SOURCE: The St. Petersburg Times
DATE: Issue #1259 (25), Tuesday, April 3, 2007
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TITLE: Prisoner Awarded $20,000 In Damages
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Russian authorities must pay more than $20,000 in damages to a St. Petersburg prisoner forced to share a cell measuring 8 square meters with 12 other inmates, the European Court of Human Rights in Strasbourg has ruled.
Andrei Frolov, 40, was awarded 15,000 euros ($20,060) in damages last Thursday in a verdict that could throw light into the dark corners of Russia’s penal system.
“The fact that [Frolov] was obliged to live, sleep and use the toilet in the same cell as so many other inmates for more than four years was in itself sufficient to cause distress or hardship of an intensity exceeding the unavoidable level of suffering inherent in detention,” the ruling reads .
St. Petersburg’s Kresty Prison, where Frolov was held from January 1999 to February 2003, was built for 3,000 prisoners but routinely holds 10,000 inmates.
Frolov was arrested in 1999 and convicted in 2001 of robbery, conspiracy and selling stolen property. He was sentenced to 16 years in jail.
To date, Frolov has been moved between 11 different cells, each measuring 8-square-meters and equipped with six bunks. Frolov told the Strasbourg court that between 12 and 14 inmates are stuffed into the cells, forcing them to sleep in shifts and allocating each person less than 0.7 square meters of private space.
During the trial Frolov said that “the cells were dimly lit; the ventilation system was blocked; inmates had to make curtains to separate the lavatory pan from the rest of the cell; all the inmates in the cell had six minutes once a week to shower together — although there were only six shower heads — with no toiletries,” according to a copy of the judgment on the case.
A complaint sent by Frolov to the Russian Justice Ministry in June 2001 was rejected and declared “unsubstantiated.”
In Strasbourg, the seven-strong panel of judges ruled in Frolov’s favor. The facts described by Frolov, including the size of cells and their overcrowded state, the poor rations and hygiene were not disputed by the legal representatives of the Russian government.
The conditions endured by Frolov are typical for Russian prisons.
In 2006, a television series depicting life in jail aired by NTV was temporarily suspended following an avalanche of letters from viewers asking the authorities to investigate whether the level of cruelty shown in the program had been exaggerated.
Also last year, Andrei Rubanov’s  best-selling autobiographical novel “Plant It And Let It Grow,” describing the Russian prison system as seen by a young banker serving a term in Moscow’s Matrosskaya Tishina prison, made the short-list of the National Bestseller Prize.
“I breathed in but it wasn’t as easy as it sounds: instead of air, my lungs were filled with some sort of disgusting substance,” Rubanov writes, describing the moment when he first stepped into the cell. 
“Sweat instantly started streaming down my temples. In a whitish heat-haze, contours of dozens and dozens of barely clothed and fully naked people began to emerge.”
According to official statistics, Russia’s prisons contain more than 870,000 inmates.
A recent report compiled by the Council of Europe shows that the mortality rate in Russia’s prisons is 20 times higher than the national average. 
The mother of Nikolai Tarariyev, a prisoner who died at the age of 26 at a hospital in Apsheronsk in the Krasnodar region in 2002 of internal bleeding caused by an untreated stomach ulcer, won a case in Strasbourg in 2006. The court ruled that Russia should pay the mother 25,000 euros ($33,432) in damages.
In 2006, Russia paid more than $480,000 of penalties for cases lost in Strasbourg. In total, all cases lost by Russia in Strasbourg amount to 1,237,000 euros ($1.65m).
Lawyer Igor Kalyapin, head of the Committee Against Torture, a non-governmental organization headquartered in Nizhny Novgorod with branches in six regions of Russia including Chechnya, has prepared several successful appeals to the Strasbourg court and reveals that for some of his clients the intervention of this court was literally a matter of life and death.
“It was only due to [the appeal to the Strasbourg court] that Alexei Mikheyev — a police officer unjustly accused of rape and tortured for ten days — survived until the trial,” Kalyapin said, adding that Mikheyev’s condition has been deteriorating. “He underwent two complicated operations in Oslo, with funding coming from Norwegian NGOs, including a policemen’s union. Needless to say, the police in Nizhny Novgorod, responsible for the torture, did not pay a penny.”
“Two out of six officers who tortured Mikheyev were only prosecuted — they received 4.5 years each — after the Russian government was informed about the case being heard in Strasbourg,” Kalyapin added.

TITLE: Markets Cleared Of Foreigners
AUTHOR: By Tai Adelaja and Daan van der Schriek
PUBLISHER: Staff Writers
TEXT: MOSCOW — The few foreign traders working at Moscow’s Leningradsky outdoor market whispered Sunday that they were selling off the last of their eggplants and potatoes and then would leave for good.
The foreigners, mostly Azeris, were keeping a low profile because they weren’t supposed to be selling anything under a law that went into force Sunday and bars all foreigners from working in outdoor markets.
“Half the market is empty,” said Vagit, an Azeri trader selling eggplants, tomatoes and mounds of green parsley and dill. “Half of the Azeris have left, and the rest will follow soon.”
At a nearly empty vegetable stall, an Azeri woman said she would leave once she sold the last potato.
Dozens of traders were working at the market in northern Moscow on Sunday even though it was officially closed for a sanitary day. It was not clear whether the closure was linked to the new law. Russian traders said such cleanups were regularly planned for the first day of the month. But Azeri traders said this was the first sanitary day in a long time.
One in every three stalls in the city’s clothes and food markets have stood empty since the first phase of the new law kicked in on Jan. 15. But Sunday’s change, economists say, could lead to widespread labor shortages and price hikes across the country.
The Federal Migration Service is signaling that it will be cautious in implementing the law. “We are not planning anything: no document checks, no market raids. We’re working as usual,” Denis Soldatikov, a spokesman for the service, said Friday.
Traders at the Leningradsky market said there had been no checks Sunday, but some were expecting them for Monday.
Soldatikov said the law would only be fully implemented in December. In an indication of the turmoil the law has caused in government circles, he added: “This is not an enforceable law. It is simply a government regulation initiated by Zurabov’s ministry. It is not the direct responsibility of our department.”
Health and Social Development Minister Mikhail Zurabov told a recent Cabinet meeting that the upcoming changes would have minimal effect on the retail sector.
Zurabov also insisted that the displacement of the first foreign traders in January had not emptied stalls or prompted a lack of variety of goods or noticeable price increases.
In contrast to Zurabov’s assurances, however, figures collected by the State Statistics Service indicate that markets are suffering shortages in labor and goods.
Since mid-January, only two-thirds of the stalls in Moscow markets are being used, and the number drops to 45 percent to 49 percent in St. Petersburg, Smolensk and Tambov, the agency said in a report prepared for the Cabinet in late February.
The report said sales of foodstuffs — including meat, fish, sugar and vegetable oil — as well as clothes had dropped in many regions, particularly in Chita and Khabarovsk in the Far East.
Economic Development and Trade Minister German Gref has warned that the restrictions on foreigners will hurt the national economy. He said sales at the markets amounted to 19.6 percent of all retail trade last year, but the figure shrunk to 16.9 percent after January. Only 72 percent of stalls are being used throughout the country, he said, and up to 60 percent of places reserved for Russian farmers remained empty.
The law is designed to streamline migration laws and reduce the influx of migrant workers, mainly from other former Soviet republics, who have traditionally dominated the country’s outdoor food markets.
As of Jan. 15, the number of foreigners allowed to work in the markets was cut to 40 percent of the total workforce. Fines of thousands of dollars have been imposed on those violating these rules.
The situation on the ground indicates that Sunday’s measures might put outdoor markets on the verge of crisis.
Migrant traders at the Cheryomushkinsky market in southwest Moscow were bracing themselves Saturday for hard times. Vegetable vendors, mainly from Azerbaijan and Uzbekistan, stood in small groups, discussing the April 1 deadline.
“No more foreigners from tomorrow,” said Oleg, who declined to give his last name. “At any rate, the market will close down completely for repairs starting April 15.” It was unclear whether the timing of the repairs was linked to the law.
Maruf Yusupov, an Uzbek trader, said he was planning to work as a security guard at the market until the dust settles. “Labor shortages will force the authorities to rescind their decision,” he said.
At the Dmitrovsky Central Market Tornado-D, outside Moscow, an administrator said it was “unfortunate to let the many foreigners working in the market go.” But, she said by telephone, the law forced her to “send them packing.”
Some markets appeared to have found a way around the new rules. The Butyrsky food market, for one, has reregistered as a trading center. “The new status means that we are no longer affected by the new migration laws,” said a market administrator, who refused to give her name.
It was business as usual at the market on Friday, as migrant vendors sat behind rows of stalls selling fresh fruits and vegetables. Asked about his documents, Ahmed, an Azeri trader who would not give his last name, said only: “Everything is in order.”
An administrator at the Danilovsky market said the market had been changed into an open joint stock company and that under the law it would be permitted to hire migrant workers.
Market administrators have a grace period of two months to comply with the new regulations, he said.

TITLE: Fruit Juice Ad Pokes Fun at Oligarch
AUTHOR: By Alex Nicholson
PUBLISHER: The Associated Press
TEXT: MOSCOW — He is one of the country’s wealthiest men and he gained notoriety over the New Year’s holiday when French police detained him briefly as part of a probe into a high-class prostitution ring.
Now the travails of Mikhail Prokhorov are being lampooned by a television commercial for fruit juices that casts a withering eye at both him and the high-rolling antics of his fellow oligarchs. The ad is a rare taste of the biting satire that used to be relatively common on television but has since disappeared.
Set to the tune of Irving Berlin’s “Puttin’ on the Ritz,” the ad spoofs the case of Prokhorov, general director of the world’s biggest nickel producer who was detained by French police at the swanky Courchevel ski resort in France in January.
The ad, which has aired since March 24 on three channels, one of them state-run, shows police escorting lines of women dressed in lingerie, furs and traditional Russian hats from a sun-kissed French ski resort, as shocked guests look on. Last out of the door is their host, scowling, with a shaved head and dressed only in a bathrobe.
The scene shifts to a comfortable Moscow living room, where a middle-class woman watches the proceedings on the news with a weary smirk. “Some enjoy fairy tales of the good life,” the voice-over says. “Others drink juice.”
The ad does not identify Prokhorov by name. But Yulia Vishnevskaya, a spokeswoman for Nidan Juices, confirmed that it was based on a January raid in France “that involved a famous Russian billionaire.” She said the ad was in line with the “anti-bourgeois message” employed to market the juices.
Sergei Chernytsin, a spokesman for mining giant Norilsk Nickel, said Prokhorov had not seen the ad, since he rarely watches television.
“But seeing as he’s a creative person with a sense of humor and self-irony … he would probably have a long laugh,” Chernytsin said.
Some of Russia’s best-known satirical television programs have gone off the air since President Vladimir Putin came to power seven years ago, and broadcasters have become more cautious. The primary TV broadcasters are all state-controlled or state-owned.
Criticism of Russia’s super-rich is seldom so blatant on major networks, and businesses are quick to swat down abrasive media coverage in the courts.
According to Forbes, Prokhorov, 41, is worth $13.5 billion and has gold, real estate and banking holdings.
After four days in detention, French police released him without charge.
Shortly after the arrest, a Norilsk spokesman said Prokhorov would sell his stake in the company and step down as general director. The company called it a corporate restructuring unrelated to the incident in France.

TITLE: St. Petersburg University Promotes Patriotic Projects Among Students
AUTHOR: By Evgenia Ivanova
PUBLISHER: Staff Writer
TEXT: Despite what people think, St. Petersburg’s young people are not apathetic victims of consumer society, St. Petersburg State University said as it unveiled the results of a contest of projects promoting the future of Russia.
The competition, “Our Future is Russia,” run by the university for the first time, aimed to attract students’ and graduates’ attention to humanitarian problems, and the promotion of tolerance and democracy. 
A 600,000 ruble prize fund ($23,104) was equally divided among the best ten ideas that ranged from the creation of a political discussion program and a game-show on TV to designing a meeting place for Russian expatriates.
“[The contest] explodes the myth of young people being a part of the absolutely indifferent environment of consumerism,” the university’s press service said in a statement Monday. “Anyhow, the emotional level of the work submitted and the level of recognition of importance of the problems introduced show that it is not all bad in terms of the progressive outlook of young people.”
University rector Lyudmila Verbitskaya said last month that “the initiative of the university reflects the need and the ability of society to independently form… the prospects of the country’s development and to be able to find the place of each citizen in this process.” 
A number of long-term projects were also recognised by the university.  
Contestant Natalia Trofimova suggested creating a network of culture and entertainment centers promoting “traditions, games and amusements of Russia’s ethnic minorities.” 
Trofimova’s project was chosen because “it follows City Hall’s philosophy toward [St. Petersburg’s potential as a] tourist attraction” and is “based on the unbiased reality of large cities where many cultures coexist,” a statement from the press office said. 
The ideas could be developed and realized in a so-called “business-incubator.” The university is currently working on creating such a unit.
In the unit, students will be offered the opportunity to organize their own businesses with the full legal and financial support of the university, the advisor to its head of science projects Timofei Utnasin told The St. Petersburg Times on Monday. 
“The majority of start-ups spend enormous amount of energy to solve organizational problems… Offering of such services is precisely the main task of the ‘incubator’ so the trainee businessmen can focus on the development of their businesses,” he said.  
 “There is an unbelievable number of talented and creative people studying in the university, many of whom would like to start up their own companies,” Utnasin added.
The university — which plans to run the competition on a yearly basis — will hand over the best projects to the presidential administration.

TITLE: 70,000 Rally in Kiev For Political Demonstrations
AUTHOR: By Mara D. Bellaby
PUBLISHER: The Associated Press
TEXT: KIEV — More than 70,000 Ukrainians rallied in the center of Kiev to press President Viktor Yushchenko to dissolve parliament and call new elections, deepening a feud between the president and Prime Minister Viktor Yanukovych.
Demonstrators at Saturday’s rally were unhappy with attempts by Yanukovych to expand his power base in parliament by siphoning away lawmakers from pro-Yushchenko factions — a move that has significantly strengthened Yanukovych’s control over the country.
Earlier Saturday, Yushchenko, who did not attend the evening rally, accused Yanukovych of breaking promises he had made in a power-sharing agreement and of trying to amass more power by poaching lawmakers from the blocs that support the president. 
Yushchenko has expressed concerns that Yanukovych could strengthen his parliamentary majority to 300 seats in the 450-seat parliament, enough to override presidential vetoes and amend the constitution.
Yushchenko threatened to dissolve the Verkhovna Rada, or Supreme Council, if the situation did not change.
“If the work of the majority is not renewed on the basis of the constitution, I will sign the decree to dissolve the parliament,” Yushchenko told a conference of his party’s delegates Saturday morning, prompting wild cheers and applause.
Seeking to push him to go ahead with the threat, his political backers called supporters out onto Kiev’s Independence Square, which was the epicenter of the 2004 Orange Revolution protests that ushered Yushchenko into power.
About 70,000 people turned out, waving flags and banners. The demonstrators accused Yanukovych of trying to revise the results of last year’s parliamentary election.
“It is not the right of the president [to dissolve the parliament], it is his obligation,” opposition leader Yulia Tymoshenko told demonstrators. The crowd shouted, “Together we will win.”
Meanwhile, a smaller crowd of about 20,000 Yanukovych supporters held a rival rally nearby.
Dissolving parliament could plunge Ukraine into a new political crisis, particularly if Yanukovych’s coalition, which denies Yushchenko’s allegations and argues that there is no constitutional basis for dissolving the parliament, refuses to abide by the president’s decision.
If Yushchenko backs down, he could find himself politically weakened and isolated; on Saturday, his party passed a resolution appealing to the president to dissolve the parliament.

TITLE: Mironov Says Putin Should Stay
AUTHOR: By Vladimir Isachenkov
PUBLISHER: The Associated Press
TEXT: MOSCOW — Federation Council Speaker Sergei Mironov called Friday for a Constitutional amendment that would allow President Vladimir Putin to stay in office after his second term ends.
Mironov’s proposal was quickly shot down by the Kremlin, but it reflects looming uncertainty over next year’s presidential election.
The comments by Mironov, who heads the pro-Kremlin party A Just Russia, also underscore what appears to be mounting pressure from some members of Putin’s inner circle for him to stay on beyond the March 2008 election.
The issue is seen as a test of the country’s political system. Any change that permits Putin to stay on would be seen by the West as a further erosion of democracy.
In a speech after his re-election as speaker, Mironov said the four-year presidential term should be extended to at least five years and that presidents should be permitted to serve three consecutive terms instead of two.
Kremlin spokesman Dmitry Peskov said Putin remained opposed to any changes to the Constitution that would extend his term.
“We proceed from the president’s position that it is pointless to change the Constitution to extend the presidential term or the number of terms,” Peskov said. 
Several analysts and opposition leaders saw Mironov’s statement as a declaration of loyalty by a longtime ally, rather than a Kremlin gambit to extend Putin’s time in office. At the same time, some observers say the move reflects growing pressure on Putin to remain in power from some of his top lieutenants.
“In this nation, where there is no real parliament and the Cabinet is weak, a lame-duck president would mean anarchy,” said Nikolai Petrov of the Carnegie Moscow Center.
Boris Makarenko, an analyst with the Center for Political Technologies, an independent think tank, predicted that Putin would step down as promised but would retain strong clout and try to rule from behind the scenes.
“Mironov’s statement was only an expression of loyalty,” he said.
Putin remains widely popular thanks to the oil-driven economic boom that has brought wider prosperity and his pledge to revive the global clout that Russia had as part of the Soviet Union.
Garry Kasparov, the former world chess champion who is now a determined Putin foe, characterized Mironov’s proposal as “hysterical weeping” by Putin loyalists who could lose their jobs in a change of administration.
“They understand that Putin will not stay on, but they don’t know what to do next,” he told a news conference.

TITLE: Berezovsky, Zakayev Questioned by Detectives
AUTHOR: By David Stringer
PUBLISHER: The Associated Press
TEXT: LONDON — Russian investigators have questioned businessman Boris Berezovsky and Chechen rebel envoy Akhmed Zakayev in London over the poisoning death of former intelligence agent Alexander Litvinenko, British law enforcement officials said Sunday.
Zakayev and Berezovsky said they had been interviewed on Friday in the presence of officials from the Prosecutor General’s Office, which is investigating Litvinenko’s death.
State television broadcast an interview on Sunday with a man who claimed Litvinenko’s death might have been connected to a plot to strengthen Berezovsky’s successful petition for asylum in Britain.
An unidentified man interviewed by “Vesti Nedeli,” a news magazine show on the state-owned Rossia channel, claimed to have been asked to pose as a security agent sent to Britain to kill Berezovsky, Russian news agencies said. Rossia declined to provide an advance transcript of the interview.
The interviewee said Litvinenko might have been killed because he was the only other witness to the plan, Russian media reported.
Litvinenko died Nov. 23 in a London hospital. In a deathbed message, he accused Putin of being behind his poisoning with radioactive polonium-210.
Officials from the Prosecutor General’s Office have asked to visit several sites in London and to question about 100 people, aiming to determine how Litvinenko was poisoned.
British police have delivered an interim file on the death to prosecutors, but no charges have been filed in connection with the poisoning.
Berezovsky said he was questioned for around four hours on Friday, RIA-Novosti reported.
“I had the impression that a tax inspector or a representative of a big Russian bank had come who wanted to find out where my accounts are,” Berezovsky was quoted as saying.
Investigators wanted to know Litvinenko’s financial status and “how much money he had in his account and who would inherit what he had,” Berezovsky said.

TITLE: Paper Warned Over Coverage
PUBLISHER: Combined Reports
TEXT: MOSCOW — The government media regulatory agency has warned Kommersant not to mention the unregistered National Bolshevik Party on its pages.
The Federal Service for Media Law Compliance and Cultural Heritage said in a letter to Kommersant that the newspaper would be in violation of the law if it printed the words “National Bolshevik Party” or an abbreviation of the unregistered party’s name.
The agency was enforcing its own ruling that since Eduard Limonov’s organization is not registered, the media should not refer to it as a political party.
“If there is no party, it’s impossible to write about it,” agency spokesman Yevgeny Strelchik said.
The service’s deputy head, Nikolai Novikov, told Ekho Moskvy radio on Friday that the letter was an attempt to head off future violations, and that Kommersant had not been cited.
NatsBol spokesman Alexander Averin said authorities were trying to impose a media blackout on dissent.
“They’re afraid of us because we are the most combative force, the most radical of those who don’t agree with them,” Averin said.
Reuters, SPT

TITLE: Opposition Plans March in April
AUTHOR: By David Nowak
PUBLISHER: Staff Writer
TEXT: MOSCOW — The Other Russia, a coalition of political opposition groups, applied Friday for a permit to hold a large-scale march in central Moscow on April 14.
The so-called Dissenters’ March will take place with or without a permit from City Hall, organizers said.
“We have a constitutional right to hold peaceful demonstrations,” said Alexander Averin, spokesman for the unregistered National Bolshevik Party, who submitted the application.
City officials promised a decision by Wednesday, Averin said.
The Other Russia has also applied for a permit to hold a march in St. Petersburg on April 15.
Police dispersed similar marches last month in St. Petersburg and Nizhny Novgorod.
Last December, some 2,500 activists from The Other Russia descended on Triumfalnaya Ploshchad, where they were surrounded by 8,500 riot police officers.
“It is obvious that as the authorities take a harder line, the chances increase that the power vertical will simply collapse,” former chess champion turned opposition leader Garry Kasparov told reporters Friday.
Kasparov heads the United Civil Front.

TITLE: Communist Leader Tries Hand at Cracking Jokes
AUTHOR: By Natalya Krainova and Kevin O’Flynn
PUBLISHER: Staff Writers
TEXT: MOSCOW — Gennady Zyuganov rattled out joke after joke at a news conference Thursday, but was only met with the occasional polite chuckle from attending journalists.
The Communist Party leader’s jokes went along these lines: “There are two main problems in Russia: roads and fools. In the Duma, one is trying to fix the other.”
Zyuganov, better known for his firebrand speeches than for his sense of humor, was speaking during the release of a book of jokes to tie in with April Fool’s Day on Sunday.
With State Duma elections just nine months away, Zyuganov used the book to poke fun at his biggest political adversary, United Russia.
The pocket-sized book, “100 Jokes From Zyuganov,” has dozens of jokes about the pro-Kremlin party and President Vladimir Putin and is accompanied by cartoons of a bear — the symbol of United Russia — looking intermittently aggressive, dopey and sulky.
But the most personal joke in the book is the one about an aide who rings up President Boris Yeltsin the day after the presidential election and asks what he wants to hear: the good or the bad news.
Yeltsin takes a tranquilizer, has a glass of vodka and begins to sweat. Let’s have the bad news, he says.
“Zyuganov got 62 percent.”
As his shaky hand moves for the pistol, Yeltsin asks, “What is the good news?”
“You won. You got 75 percent.”
Zyuganov, after leading Yeltsin by a clear margin, lost the 1996 presidential election in a race that the Communists say was fixed.
The book was put together by Zyuganov’s press secretary, Alexander Yushchenko, who writes in the foreword that Zyuganov would always cheer up his party activists on long train trips by telling jokes. A total of 20,000 copies of the book have been printed.
Zyuganov’s performance Thursday wasn’t exactly stand-up comedy. For a start, he sat down. While he told jokes, a short man stood in a bear’s costume to his right carrying a poster advertising Zyuganov’s book and wearing a bandage over his jaws, as if to keep him from talking or biting.
The Communist leader tried to please the journalists — each was given a free box of honey, too — but a tough crowd is a tough crowd, especially when they are hearing jokes that probably only sound funny on the second day of a train journey.
One joke may have tinges of anti-Semitism, not uncommon among Communist Party officials when talking about former oligarchs such as Boris Berezovsky: It is an oligarch’s funeral, and other oligarchs are attending. Vladimir Gusinsky walks past and drops $200 into the open casket; Vladimir Potanin walks past and adds his $200. Then Berezovsky walks past, takes out the $400 and leaves a check for $600.
On the other hand, the Communists, who attempt to grab the nationalist vote as much as any party, could be said to be showing a macabre sympathy toward the plight of the migrant in the capital with one joke: In a graveyard late at night, a skeleton gets out of his grave and knocks on the next grave.
“Gogi,” he says in a comic Georgian accent, “Let’s go into Moscow and have a stroll, eat some shashlik and drink some wine.”
Gogi pops out of his grave and they head off, but Gogi suddenly turns back, grabs his gravestone and puts it on his back.
“Why are you bringing that with you?” asks his friend. “Hey, you know you can’t walk round Moscow without any documents,” Gogi replies.
The plan was for Zyuganov, a captain of a KVN comedy club at his university, to tell jokes for an hour, but perhaps because of the reporters’ response he stopped early.
“I think that’s enough, let’s finish,” Zyuganov said.
Zyuganov had been at ease when telling his jokes but was more a politician when he replied shortly and coldly to journalists’ questions.
The show would only go so far.

TITLE: GM to Splash Out on Local Plant
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: American automotive giant General Motors has announced it will triple investment into its new Russian assembly plant, currently being constructed in Shushary on the outskirts of St. Petersburg. 
As a result, the plant will produce three times as many cars as was initially planned.
GM inaugurated construction of the plant on June 13, 2006, during the 10th St. Petersburg International Economic Forum. With a capital injection of $115 million the plant was intended to produce 25,000 cars a year. However, last week GM executives announced a new, more ambitious investment plan.
“Russia is the largest market for Chevrolet in Europe. Demand for our cars keeps growing. When we launch the plant in 2008 we will be in a much more favorable position to satisfy that market demand,” Carl-Peter Forster, president of General Motors Europe, was cited as saying in a press release from the Committee for Economic Development, Industrial Policy and Trade.
By investing $300 million into the plant GM plans to produce 70,000 units a year.
“We welcome the decision by General Motors to increase investment and the volume of production. For our part, we will do our best to realize this project as soon as possible. We are investing considerably into the modernization of engineering infrastructure and the creation of new industrial zones,” the press release quoted St. Petersburg Governor, Valentina Matviyenko, as saying. She noted that additional funds would be provided this year by the city to train high-quality personnel for the new enterprises.
“Creation of a high-tech automotive plant in St. Petersburg contributes to the development of carmaking — the new industry in the city,” Matviyenko said.
According to Forster’s estimations, the Russian car market was Europe’s fifth largest last year in terms of sales. The market grew by 22 percent compared to 2005.
General Motors sold over 132,000 cars in Russia in 2006. Chevrolet accounted for 84 percent of total sales.?In January-February 2007 General Motors sold 25,981?cars in Russia including 20,805 Chevrolets. As well as the plant that is being constructed in Shushary, GM operates production enterprises in Toliatti and Kaliningrad. GM-Avtovaz was established in 2001 as a joint venture to produce Chevrolet Niva and Viva.
In 2004, GM started assembling cars at the plant of its partner Avtotor. At the moment the plant in Kaliningrad produces the Cadillac, Hummer and Chevrolet brands. The new plant in Shushary will produce the off-road cars Chevrolet Captiva and?new model of C-class cars. It would be a whole-cycle assembly plant that will operate in two shifts. Production will start in late 2008 employing 900?workers, engineers and managers.
“Our current investment plan reflects our preference to produce cars in the countries where we sell them, in the largest markets, and our eagerness to contribute to industrial growth and increase employment in Russia,” said Warren Brown, managing director of General Motors in Russia.
Gairat Salimov, analyst for the automotive industry at Troika Dialog brokerage, saw this increase in investment and production capacity as a logical and prudent step for GM.
“The Russian car market is growing very fast. And producers know that the company which possesses the largest capacities here in Russia has the best chance to beat the competition,” Salimov said.
He did not exclude GM increasing its capacities still further in order to keep up with Ford and other foreign producers that have established assembly plants in Russia.
“Unlike Russia and Asian carmakers, western producers aim at the steady and stable increase in production and capacity. It’s easier for them to hire new people rather than to fire them. Thus they rarely enter new markets staking a lot at the very beginning,” Salimov said.
GM has production enterprises in 33 countries. Last year total sales accounted for 9.1?million cars including Buick,?Cadillac, Chevrolet, GMC, GM Daewoo,?Holden,?Hummer,?Opel, Pontiac, Saab, Saturn and Vauxhall.

TITLE: Agitation at Ancor, Locals Break Loose
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Several shareholders of ANCOR Management recruiting company have appealed to the Moscow Arbitration Court to invalidate the decisions and activities of General Director Igor Khukhrev, who also has a stake in the company. They accuse him of illegally transferring assets and not in accordance with their interests.
According to their statement, in December 2006 Khukhrev transferred the rights over the ANCOR trademark from ANCOR Management to ANCOR Regions Ltd., a company in which he has a 99.9 percent stake.
Earlier, in September 2006, ANCOR Management sold a 100 percent stake in its subsidiary ANCOR-Petersburg Ltd. To ANCOR Regions at a nominal cost of 8,000 rubles ($307). Similar deals were signed in relation to 20 other subsidiaries.
The shareholders claim that in January this year all the assets including the trademark were sold for?11,000 rubles ($420) to?Gaznefteksport, which later was renamed as Ancor-holding, in which they have no share.
“Igor Khukhrev signed all these deals against the Federal law on joint-stock companies. Khukhrev did not have the authority to put through these deals,” said Yelena Novikova, shareholder with 36.72 percent stake in ANCOR Management.
Novikova estimated the assets and trademark to be worth around one billion rubles ($38.4 million) and demanded that Khukhrev compensate all material losses. Other shareholders supported her, including Natalia Ganina (15.55 percent stake), Tatiana Bogus (2.67 percent) and Irina Kondratova (1.33 percent).
“We will protest against the illegal activities of the General Director of ANCOR Management and the group of people in collusion with him. They contradict the letter and intent of corporate law,” said Andrei Mischenko, lawyer for the plaintiff.
Last year ANCOR Management reported net sales of $25 million. It holds a 10 percent share of the Russian recruiting market and serves over 1,000 companies including multinationals.
“To sell important and valuable assets the General Director needs the approval of shareholders. But the value of assets is estimated in a formal way. I would suggest that the material value of the transferred assets was quite low, considering the practice of trademark assessment in Russia,” said Victor Naumov, partner in the sphere of intellectual property and information technology protection at Beiten Burkhardt St. Petersburg.
Regardless of the outcome, St. Petersburg shareholders reacted quickly in an attempt to hang on to their business. Around 95 percent of people at the St. Petersburg office resigned and promptly began work at Ancor-Saint-Petersburg Ltd., a company Natalia Ganina registered in 2003.
Having no cash in its bank accounts Ancor-Petersburg broke rental agreements, and Ancor-Saint-Petersburg rented the same offices.
Over 70 percent of clients signed recruitment agreements with the new company, Ganina said. 
“The work is going on in a normal way.”
Igor Khukhrev, General Director of ANCOR Holding, denied that there was conflict.
“Novikova and Ganina were planning to leave the business. We have been negotiating to buy-out their stakes. Instead of that, we have seen these events in St. Petersburg. Nevertheless I’m still ready for negotiations,” Khukhrev said.
He indicated that negotiations with Ganina have already started and the managers of ANCOR Holding are “using all the legal tools available to resume the work of the office and return documents and materials of value.”
As for the clients in St. Petersburg, Khukhrev said they are being served by a mobile group of ANCOR in St. Petersburg and by employees of the Moscow office.
Khukhrev indicated that a number of former employees have already applied to the holding asking to be reinstated in the company.

TITLE: Aeroflot, UniCredit Will Bid Jointly for ‘Available’ Alitalia
AUTHOR: By Alessandro Torello
PUBLISHER: Bloomberg
TEXT: MOSCOW — Aeroflot, Russia’s largest airline, will join UniCredit SpA in bidding for Alitalia SpA and a third partner may join later, UniCredit’s investment banking head said. Alitalia shares were suspended from trading in Milan. 
UniCredit, Italy’s largest bank by assets, will control 5 percent of the bidding group, while Moscow-based Aeroflot will control the remaining 95 percent, Sergio Ermotti, UniCredit’s investment-banking unit chief, told reporters today in Milan. 
“Aeroflot has a history of restructuring,’’ and the carrier “can bring know-how to Alitalia,’’ Ermotti said. “We remain available to enlarge the shareholding structure with another industrial partner, if the Finance Ministry will allow it.’’ 
Italy’s government, which owns 49.9 percent of Rome-based Alitalia, aims to sell at least a 39.9 percent stake by mid-year after abandoning turnaround efforts for a company that had a 405 million-euro ($540.8 million) pretax loss in 2006. New investors had an 11 a.m. Milan time deadline to decide on joining one of five shortlisted groups, including UniCredit and Texas Pacific Group, eligible to submit non-binding bids by April 16. 
Shares of Alitalia rose as much as 4.6 cents, or 4.9 percent, to 99 cents today and were up 4.5 percent at 98.6 cents before being suspended. 
Shares of Aeroflot extended gains, rising 5.6 percent to 78 rubles on the Micex Stock Exchange at 2:02 p.m. in Moscow, valuing the carrier at $3.3 billion. The stock was up 2.8 percent before the bid announcement.

TITLE: Alstom Agreement
PUBLISHER: The Associated Press
TEXT: MOSCOW — French power and transport company Alstom on Monday signed an agreement with a Russian company to create a joint venture producing turbines and generators for Russian-built nuclear power plants.
Alstom said in a statement that it and Russia’s Atomenergomash company would invest some 200 million euros (US$267 million) in the venture, which will be based at Podolsk, near Moscow.
Atomenergomash, a subsidiary of Russia’s main equipment maker for the nuclear power industry, will hold a controlling, 51 percent stake.
In a statement, Alstom CEO Patrick Kron said the deal gives the company “privileged access to the burgeoning Russian market.”

TITLE: MMK Expected to Invest $5.2 Billion
PUBLISHER: Bloomberg
TEXT: MOSCOW — Magnitogorsk Iron & Steel, Russia’s largest stand-alone steel mill, plans to invest $5.2 billion through 2012 to battle rising costs and expand output, Renaissance Capital said in a report.
The steelmaker, reliant on outside suppliers for raw materials, is also considering building a coking coal plant in central Siberia together with a unit of domestic rival Evraz Group, the investment bank said March 26 in a confidential report for investors. 
Magnitogorsk spokeswoman Yelena Azovtseva could not be reached for comment Friday.
“Rising costs of raw material and potentially gas over the longer term create a further impetus to improve margins,” RenCap analysts Rob Edwards and Yury Vlasov wrote in the report. The analysts forecast that the steelmaker’s costs will rise by almost one-third before 2010.
Controlled by chairman Viktor Rashnikov, the Ural Mountains-based company will become Russia’s fifth steelmaker to offer shares to investors next month. Magnitogorsk may offer as much as 13.6 percent of new and existing shares in London. ABN Amro Rothschild, Morgan Stanley and RenCap are managing the sale.
Magnitogorsk has a market value of between $11.4 billion and $13.3 billion on an equity basis, RenCap’s report said. The steelmaker has the country’s second-best steel-industry margin on earnings before interest, taxes, depreciation and amortization, or EBITDA, with 31 percent, the report said. The EBITDA margin is a measure of how efficiently a company uses revenue.
Crude steel production at the Urals producer could climb 16 percent to 14.5 million tons in 2009, RenCap said.
The steelmaker is also looking to develop the Kureinskaya coal deposit in the Kuznetsk Basin, which holds 430 million tons of hard- to medium-grade coke reserves, RenCap said. 
Magnitogorsk owns half of the deposit’s license-holder, Ugolnaya Co. Kazankovskaya, via its MetAl unit. Evraz’s coal unit Yuzhkuzbassugol owns the rest.
Given a looming coal oversupply in the country, Magnitogorsk would have to rely on exports or postpone the development, said Kirill Chuiko, an analyst with UralSib.
To secure an export route to Asia, Magnitogorsk has bought a 47.5 percent stake in Vladivostok Commercial seaport in the Far East via its M-Port unit. 
The steelmaker also has 6 percent of Yeisky seaport on the Black Sea, RenCap said.

TITLE: Moscow Eyes Bigger Airbus Role
PUBLISHER: The Associated Press
TEXT: PARIS — Russia’s economics minister pressed his country’s bid for a greater role in Airbus parent company EADS on Sunday, saying Moscow wants a clear answer on whether it is a welcome partner in the European aircraft manufacturer.
“We have given clear signals that we want to cooperate with Airbus,” including by raising Russia’s stake in Franco-German EADS, German Gref told reporters in Paris. “For now we do not have a comprehensive strategy from the Airbus side.”
Last year Russia’s state-owned Vneshtorgbank, or VTB, announced it had acquired 5 percent of European Aeronautic Defence & Space Co. In response, EADS warned that the Moscow bank would not be welcomed as a decision-making industrial shareholder.
Some observers say tighter links with Russia could endanger the European defense group’s U.S. business, and generate concern about governance at EADS and the transfer of sensitive technologies.
Moscow, though, is determined to increase its role in Airbus, which is struggling to recover from costly delays to the A380 superjumbo, losses because of the weak dollar, and a year of management turmoil that has sent EADS stock tumbling.
Gref expressed frustration at resistance to a greater Russian stake, saying it could help the aircraft-maker expand into a potentially vast Russian market against competition from U.S.-based Boeing Co.

TITLE: Food Retailing Market To Expand 10% a Year
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s $99 billion food-retailing market will expand at an annual pace of more than 10 percent through 2011, the fastest in Europe, an analyst covering Eastern Europe for London-based Euromonitor said at a conference in Moscow on Thursday.
Growth in the entire Russian retail industry will come to 6.3 percent per year on average through 2011 as consumption grows, according to a Euromonitor statement. 
The country still has just two retailers per 1,000 citizens, the second-lowest level in Europe, leaving room for local and foreign companies to keep expanding, Euromonitor’s Irina Kazanchuk said.
The biggest revenue gains among Russian grocers in 2006 came at superstore chains, where sales jumped 60 percent, Kazanchuk said. A total of 40 such outlets were opened in the country last year, up by more than half from 2005, she said. 
Superstores will raise their sales by more than 20 percent annually to $9 billion by 2011, outpacing the retail industry, according to the analyst.

TITLE: Oil, Atoms, High-Tech Kazakhs
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — Oil, nuclear and high-tech industries dominated talks between Prime Minister Mikhail Fradkov and Kazakh leaders in Astana, the government said in a statement released Friday.
“Our talks have been highly constructive and were actively engaged in by both parties,” Fradkov told a news conference after a meeting with Kazakh President Nursultan Nazarbayev and Prime Minister Karim Masimov. 
“In this relatively short amount of time we managed to discuss topics over a wide range of important issues.”
The trade and economic turnover between the countries increased 30 percent in 2006 to $13 billion, he said. 
Fradkov also said the two countries were actively cooperating in space and military programs and were planning jointly to establish chemical and petrochemical enterprises, the government said.
The delegation to the Kazakh capital included the head of the Federal Atomic Energy Agency, Sergei Kiriyenko, who told reporters that the two countries were negotiating on the possibility of building a nuclear power plant near the Caspian port of Aktau, although he did not offer a timeframe, Interfax reported.

TITLE: Berlin-Irkutsk Train Plans
PUBLISHER: Reuters
TEXT: BERLIN — European rail enthusiasts may soon be able to travel even further into the depths of Siberia without having to switch trains as a Russian rail operator plans a direct, roughly five-day journey between Berlin and Irkutsk.
At present, the longest direct train journey from Western Europe leaves Berlin on Saturdays and arrives in the Siberian capital Novosibirsk on Wednesdays, German rail operator Deutsche Bahn said.
The trip takes almost four days and covers around 5,000 kilometers.
Russian Railways, or RZD, is planning a new route from the German capital to Irkutsk, one of the largest cities in Siberia, situated near Lake Baikal. It is about 1,800 kilometers east of Novosibirsk by rail.
The journey could take up to 30 hours longer than the Berlin-Novosibirsk route, a spokesman for RZD said.
Travelers can also reach Irkutsk with the Trans-Siberian Railroad.

TITLE: German Seeks Unification on a European-Wide Scale
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: As one might expect, Germany’s Consul General in St. Petersburg has had a long and successful diplomatic career. Before being sent to Russia in July 2006, Bernd Braun worked in such countries as Sudan, the U.S., Hungary, Ukraine, Estonia and Kenya, where he enjoyed learning about new cultures and different political systems.
Born in 1946 in Berlin, Braun first thought about an international career in 1964-1965 when he went to the U.S. as a high school exchange student. 
“When I came back to Germany I had the idea that I would like to work abroad,” he said. “However, I was not sure that I could make it. I tried to be flexible and stay open to other career opportunities and that is why I finished my law studies in 1971 and then started legal training. But I always had my eye on foreign affairs.”
Braun knew that in order to become a diplomat in Germany you must speak at least two foreign languages — English and French — and therefore aimed to improve his French, “which was not very good at that time.” 
In 1975, he received a scholarship to study in Paris at the prestigious Ecole Nationale d’Administration where many well-known French politicians, the current French president Jacques Chirac among them, have studied. 
On completing his studies in France, Braun entered the Foreign Service in Bonn. He worked at the Ministry of Foreign Affairs in Germany for three years until 1980 when he was appointed press and cultural attache at the German Embassy in Khartoum. 
In 1983, Braun returned to the U.S. to represent Germany on the Human Rights and Social Affairs Committee at the United Nations Assembly in New York. This was also where he met his future wife, an American journalist.
Braun found Leningrad rather depressing in 1980, the year he first visited the city.
“Although it was the beginning of July, the city was gray and dull. There were almost no cars on the roads. I remember that the tramway tracks were so deep that the cars could hardly cross them. Now a lot has changed — the city’s infrastructure has improved and it feels like a real European city,” Braun said.
However, Braun doubts whether St. Petersburg has that much in common with cities in Germany. “Most German cities are quite old and lots of them were destroyed during the Second World War and then completely reconstructed,” he said. “My home city of Berlin has also changed a lot. It is a really international place. It is not a beautiful city but certainly very interesting and I like it.”
Working at the office for foreign affairs, Braun was always interested in questions related to the reunification of Germany. He said that he was very satisfied when they finally made it happen. 
“Although in many respects the eastern and western parts of Germany are still not equal and it will take lots of time and effort to being that about, I am very glad that Germany is now unified,” he said.
According to Braun, among the main problems facing modern Germany is the high level of unemployment (from 10 per cent across the country as a whole to 20-25 per cent in the east). 
“We lost many industrial jobs in East Berlin after the fall of the Berlin wall. Industry was just relocated to countries such as Poland, China and Vietnam where labor is much cheaper. Unemployment in Berlin increased up to 16 per cent,” he said. 
According to Braun, among the countries where German companies are looking for business opportunities, Russia is a special case. 
“German companies that operate in Russia are not looking for cheap labor — they can find that in other countries. They are focused on the exceptional market potential that the country offers,” he said.
With the development of business connections, relations between Russia and Germany are rapidly progressing, Braun said. 
“People in Germany are friendlier towards Russians than before. For many of them Russia used to be an occupant, the power that propped up the Berlin wall. I was a child in 1953 when the Berlin uprising took place in the Eastern part of the city. It was quashed by Russian tanks. I am very glad that the situation has now changed completely. Many Germans are very interested in Russia and eager to know what is happening here now,” he said.
According to official statistics, in 1950-2006, 4.5 million native Germans emigrated from republics in the former USSR to Germany. Since 1991 175,000 Jews have migrated to Germany from the CIS. “Those two groups of immigrants usually have their own particular educational, professional and cultural backgrounds and therefore integrate themselves in different ways. 
“Many native Germans moved to Germany directly from the countryside and often do not possess higher education, while their children cannot speak German and have serious problems integrating into the new society.” 
“Jewish immigrants, on the other hand, are usually better educated, they find jobs more easily and get additional support from synagogues and cultural communities facilitating the process of integration,” Braun said. 
Although immigration from Russia to Germany has declined, according to Braun this is only one of the first indications that Russia is on the right track.
“There are still many problems needing to be solved in Russia. You need to make the country more democratic, fight against bureaucracy, have a free press and equal opportunities for the whole population,” he said.
Last Tuesday, Braun spoke at an international seminar “Treaty of Rome —50 years,” that took place at the Faculty of International Relations of St. Petersburg’s State University and the European University of St. Petersburg. “Today our main efforts are focused on building up a unified Europe. On March 25th, 2007 all Europeans celebrated the 50th anniversary of the signing of the Treaty of Rome, which was the beginning of a united Europe,” he said.

TITLE: UES, Norilsk Spar Over OGK-3 Subsidiary
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: MOSCOW — A battle is brewing over the fate of $1.5 billion between state utility Unified Energy Systems and one of its main strategic partners, Norilsk Nickel. 
The utility’s CEO, Anatoly Chubais, said Friday that Norilsk would have to invest more money than planned into OGK-3, the UES subsidiary that Norilsk effectively came to control this month. 
But Norilsk has other plans. Its general director, Denis Morozov, said that after carrying out the agreed-upon investment project for OGK-3, Norilsk would spend the remaining money elsewhere, as it sees fit.
The two executives spoke in separate conference calls last week.
On Tuesday, Norilsk finalized the purchase of 38 percent of OGK-3 for $3.1 billion, paying well above the market price to get within a few percent of majority control, which it will secure in a matter of days, analysts said.
OGK-3, which owns six power stations across the country, had only expected to raise $1.6 billion from the sale, just enough to carry out the development program approved by its board of directors. Although Norilsk has every intention of realizing this program, the remaining $1.5 billion will be spent on other acquisitions in the power sector, Morozov said Wednesday.
Chubais said Friday that this was unacceptable. 
“We will propose to our new partners, Norilsk Nickel, additional investment projects for OGK-3,” Chubais said. These projects are to be funded with the extra cash from the share sale, and by mid-June, Norilsk will be asked to sign a “final, detailed, and legally binding” contract, committing it to spend the entire $3.1 billion on OGK-3, Chubais said. 
Morozov said he expected that Norilsk, as majority shareholder, would have the last word on how its money would be spent. “All the money we invested in OGK-3 will stay on OGK-3’s balance sheet and basically under Norilsk’s control,” he said. This, he added, was one of the main reasons Norilsk decided to invest in OGK-3 on such a scale.
Even the basic investment program that Norilsk agreed to in a signed memorandum could be revised, the company’s head of investor relations, Dmitry Usanov, said in Wednesday’s conference call. “We will review and look with more attention at the existing program, and in case of need, we will optimize it,” he said. 
But Chubais said that only under “radical” circumstances — such as a drastic change in fuel costs for power plants, a sudden spike in inflation, or an unexpected change in the pace of the sector’s liberalization — could the investment program be amended in any way. All strategic investors in the power sector would be bound in the same way to UES’s investment goals, he said.
OGK-3 chairman Alexander Chikunov said after the share sale took place last month that UES could take Norilsk to court if it failed to carry out the investment program.
The legal odds would appear to be on Norilsk’s side, however, as Russian courts tend not to interfere with a majority shareholder’s right to spend a company’s money. 
But UES still has some influence on the OGK-3 board. With a 38 percent stake, it can block any major decisions, at least until July 2008, when the national utility is to be dismantled as part of the energy sector reforms. After that, its shares in OGK-3 will go pro rata to its existing shareholders. None of these will have a big enough stake to challenge Norilsk’s control, however. 
Getting a court to step in on UES’s behalf would be an uphill legal battle, Chikunov told a March 10 news conference at UES headquarters. “This practice is indeed not very widespread in our country, but lawyers insisted while drawing up the documents that this practice will take shape as we go along.”
After UES is gone, a noncommercial body called the Market Council will police the power industry in cooperation with the electricity trading exchange. What regulatory bite these organizations will wield is not yet clear. 
OGK-5, one of the first generating companies to go public in 2006, said last month that the investment program laid out by UES was excessive and would not be realized in full, Bloomberg reported.
UES’s forecast of 5 percent annual growth in electricity demand is grossly inflated, analysts have said. Over the next four years, rising electricity prices will keep growth down to 3 percent per year, reducing the need for new capacity, said Tigran Hovhannisyan, utilities analyst at MDM Bank. UES’s five-year plan for some 70,000 megawatts of new installed capacity — the equivalent of about 15 power stations — has astonished many experts with its gargantuan scale. At about $700 for every new kilowatt, it would cost $50 billion to install this much capacity, with the new investors in UES spin-off companies bearing most of the burden.
By the end of this year, Norilsk Nickel plans to spin off a $7 billion electricity company called Norilsk Power, which will inherit control of OGK-3. Mikhail Prokhorov, who stepped down as CEO of Norilsk Nickel this month, is widely expected to head up the new company, although Morozov and Usanov declined to comment on his future management role. 
Who emerges victorious in this battle over investment in the electricity sector may well depend on political influence, rather than the legal interpretation of Norilsk’s investment commitments, however.
If political power and wealth go head-to-head in modern Russia, power always wins, said Vladimir Lebedev, general director of TGK-5, another generating company to be spun off from UES this year.
“Strategic investors make promises to carry out these investment projects,” Lebedev said in a recent interview. “Going back on your promise to the government is a dangerous thing in Russia.”

TITLE: Tomskneft Auction Set For May 3
PUBLISHER: Bloomberg
TEXT: MOSCOW — Yukos oil output and refining assets in Siberia and electricity assets in southern Russia will be auctioned off May 3, the government said Saturday. 
The Federal Property Fund will auction off the two sets of assets in two separate lots, the government said in the state-owned Rossiyskaya Gazeta newspaper. The assets were cleared for sale Feb. 20. 
The company, once the country’s largest oil exporter, was declared bankrupt last year after the government levied a bill for more than $30 billion in back taxes.
Tomskneft, Yukos’ largest remaining oil-production unit, the Angarsk refinery and Eastern-Siberian Oil are among the assets to be auctioned off in a single lot at a starting price of 166.3 billion rubles ($6.4 billion), the notice said.
Should Rosneft win the bidding for the assets auctioned May 3, it would leapfrog LUKoil, becoming Russia’s largest oil producer. President Vladimir Putin is tightening control over the country’s oil and gas resources by building up state-run companies such as Rosneft into so-called “national champions.”
The Federal Property Fund has also set an initial bid price of 3.71 billion rubles for Yukos’ power, service and other assets in southern Russia, the government said in the notice. The holdings include a 26.3 percent stake in KubanEnergo, a monopoly provider of electricity and heat to the Krasnodar region.
The Federal Property Fund will accept bids for participating in the May auction from April 2 through April 28, the notice said.
Some of BP’s biggest shareholders plan to question the company about its role in the auction of Yukos’ 9.44 percent stake in Rosneft, the Sunday Telegraph reported, without citing anyone.
BP’s Russian joint venture, TNK-BP, abandoned its bid less than 10 minutes after the auction started, the newspaper said Sunday. The company’s early withdrawal from the sale led to speculation that it was trying to curry favor with the Kremlin, the paper said.
At least two of BP’s 20 largest shareholders intend to question the company over the allegations, the newspaper said.

TITLE: Aricom to Purchase Iron Deposit, Targets China
PUBLISHER: Reuters
TEXT: LONDON — Aricom, a London-listed miner with assets in the Amur region, plans to acquire control of an iron ore deposit with a view to supplying China’s booming economy, its CEO said Friday.
Aricom has agreed to pay $27 million for 60 percent of Lapwing, which owns the rights to develop the Garinskoye deposit in the Amur region. It also paid $19.7 million for an option to buy another 25 percent of Cyprus-based Lapwing for $100 million within two years.
CEO Jay Hambro said the higher price for the 25 percent stake would reward Aricom’s Russian partners for their role in acquiring the deposit at a tender last year, while leaving room for an increase in value as the project is developed.
“The tender process is us getting in at cost,” Hambro said by telephone from London. 
“We believe it’s worth a lot more than that, because I’m leaving a lot of money on the table for the Aricom shareholders.”
Hambro said the other 40 percent of Lapwing was owned by “Russian individuals and institutions who helped us with the tender process.”
JP Morgan Cazenove has valued Garinskoye at about $2 billion in a preliminary estimate for clients seen by Reuters. 
On that basis, Aricom’s 60 percent share would be worth 1.13 pounds ($2.22) per share, giving a total per-share value of 2.02 pounds.
Aricom shares traded flat on Friday at 66 pence.

TITLE: Total Fined Over Safety Violations
PUBLISHER: Bloomberg
TEXT: MOSCOW — French oil major Total has received a fine of 30,000 rubles ($1,150) for ignoring safety violations at its Kharyaga project. Environmental regulators are seeking to revoke its license in a separate audit.
Total’s Russian unit failed to plan how to use petroleum gas pumped from the oil field, gain permits to work with explosive substances or provide proof of two managers’ qualifications, the industrial safety agency said in a statement Thursday. The fine was the maximum possible.
The managers must be suspended until they prove they are sufficiently qualified to work at “dangerous” sites, the agency said.
Kharyaga is Total’s only major project in Russia.

TITLE: Moscow’s Eurasian Alternative
AUTHOR: By Janusz Bugajski
TEXT: Recent developments revolving around energy supplies and the future of Kosovo demonstrate how an emboldened Russia is intent on dominating the European agenda. Moscow’s strategy toward the European Union consists of three core elements: disrupting EU consensus; gaining influence over key states; and preventing any further NATO or EU expansion.
In his landmark speech at the Munich security conference in February, President Vladimir Putin spelled out his priorities: to diminish the effectiveness of international organizations that obstruct Moscow’s expansionist ambitions and to restore Russia’s stature as a global power. Centralized control over growing energy revenues has enabled the Kremlin to accelerate the pursuit of these objectives.
Moscow greatly benefits from the absence of a coherent EU policy toward Russia. Formal mechanisms exist to regulate relations, but these have limited impact as long as member states can’t agree on the details, as illustrated by the failure to renew the EU-Russia Partnership and Cooperation Agreement. Policy differences are most visible between newcomers to the EU in Eastern Europe and the French, German and Italian governments. While the former are fearful of Russia’s resurgence and therefore prefer limiting the Kremlin’s influence, the latter three are apprehensive about provoking disputes with Moscow.
For Paris, Berlin and Rome, commercial pragmatism prevails over geo-strategic calculations, thus reducing the effectiveness of any joint EU approach. For Moscow, increasing energy supplies and business inroads, especially in strategic infrastructures, will expand its political influence in key EU capitals. Conversely, Europe’s growing energy dependence on Russia will undermine any unified response to Moscow’s policies.
There are several telling examples of how Russia exploits EU divisions to its advantage. The planned Nord Stream pipeline under the Baltic Sea, contracted between Russia and Germany without an EU consensus, epitomizes Russia’s approach. Nord Stream serves four objectives: to limit Russia’s reliance on transit across Central Europe; to deepen West European dependence on Russia; to generate disputes between Germany and Poland; and to marginalize the Poles and Baltics within the EU by depicting them as incorrigible Russophobes.
The Kremlin not only manipulates divisions between older and newer members. It also aims to forestall any common policy among EU newcomers. Hungary and Bulgaria have become the primary targets among former Soviet satellites. The Kremlin is capitalizing on long-standing personal connections with Socialist officials in these countries to construct pipelines and distribution points that will pre-empt Europe’s energy diversification.
Hungary’s Socialist government has reportedly decided to support the extension of Gazprom’s Blue Stream pipeline through Turkey to supply Caspian gas under Russia’s control to the EU. If implemented, the project may scuttle the EU’s planned Nabucco pipeline, viewed as essential in avoiding overdependence on Russian-controlled gas. Financial windfalls have lured Budapest, as Moscow promises to transform Hungary into a European hub for Caspian gas.
In the Balkans, the Kremlin is extending its control over Bulgarian and Greek energy infrastructures and thereby weaving another web to entangle the EU. In mid-March, the Bulgarian and Greek prime ministers signed an agreement with Putin to launch the Burgas-Alexandroupolis oil pipeline project. A Russian consortium, including Gazprom, will hold a 51 percent stake in the pipeline, with Bulgaria and Greece sharing the remaining 49 percent.
Once again, the goal is to make alternative routes and supplies redundant as Russia intensifies its control over Europe’s energy needs. As the Bosporus is congested with tanker traffic, various proposals have been tabled to supply oil across the Balkans to the EU. The Kremlin supports the Bulgarian-Greek route as it calculates that Sofia and Athens will prove more politically reliable than other Balkan capitals.
Imminent decisions on the final status of Kosovo provide an additional opportunity for Moscow to accentuate splits within the EU and across the Atlantic. While Washington and several EU capitals are eager to resolve the untenable status quo in Kosovo, Russian officials have endeavored to sabotage the most rational settlement. They encourage Serbia to resist Kosovo’s sovereignty by questioning the competence of the UN special envoy for the territory. At the same time, Moscow appeals to countries such as Spain and Slovakia with significant minority populations by raising the specter of separatist precedents.
Russia’s delaying tactics over Kosovo serve two purposes. First, they enable the Kremlin to interject as a major player in Europe’s trouble spots, even though it has contributed little to regional security, political reform or economic growth. Second, Moscow benefits from international disputes over Kosovo as this further hinders the emergence of any Western consensus in containing Russia’s ambitions in the Black Sea, Caucasus and Caspian regions.
After extracting maximum advantages from its position on the UN Security Council by postponing a vote on Kosovo’s status, Russia’s eventual acknowledgment of Kosovo’s independence will serve another strategic goal. It will strengthen Moscow’s hand in Moldova, Georgia and Ukraine.
Russia is unlikely to recognize the full independence of the secessionist regions of Transdnestr in Moldova, and Abkhazia and South Ossetia in Georgia. Instead, it will exploit those trouble spots to keep Moldova and Georgia off balance and outside the EU and NATO. It will also heat up the Crimean separatist question when necessary in order to bring Ukraine into a closer Russian orbit. In stymieing the emergence of a wider Europe and a broader trans-Atlantic community, Moscow is pursuing a “Eurasian” alternative to democratic rule and trans-Atlantic security.

Janusz Bugajski is director of the New European Democracies project at the Center for Strategic and International Studies in Washington. This comment appeared in The Wall Street Journal.

TITLE: Bidding For a New Look at Theory
AUTHOR: By Konstantin Sonin
TEXT: Returning to theory is often one of the ways people try to explain what went wrong in major auctions that have been held here in the past. The sale of the state’s 75 percent stake in Slavneft in 2002, for example, was run in such a way that it maximized the opportunity for collusion between the most likely bidders. When the auction mechanism is based on open bidding — so-called English auctions — it is easy for participants who have reached an agreement on the outcome beforehand to track the bidding and make sure that no one deviates from the plan. The fact some of the firms that participated were just fronts for unknown interests facilitated collusion even further. If one party to the plan noted that a bidder was acting outside the original agreement, he might activate a “sleeping” bidder to protect his interests.
In the 2004 auction for Yuganskneftegaz, formerly the largest production asset at Yukos, the whole process reached the absurd. It was unclear immediately following the auction which of the major parties interested, Rosneft or Gazprom, was behind the unknown company that came out the winner.
An example of how best to prevent collusion between bidders came in the auction for a blocking stake in state-owned telecoms giant Svyazinvest in 1997. As this case demonstrated, the risk of behind-the-scenes deals is minimized if the auction is conducted using sealed bids. The ultimate winners said themselves that they overpaid for the stake significantly, which had to be a positive result for those who organized the sale.
It appears that we may face the same issues again when Yukos’ remaining assets go on the block over the next few weeks. In the first of these auctions, in which the now-bankrupt company’s shares in state-controlled oil major Rosneft will be up for bid Tuesday, the outcome looks like a foregone conclusion. Even ignoring the likelihood of political interference, the main contender is Rosneft itself. It will be hard for TNK-BP, the other declared contender, to walk the fine line involved in losing the auction while still giving the impression that it is trying to win. As a result, it will likely be very careful in bidding. If the auction were “closed,” meaning that it was based on the submission of sealed bids, the price fetched for the assets would be higher, as the favorite would have to insure itself against the risk of coming in too low.
The organizers have clearly not taken a best-theory approach in setting up another looming auction, scheduled for April 4. This will combine a 20 percent packet of shares in Gazprom Neft (the renamed Sibneft), ArcticGaz, Urengoil, and other Yukos assets. Pure theory would suggest that these assets should have been auctioned off separately. That way, bidders who didn’t have deep enough pockets to vie for the entire package might have been interested in some of the individual assets. At the risk of sounding repetitive, this should have been designed as a closed auction as well. Bundling all of these assets into one package has made the auction absolutely uncompetitive. There is only one company in Russia that is interested and able to tackle something this big, and that is Gazprom. If the plan had been to auction the assets individually, Gazprom would have faced competition for at least some of these, a factor that would likely have driven prices higher. But the organizers apparently believed that organizing the auctions separately would allow the bidders to collude and that some assets would be scooped up on the cheap. 
All of this theory aside, it is possible that political decisions about what should go to each of Rosneft and Gazprom and with only token competition have played the chief role in determining the auction mechanism here. If this is the case, then everything has been organized according to auction theories.

Konstantin Sonin is a professor at the New Economic School/CEFIR.

TITLE: The Penalty for Unlawful Authority
AUTHOR: By Vilena Shchekalova
TEXT: Until recently, the tax authorities often went unpunished for any unlawful decision they made or any illegal activity they carried out. Taxpayers rarely appealed to the arbitration court, neither  to declare the tax authorities’ decision or activity unlawful, nor to request compensation for the legal expenses of  going to the arbitration court. 
The taxpayer’s position was impaired because the tax authorities, exempt from paying state duty for legal proceedings, would appeal a lower court’s decision even knowing they would lose the case. 
Even after receiving the final court decision in favor of the taxpayer at all three levels of appeal, the tax authorities knowingly continued taking the unlawful decisions and carrying out the illegal actions subsequently  and in similar situations. In another example of the tax authorities abusing their rights, after formally contesting the decision of the arbitration court by appealing to the highest authority, the tax authority would then fail to send representatives to attend the court process. 
All of this is a vicious circle for the taxpayer, who has to spend  a significant amount of time at the arbitration court to protect his rights and interests. On top of this the taxpayer has to pay for the legal services of his representatives at the arbitration court. 
This situation is also inconvenient for the arbitration courts, which must repeatedly examine the same types of tax disputes. Since 2006, the arbitration courts have increasingly imposed financial liability on the tax authorities to compensate the successful/winning side’s legal expenses for pronouncing ungrounded, unlawful and occasionally absurd decisions, for delaying the legal process or for senseless appeals to higher instances. Before, the compensation was merely symbolic, but now it tends to correspond to the market price.
The arbitration court’s reasoning on such cases is insightful. In some cases, the tax authorities argue that the taxpayer’s fees for legal representation were not necessary because extensive court practice already existed for that particular type of case. The tax authority also argued that there were already legal departments/employees on the company’s staff or that the sum of compensation for legal representation was larger than the sum related to  the disputed decision or action of the tax authorities. These arguments were turned against the tax authorities. The arbitration court pointed to the tax authorites’ abuse of procedural laws in involving the taxpayer in a groundless dispute where the tax authorities were already aware of the precedents of these types of cases. The straightforward conclusion of the court is that the legal fees that were incurred by the taxpayer because of the tax authorities’s actions should be fully reimbursed to him by the tax authorities.  
Thus, the court has linked the tax authority’s awareness of  court practice formed in relation to a specific case to guilty and unlawful decisions made by the tax authorities and the taxpayer’s expenses for representation of his interests in court.  The tax authorities’ desire to reduce the compensation it owes for legal expenses by manipulating the argument of ‘reasonable legal fees’ has not been accepted by the arbitration court.  
All taxpayers who challenge an unlawful decision or action  should also demand that the tax authorities compensate their legal expenses accordingly. 

Vilena Shchekalova is Associate at DLA Piper in St. Petersburg.

TITLE: VTB Eyes $6 Bln Offering
PUBLISHER: Reuters
TEXT: MOSCOW — VTB, Russia’s No. 2 bank, hopes to raise as much as $6 billion when it offers nearly 25 percent of the company next month, the Vedomosti daily on Monday quoted sources familiar with the transaction as saying.
That estimate of proceeds from Russia’s first international banking IPO, in which state-owned VTB would float new shares equivalent to 22 percent to 23 percent of its equity, is one-half higher than a forecast by Economy Minister German Gref of $4 billion.
Around two-thirds of the offering would be sold to foreign investors, with the remainder going to domestic investors who must bid a minimum 30,000 roubles ($1,153), Vedomosti also reported.
Deutsche Bank, Citigroup and Goldman Sachs are acting as lead managers for VTB’s IPO in London, while the bank’s retail arm VTB-24 and Renaissance Capital will market the offering in Russia.
A source familiar with the offering told Reuters on Friday that pre-marketing would begin on April 9, with the IPO road show to start two weeks later. Final pricing is planned for May 10-12.

TITLE: X5 Issue Could Finance New Acquisitions
AUTHOR: By Rachel Sanderson and Douglas Busvine
PUBLISHER: Reuters
TEXT: MOSCOW — Leading food retailer X5, controlled by Mikhail Fridman’s Alfa Group, is mulling an offering of new shares to finance acquisitions, it said Friday.
CEO Lev Khasis said X5 was considering raising from $1 billion to $2 billion in new equity for both organic growth and acquisitions. The retailer has an option to buy the Karusel hypermarket group from Jan. 1, 2008.
Khasis, speaking on the margins of a retail conference in Spain, said the timing and the amount of the new share issue would be decided in the next two months.
“If we were to undertake the acquisition of Karusel or other operations, these initiatives would require additional capital, and we are currently reviewing the possibility of a secondary offering,” Khasis said, reiterating an earlier statement.
Khasis said that, subject to shareholder approval, the issue would be made in London, where X5’s global depositary receipts are listed, and possibly on one of Moscow’s stock exchanges.
X5’s GDRs fell by over 2 percent to $27.75 on fears that existing shareholders would be diluted.
Victoria Grankina, retail analyst at Troika Dialog, said those fears were exaggerated. In a note, she kept her “buy” rating on the stock and a price target of $40.25, assuming that X5 raises $1.2 billion on equity markets.
Khasis added that X5 was in talks about possible deals. “We have a lot of negotiations and at least a dozen companies are in negotiations with us, and for sure, probably we’ll buy something from them,” Khasis said. “Throughout the year, at least a couple of acquisitions will be completed.”
X5’s interest was in the European part of Russia, Khasis said. 
He added that X5 was also looking at organic and acquisitive growth in Ukraine, where it aimed to be market leader.
The company, which has a market value of $6.4 billion, was created last May through a merger between discounter Pyatyorochka and supermarket chain Perekryostok. Its option to buy Karusel — owned by two shareholders in X5 — was agreed at the time.
One of Karusel’s owners has said, however, that talks on a possible sale to U.S. retail giant Wal-Mart were under way, creating uncertainty over whether X5 would indeed be able to complete the acquisition.
X5 has also recently postponed a 25 billion ruble ($960 million) bond issue, citing unfavorable market conditions. Khasis said the bond offering would go ahead “as soon as market conditions make it attractive.”
Analysts doubted that X5 would issue as much as $2 billion in new equity, saying it would probably opt for a mix of equity and debt to finance takeovers.
Natasha Zagvozdina, retail analyst at Renaissance Capital, said the entire new share issue would probably not go toward the purchase of Karusel, whose enterprise value she estimated at between $1.2 billion and $1.5 billion.
She named retailers Kopeika and Ramstore as other potential targets. “We think that X5 will go for a debt and equity combination to fund its aggressive expansion plans,” she said.

TITLE: Iran Exposes Britain’s Weakness
AUTHOR: By Niall Ferguson
TEXT: Let that be a lesson. Even before Britain’s politicians had finished saying sorry for depriving millions of their liberty last Sunday, the 200th anniversary of the abolition of the slave trade, 15 Britons found themselves deprived of their liberty by the Iranian government. When will Prime Minister Tony Blair ever learn that, in international relations, nice guys finish last?
This is indeed what comes of being too nice. A month before expressing his “deep sorrow and regret for our nation’s role in the slave trade,” Blair had announced his intention to reduce British troop levels in Iraq by 1,600 within a matter of months. “The next chapter in Basra’s history,” he declared, “can be written by Iraqis.” Unfortunately, it looks more likely to be written by Iranians. And somehow I don’t think they’ll be saying sorry afterward.
Until this crisis, Iran had been on the diplomatic rack. A week ago, the United Nations Security Council imposed new sanctions to punish the regime in Tehran for continuing with its nuclear program. This reflected growing impatience, even on the part of hitherto indulgent Russia, with the Iranians’ persistent defiance. But Mahmoud Ahmadinejad, the Iranian president, is never to be underestimated. To regain the diplomatic initiative, he targeted the weakest link on the Security Council. This turns out to be Britain.
There is no serious doubt in my mind that the British sailors taken prisoner on March 23 were in Iraqi rather than Iranian waters. The Iranians themselves initially — and inadvertently — admitted as much. But the key fact remains that, whether through bad luck or negligence, 14 British men and one British woman are now in Ahmadinejad’s clutches. Suddenly, the most the Security Council seems able to do, despite the fact that the captives were on a UN-mandated mission, is to express “grave concern.”
Delighted by their coup, Ahmadinejad and his lackeys have been amusing themselves by forcing Leading Seaman Faye Turney to sign bogus letters dictated to her in Borat-ese: The Iranian people “have brought me no harm, but have looked after me well. … Even through our wrongdoing, they have still treated us well and humanely, which I am and always will be eternally grateful. … Isn’t it time for us to start withdrawing our forces from Iraq and let them determine their own future?”
We have been here before. Englishwomen in bondage play a central role in Linda Colley’s masterpiece, “Captives: Britain, Empire and the World 1600-1850.” As Colley points out, it was not only Africans who were enslaved in the 17th and 18th centuries. Tens of thousands of Britons shared their fate if they fell into the hands of the so-called Barbary corsairs, the Moroccan and Algerian raiders who infested the western Mediterranean. The Faye Turney of 1756 was Elizabeth Marsh, seized off the Moroccan coast and subjected, by her own account, to the amorous attentions of the future Sultan Sidi Muhammad. (Incidentally, when is the king of Morocco going to apologize for this?)
In those days, there was little hope of rescue. Britain’s armed forces were far too thinly stretched over its rapidly expanding empire for Rambo-style missions to liberate scattered slaves and POWs. The most the Barbary slaves could hope for was to be ransomed, to which end collections were regularly made in British churches.
It is in this light that we need to understand James Thomson’s immortal lines: “Rule, Britannia! Britannia, rule the waves: Britons never shall be slaves.” When first set to music in 1740, this was a forward-looking injunction to Britain’s rulers to go ahead and rule the waves, precisely so that Britons would no longer run the risk of being enslaved.
Only gradually, in the period of British imperialism not covered by Colley’s book, did the British acquire that kind of power: not necessarily the power to prevent Britons from ever being taken captive, but the power to inflict disproportionate retaliation when they were. (And also, let us not forget, the power to abolish the Atlantic slave trade. Had it not been for the policing efforts of the Royal Navy, the legislation passed 200 years ago would have been ineffectual.)
Time and again, the Victorians meted out retribution to those who had the temerity to deprive British subjects of their liberty, the more terrible in cases where the lives and (worse) the honor of Englishwomen were placed in jeopardy. Nemo me impune lacessit was the ancient motto of the Scottish crown: “No one messes with me and gets away with it.” In effect, that became the motto of the entire Victorian empire.
I suppose a remnant of that spirit survived into the 1980s. There was certainly something distinctly Victorian about the Falklands expedition: the scale of the venture, the distance covered and the relatively small number of Britons to be rescued.
Yet today we live in a different world. Britain could not re-fight the Falklands War if Argentina invaded the islands tomorrow. Nor could a British strike force be sent to punish the Iranian government today. If military action is going to be taken against Iran this year, it will be initiated by the United States, not Britain. And, to judge by Faye Turney’s conspicuous absence from the front pages of U.S. newspapers, a British hostage crisis won’t be the casus belli.
As he approaches the 10th anniversary of his election as prime minister, Blair consciously invites comparisons to Margaret Thatcher, the only other prime minister since 1827 to endure so long. Yet this new crisis of captivity, like Blair’s needless kowtowing over slavery, exposes the profound differences between the nice guy and the Iron Lady.

Niall Ferguson is a columnist for the Los Angeles Times.

TITLE: Moscow on the Thames
AUTHOR: By Alexei Bayer
TEXT: In a song cataloguing the ills of contemporary Russia, sardonic balladeer Timur Shaov sings about Russians who choose to leave the country, cautioning them: “London is not elastic, we won’t all fit there.”
Londoners probably exaggerate when they claim that rich Russians have driven up their real estate prices — they used the same complaint against rich Arabs in the 1970s — but it is true that the vibrant, free-spending Russian community has contributed to the social, cultural and economic revival of the British capital.
There are Russian-speaking enclaves in Berlin, Tel Aviv and New York, but London has become the undisputed hub of Russian expat life, usurping the role played by Paris in the 1920s.
There are many reasons for this. English, rather than French before the Revolution or German in the early Soviet period, is now the foreign language a Russian is most likely to speak. London is closer to Moscow than New York, while getting a British visa is easier — and a damn sight less humiliating — than dealing with the rude and bureaucratic U.S. Consulate.
Britain has had a special connection to post-communist Russia ever since British Prime Minister Margaret Thatcher famously declared in 1984 that she could do business with Soviet leader Mikhail Gorbachev. The Russian colonization of London was started in the early 1990s by U.S. citizens of Russian-Jewish descent who flocked to the old country to make money but prudently parked their families in London. Many U.S. multinationals and financial institutions still run their Russian operations from Britain.
The 53 Russian billionaires on the Forbes list probably spend more time in Britain than anywhere else, including their native country. One, Roman Abramovich, has taken Chelsea to the top of English football. Another, Boris Berezovsky, has emerged as the Leon Trotsky of the Putin era and has turned London into the nerve center of Russian political opposition.
In fact, there has been talk of the British losing patience with their Russian residents after the poisoning last year of ex-KGB agent Alexander Litvinenko. However, while the Brits may consider it bad manners to place highly radioactive polonium-210 into a restaurant tea kettle, they are used to East Europeans settling scores in London, such as the 1978 murder of Bulgarian dissident Georgy Markov with a poisoned umbrella tip.
The British love affair with Russia will continue as long as it is good for business. So far, business has been great. Over the past three years, Russian companies have been instrumental in helping the City of London pull ahead of Wall Street as a global financial center. Russian IPOs totaled $4.9 billion in 2005 and rocketed to $14.5 billion last year. If analysts in are to be believed, this is just the tip of the iceberg. Hundreds of Russian firms big and small are expected to go public in coming years.
Most are likely to find their way to the London Stock Exchange and to its Alternative Investment Market, geared to small, rapidly growing startups. Russian companies are especially attracted to London because it offers laxer rules for listed companies than New York, where regulations were tightened in the aftermath of Enron and other malfeasance at the start of the decade.
Russian corporate governance is notoriously shoddy, and many would not have been able to list in New York at all. And state-owned Rosneft, which alone raised over $10 billion in London last year, acquired its most valuable oil-producing assets after the government stripped them from Yukos.
Russian stocks suffered one of the worst sell-offs during the global market decline in late February and early March. This may not be the end of market selling. Investors should not forget that during the 1998 ruble crisis Russian companies didn’t hesitate to cheat their foreign investors. London may yet come to regret the bear’s hug.

Alexei Bayer, a native Muscovite, is a New York-based economist.

TITLE: Worried Over Strasbourg, Scared of The Hague
AUTHOR: Yevgeny Kiselyov
TEXT: For over a week now I have been perplexed by the fact that those monitoring human rights in Russia have not come up with an answer for the following question: Why after four years of relentlessly prosecuting the Yukos case did Moscow’s Basmanny District Court decide in favor of former CEO Mikhail Khodorkovsky on March 20?
Why has the court — the very name of which has become synonymous with selective application of the law, or simply lawlessness — suddenly granted the defense’s motion against hearing the latest charges against Khodorkovsky and his former business partner Platon Lebedev in a court in the remote Chita region?
There was another decision from the court, on Monday, that muddied the waters a bit but likely didn’t represent a change in the outcome. I will return to that later.
The fact remains that over the last four years the court has handed down dozens of rulings regarding Khodorkovsky, Lebedev and Yukos. The defense lawyers have, as a rule, challenged the actions by the Prosecutor General’s Office. The court, as a rule, has decided in favor of the prosecution. That’s why the latest decision was so surprising.
Those who prepared the proceedings moved the hearing to Chita, almost 6,000 kilometers away. This would have made it more difficult for the press, defense witnesses and defense lawyers to attend. It looked like a move to reduce publicity after the initial Moscow proceedings were accompanied by daily demonstrations and the presence of high-profile supporters.
Shifting the venue to Chita was against the law, which states that defendants should be tried either in their city of residence or where prosecutors claim a crime was committed. Nobody expected the court to allow an end run around this requirement.
Even less expected was its subsequent change of mind.
Some starry-eyed optimists might suggest the court has just decided that strict adherence to the law is paramount. But the shift is more likely linked to a comment by Yury Shmidt, Khodorkovsky’s lawyer. He said that when the court openly and repeatedly sides with the prosecution it helps the defense. The more Khodorkovsky’s rights are violated, the greater the chance he will win when he seeks redress from the European Court of Human Rights in Strasbourg.
The Strasbourg court will examine if the defendants had access to objective and impartial proceedings; whether the adversarial principal of justice was properly applied; if the defendants’ procedural rights were ignored; if the proceedings were open to the public and media; and how state-controlled media covered the proceedings.
There were clearly violations. Neither Khodorkovsky nor his lawyers was given sufficient time to become acquainted with the prosecution’s materials in the case. The defense was refused the right to introduce documents, reports by independent experts and other materials into the record of the court’s proceedings. And, as defense lawyers have often pointed out, the verdicts have been nearly verbatim repetitions — including grammatical errors — of the indictment.
It is not hard to imagine Khodorkovsky and Lebedev winning their case in Strasbourg.
Until recently, Russian authorities have maintained a very condescending attitude toward the Strasbourg court. It might have been unpleasant losing different cases in the court, but the decisions obtained on human rights violations there don’t have the power to overturn rulings from Russian courts. Telling the public that the problem is in the court’s anti-Russian bias, fanned by enemies who cannot bear to watch the country’s return to power and greatness, is also an integral part of the strategy.
But the authorities now seem to realize that decisions from Strasbourg have legal as well as political consequences. The legal consequences could roll over into financial penalties in the billions of dollars.
As a case in point, this year the European Court of Human Rights is expected to hear complaints connected with the Yukos case. A parallel process has been taking place quietly and unobtrusively. Yukos shareholders have filed a lawsuit against the Russian government demanding compensation for what was essentially the nationalization of the oil company. The amount they are suing for, $50 billion, is the largest in the history of legal arbitration.
Although the authorities are publicly silent about the case, they are taking it very seriously. They have spared no expense in hiring a major U.S. law firm, Cleary, Gottlieb, Steen & Hamilton, and bringing in top-notch Russian lawyers.
The first hearings at the International Court of Arbitration at The Hague will come at the end of the spring. The court could rule that the case is outside of its jurisdiction, which would end Russia’s problems. If it takes the case, the proceeding could stretch out for years. Imagine the difficulties for Moscow if the Strasbourg court ruled in Khodorkovsky’s favor while The Hague was still considering the unlawful nationalization complaint.
The Kremlin now has to deal with the possibility that future verdicts from Strasbourg will be used in arbitration lawsuits or criminal proceedings against the state or senior Russian officials.
This helps explain why President Vladimir Putin replaced Pavel Laptev, who ended his term in Strasbourg in disgrace, with Veronika Milinchuk, a close associate of Justice Minister Vladimir Ustinov, as representative to the human rights court. Her appointment came with the announcement that, henceforth, the country’s representative to Strasbourg will hold the post of deputy justice minister.
Ustinov has his own reasons for being concerned about the result of the proceedings in Strasbourg. After all, it was he who ran the Prosecutor General’s Office that brought criminal charges against Yukos executives, applied for warrants to conduct searches and arrests, and managed to obtain the strict verdicts it was seeking against the accused.
Taken together, all of this suggests that the looming hearings in Strasbourg might be behind the decision to transfer the trial back to Moscow.
If this is the case, we might even expect the new proceedings to be conducted in accordance with all proper procedures. Even if it adds a year to the duration of the hearings, it will be worth it. A facade of irreproachable punctiliousness will have to be maintained during the process of reaching the predetermined guilty verdict. Only then will the state have any hope of defending its actions in Strasbourg.
Monday’s decision on the legality of moving Khodorkovsky and Lebedev to Chita might introduce some confusion here. But, as a member of Khodorkovsky’s legal team explained to me, the ruling was of no real importance.
For the defense, what is important is that it has in hand a decision with greater legal bearing. This is the Basmanny District Court ruling that the investigation into the charges against Khodorkovsky and Lebedev can’t be carried out in Chita, and this ruling can only be overturned by a higher court. If the Moscow City Court upholds the decision, this supports my theory that there is a political consideration in relation to the Strasbourg Court in play. If the Moscow City Court does overturn the decision, I’m wrong, and the Basmanny District Court ruling was just a blip.
We probably won’t have to wait long to find out what the real case was.

Yevgeny Kiselyov is a political analyst.

TITLE: U.S. and S. Korea Sign Free-Trade Agreement
PUBLISHER: Reuters
TEXT: SEOUL — South Korea and the United States reached a deal Monday that could increase their annual $72-billion trade by more than $20 billion, officials from both countries said.
The agreement follows nine months of talks between the U.S. and Asia’s third-largest economy, and comes in time to allow the Bush administration to use fast-track trade legislation that expires June 30. The legislation allows the president to negotiate trade pacts that Congress may approve or reject, but not alter. 
Details of the pact were not available, but South Korean officials have said the most contentious issues were agriculture, including beef and oranges, and automobiles.
Each side wants the other to lower tariffs and other barriers to auto imports. The United States has been demanding that South Korea, whose consumers pay among the world’s highest prices for food, open its tightly protected farm market to American beef imports.
South Korea used to be a major market for U.S. beef until Seoul banned imports in 2003 in response to a case of mad cow disease in Washington state. South Korea said in September that it would resume imports provided that beef parts it deemed risky, such as bones, were not included.
Some estimates say an agreement could add $20 billion to two-way trade each year. 
Months of talks have been overshadowed by large and sometimes violent protests in South Korea, mostly over fears that its heavily subsidized farmers could not survive a flood of cheaper American farm products.
The U.S. government had demanded changes to South Korea’s tax structure to remove restrictions on American cars. The United States also wants greater access to South Korea’s lucrative financial services, including insurance.

TITLE: Carphone Warehouse Sees Subscriber Rise
AUTHOR: By Alex Armitage
PUBLISHER: Bloomberg
TEXT: LONDON — Carphone Warehouse Group Plc, Europe’s largest handset retailer, said its subscriber count rose 14 percent in the fourth quarter and the company will incur additional costs to improve broadband customer service. 
The number of connections climbed to 1.02 million in the 13 weeks ended March 31, Carphone Warehouse said Monday in a statement. The London-based company, which has more than 2,000 stores in 10 countries, said full-year pretax profit will meet analysts’ estimates. 
Carphone Warehouse is taking steps to recover from delays it had last year in processing new applications for the company’s broadband service. The phone retailer will spend an additional 10 million pounds ($19.7 million) to 15 million pounds in the year ending March 2008 to improve services. 
“The U.K. broadband problems are being fixed, although costs are higher and migration slower than anticipated,’’ Christian Koefoed-Nielsen, an analyst at Panmure Gordon & Co. in London wrote in a note after the announcement. The costs “raise questions as to the reliability of guidance going forward, and will likely impact sentiment on the stock.’’ 
Koefoed-Nielsen, who rates the shares “buy,’’ cut his pretax profit estimate for fiscal 2008 by 30 million pounds to 221.1 million pounds because of the higher costs. 
Investec Securities analyst Christian Maher reduced his prediction for Ebitda, or earnings before interest, taxes, depreciation and amortization, by 30 million pounds to 409.9 million pounds because of the rising costs. 
The company will announce earnings on April 24. 
Carphone Warehouse shares fell 2.5 pence, or 0.9 percent, to 274.25 pence at 10:13 a.m. in London. The stock rose 13 percent last year. 

Virgin Mobile 
The retailer said it will spend an additional 10 million pounds to 15 million pounds in the year ending March 2008 as part of its joint venture with Virgin Mobile France. 
In June, the company said there were delays in processing some broadband applications after sign ups for the service were double the company’s initial targets. Chief Executive Officer Charles Dunstone called the problems a customer service “nightmare,’’ according to a Sunday Times article in July. 

Lost Ground 
The company is “a little behind’’ its original plan for customer additions because of delays in connecting users earlier this year. The company, which had 2.27 million broadband subscribers at the end of the period, said it will “make up the lost ground by the summer.’’ 
The company’s broadband forecasts that it gave in April for average revenue per user of 26 pounds per month and gross margin of 12 pounds to 13 pounds per month won’t be affected by the higher costs, said Peregrine Riviere, Carphone Warehouse’s investor relations director. 
Carphone Warehouse said it was in talks with Best Buy Co., the largest U.S. electronics retailer, to expand the two companies’ Best Buy Mobile partnership in the U.S. and Best Buy’s ‘Geek Squad’ service in the U.K.

TITLE: Del Monte Recalls Food Items
PUBLISHER: The Washington Post
TEXT: WASHINGTON — Another major U.S. pet food maker said Sunday that it is recalling some edible products for cats and dogs after learning from the Food and Drug Administration that the company had received tainted ingredients from a manufacturing plant in China.
Del Monte Pet Products, based in San Francisco, said that as a precautionary measure it was voluntarily recalling several items, including Gravy Train Beef Sticks, Jerky Treats and Pounce Meaty Morsels, as well as others sold under private labels.
The move came after an unknown number of pets died or became ill after eating tainted food.
Del Monte said it acted after the FDA notified the company that it had received wheat gluten from China that contained melamine, a possible toxin.
Del Monte, in a statement posted on its web site, said the “adulteration” affected a limited quantity of its products under a select number of packaging codes.
Several other pet food manufacturers also have been affected by recalls, including Nestle Purina PetCare Co., which makes Alpo brand dog food; Menu Foods, headquartered in Streetsville, Ontario; Proctor & Gamble’s Iams and Eukanuba; and Nestle S.A.

TITLE: European Manufacturing Growth Unexpectedly Slow
AUTHOR: By Sheyam Ghieth
PUBLISHER: Bloomberg
TEXT: LONDON — Europe’s manufacturing growth unexpectedly slowed in March after demand for exports cooled and a tax increase in Germany hurt spending in the region’s largest economy. 
Royal Bank of Scotland Group Plc said its index of manufacturing in the euro region fell to 55.4 from 55.6 in February. A reading above 50 indicates growth. Economists expected the gauge, compiled by NTC Economics Ltd. From a survey of 3,000 purchasing managers, to increase to 55.7, the median of 32 estimates in a Bloomberg News survey showed. 
Slowing growth in the U.S. and the euro’s 10 percent appreciation against the dollar in the past 12 months are clouding the outlook for European exports this year while a tax increase in Germany has curbed consumer spending. Any economic slowdown may be short-lived after confidence among executives and consumers rose to a six-year high in March and unemployment fell to a record low in February, supporting the case for higher European Central Bank interest rates. 
“Manufacturing activity is still at a pretty elevated level overall across the eurozone,’’ said Howard Archer, an economist at Global Insight Inc. in London. “The survey is unlikely to markedly change the view within the ECB that there is no need for monetary policy to remain on ‘the accommodative side.’’’ 
The ECB raised its benchmark rate to 3.75 percent last month, the seventh move since late 2005, and left the door open for a further increase to contain inflation, saying its policy is still boosting economic growth. 
The ECB raised its forecasts for economic expansion this year and next. It now predicts growth of about 2.5 percent in 2007 and 2.4 percent in 2008. 
The economy grew 2.6 percent last year, the most since the start of the decade, as companies increased investment and hiring to meet booming export orders. 
Growth in new export orders slowed in March, with the PMI falling to 55.3 from 56.2 in February, today’s report showed. 
Orders for durable goods in the U.S., the world’s largest economy, unexpectedly dropped for a second month in February and consumer confidence fell in March as a housing recession in the world’s largest economy showed few signs of abating.

TITLE: Amatuer Wins PGA Event, Can’t Keep the Prize Money
AUTHOR: By Norman Dabell
PUBLISHER: Reuters
TEXT: CASCAIS, Portugal — Spain’s Pablo Martin became the first amateur to win on the European Tour on Sunday since its opening season in 1972. 
The 20-year-old took the Estoril Portuguese Open title by a stroke from France’s Raphael Jacquelin. 
Martin achieved what he failed to do in 2003 when he led going into the last day of a tournament in Tenerife only to fade away. This time he created golfing history with a closing three-under-par 68 to total seven-under-par 277. 
The Spanish youngster began the final round two strokes behind his former Oklahoma State University golf team mate Alex Noren but the Swede was the one to wilt as he slid to a 76. 
Martin’s only real blemish was to find a sandy lie in gorse roots on the short 15th. But he rode his luck, getting a free drop clear of trouble because a sprinkler-head interfered with his stance, and rescued par. 
Despite his fine round, Martin came under severe pressure from Jacquelin, the 2005 Madrid Open champion, when the Frenchman chipped in at the 18th for a 67 to leave the Spaniard needing to par the last two holes to prevail. 
Jacquelin’s consolation was to take the first prize, awarded to him because of Martin’s amateur status. 
The second placed man overnight, 24-year-old rookie pro Ross McGowan, one shot ahead of Martin going into Sunday, slumped after going out in four-over 40 on his way to a 76. 
Former British amateur champion Graeme Storm of Britain threatened but crucially missed two successive four-footers for birdies coming home and also subsided with a 72. 
Martin recognized his stroke of luck at the 15th but showed a wise head when he told reporters: “Of course, sometimes I thought about what all this meant as I played. 
“But I told myself to stay in the present and just keep playing the shots the best I could. 
“The 15th, of course, was very important. You play a lot of shots in a round, it was a good break.” 
Martin said he was “quite proud” of his historic win and happy to make up for his collapse in 2003 when he finished 22nd. 
“The last time I had chance to win I was shaking in my shoes. This time it was not so bad.” 
Martin is studying economics and looked a little wistful when reminded he had lost out on the 200,000 euro first prize. Asked how he felt about it, he said: “No comment.” 
David Sheehan, a doctor, won a tournament at Royal Dublin as an amateur in 1962, but the tour was then run by the British PGA, 10 years before the European Tour played its first season.

TITLE: Iranian Radio Reports ‘Positive’ Change
AUTHOR: By Nasser Karimi
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran — Iranian state radio reported that all 15 British sailors and marines held captive by Iran have confessed to illegally entering Iranian waters but, in an apparent softening in the dispute, said their statements would not air because of “positive changes” from Britain. 
The softer tone was apparently mirrored in London, where an official said Britain has agreed to consider discussing with Iran how to avoid future disputes over contested waters in the Persian Gulf.
Britain, however, wants an unconditional release of the crew and is not “negotiating” for their freedom, said the official, who spoke on condition of anonymity because of the sensitivity of the crisis. Iran has demanded an apology from Britain as a condition for the release of the crew, who were seized March 23.
Britain contends the sailors were in Iraqi waters, however, and has said it would not apologize. It has also criticized the airing of footage of four of the sailors confessing so far, saying the statements appeared coerced and the broadcasting of captured military personnel violated international norms.
In video Sunday, the captives appeared on the state-run Arabic-language TV channel Al-Alam in separate clips, pointing at the same map of the Persian Gulf.
The first sailor, who was identified as Royal Marine Captain Chris Air, said the Iranians supplied the group with GPS coordinates which he said were “apparently” in Iranian waters.
Air pointed with a pen to a location on the map where he said two boats left a warship of the U.S.-led coalition in Iraq around 8:30 a.m. on March 23. He said the seven marines and eight navy sailors were captured around 10 a.m.
He said “we were seized apparently at this point here on their maps and on the GPS they’ve shown us, which is inside Iranian territorial waters.”
The second sailor, identified as Lieutenant Felix Carman, pointed to an area on the map and said that location was where he and the 14 others were arrested.
“I’d like to say to the Iranian people, I can understand why you are so angry about our intrusion into your waters,” he said.
In a letter sent in response to a note from Iranian officials, Britain agreed to consider discussions about how to avoid similar disputes in the future, said the British official. Britain’s response — most of which has been kept secret — may have prompted the report Monday from Iran’s state-run radio.
British Prime Minister Tony Blair’s spokesman earlier in the day called the broadcast confessions “stage-managed,” and said Britain had not changed its demand for the sailors’ unconditional release.
“The Iranians know our position, they know that stage-managed TV appearances are not going to affect our position,” the spokesman said on condition of anonymity in line with government policy. “They know we have strong international support.”
Ministers were scheduled to hold a government crisis committee meeting later Monday.
Iran’s ambassador to Moscow had said on Sunday that the sailors’ case had entered a “legal phase,” but backtracked from earlier remarks attributed to him that the sailors could be tried.
The alleged admissions of intrusion into Iranian territorial waters are not entirely new: Iran’s military chief had said the day after their capture that the sailors had confessed after interrogations to illegally entering Iranian waters.
On Sunday, Iran’s Arabic-language state television station, Al-Alam, broadcast footage of two of the sailors using maps to show that they were in Iranian waters when they were surrounded and seized by Iranian military vessels.
Britain has released its own maps and GPS coordinates showing their location to be in Iraqi waters at the time of the capture.

TITLE: Tsunami Hits Solomon Islands, At Least 13 Dead
AUTHOR: By George Herming
PUBLISHER: The Associated Press
TEXT: HONIARA, Solomon Islands — A bone-rattling undersea earthquake sparked a tsunami that sent 10-foot-high waves crashing into parts of the Solomon Islands on Monday, wiping out one village and killing at least 13 people. The death toll was expected to rise.
Large waves struck the western town of Gizo, inundating buildings and causing widespread destruction within five minutes of the earthquake.
“There wasn’t any warning — the warning was the earth tremors,” Alex Lokopio, the premier of the Solomon’s Western Province, told New Zealand’s National Radio. “It shook us very, very strongly and we were frightened, and all of a sudden the sea was rising up.”
Despite initial regionwide warnings, there was no repeat of the massive 2004 tsunami, when a magnitude 9 quake sent massive waves slamming into the coastlines of a dozen countries around the Indian Ocean’s rim, killing or leaving missing about 230,000 people.
Julian Makaa, spokesman for the Solomons National Disaster Management Office, said numerous villages in the country’s remote west were reporting people being swept away as waves plowed through their communities.
Reports remained sketchy because communications were reduced in many cases to scratchy two-way radio lines. Emergency officials have yet to be able to reach the area hit by the tsunami and communications with the area is limited.
Alfred Maesulia, the information director in Prime Minister Manasseh Sogavare’s office, said late Monday that 13 people had been killed and an unknown number were still missing.
“Some people were seen floating on the sea during the big waves but it was very difficult to go near them,” Maesulia told The Associated Press. “The number at the moment is 13. It’s possible that number will increase, maybe double up or even more.”
Lokopio said he witnessed a large wave crashing into the island.
“I saw the wave … all of a sudden the water was just rising up and moved toward the island and hit all the houses on the coastal area, and all of their property was washed away to the open sea,” he said.
Julian McLeod of the Solomon Islands National Disaster Management Office said there were unconfirmed reports that two villages in the country’s far west were flooded.
National police spokesman Mick Spinks said “our biggest problem is communications, because most of the high frequency radio system there was submerged.”
Gizo resident Judith Kennedy said water “right up to your head” swept through the town.
“All the houses near the sea were flattened,” she told The Associated Press by telephone. “The downtown area is a very big mess from the tsunami and the earthquake,” she added. “A lot of houses have collapsed. The whole town is still shaking” from aftershocks.
The U.S. Geological Survey said the quake measured magnitude-8.0 and struck at 7:39 a.m. about 6 miles beneath the sea floor, 217 miles northwest of the capital, Honiara.
The Pacific region from Australia to Hawaii went on high alert for several hours after the quake struck between the islands of Bougainville and New Georgia.
Gizo, a regional center, is just 25 miles from the earthquake’s epicenter.
Another witness in the town, dive shop owner Danny Kennedy, Judith’s father, estimated the height of the wave at 10 feet. 
“I’m driving down the street — there are boats in the middle of the road, buildings have completely collapsed and fallen down,” he said in a telephone interview. 
“We’re just trying to mobilize water and food, and shelter for people at the moment because… in the town alone there’s going to be between 2,000-3,000 homeless. It’s not a very good scene at the moment.” 
Maesulia said deaths and widespread destruction was also reported on Simbo, Choiseul and Ranunga islands near Gizo. 
“There are reports that some villages were completely washed away,” he said. “Sasamungga village is quite a big village… it was reported that 300 houses were completely destroyed in that village alone.” 
Harry Wickham, who owns a waterfront hotel in Gizo, said the damage was widespread. 
“The waves came up probably about 10 feet and swept through town,” he told Australia’s Nine Network television by telephone. “There’s a lot of water damage and a lot of debris floating around,” he added. 
“Ten feet of water washing through town — you can imagine what damage it has done here.” 
A town in the west, Munda, was believed to be badly damaged, officials and the Solomon Islands Broadcasting Corp. said, but details were not confirmed. 
Solomon Islands deputy police commissioner Peter Marshall said an airplane was due to fly over the devastated areas later Monday to assess damage. He said a national state of emergency has been declared. 
The Hawaii-based Pacific Tsunami Warning Center reported the quake at magnitude 8.1, and said a temblor of that strength could cause a destructive tsunami and issued a warning bulletin for the Solomon Islands and neighboring Papua New Guinea. The alert was later lifted, and no reports of a wider tsunami or damage elsewhere emerged. 
Australian officials closed beaches anyway along the length of the country’s east coast, from near the Great Barrier Reef in the north to Sydney and it’s famous Bondi beach in the south. Ferry services in the city were canceled. 
It ordered a lower-level “tsunami watch” for other places, including most South Pacific countries, but later canceled the alert. The center said a 6-inch wave had been reported in Honiara. 
Policeman Godfrey Abiah said in Honiara that police in Gizo had received warning about a possible tsunami and were helping people leave the town for higher ground when the wave hit. 
“We have lost radio contact with the two police stations down there and we’re not getting any clear picture from down there,” he told the AP by telephone. 
A spokesman for Prime Minister Manasseh Sogavare, Deli Oso, said the quake was felt in Honiara but there were no reports of any damage. 
The Solomon Islands is a poverty-wracked archipelago of more than 200 islands northeast of Australia, with a population of about 552,000 people, that lies on the Pacific Basin’s so-called “Ring of Fire,” an arc of volcanos and fault lines where quakes frequently happen.

TITLE: Golf’s Young Champ Took Her Time
AUTHOR: By Doug Ferguson
PUBLISHER: The Associated Press
TEXT: RANCHO MIRAGE, California — Morgan Pressel is the youngest major champion in LPGA Tour history. 
Even at 18, not even a year removed from high school, it still felt like a long time coming because Pressel seems to have been on this stage forever. 
She was that 12-year-old with a swagger and braces, the youngest ever to qualify for the U.S. Women’s Open six years ago. She walked with her shoulders erect, ponytail bobbing from side to side, acting then as if she belonged. 
She was that high school kid who upstaged Michelle Wie at Cherry Hills two years ago and had the U.S. Women’s Open won until Birdie Kim stole it away with an improbable bunker shot for birdie on the final hole as Pressel watched, stunned, from the fairway. 
She made it through Q-school during her senior year of high school, pressing the LPGA Tour to let her join at age 17 even though the rules said you have to be 18. The tour let her play, and just look at her now. 
Pressel was crying again Sunday — she always does that — only these tears were a mixture of sadness and joy, and mostly shock. She was four shots behind playing the 18th hole. About an hour later, she took a plunge into the pond after a stunning one-shot victory Sunday in the Kraft Nabisco Championship. 
“I’ve always had high hopes and big dreams,” Pressel said. 
And she always believed she would be a major champion, even if she couldn’t draw this up in her dreams. 
Pressel did her part, closing with a 3-under 69 and playing the final 24 holes at tough Mission Hills without a bogey. After three straight par saves, she followed with a 10-foot birdie putt on the 18th to finish at 3-under 285. 
That’s how major championships are won. 
Suzann Pettersen and a host of others supplied the help she needed. Pettersen couldn’t find a fairway over the final five holes, played them in 4 over par and left short a 25-foot birdie putt on the final hole that would have forced a playoff. 
That’s how major championships are lost. 
“I said yesterday that the one who made the fewest mistakes would win,” she said. “I did a few too many.” 
She wasn’t alone. 
— Se Ri Pak, missing only this major to complete the career Grand Slam, had a three-shot lead on the front nine, fell two shots behind Pettersen over a four-hole stretch around the turn, then bogeyed five of the last six holes for a 77. 
— Catriona Matthew had a 30-foot birdie putt on the 18th hole that would have made her the clubhouse leader at 4 under. She ran it 5 feet by the hole, missed it coming back and walked off with a bogey, a 71 and a tie for second place. 
— Stacy Prammanasudh took bogey on three of the last five holes and shot 71 to finish two shots behind. 
— Brittany Lincicome was hanging around making one clutch par after another until she dropped a shot on the 15th. She had a 10-foot birdie putt on the 18th that just missed, leaving her with a 72 and one shot behind. 
Even so, nothing compares to Pettersen. 
The 25-year-old from Norway, a runner-up last week to Lorena Ochoa outside Phoenix, was in command as so many others stumbled until a bogey from the rough on the 15th and a double bogey on the 16th, when it took her three shots to reach the front of the green and three shots with her putter. She came up short on the 17th and missed an 8-foot par putt. 
She missed the fairway on the 18th, which kept her from going for the green in two. And her wedge was 25 feet away. 
“So it never ends,” she said, her voice still choking with emotion. 
“I was so happy last week for a second place,” she said. “But this time, I felt like I lost the tournament.” 
Pettersen also gave credit to Pressel, and indeed, credit was due. 
She took double bogey on the 12th hole Saturday for the second straight round, but never lost hope. Standing outside the scoring trailer after the third round, Pressel was reminded that she played in the final round a year ago with Karrie Webb and watched her make up a seven-shot deficit and win in a playoff. 
“I’m right in there with a chance,” she said when she was four behind going into the last day. “A little help doesn’t hurt.” 
She smiled at that recollection Sunday, her clothes and hair drying from an unlikely jump into the pond. 
The tradition at Mission Hills is for the winner to leap into the water surrounding the 18th green. 
“This week was just my week,” Pressel said.

TITLE: 13 Killed by Truck Bomb in Northern Iraq
AUTHOR: By Yahya Barzanji
PUBLISHER: The Associated Press
TEXT: KIRKUK, Iraq — A suicide truck bomber targeted a police station in the oil-rich northern city of Kirkuk on Monday, killing at least 13 people and wounding dozens, including many children from a nearby school, police said.
Video by an Associated Press cameraman at the scene showed at least four wounded U.S. soldiers and one badly damaged American Humvee. The soldiers were being treated by Army medics, with one seated while having gauze bandages wound around his bloodied head.
Another soldier, whose nose was bleeding, was standing and waving directions to others. A third soldier was carried away on a stretcher and a fourth was being treated on the ground with his feet elevated against shock.
The attacker rammed the truck into the concrete blast barriers protecting the back of the compound at about 11:30 a.m., detonating his explosives, which were hidden under bags of flour, police spokesman Brig. Gen. Sarhat Qadir said.
The Rahim Awa police compound is in a predominantly Kurdish neighborhood in a northern part of the city, and other officials said U.S. troops had been visiting an Iraqi criminal investigations unit there when the blast occurred. The U.S. command in Baghdad said it was looking into the report.
Bombings elsewhere in Iraq killed at least 11 people and wounded more than 40.
The violence came a day after Senator John McCain led a Republican congressional delegation on a heavily guarded tour of a central Baghdad market and declared that a nearly 7-week-old security crackdown to pacify the capital is working.
While Baghdad has seen a recent dip in violence as extra U.S. and Iraqi troops have flooded the streets, other parts of Iraq — including Kirkuk — have seen a surge in attacks after Sunni and Shiite militants apparently fled the operation.

TITLE: Drama Among The Medals At Cycling Championship
PUBLISHER: Combined Reports
TEXT: PALMA DE MALLORCA, Spain — Olympic champion Chris Hoy of Britain won his fourth 1-kilometer sprint title at the world track championships Sunday. 
Hoy finished in 1 minute, 0.999 seconds, nearly a full second ahead of Francois Pervis for his second straight title, two days after winning his first keirin championship. British cyclist Jamie Staff was third in 1:02.074. 
Favorite Theo Bos won his third men’s sprint championship in the past three years, beating Gregory Bauge of France for his first medal at this year’s worlds. Mickael Bourgain of France won the bronze after beating Craig McLean of Britain. 
Franco Marvulli and Bruno Risi led Switzerland to gold in the men’s sprint with 14 points, one more than Dutch teammates Peter Schep and Danny Stam. The Czech Republic took bronze. 
Britain won its seventh medal in the women’s keirin after Victoria Pendleton finished ahead of Chinese cyclist Shuang Guo in the eight-lap race. Sprint champion Anna Meares of Australia finished third. 
Katherine Bates gave Australia its second gold with her victory in the 25-kilometer points race. Mie Bekker Lacota of Denmark finished six points back with 29 points, two more than bronze medallist Catherine Cheatley of New Zealand.
On Saturday, Spain’s Joan Llaneras  played a leading role on a dramatic night of action at the championships. 
Llaneras brought the house down with an emotionally charged victory in the points race to claim a seventh world track crown in front of his home town crowd at the Palma velodrome. 
The 37-year-old, who won his first world title over a decade ago, considered quitting the sport when Isaac Galvez, his partner for the Madison event, died after colliding with another rider in a track race in Ghent last November 
He decided to continue because the world championships were being held on his home island. 
“This is the biggest thing I’ve won in my life, there’s no doubt about that,” a tearful Llaneras told reporters during a lap of honor in which he stopped to embrace members of Galvez’s family. 

(Reuters, AP)

TITLE: Former Bush Aide Loses Faith
AUTHOR: By Randall Mikkelsen
PUBLISHER: Reuters
TEXT: WASHINGTON — The chief strategist of George W. Bush’s 2004 re-election campaign said he had lost faith in the U.S. president over Iraq and other issues, in a high-level rupture of Bush’s famously loyal inner circle. 
Matthew Dowd, a polling expert who switched parties to become a Republican and also served as a senior strategist in Bush’s 2000 presidential campaign, told The New York Times in an interview on Sunday that Bush must face up to Americans’ growing disillusionment with the war.
Dowd said he had found himself agreeing with calls by Democratic Senator John Kerry of Massachusetts, Bush’s opponent in 2004, for a withdrawal of U.S. troops from Iraq.
“If the American public says they’re done with something, our leaders have to understand what they want,” Dowd said. “They’re saying, ‘Get out of Iraq.”’
He also cited the administration’s bungled handling of the response to Hurricane Katrina in 2005 and Bush’s refusal to meet Cindy Sheehan, who had lost a son in Iraq, while she was leading a protest outside Bush’s Texas ranch.
“I had finally come to the conclusion that maybe all these things along do add up,” Dowd said. “That it’s not the same, it’s not the person I thought.”
Although some other administration officials have expressed similar views over the years, the Times said Dowd is the first member of Bush’s inner circle to break so publicly with him.
Dowd said he had been attracted to Bush by his ability as Texas governor to work across party lines but Bush had failed to do the same as president and had become isolated with his views hardening. The Times said Dowd was speaking out partly in an effort to get through to Bush.
“I really like him, which is why I’m so disappointed in things,” Dowd said. “I think he’s become more, in my view, secluded and bubbled in.”
He said Bush had failed to call for a shared sacrifice among Americans after the September 11 attacks and followed a divisive political strategy.
Dowd helped develop Bush’s successful re-election strategy of rallying his Republican “base” but sounded a different note in the Times interview.
“I think we should design campaigns that appeal not to 51 percent of the people,” he said, “but to bring the country together as a whole.”
White House counselor Dan Bartlett said Dowd’s criticism reflects the U.S. debate over the war.
“This war is a complicated and difficult one and it brings out emotions in people from both sides of the aisle, even those who work closely for the president, and the president respects his position,” Bartlett said on CBS television’s “Face the Nation.”
“Obviously, we disagree with him as far as [Bush] being too insular or him bringing the troops home,” Bartlett said. “What troubles me is that there is a perception that this president doesn’t understand the difficulties of this war … there’s nothing that weighs more heavily on his mind.”
The Times said Dowd acknowledged that the expected deployment to Iraq of his oldest son, Daniel, an Army intelligence specialist, was a factor in his changed view of Bush.
Dowd said he now wanted to “do my part in fixing fissures that I may have been a part of.” 
The Times said Dowd cited Democratic Senator Barack Obama of Illinois as the only 2008 presidential candidate who appeals to him.

TITLE: U.S. Lead World In The Pool
AUTHOR: By Beth Harris
PUBLISHER: The Associated Press
TEXT: MELBOURNE, Australia — Led by Michael Phelps’ seven gold medals, the United States dominated the world swimming championships. The Americans won a leading 36 medals, including 20 golds — equaling their best showing in 29 years. 
If the world’s other swimmers want to catch up, they’ve got some work to do before next year’s Beijing Games, especially the Chinese.
“We haven’t seen anything from China yet,” said Jon Urbanchek, special assistant to U.S. men’s head coach Bob Bowman. “Hopefully, they’re not keeping anyone to surprise us.” 
As the host country in 2008, the Chinese will be eager to top the medal count, and swimming offers a huge cache of gold, silver and bronze. 
But they can’t be very encouraged by their showing in Melbourne. 
For the first time in recent years, China brought a full team of more than 40 swimmers to a major international competition. The Chinese were represented in 13 of the 40 finals, and won two medals. 
“There’s a big difference between us and the others,” freestyler Yang Yu said. “Our gap is very big. They all swam very fast, and it felt like we were moving in the same spot.” 
Next year in Beijing, the Olympic finals will be held in the morning to appease NBC, which will televise them live in U.S. prime time. 
That could be a problem for at least one Chinese swimmer. 
“I feel tired racing in the morning,” freestyler Pang Jiaying said. 
“I would swim a lot better if I swam at night.” 
Wu Peng earned the silver behind Phelps in the 200-meter butterfly. The Chinese women took the bronze in the 400 medley relay. 
“When you have the rest of the world improving so quickly, it can make us look like we haven’t got any improvements when we maintain our standards,” breaststroker Qui Hi said. 
She said China’s coaches tried something new before worlds by having the swimmers train at altitude. 
“The whole experiment didn’t work,” she said. 
Qui wants a different approach leading up to Beijing. 
“I really hope that someone could come and work with us and train us up to improve our physiques, styles and psychology,” she said. “I don’t want any new experiments but rather a thorough preparation.” 
No one was more prepared than Phelps, whose seven-gold haul was worth $210,000 in bonus money from USA Swimming. He picked up extra cash from FINA, the sport’s governing body, too. 
American swimmers accounted for 12 of 15 records set over eight days in the temporary pool at Rod Laver Arena. Five of those belonged to Phelps. 
“That was the greatest performance of all time,” U.S. head coach Mark Schubert said. 
Phelps never got a chance to swim for an eighth gold after his U.S. teammates were disqualified in the 400 medley relay preliminaries on the final day. 
Ian Crocker, who had been in position to derail Phelps in the 100 fly before losing, dove in too early on an exchange, causing the DQ. 
“It definitely wasn’t intentional,” Phelps said. “Everything can’t go perfect.” 
Things nearly did for Australian Libby Lenton, who was the most successful female swimmer with five golds in six races. The Aussies finished second behind the U.S. with 21 medals and nine golds. 
“This has given us a perfect launch pad,” Aussie Brenton Rickard said. “Hopefully we can keep this momentum all the way to Beijing.” 
Lenton’s teammate, Leisel Jones, swept the 100 and 200 breaststroke titles on her way to three golds. American teenager Katie Hoff won three golds, including both individual medleys. 
Laure Manaudou of France was named the meet’s top female swimmer for winning the 200 and 400 freestyles. She earned three other medals, too. 
American Ryan Lochte claimed two golds and three silvers. He set a world record in upsetting teammate Aaron Peirsol in the 200 back. 
Besides China, some of the biggest busts were Aussie Grant Hackett, German Britta Steffen and South Africans Roland Schoeman and Ryk Neethling. 
Hackett warned everyone going into the meet that his training had been disrupted by a coaching switch and his impending wedding. He struggled to a bronze in the 800 free and a pair of seventh-place finishes, including the 1,500 free, which he had won four straight times. 
“Nothing went according to plan,” Hackett said. 
Steffen, who emerged as a world record holder at last year’s European championships, came away with a silver and a bronze in five races. 
Schoeman boasted that he had never been fitter and more prepared, but managed only two seventh-place finishes to go with a gold in the 50 butterfly, a non-Olympic event. 
He and Neethling were part of the South African 400 free relay that finished fourth. Like Schoeman, Neethling wasn’t a factor in the 100 free, ending up last.

TITLE: Nightmare Match Has
Zenit Coach In Despair
AUTHOR: By Matthew Brown
PUBLISHER: Staff Writer
TEXT: FC Zenit St. Petersburg coach Dick Advocaat promised tough words at team training Monday after a nightmare third round tie Saturday at Petrovsky Stadium that left his team languishing at eighth in the Premier League and police sources saying that more than 20 fans fans were injured in post-match brawling.
Zenit was crushed 3-1 by last season’s runner-up FC Spartak Moskva in its first home loss of the season and easing the Moscow team’s passage to equal-top of the Premier League table. 
Goals from Yegor Titov and Martin Stranzl and a Vladimir Bystrov penalty made it 3-0 by half-time but Spartak was then reduced to ten men when Aleksei Rebko was sent off for two yellow cards.
Pavel Pogrebnyak pulled one back for Zenit five minutes before time, but the match left Advocaat scratching his head.
“Sometimes as a coach you wonder what is happening to your team,” he said afterwards in comments posted at www.fc-zenit.ru. “On Monday we will need to go through what happened today, because the whole team played very poor football. All three goals came from individual mistakes. Even against ten men, it’s hard to recover from that.”
Fontanka.ru reported police sources saying that 23 people were hospitalized on Saturday after a brawl between Zenit and Spartak fans in the Kransogvardeisky region, south-west of the city center. Injuries were described as “moderate” and 19 fans had been released by Saturday night. No arrests were reported.
In Moscow, champions CSKA Moskva is on course for its third successive Premier League title after a 2-0 win against FC Lokomotiv Moskva. With three games played apiece, CSKA and Spartak top the table with seven points each. FC Moskva also has seven points after a 0-0 draw at FC Krylya Sovetov Samara.
Advocaat promised to put on his thinking cap after Zenit’s disappointing showing on Saturday that leave it with four points so far.
“I’m still thinking about this game,” he told journalists. “It will take me a couple of days. We will come back stronger than ever.”

n?In the Russian Hockey League, CSKA Moscow is still dreaming of making the playoff finals after it beat heavily favored Ak Bars Kazan 3-2 in Moscow on Sunday in game three of the best-of-five semi-finals. Ak Bars leads the series 2-1, having won games one and two 5-2 and 4-2, respectively. 
Fourth games were set to be held in Moscow and Magnitogsk late Monday.

TITLE: Falklands ‘War of Words’ 25 Years Later
AUTHOR: By Sonia Avalos
PUBLISHER: Agence France Presse
TEXT: BUENOS AIRES — Argentina brushed away British diplomatic overtures and accused London of “arrogance” as the two countries on Monday marked the outbreak of their war over the Falkland Islands 25 years ago.
While British Foreign Secretary Margaret Beckett voiced “continuing regret” over the loss of life on both sides of the conflict in the South Atlantic, her Argentinian counterpart condemned what he described as the insensitive military triumphalism of London’s commemorative plans.
“What they want to do is not what [Tony Blair] called a commemoration, but a triumphant military parade, a typical gesture of arrogance,” Foreign Minister Jorge Taiana said on Sunday.
His remarks capped a week of Argentine salvos over the Falklands, known here by their Spanish name, the Malvinas.
Argentina unilaterally canceled a bilateral oil exploration agreement with Britain and announced sanctions against companies exploring in the disputed area.
As much as 60 billion barrels of crude lie in ocean-bed structures around the archipelago.
Britain and Argentina waged a two-month long war after Argentina’s military government, headed by General Leopoldo Galtieri, invaded the remote South Atlantic islands, 480 kilometers off its coast, on April 2, 1982.
More than 900 people died — including 649 Argentinian and 255 British troops and three islanders — during air, land and sea hostilities.
Twelve thousand kilometers away, Britain’s then prime minister Margaret Thatcher, whose “Iron Lady” reputation was forged during the crisis, sent in 110 ships and 28,000 military personnel to retake the islands and liberate the around 3,000 inhabitants.
In a statement on the eve of the invasion anniversary, Beckett had stressed London’s commitment to “constructive” ties with Buenos Aires, and announced an offer for families of dead Argentine soldiers to hold a memorial ceremony on the islands towards the end of the year.
Taiana admitted the war was “a tragic event and a mistake,” but insisted it did not alter the validity of Argentina’s claims to sovereignty over the Falklands which date back to the early 19th century.
And he blasted London for what he described as “its repeated refusal to comply with an international mandate on beginning talks” about the future of the islands.
“There can be no doubt that our demands are peaceful but firm,” Taiana said. “And being firm means demanding that Britain comply with its international obligations.”
Britain insists that Falklanders first have to vote for the British withdrawal at a referendum, a plebiscite that has yet to take place. The majority of the population of the islands is firmly pro-British.
The two countries reestablished diplomatic relations in 1990 but, despite efforts at reconciliation in recent years, ties remain problematic and Argentina rejected an invitation to a joint commemoration service in London to mark the 25th anniversary of the conflict.
In an editorial on Monday, the British newspaper The Times said it was time to repair relations that were, at present, “reasonable but not much more.”
“More exchanges and an end to lingering hostility would bolster the islands’ confidence and prospects,” it said.
Argentine President Nestor Kirchner was expected to attend a commemorative ceremony in the town of Ushuaia, in the south of the country, organized by veterans of the war.
London is remembering the anniversary of the conflict with a series of events in the coming weeks, including exhibitions, veterans’ reunion dinners and church memorials.
Thatcher, now 81 years old and in poor health, is among those taking part in the events, which will climax on June 14, the date in 1982 when Argentina surrendered to Britain.

TITLE: Pope Moves Step Toward Sainthood
AUTHOR: By Philip Pullella
PUBLISHER: Reuters
TEXT: VATICAN CITY — The campaign to make Pope John Paul II a saint reached a landmark on Monday as promoters offered proof of a purported miracle and a cardinal suggested it should be speeded up because there was no doubt of his sanctity. 
At a ceremony including solemn oaths and centuries-old sacred rituals on the second anniversary of his death, officials formally concluded the first phase of a probe into his holiness.
The Rome diocese gave the Vatican tens of thousands of pages of documents and transcripts which propose that John Paul should be beatified, the last step before sainthood.
Two years is an unusually short time for the completion of the first phase of a sainthood cause, which can usually take decades or, in some cases, hundreds of years.
The evidence gathered and handed over at the ceremony at Rome’s Basilica of St. John includes testimony from some 130 people as well as scrutiny of his life, spoken words and writings.
Three black leather trunks were sealed with ribbon and hot red wax as Church officials and thousands of faithful applauded.
They include documentation on the case of Sister Marie Simon-Pierre, a 46-year-old French nun diagnosed with Parkinson’s — the same disease that the late Pope had — until she said it inexplicably disappeared two months after his death.
Simon-Pierre, who worked as a maternity ward supervisor in Aix-En-Provence, could be central to the case since the Church demands proof of a medically unexplained healing before a candidate can be beatified. She attended Monday’s ceremony. The documentation prepared by the Rome and Krakow dioceses (where he was archbishop) will now be opened and reviewed by the Vatican’s Congregation for the Causes of Saints.
If the Vatican rules the cure of Simon-Pierre was a miracle, another would be required before sainthood is bestowed.
Many Catholics are convinced of John Paul’s sanctity, a belief stressed by the late pope’s former secretary in a mass just after dawn at the pope’s crypt in St. Peter’s Basilica.
“The faith of the people of God clearly recognizes his sanctity,” said Cardinal Stanislaw Dziwisz, who in the past has suggested that Pope Benedict should skip the beatification stage for his predecessor and move directly to sainthood.
“John Paul II was a member of the friends of Jesus, that is, the group of saints,” Dziwisz said.
Crowds at John Paul’s funeral in April 2005 chanted “Santo Subito” (“Make him a saint now”).
“I think he should be made a saint as soon as possible because he gave the Polish people everything we could ask for,” said Antoni Krokowicz, 20, who traveled from Poland for the ceremonies. “He was a great man.”
In May, 2005, Pope Benedict put John Paul on the fast track by dispensing with Church rules that normally impose a five-year waiting period after a candidate’s death before the procedure that leads to sainthood can even start.

TITLE: A Star is Born as Serbian Teenager Wins in Florida
AUTHOR: By Steven Wine
PUBLISHER: The Associated Press
TEXT: KEY BISCAYNE, Florida — Novak Djokovic twice threw his racket in anger. The third time, he tossed it into the stands in jubilation. A delighted young woman in the front row caught the souvenir from the new Sony Ericsson Open champion. 
Djokovic won his first ATP Masters Series title Sunday, beating qualifier Guillermo Canas 6-3, 6-2, 6-4. 
The 19-year-old Serb’s teenage temper occasionally showed, but he hardly had cause for anger. Djokovic became the youngest men’s champion in the event’s 23-year history. 
“Tennis has a new star today,” tournament chairman Butch Buchholz said. “He’s going to be around.” 
Canas upset top-ranked Roger Federer twice last month, including in the fourth round Tuesday. But the 29-year-old Argentine’s relentless baseline game failed to faze Djokovic, who dominated with his versatile shotmaking and held every service game. 
“I hope this is only the start,” said Djokovic, runner-up at Indian Wells two weeks ago. “I was always trying to compare myself to the best players in the world, because that’s what I want to be. Right now I feel like probably for the first time in my career I’m on that level, that I deserve to be one of the three best players in the world.” 
Seeded 10th, Djokovic will improve to a career-high No. 7 in the rankings Monday. 
He has already put Serbia back on the tennis map. The nation has a modest tennis tradition aside from Monica Seles, a nine-time Grand Slam champion who was in the crowd Sunday. 
“I’m very happy about that, because she was one of my idols when I was young,” Djokovic said. 
The crowd roared when Djokovic skipped a forehand winner off the baseline on match point, and his exuberant celebration kept the cheers coming. After collapsing to his back in glee, he rose to hug Canas, climbed into the stands to embrace his parents, then returned to the court and threw his shirt and racket to the cheering crowd. 
“It was a very emotional moment for me,” Djokovic said. “I was thinking even to put away my shoes and shorts and everything. But I said, OK, television is here, so I’ll keep that.” 
Canas applauded the young champion. 
“If he continues like this, he’s going to be one of the top three or four players very, very soon,” Canas said. 
Canas can take consolation in a career resurgence. Ranked as high as eighth before serving a 15-month doping suspension that ended last summer, he was 143rd at the start of the year but will climb to about 31st in the new rankings. 
“Now everybody knows I’m back on the tour,” Canas said. “I’m very happy now, but hopefully more happy moments are going to come for me.” 
The wiry Djokovic succeeded where Federer failed, mixing pace, spins and angles so well that some of his shots were beyond reach even for Canas, whose forte is fetching. The Serb’s repertoire ranged from 130-mph serves to feathery drop shots, including one to end the match’s longest game. 
That game in the second set lasted 20 minutes and 22 points. 
“It was really long, and really important for me to win that game,” Djokovic said. “It was probably a turning point. It’s very important to stay very calm and mentally strong. I managed to do that.” 
The showing by both finalists suggests the upcoming clay-court season could be a mad scramble. Djokovic, Canas and Rafael Nadal all pose potential obstacles in Federer’s bid to complete a career Grand Slam by winning the French Open in June. 
“Clay is one of my favorite surfaces, that’s for sure,” Djokovic said. “I can play a lot of different styles of the game, which gives me a lot of advantage, so I hope I’ll do well.”

TITLE: 381 Dead In Somalia Clash
AUTHOR: By Salad Duhul
PUBLISHER: The Associated Press
TEXT: MOGADISHU, Somalia — Fierce fighting between Ethiopian-backed government forces and Islamic insurgents has killed 381 people over four days, a local human rights organization said Monday, as the government warned residents to abandon their homes ahead of a new military offensive.
“For the last four days we have registered 381 deaths and 565 people wounded,” said Sudan Ali Ahmed, chairman of Elman Human Rights Organization.
The fragile Somali government backed by Ethiopian forces called on civilians in the capital to leave their homes in disputed areas ahead of a new military offensive against a lethal Islamic insurgency.
Salad Ali Jelle, the deputy defense minister, said the government does not recognize a cease-fire negotiated between Ethiopian military and clan elders.
“We call on the civilians living in terrorist-held areas in Mogadishu to abandon their houses because it is possible that government troops may target these areas any time,” Jelle said. 
“We have to clean Al-Qaida elements from Mogadishu.”