprovoked war.
Specter obviously took Bradbury’s hint and jumped to do the boss’ bidding, with the help, as always, of the mainstream media. All the initial stories portrayed Specter’s bill as a “grand compromise,” a “retreat by Bush” to sensible, moderate, middle ground — despite the fact that, as Greenwald notes, the measure “expressly removes all limits on the president’s eavesdropping powers” and gives the White House carte blanche to sidestep the bill’s few toothless oversight procedures any time it wishes. By reporting the precise opposite of what the bill actually does, the press has established a comforting storyline in the public mind: “The system of checks and balances still works, everything’s fine, nothing to see here, move along folks.” Now, any opposition that might arise to this power-grab can be dismissed as partisan quibbling or shrill Bush-bashing. After all, who would object to a “grand compromise” except some traitor or jihadi-lover?
Of course, none of this repressive machinery would be necessary if your actual intention was to track terrorists and uncover potential threats. Presidents in need of domestic surveillance have long had access to a special secret court that greenlights eavesdropping whenever there is even the remotest hint of possible danger. Since 1978, the court has approved more than 18,700 such requests and rejected only four. It even has an emergency provision that allows presidents to start wiretapping without prior approval. But these vast powers aren’t enough for Bush; in fact, he apparently began circumventing the court with warrantless phone record spying seven months before the Sept. 11 attacks, Bloomberg reports. (One measure in Specter’s bill will allow Bush to quash the lawsuit from which this revelation emerged.) Whatever he’s really doing with his warrantless spy programs, whatever he’s trying to hide from independent oversight, it has little or nothing to do with fighting terrorism.
Naturally, Specter’s kowtowing concoction is larded with pious claptrap about “protecting civil liberties.” But it’s all just the proverbial lipstick on a pig, a cynical attempt to gussy up the ugly reality of raw, blunt, brutal power that has cowed — if not quelled — the once-proud spirit of American freedom.

TITLE: Notes From a Very Russian Musical Underground
AUTHOR: By Sophia Kishkovsky
PUBLISHER: The New York Times
TEXT: It’s another busy night at the noisy Casino de Paris here in Moscow, a grown-up post-Soviet Disneyland where burly men with expensive cell phones, their dolled-up companions and aging, wide-eyed foreigners play blackjack amid swirls of cigar smoke and snifters of cognac. But what makes the scene truly Russian is the musical entertainment. On a vintage-looking stage framed by red velour curtains, a group of musicians is livening up the proceedings with tunes inspired by an unlikely source: the gulag.
Some of the songs played by the band, Lesopoval — the word means timber-felling, after a brutal form of forced labor in the gulag — are jaunty; others are plaintively romantic. Backed by accordion, synthesizer, guitar, drums and choreographed singers, Sergei Kuprik, the lead heartthrob, sings of the long train ride to the barracks, life in the barracks, love in the barracks, memories of the barracks.
His lyrics are sprinkled with untranslatable prison slang but have the unmistakably epic sweep of this nation’s history.
This is Russian chanson, an amorphous genre (not to be confused with the French cabaret style made famous by Edith Piaf and Charles Aznavour) that has become the soundtrack of contemporary Russia. In almost any city, it booms from kiosks and cars and casinos and discos, with gritty songs of Russian life that appeal to pre-teenagers and little old ladies alike and contrast sharply with the bland vanilla pop of the payola-ridden state-controlled media.
With its deeply, even brazenly romantic take on crime and punishment, it has often been compared to American gangsta rap (and, in its more soulful, renditions to country music), and it has similarly attracted an audience of people far beyond the actual criminal underworld. When Mikhail Krug, often called the king of Russian chanson, was murdered in 2002, hundreds of thousands attended his funeral. Fans still descend on his home and grave as if they were Graceland.
But even more than gangsta rap, Russian chanson has attracted the ire of politicians. In a widely broadcast denunciation, Vladimir Ustinov, who was then prosecutor general, referred to a chanson competition in Russia’s prisons as “propaganda of the criminal subculture.” In Siberia, a public official recently announced that intercity bus drivers would be “banned from listening to chanson and other obscene music.”
In Russia, where radio and television are often subject to bribery and political influence, that official disfavor can have real consequences. And so chanson, despite its popularity, is relegated to sporadic broadcasts and late-night time slots.
“They’re afraid that people who listen to pop will suddenly hear chanson and they’ll like it,” Kuprik said. “Maybe there are other reasons. Maybe censorship. There’s an idea that Soviet people shouldn’t think, reflect.”
As a result, it enjoys a strange double identity of a sort possible only in a country balancing the liberties of wild capitalism with the legacy of recent totalitarianism. It is a forbidden product that flourishes in the brightest spotlight, a phenomenon that is officially discouraged but tacitly indulged, a status symbol all the more powerful because it’s illicit.
“I like the phrase of one DJ,” said Mikhail Medvedovsky of Radio Petrograd Russky Chanson, a St. Petersburg radio station that has thrived despite the strictures on its music — a paradox that is characteristic of the Russian media. “‘Russian chanson is like a pornographic magazine. Everyone reads it, everyone listens to it, but they’re afraid to admit it.’”
Some officials and bankers, he said, don’t hide it and ask for advance copies of the latest releases. In fact, some of the most popular performers earn their biggest paychecks at parties and weddings for Russia’s rich and famous. And Lesopoval recently played at the birthday of Vladimir Zhirinovsky, the leader of the Liberal Democratic Party.
The deep roots of chanson stretch back to pre-revolutionary Russia, to the songs of serfs and tsarist political prisoners. (They may reach back even further: One of the highlights of Holy Week in the Russian Orthodox Church is a hymn called “The Wise Thief,” which Russians are known to race to church to hear.)
Some of these songs sound like Russian equivalents of chain-gang songs and have deep folkloric roots. The protest songs of future Bolshevik leaders held in tsarist prisons are also part of the genre’s history. Meanwhile, blatnaya pesnya (literally translated as “criminal songs”) have a distinct underworld air.
The roots took hold in the early Soviet era, with its bloody period of civil war and nationalization, followed by the New Economic Policy, a brief, chaotic period of liberalization — and criminality — that many have compared to the current era. The port city of Odessa, an economic and ethnic crossroads, was one of the centers of that period, and it became the spiritual home to this kind of music. When a number of Russian musicians went to sing for their supper in Paris, the musical style got a name: chanson.
Stalin’s repression and gulags added another layer of meaning, and the result was a vital new form: songs that told of the pain of life under the Soviet system while at the same time mocking it. Or at least tweaking it: These songs are sometimes referred to as blatnaya muzyka — criminal music, which is also the name of a guide to criminal slang used by agents of the NKVD, the KGB’s predecessor. (President Vladimir Putin has been known to slip into it when angry, irritated or speaking of Chechen terrorists.) As Anton Yakovlev, the chief editor of Russky Chanson radio, says, “The totalitarian system of Soviet power gave rise to a second culture in everything.”
During the Khrushchev era’s thaw and the “period of stagnation” during the Brezhnev years, the songs were sung at home and in closed concerts, and recorded in secret apartment studios. Recordings were distributed samizdat, passed hand to hand like carbon copies of Solzhenitsyn’s banned novels.
By 1980 the music had become so popular that the death of Vladimir Vysotsky, a gravelly voiced bard who is the genre’s godfather, nearly shut down Moscow. But the music also developed on the opposite side of the Iron Curtain.
In the 1970s, Little Odessa — New York’s Brighton Beach — became the Western cradle for chanson. On the emigre circuit, these uncensored evocations of Soviet life gave audiences bittersweet memories of home. But the recordings also made their way back to Russia, sneaked in by sailors and diplomats, many of the same people who were bringing in banned books.
A strong strain of political protest runs throughout. “That’s one of the themes,” said Dmitry Andreyev, the executive director of Russky Chanson, a Moscow recording label that trademarked the term in the ‘90s, “the injustice of the system, which is characteristic, if you draw parallels, for rap and chanson.”
One of the biggest stars, Sergei Trofimov, recently filled a Moscow concert hall playing “Generation Pepsi,” which expresses disappointment with the post-Soviet experience. And Lesopoval recorded a song that honors soldiers fallen in Chechnya, a subject usually swept under that carpet.
But as diverse as the style and delivery may be, the lyrics almost inevitably return to blatnaya pesnya.
Chanson’s popularity is undeniable, but it is hard to quantify. Piracy accounts for such a vast and uncounted portion of all music sales that concerts do not so much support record releases as make up for them. “There is no doubt,” Andreyev said, “that pirates produce millions of our discs.”
Whatever the numbers, with its simple, hummable melodies and resonant subject matter, chanson “can be defined as songs about life, from the soul,” suggested Kuprik, the singer from Lesopoval.
Songs about Russian life, Soviet or post-Soviet, necessarily involve an ambivalent relationship to the government. And when it comes to chanson, the feeling is apparently mutual.
For all the official condemnations of the genre, Radio Chanson, an easy-listening version based in Moscow, is No. 3 in the market, and no less than the Interior Ministry choir performed the station’s theme song at a recent awards show.
In St. Petersburg, the music’s unofficial capital, Alexander Rozenbaum is one of the biggest stars. “It’s an oppressive city formed by tsarist power,” he said. “You feel it most near the State Department. If you’re here, you feel it near the Kremlin, near the Winter Palace.” But Rozenbaum embodies the paradox of chanson’s forbidden-but-cherished status: Onstage, he sings of lone wolves and bandits in the night, packing halls across the country. Offstage, he has a seat in the State Duma as a member of United Russia. Even Putin may have given chanson a boost.
In 1999, the weekly Argumenty i Fakty reported that one of his pastimes as a student at the KGB’s foreign intelligence school in Moscow was making copies of recordings by Mikhail Shufutinsky and Villi Tokarev, both of whom left flourishing mainstream careers in Russia for the United States in the ‘70s.
Tokarev drove a New York cab and plowed his earnings into recordings that made him a star all over again, in Brighton Beach and across the entire Soviet Union. But this time around he wasn’t performing pop; he was singing songs about emigre life that sound as if they’re set to Balkan turbo-rock.
Now 72, he still performs them with unfathomable energy for any age. He drew the largest crowd ever to the Lubavitcher-run, oligarch-financed Moscow Jewish Community Center in May. Concert organizers credited him with helping to raise the Iron Curtain, and despite his Kuban Cossack origin, there are plans to nominate him as the Jewish community’s man of the year.
In an interview after the concert, he said that chanson’s “main mission is to convey what happens to people.”
“These are very truthful songs,” said Tokarev, who has a handlebar mustache and performed in a canary-yellow suit. “There can’t be any lies or hypocrisy in them. Such songs would immediately betray themselves.”

TITLE: Fakes, Fakes And More Fakes
AUTHOR: By Kim Murphy
PUBLISHER: The Los Angeles Times
TEXT: Want to buy a fake vacation, medical degree or “Siberian purebred” alley cat? Anything’s possible, as long as you don’t care whether it’s real.
Always wanted to brag to your friends about your trip to Brazil, but couldn’t afford to go? No problem!
For $500, nobody will believe you weren’t sunning yourself last week on Copacabana Beach, just before you trekked through the Amazon rain forest and slept in a thatched hut. Hey! That’s you, arms outstretched like Kate Winslet on the bow of the Titanic, on top of Corcovado!
Persey Tours was barely keeping the bill collectors at bay before it started offering fake vacations last year. Now it’s selling 15 a month — providing ersatz ticket stubs, hotel receipts, photos with clients’ images superimposed on famous landmarks, a few souvenirs for living room shelves.
If the customer is an errant husband who wants his wife to believe he’s on a fishing trip, Persey offers not just photos of him on the river, but a cell phone with a distant number, a lodge that if anyone calls will swear the husband is checked in but not available, and a few dead fish on ice.
Of course, it’s not the real thing. But in Russia, this is a distinction that easily can drift into irrelevance. If there is a world capital of audacious fabrication, it must be Moscow, where fake is never a four-letter word.
Forget fake Rolexes and Gucci bags — that’s kids’ stuff. Russian entrepreneurs offer million-dollar fake Ivan Shishkin paintings, forged passes to the Kremlin bearing President Vladimir Putin’s apparent signature, false medical school diplomas and alley cats palmed off for $300 as “Siberian purebreds.”
An old-fashioned brawl at a wedding can be had for $300 to $400. (“If you read any book about traditional weddings in Russian history, there must be a fight,” said 22-year-old Alexander Yermilov, who recently made a living at it.)
Any Russian market is likely to contain jars of malodorous fish eggs masquerading as $100 Beluga caviar, fizzy tap water bearing the label of a rare mountain spring, “wine” with exclusive French labels containing grape juice and cheap alcohol, and pricey Japanese cell phones or Sony PlayStation 2 consoles that were assembled on the outskirts of Moscow.
International experts say that 12 percent of the pharmaceutical drugs in Russia are counterfeits. In one recent study, a large proportion of the headache remedies surveyed contained no active ingredients at all.
The Economic Development and Trade Ministry has estimated that 50 percent of all consumer goods sold in Russia are fake; the counterfeit trade, Minister German Gref announced in January, has reached $4 billion to $6 billion a year — no one knows exactly, because the books are cooked.
American trade officials, who for years have battled rampant piracy of U.S.-licensed DVDs and CDs, say the situation has gotten worse. Russia is the world’s biggest exporter of pirated music products — many of them brazenly manufactured behind the locked gates of former military bases.
“What you’re witnessing on the piracy front is kind of emblematic of what’s happening in Russia generally,” said Neil Turkewitz, executive vice president of the Recording Industry Association of America. 
“It’s a kind of decision, whether it’s an overt one or subconscious, to kind of ‘do it on its own terms.’ And that you don’t really need to play by the rules of the international community to move forward.”
Every Russian must ford a river of flimflam, much of which is tolerated because it makes everyone’s life, for the most part, cheaper and more manageable than the real thing.
Moscow’s legendary traffic jams, for example, part like the Red Sea for a vehicle with a fake VIP sticker and a flashing blue light on top. (The real ones are issued only to important government officials, but if you have a big black Mercedes with tinted windows, who’s going to know?)
Stickers in the subway also offer fake work permits, fake certificates for free healthcare and “help” getting a heavy equipment operator’s license. For the reasonable sum of $18.50 a year, drivers can buy a perfectly legal-looking liability insurance policy to show if they’re stopped by the police.
False diplomas and term papers are the busy student’s way of getting over that last hurdle at school. Even Putin’s doctoral dissertation, researchers from the Brookings Institution revealed earlier this year, contained major sections lifted from a text published by academics from the University of Pittsburgh.
The revelations were barely repeated in the Moscow press, not because they were scandalous, but because they weren’t — government officials routinely rely on fake dissertations patched together by underlings.
A woman named “Nadezhda,” whose number was distributed in Moscow metro stations offering to provide university diplomas, was asked by a reporter if she could come up with a degree from the Russian State Medical University.
“No problem. It will cost you 15,000 rubles [$555]. What year of graduation do you want?” she asked.
“How about somewhere between 1982 and 1984?”
“It is doable.”
She told the caller to provide his full name and education specialty, and asked what kind of grades should be listed on his transcripts and whether he wanted to have attended day classes or night school. 
“By the way, have you studied medicine?” she inquired then, in an apparent attack of conscience.
“Frankly, no.”
“Then maybe you don’t need to go into it.”
“Well, I need it badly.”
“Well, I mean, if you have nothing to do with medicine, maybe you should reconsider it and maybe settle for something else.”
“No, really, I need a medical degree quite badly. I can’t explain it to you over the phone now.”
“Well, OK then, let’s do it. When will you have the information ready?”
Yury Lubimov, adviser to the economic development minister on piracy issues, said to understand the Russian public’s appetite for fakes, one must understand the importance of appearances.
“It’s like the French notion of faire montrer. It’s better to look like something than to be something. It’s a very Eastern way of thinking,” Lubimov said. 
“I know people here who have not very much money at all, but he will buy a very big car so that other people will see that he’s rich, he’s powerful.”
Or maybe, that he has a photo proving he was on the Great Wall of China during his last vacation, wearing his “Adidas” sport shoes and his “Dior” sunglasses.
Of course, no one can spot a fake like a Russian — ask any woman who ever looked with disdain at a rabbit fur coat going down Tverskaya Ulitsa. Or ask Maria Babalova, music critic at the newspaper Izvestia, who raised an eyebrow when she saw billboards pasted all over town for an upcoming performance of “The Rising Stars of La Scala.”
Why hadn’t anyone ever heard of this tenor and soprano, if they were from La Scala?
Grigory Papish, general producer of the Moscow International Music House, where the performance was scheduled, said he learned too late that the singers were “on their way to having contracts” with La Scala.
“The man, the tenor, he showed some hints of a voice, some signs of the old Italian school of singing,” Babalova said in an interview.
“As for the woman, she was a tragicomic sight,” she said. “Her dress barely covered her aging knees. One of the straps didn’t want to stay on her shoulder, and she was more concerned with fixing it than with her performance. She had no voice to speak of. Instead of singing, she howled, squeaked, slurped.”
The not-quite La Scalites came on the heels of some not-quite Royal Opera House Covent Gardenites at the Tchaikovsky Concert Hall, and one of the biggest art scandals to hit Europe recently — the revelation last year that hundreds of works of Russian art had been faked and sold for tens of thousands of dollars more than their actual worth.
“I personally know of 120 faked works of which I have firsthand knowledge of what they were originally, what they became through forgery and where they were sold. I also know of about 200 more such cases, but I don’t know where they were sold,” said Vladimir Petrov, an expert at the Tretyakov Gallery who has documented the forgeries.
The scam involved acquiring relatively cheap works by lesser-known Northern European painters of the 19th century, then altering them slightly, inserting a Russian motif such as an Orthodox church in place of a Dutch windmill, to make it look as if a well-known Russian painter of the same period had painted them.
Paintings purchased for $1,500 to $20,000 were altered and sold as Russian masters by Vladimir Orlovsky, Alexander Kiselev and others for $50,000 to $1 million. “I’m afraid there are many others. It’s like an epidemic,” Petrov said.
The issue of counterfeiting reached a crisis of sorts late last month, when government officials, in what was said to be an attempt to crack down on the huge quantity of fake wine on the market, issued new excise stamps and declared that all the old, easily copied stamps would no longer be valid.
Wine store shelves were left nearly empty; merchants and buyers alike flew into a panic. 
Suddenly, it seemed possible that even fake wine was better than no wine at all.
Blame was thrown equally at sluggish bureaucrats, greedy customs officials and corrupt inspectors — the main engines of the status quo, when it comes to fakery in Russia.
“To maintain a struggle with fakes in the market, you need to have a well-functioning system of law enforcement organs, a good judicial system, a customs system. All of this is lacking,” said Dmitry Yanin, head of the Confederation of Consumer Societies in Russia. 
“I think everyone understands that there will be no qualitative change on the market in fakes in Russia,” Yanin said.
Dmitry Popov, founder and CEO of Persey Tours, certainly hopes not. Last year, he made $2,000 helping a Siberian gas station owner convince his friends that he had rented a ride on the Russian space shuttle to the moon.
“Of course he was smiling when he ordered this,” Popov said. “But he paid.”

Los Angeles Times staff writer Sergei L. Loiko contributed to this report.

TITLE: Israeli Forces Push Deeper Into Lebanon
AUTHOR: By Kathy Gannon
PUBLISHER: The Associated Press
TEXT: SIDON, Lebanon — Israeli ground forces pushed deeper into the country in heavy fighting with Hezbollah guerrillas on Monday, and Secretary of State Condoleezza Rice made a surprise visit to Lebanon to launch diplomatic efforts aimed at ending 13 days of warfare. 
Rice met with Lebanese Prime Minister Fuad Saniora, who greeted her with a kiss on both cheeks. Rice told him, “Thank you for your courage and steadfastness.”
Saniora and other Lebanese officials are expected to push Rice to call for an immediate cease-fire, something the Bush administration has resisted. Her mission is the first U.S. effort on the ground to resolve a crisis that has convulsed the Middle East and threatens to engulf other countries in the region. It erupted when Hezbollah captured two Israeli soldiers last week and Israel responded by bombing Lebanon.
President Bush has opposed an immediate cease-fire, saying the root cause of the conflict — Hezbollah’s domination of south Lebanon — must be resolved. His administration has said international peacekeepers might be needed in Lebanon once that issue is dealt with.
An Israeli military helicopter crashed Monday near the Lebanese border, and the military said there were two casualties. It was not immediately clear if the crash was related to fighting around the biggest Lebanese border town, Bint Jbail.
Israel said its troops captured two Hezbollah guerrillas, the first in the current conflict. “The two prisoners are located in Israel and will be held here with the aim of interrogating them,” Brigadier General Alon Friedman told Israel Army Radio.
Fierce fighting raged as Israeli troops moved deeper into Lebanon to besiege Bint Jbail, dubbed the “capital of the resistance” due to its intense support of Hezbollah during Israel’s 1982-2000 occupation of the south.
Israeli artillery barrages sent plumes of smoke into the air and the military said soldiers took control of the area around Bint Jbail but did not capture the town, about 2 1/2 miles from the border.
Ten Israeli soldiers were wounded in the attack, the military said.
Hezbollah claimed to have caused Israeli casualties in hits on five tanks moving on the road to Bint Jbail and around Maroun al-Ras, a hilltop village closer to the border that Israeli ground forces seized in heavy fighting over the weekend.
Bint Jbail holds a strong symbolism for Hezbollah. A day after Israel troops ended their occupation in 2000, Hezbollah leader Sheik Hassan Nasrallah went straight to Bint Jbail for his first celebration rally.
Much of the town’s population of 200,000 is believed to have fled, but many are still there. A Red Cross doctor who visited Bint Jbail on Sunday, Dr. Hassan Nasreddine, said he saw families crowded into schools and mosques and other shelters. He could not estimate how many remained.
Hezbollah leader Sheik Hassan Nasrallah said in remarks published Monday the priority was to arrange a cease-fire and his party was open to discussing ideas on how to end the crisis. He also said an Israeli ground invasion would not protect Israel from Hezbollah rocket attacks.
Some 95 rockets hit Israel on Sunday, the Israeli military said. Two more rockets were fired into Israel on Monday, landing in the northern town of Kiryat Shmona, rescue officials there said. No casualties or damage were reported.
At least 384 people have been killed in Lebanon, including 20 soldiers and 11 Hezbollah fighters, according to security officials. At least 600,000 Lebanese have fled their homes, according to the WHO — with one estimate by Lebanon’s finance minister putting the number at 750,000, nearly 20 percent of the population.
Israel’s death toll stands at 36, with 17 people killed by Hezbollah rockets and 19 soldiers killed in the fighting.
The daily toll in Lebanon appeared to be slowing — with six civilians reported killed Sunday — likely a reflection of the exodus of Lebanese from the heaviest hit areas, or the difficulty of getting figures in a war zone.
But those who had not hunkered down were still in danger. Israeli missiles on Sunday hit a convoy of fleeing Lebanese, killing four. In Israel, two were killed when Hezbollah rockets pounded Haifa, the country’s third largest city. 
With Israel and the United States saying a real cease-fire is not possible until Hezbollah is reined in, Arab heavyweights Egypt and Saudi Arabia were pushing Syria to end its support for the guerrillas, Arab diplomats in Cairo said. Israel signaled a policy shift, saying it would accept an international force — preferably from NATO — on its border to ensure the peace in southern Lebanon. 
Israeli Defense Minister Amir Peretz said the military would not launch a full-fledged invasion but instead carry out a series of small-scale raids into the south. 
Peretz said that once the offensive had gotten Hezbollah away from the border, his country would be willing to see an international force move in to help the Lebanese army deploy across the south, where the guerrillas have held sway for years. 
More foreigners evacuated Lebanon by sea from Beirut port. The European Union was sending a ship to the southern port of Tyre on Monday and Canadians were sending another ship on Tuesday to pick up foreigners stranded by the destruction of highways and bridges in Israeli airstrikes. 
Some 4,500 British citizens and 12,000 Americans have left Lebanon, and the evacuations for both those countries appear nearly complete. 
Officials were trying to speed the delivery of aid down bomb-shattered roads to the south where they’re needed most — though Israel has not defined a safe route to the region.

TITLE: IN BRIEF
TEXT: Israel Kills 3 in Gaza
GAZA CITY, Gaza Strip (AP) — Israeli artillery shelled a town in the Gaza Strip used by Palestinian militants to fire rockets Monday, and hospital officials said three Palestinians were killed and eight were wounded. 
The attack occurred in a neighborhood of the northern town of Beit Lahiya, where Palestinian militants had just launched seven rockets at southern Israel, causing no casualties, the Israeli army said.
One Israeli shell exploded near an apartment building, creating a large crater in the ground. Residents ran through the area in a frenzy, with some carrying their children.
A security official at the scene said another shell exploded in an open space between two apartment buildings, hitting residents standing there. Other shells shattered the windows and facade of another apartment building.

Sri Lanka Seeks Help
COLOMBO (AFP) — Sri Lanka has sought help Monday in evacuating thousands of workers trapped in Lebanon, amid claims by some housemaids their employers tried to stop them leaving by holding on to passports and wages. 
Government officials said most of the 80,000 Sri Lankans working in the Middle Eastern country — mainly as housemaids, truck drivers and child-minders — had opted to remain behind.
However, there were also complaints from dozens of workers that their employers were refusing to pay them or return their passports in a bid to prevent them from leaving their jobs.
At least 30 complaints were received by a single official at the Foreign Employment Bureau in Colombo accusing Lebanese employers of trying forcibly to keep back Sri Lankan maids by holding on to their passports or wages.

Iraq Condemns Crisis
LONDON (AFP) — Iraqi Prime Minister Nuri al-Maliki has condemned Israel’s bombing of Lebanon’s civilian infrastructure and vowed to push for a ceasefire during talks with his British counterpart Tony Blair on Monday. 
As he began his first official visits to London and Washington since his government was formed in May, Maliki took a stronger line against Israel than the leaders of Britain and the United States.
“I can’t find enough justification for what is happening, the destruction of the infrastructure is even not consistent with the rules of war,” Maliki told BBC radio before his talks with Blair.

Oil Prices Fall
LONDON (AP) — Oil prices dropped Monday after the Saudi oil minister said OPEC wanted to avoid fluctuating prices and as U.S. Secretary of State Condoleezza Rice traveled to the Mideast to try to find a diplomatic solution to the violence in Lebanon and Israel. 
Prices will be dependent upon the progress of these talks, said Paul Harris, head of energy and emissions at Bank of Ireland Global Markets in Dublin.
Light, sweet crude for September delivery was down 83 cents to $73.60 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe.
September Brent on London’s ICE Futures exchange fell 69 cents to $73.06 per barrel.
Rice also will go to Rome for sessions with representatives of European and moderate Arab governments that are meant to shore up the weak democratic government in Lebanon.

TITLE: Experts Worried as Ariel Sharon’s Condition Deteriorates
AUTHOR: By Ramit Plushnick-Masti
PUBLISHER: The Associated Press
TEXT: JERUSALEM — Medical experts warned Monday that former Israeli Prime Minister Ariel Sharon’s deteriorating condition could put his life in danger, while the hospital treating him said it would run more tests to find the cause of his downturn. 
The Sheba Medical Center near Tel Aviv said Sunday the former leader’s kidneys were failing and that changes were detected in his brain membrane. Sharon, 78, has been in a coma since suffering a severe stroke in January.
A hospital spokeswoman refused to say whether his life was threatened.
Two of Sharon’s former aides, who said they spoke to his son, Gilad, said Sunday there was no immediate danger to the former leader’s life. The former aides spoke on condition of anonymity because they were not authorized to discuss the matter with the media.
But Dr. John Martin, a cardiovascular expert at London’s University College, said the kidney failure and the changes in the brain membrane that Sharon suffered in the past two days indicated the former leader’s life was in danger. His comments were echoed by other physicians quoted in Israeli media.
Kidney dialysis and drugs to treat what appears to be cerebral edema could lead to an improvement in Sharon’s condition within hours, Martin said. But many physicians would choose not to take such steps when a patient has been in a coma for more than seven months, he added.
“This is a significant decrease in his condition,” Martin told said. “Shall we give dialysis or shall we let him die ... most European physicians would consider this at this point.”
Dr. Anthony Rudd, a stroke expert at St. Thomas’ Hospital in London, said doctors could put Sharon on dialysis but treatment was becoming “increasingly futile,” adding that at Sharon’s age and in his condition, once one organ fails the others soon follow.
“If they’re issuing reports that he’s deteriorating, it would be unlikely he could deteriorate much further and survive,” Rudd said.
Sharon, Israel’s most popular politician, had a small stroke in December and was put on blood thinners before suffering a severe brain hemorrhage in January. The Israeli leader underwent several extensive brain surgeries to stop the bleeding, and many independent experts doubted he would ever recover.
The last surgery, in April, reattached a part of Sharon’s skull that was removed to reduce pressure on his brain. The reattachment was described as a necessary step before transferring Sharon to a long-term care facility.

TITLE: Saddam Hospitalized By Hunger, Trial Resumes
AUTHOR: By Bushra Juhi
PUBLISHER: The Associated Press
TEXT: BAGHDAD, Iraq — Saddam Hussein’s trial resumed Monday for closing arguments, a day after the former Iraqi leader was hospitalized and fed with a tube during his hunger strike to demand better security for his lawyers. 
Prosecutor Jaafar al-Moussawi said Saddam’s condition had stabilized and he should be fit to appear in court this week. He was not present when the trial resumed Monday after a two-week break and had not been scheduled to present his closing statement until later in the week.
Saddam began the hunger strike July 7 to protest the killings of three members of the defense team since the trial began in October. The latest lawyer attacked was Khamis al-Obeidi, who was abducted and slain June 21.
The defense rejected an offer of the same security provided to the judges and prosecution lawyers: residence inside the Green Zone, the fortified Baghdad neighborhood where the court is located. Instead, they wanted bodyguards.
Saddam and the seven others have been on trial since Oct. 19 for the deaths of Shiite Muslims after a crackdown in the town of Dujail, which was launched after an assassination attempt there in 1982. They could receive the death penalty if convicted.
Chief Judge Raouf Abdel-Rahman adjourned the session July 11 to give the defense team time to reconsider its boycott of the proceedings over al-Obeidi’s death. The defense has blamed the slaying on Shiite militiamen.
The defense announced last week that it would continue the boycott, despite the judge’s threat to appoint attorneys to deliver final summations. Two of Saddam’s seven co-defendants were expected to give their closing arguments on Monday.
Saddam’s half brother Barzan Ibrahim told the court during the session that he rejected his court-appointed counsel and asked for more time to find a new attorney or to convince his lawyers to come back.
Abdel-Rahman asked him to listen to the closing argument of the court-appointed lawyer but Barzan, a former intelligence chief, refused and said he wanted to leave.
“I have lawyers as your honor knows but they are passing through very difficult and critical times because three of them were killed and one was injured and is still in hospital,” Barzan said.

TITLE: Kosovo Pitches For Independence
AUTHOR: By Shaban Buza and Beti Bilandzic
PUBLISHER: Reuters
TEXT: VIENNA, Austria — Kosovo formally made its pitch for independence face-to-face with Serbia on Monday at their first top-level talks since NATO bombs drove Serb forces from the province in 1999. 
The one-day meeting in Vienna placed the Albanian majority’s demand for independence on the agenda of a U.N.-led mediation process that began in February, seven years since the West intervened to halt a wave of ethnic cleansing and the United Nations took control.
Kosovo’s ethnic Albanian President Fatmir Sejdiu said independence was “the beginning and end of our position.”
“The will for independence cannot be ignored or negotiated away in talks,” he said, according to a copy of his speech.
Across the table, aides said Serbian President Boris Tadic predictably rejected the “ultimatum,” setting the tone for talks that gave little hint of the compromise urged by the West.
It was the first time the presidents and prime ministers of both sides had held direct talks since Serbia’s 1998-99 war with ethnic Albanian guerrillas. Some 10,000 Albanian civilians died and 800,000 fled, marking the culmination of a decade of Serb repression under late strongman Slobodan Milosevic.
Seven turbulent years later, the West says Kosovo’s economic and political limbo is unsustainable. It wants a settlement within the year, which diplomats say will likely bring some form of independence with or without Serbian consent.
The two delegations avoided handshakes, entering the Gothic Room of the Vienna palace from opposite ends. Serbian Prime Minister Vojislav Kostunica opted out of a joint lunch with the Kosovo delegation, which included two former guerrillas.
U.N. chief mediator Martti Ahtisaari had played down hopes of a breakthrough, given what diplomats say is an unbridgeable chasm between the two sides. Some 90 percent of Kosovo’s 2 million people are Albanians who reject any return to Serb rule.
But Serbia sees Kosovo as its “Jerusalem,” the cradle of Serbdom and home to scores of centuries-old Orthodox churches. 
Kostunica said Belgrade could offer “substantial autonomy.” But it “cannot accept the creation of a separate state on 15 percent of its territory.”
Too little too late, said Kosovo negotiator Veton Surroi. “After everything we’ve been through, it is unrealistic to discuss modalities of autonomy. Kosovo will go its own way.”

TITLE: 2 Killed by Floating Artwork
PUBLISHER: Reuters
TEXT: LONDON — Two women died and 13 people were injured when they fell from a huge inflatable sculpture after it broke its moorings and flew into the air in a park in northeastern England, police said Monday. 
Up to 30 people were inside the walk-in exhibit, which has been shown around the world, when a gust of wind blew it 9 meters above the park in Chester-le-Street on Sunday.
“All of a sudden it just started rising like a balloon,” said witness Mark Spooner. “[It was] flinging people all over. Then it just seemed to flip over in the air.”
The victims, aged 68 and 38, had been walking through the artwork with children when it took off. A three-year-old girl was seriously injured.
“[The] inflatable exhibition broke its moorings and tipped those using it on to the ground,” police said in a statement.
Designed by artist Maurice Agis, the exhibit, called Dreamspace, is made out of plastic sheeting. Half the size of a soccer pitch, visitors can wander through its maze of corridors. It was brought to earth after it drifted into a pole.

TITLE: ‘Consummate Latino Look’ Wins it For Miss Universe
AUTHOR: By Beth Harris
PUBLISHER: The Associated Press
TEXT: LOS ANGELES — An 18-year-old from Puerto Rico who hopes to someday star in U.S. and Latin American films was crowned Sunday night as Miss Universe 2006. 
Zuleyka Rivera Mendoza shared a nervous emotional hug with first runner-up, Kurara Chibana of Japan, moments before the winner was announced, then clasped her hands to her mouth in amazement as her name was called.
She beamed as the crown was placed on her head but briefly fainted after a post-pageant news conference. She quickly recovered after being given liquids, said Miss Universe spokeswoman Esther Swan.
Rivera, who was wearing a dress made entirely of metal chains, had been standing under hot stage lights for some time when she began to topple over. Someone caught her as she fell.
“I always had faith and confidence in myself, but I never knew I was going to win,” Rivera, speaking in Spanish from the stage, said in her first remarks as Miss Universe.
The winner, who is from coastal town of Salinas, said she would continue the pageant’s mission of promoting awareness and education about AIDS and HIV.
“I want to tell those people there’s always problems in life, but there’s always possibilities to improve things,” she said.
Miss USA Tara Conner was the contest’s fourth runner-up. Also finishing in the top five were second runner-up Lauriane Gillieron of Switzerland and third runner-up Lourdes Arevalos of Paraguay.
In her pageant biography, Rivera explained what made her different from the other contestants.
“Physically, I have been told by modeling agencies and friends that I represent the consummate Latino look,” she said. “Everything in my face expresses our heritage, our music and the wonderful mixes of races that we are.”
Rivera is the first winner from Puerto Rico since Denise Quinones in 2001, and the fifth overall in the pageant’s 55-year history.
Conner was vying to become the first U.S. winner since Brook Lee in 1997. The Kentucky native wore a red-white-and-blue jockey outfit and cracked a whip during the opening parade of nations. Several of the contestants sported costumes featuring colorful native dress, including feathers, sequins, fur, massive headpieces and, in the case of Miss Japan, a Samurai sword.
Lia Andrea Ramos of Philippines was chosen most photogenic in an online vote by the public. Angela Asare of Ghana won the congeniality award in a vote by all 86 contestants. Chibana, who carried the impressive looking Samurai sword, won the award for best national costume.
“They were probably afraid not to pick Miss Japan or she would use that sword,” quipped commentator Carson Kressley of TV’s “Queer Eye.”

TITLE: Tour de France Won by Brave Landis
AUTHOR: By Jim Litke
PUBLISHER: The Associated Press
TEXT: PARIS — With the wind at his back now, gently rustling the banners along the Champs-Elysees, Floyd Landis made a thrilling comeback Sunday to win the world’s greatest bicycle race. 
The first Tour de France of the post-Lance Armstrong era was captured by another American but nothing else about the race was the same. 
Instead of order and the invincibility that characterized all but one of Armstrong’s seven straight wins, Landis was hounded by chaos from start to finish, projecting frailty throughout.
Landis seized the lead several times only to give it back, and last Wednesday, in one of the most shocking collapses ever witnessed on the Tour, he seemingly threw any chance of winning over the side of the Alps. 
Abandoned by his teammates on a 113-mile ride up the mountains to La Toussuire, Landis was passed by one rider after another, plummeting from first place to 11th and losing almost nine minutes in the bargain. 
“There are days when you crack, but on those days, you lose one, maybe two minutes. This wasn’t a crack,” Robbie Ventura, Landis’ coach said. “It was a detonation.” 
The next day, Landis attacked on the first climb back up the same mountain range, a 125-mile stage to Morzine-Avoriaz, and didn’t stop until he left his opponents out of breath. The gamble was so audacious that as word of Landis’ plan rippled through a pack worn out after a week in the Pyrenees and Alps, several riders pulled up alongside and begged him not to try it. 
“I just told ‘em,” Landis said, “‘Go drink some Coke, ‘cause we’re leaving on the first climb if you want to come along.”’ 
That epic ride was still the talk of the Tour late into Saturday night, just a few hours after Landis effectively locked up the race with a third-place finish in the 35.4-mile individual time trial to Montceau-les-Mines. 
Armstrong and Belgian Eddy Merckx, two of the greatest champions the sport has ever known, were huddled in a back booth at the Hotel Costes, awaiting the largely ceremonial last-stage run-in to the Champs-Elysees. 
“How crazy was that?” Armstrong said. Rather than answer, Merckx, a five-time champion himself and a competitor so fierce he was nicknamed “The Cannibal,” shook his head slowly in disbelief. A moment later, though, he lifted the right sleeve of his polo shirt and flexed his biceps. 
“Strong,” Merckx said. “Just incredibly ... unbelievably ... strong.” 
Both men could have vouched for Landis long before that. Armstrong because he plucked the then 26-year-old rider off a failing team and made him a key member of the winning U.S. Postal Service teams from 2002-04; Merckx because his son, Axel, is part of the Swiss Phonak squad that Landis willed to victory after he left USPS determined to become the leader of his own team. 
“Floyd won this race,” Armstrong said Sunday afternoon from a Paris hotel room where he watched the finish. “His strength was not his team, his strength was his mind and his will.” 
Landis flashed those qualities even as a teenager. Raised in a strict Mennonite home in a small town in Pennsylvania, he began riding with pals just to get around. It quickly became an obsession. Soon after, Landis stepped out of the Mennonite religious fold. 
“I wanted to get away and find out what there was in life, on my own,” he said. “And the bicycle was a way of doing that.”

TITLE: Zvonareva Finds Route To Victory
PUBLISHER: Reuters
TEXT: NEW YORK — Russia’s Vera Zvonareva rounded off a week of upsets with a 6-2, 6-4 victory over Katarina Srebotnik of Slovenia to win the Cincinnati Open on Sunday. 
Zvonareva’s second title of the year was well-earned. 
The unseeded Russian knocked out seventh seed Tatiana Golovin, fifth seed Jelena Jankovic and former world number one Serena Williams in her march to the final. 
The 21-year-old needed just 56 minutes to beat fourth seed Srebotnik and collect her fifth career title. 
“I was fighting for every point,” Zvonareva told reporters. “It was a long time since I last played her, and I didn’t know what to expect so I just figured it out on the court. 
“I had a few less errors than her too so that helped.” 
The Russian world No. 50 took control after breaking Srebotnik to go ahead 3-2. She raced away with the first set and was quickly 2-0 up in the second. 
Srebotnik, who reached her first final of the season with a semi-final win over defending champion Patty Schnyder, stopped the tailspin when she held serve at 2-1. 
The Slovenian continued to battle, finally breaking Zvonareva to level at 3-3 but the Muscovite broke straight back twice to close out the match. 
Srebotnik does not have to wait long to get even since the two women are scheduled to meet in the first round of the Bank of the West Classic starting on Monday in Stanford, California. 
“She [Zvonareva] has been playing unbelievably since her win in Birmingham,” said Srebotnik. “But I won the most games in one set from her this week, 6-4, so I’m happy about that.” 

Top seed James Blake recovered from a shaky start to beat Andy Roddick 4-6, 6-4, 7-6 in the final of the Indianapolis International Championship on Sunday. 
Roddick’s defeat in two hours, three minutes, left the former world number one without a title since winning in Lyon nine months ago but he does return to the world’s top 10. 
Blake, who moves to a career-high fifth in the world, enjoyed his second win a row over second-seeded Roddick whom he also beat at Queen’s Club in London last month. 
Blake, who has already won in Sydney and Las Vegas this year, is 2-6 against Roddick after losing the first six matches to his fellow American. 
“This is one of the best finals I’ve ever played,” Blake told reporters. “I had to play like that to beat a champion like Andy. 
“I played my best tennis, it’s very satisfying to have done it in the final.” 
The winner said he hoped it marked a revival for American tennis after disappointments at the French Open and Wimbledon. 
“Andy and I wanted to prove that U.S. tennis is back now,” Blake said. “We’re on our surface now and we want to do well going into the U.S. Open and hopefully for the rest of the year.”

TITLE: Tearful Tiger Defends Title
AUTHOR: By Mark Lamport-Stokes
PUBLISHER: Reuters
TEXT: LIVERPOOL, England — Tiger Woods completed one of the best ball-striking weeks of his career to retain his British Open title with an emotional two-shot victory over compatriot Chris DiMarco on Sunday.
One stroke clear at the start of the day, the 30-year-old American birdied three of the last five holes at Royal Liverpool for a five-under-par 67, sealing his 11th career major.
Although chased hard by DiMarco, Woods was always in control and coasted to his third British Open with a superb display of precision golf in breezy conditions. 
Shaping the ball as required and putting beautifully, the world number one became the first player to lift the Claret Jug two years in a row since fellow American Tom Watson at Royal Birkdale in 1983.
Having romped to his second Open title by five strokes at St. Andrews 12 months ago, the game’s leading player completed a successful defense at Hoylake with a 72-hole total of 18-under 270.
“I don’t know where to begin,” an emotional Woods told a news conference after sealing victory in only his third event since the death of his father Earl on May 3.
“I’m excited and worn out, just so many different emotions to describe right now because it all came pouring out on 18.
“My father has meant so much to me and the game of golf and I just wish he could have seen it one more time.”
Woods, who moved into second place alongside fellow American Walter Hagen in the all-time major standings behind only Jack Nicklaus (18), was delighted with the quality of his play.
“As far as control, that was probably one of the best ball-striking weeks I’ve ever had,” he said.
“That’s shaping the ball, moving my trajectory and different heights and really controling my spin going into the greens.” 
DiMarco, edged out by Woods in a playoff for last year’s Masters, briefly got to within a shot and closed with a 68 to finish second, with 2002 champion Ernie Els a further three strokes behind in third after a 71.
Sergio Garcia, joint second overnight with DiMarco and Els, tumbled backwards early on after missing short putts to bogey the second and third.
Playing in the final pairing with Woods, the Spaniard never replicated the form of his third-round 65 on his way to a 73 and a tie for fifth with Japan’s Hideto Tanihara, who closed with a 71.
American Jim Furyk, winner of the 2003 U.S. Open, secured fourth place at 12 under after three birdies in the last four holes gave him a 71.
Woods’ put paid to DiMarco's challenge with a run of three birdies in a row from the 14th and then burst into tears in the arms of his caddie Steve Williams after tapping in for par at the last.