SOURCE: The St. Petersburg Times
DATE: Issue #1285 (51), Tuesday, July 3, 2007
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TITLE: Italy’s Gulag Victims Get Memorial
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Luciana De Marchi was 13 when her father — Italian filmmaker Gino, a communist living in Moscow — was arrested by the Soviet secret police and disappeared without a trace. That was in 1937. The daughter, who has since invested determination, courage and resilience into finding the truth, traveled to St. Petersburg on Friday with Italian politicians and other descendants of Italian victims of Stalin’s purges to open a monument commemorating relatives and compatriots who perished in the Gulag. The monument was unveiled Friday at the Levashovo Memorial Cemetery northwest of the city.
When De Marchi finished a speech delivered in Italian at the opening ceremony, Russians in the audience gestured to an interpreter that her words needed no translation.
“This land holds people of many nationalities; like my father, they were innocent victims,” she said. “It exudes one message, a call to confront terror and embrace love — not in the egoistic but the humane sense of the word.”
The abstract monument — a chunk of dark granite engraved with dedications and an olive branch — was installed with support of the Italian Culture Institute in St. Petersburg and the Italian non-governmental organization Garden of the Righteous.
Levashovo, formerly a secret burial site for victims of political repressions of the Stalin’s era, was discovered by activists from local human rights group “Memorial” in 1989 and later became a memorial cemetery. It takes up over eleven hectares and is believed to contain over 20,000 bodies. 
“The first trucks containing victims arrived here in the summer of 1937, and for nearly fifty years nobody — not even residents of nearby villages — knew what was happening behind its high fences,” said Anatoly Razumov, head of St. Petersburg-based Center for the Recovered Names. “Sometimes up to 800 people were shot in a single night.”
Photographs of victims of the Gulag are attached to trees around the cemetery. 
Nobody knows the exact location of the bodies of their relatives — when the pictures are placed or a monument is installed, people are guided by intuition.
“Some of these people were prosecuted purely on the grounds of their non-Russian nationality, others were killed because they dared to disagree with the ruling regime, believed in other ideals than Communism, or challenged the terror that had engulfed the country,” Razumov said. 
In the first half of the 20th Century the Italian community in Russia numbered 4,000 people. Between 1919 and 1951 more than 1,020 of them perished in purges. 
Among those shot by the regime were amateur theater director Robert Barbetti, electrician Anton Lonzar, legal advisor Jan Maletti and Victor Marchesetti, a researcher with the Russian National Library.
The fate of many victims still remains obscure even to their closest relatives.
“There were many decades of lies: we were told that Gino was sent into exile, then that he died of peritonitis,” De Marchi said. “It was not until several years ago that I discovered he was shot by the NKVD [1930s-era secret police].” 
Italian politician and national secretary of Italy’s Left Democrats Piero Fassino compared the opening ceremony with the lifting of a thick cloud of hypocrisy which for many decades covered shameful parts of Russian history. 
“Stalin’s repressions were the most brutal manifestation of the Communist regime, with its deeply flawed dictatorial philosophy of creating a just and equal society without liberty,” he said. “Equality and justice can exist only in a free society. No state that oppresses freedoms and liberties has the slightest chance of building a system of social justice.”
Fassino’s words echoes criticism that today’s Kremlin draws from liberal politicians and human rights advocates.
No officials representing City Hall spoke at the ceremony. Vice-governor Lyudmila Kostkina, who had been scheduled to attend the event, did not turn up but sent a wreath.
Fassino said that among those persecuted in Russia were 300 Italian Communists who fled their native land deluded by their belief in Soviet Communism, only to swap Italian fascism for another tragedy.
“What was especially tragic is that the Italian communists suffered much more from their own comrades who betrayed them or did not have enough courage to fight for them than from the Soviet secret police. Gino De Marchi was arrested after a report — containing false accusations — by someone he once regarded as his close ally. We are here to say we will remember the bitter lesson.”
Is modern Russia really willing to learn from its history?
For the people to develop an immunity against a totalitarian regime, they have to understand it. This understanding is lacking in the country.
Despite Russia’s bloody history and the Bolshevik legacy, there is still no museum of the Gulag in the country. The nation’s only Gulag museum is a remote, former prison camp in the Perm region. Several controversial paragraphs in a history textbook is all that tell the country’s schoolchildren about Gulags. As Russia’s human rights advocates put it, “it is very often in Russia that what is supposed to be a book of remembrance turns out as a KGB achievements report.”
Many exhibitions on Stalin’s rule tend to touch on the mechanisms of the death machine and totalitarian regime, rather than on human stories. But only a human story can give you an understanding of what was going on, said Irina Flige of the historical branch of the St. Petersburg human rights group Memorial.
“The stories have to be as personal and human as possible,” she said. “It is all for the people to sense the connection, and it is all for them to develop a desire to stand up against terror in their own lives.”
“Acknowledging crimes of the regime is not a humiliation for a nation but a sign of commitment to democracy and political maturity,” said Vittorio Claudio Surdo, the Italian ambassador to Russia. “We have done it in Italy when we condemned the hostilities of the Mussolini regime. Every year, on 27 January, on the Holocaust Memorial Day, in all Italian schools we hold lectures about the persecutions of the regime.”
Stalin’s era still causes a mixed reaction in many Russians. 
Russia’s head of state, Vladimir Putin, a former KGB officer himself, once publicly likened Stalin to the Central Asian despot Tamerlane. Conceding that Stalin was a dictator, Putin often repeats that Stalin’s role in defeating Nazi Germany was instrumental and should not be ignored.
This year’s poll by the All-Russian Center for Public Opinion Research shows that every third St. Petersburger believes that Stalin played a positive role in history. Almost as many said his role was negative.
Italian essayist Gabriele Nissim, the founder of the nongovernmental Garden of the Righteous in Milan, feels reminding the people is essential.
“Every reminder about the purges of totalitarian regimes — be it a written, oral or visual story — helps building an immunity against totalitarism and boosts democratic developments in Europe, where Russia is an integral part,” Nissim said at the opening ceremony. “Those rushing to hush these memories up very fast, are in most cases driven not by the desire to reconcile with the past or create a new political movement but by an ambition to completely untie their hands without devoting much thought to human rights.”

TITLE: Putin, Bush Engage in ‘Family Dialogue’
AUTHOR: By Deb Riechmann
PUBLISHER: The Associated Press
TEXT: KENNEBUNKPORT, Maine — Plates piled with pancakes and omelets and an Atlantic Ocean fishing trip served as the warmup Monday for talks between President Bush and Russian President Vladimir Putin.
The issues menu was daunting: differences over the fate of Kosovo, democracy in Russia and U.S. missile defense plans. These, among other vexing questions, have clouded a once-warm relationship.
After a hearty Maine breakfast, the leaders and security agents piled into the powerful speedboat navigated by Bush’s father — former President George H.W. Bush. Under a bright morning sunshine, Putin and the Bushes roamed close to the shoreline around the Bush family’s oceanfront estate for about an hour and a half.
Putin landed a fish, while his host did not, and then the two presidents sat down for their informal talks inside Walker Point’s stone-and-shingle main house overlooking the rocky and jagged Atlantic coastline. What remained to be seen was whether the Russian leader was as adept at smoothing relations with Bush as he was at outsmarting the fish.
Bush and Putin have contrasting views on democracy and missile defense, NATO expansion into Russia’s backyard and independence for Kosovo. They both want to stymie Iran’s nuclear weapons ambitions, but don’t see eye-to-eye on how tough to get with Tehran or even whether Iranian missiles currently pose a threat.
When Putin arrived Sunday afternoon, it was all handshakes, kisses and smiles. Putin gave a kiss on the cheek to first lady Laura Bush and the president’s mother, Barbara Bush, and handed them bouquets of flowers.
They took their first spin in the former president’s prized boat, Fidelity III, for about 45 minutes, starting nearly immediately after he got there. Bush and Putin were seen grinning and waving to photographers as they zoomed along the coastline. The evening ended with a dinner of lobster and marinated swordfish.
While both sides downplayed expectations for the meetings, the two leaders were expected to call their missile defense experts to a joint meeting so they can learn about the installations the United States is proposing and the capabilities of the Azerbaijan system.
They might also come to a closer understanding about getting a third, tougher round of UN Security Council sanctions against Iran because of its refusal to stop enriching uranium. 
The U.S., Russia and their fellow permanent UN Security Council members, however, have told Iran they will hold off on new sanctions if it stops expanding its enrichment activities while they seek to restart talks about the program with Tehran. Diplomats say the Iranian government has not yet responded to the proposal.
On Kosovo, UN Secretary-General Ban Ki-moon said Monday that he hoped Bush’s meeting with Putin would resolve differences over the future of Serbia’s breakaway Kosovo province, but a Putin adviser offered little hope for that.
Over Sunday night’s meal, there was “family style dialogue” about coming elections in both countries. Putin spokesman Dmitry Peskov denied any tense discussions.
“Definitely not,” Peskov said. “We could not have predicted the warmness and hospitality from President Bush. The Russian president was very much satisfied with that.”
But for all the pleasantries and talk about patching up the Bush-Putin friendship and forging fresh relations with Russia as it transitions from its communist past, the rhetoric coming out of the Kremlin of late seems mired in the Cold War.
This tiny seacoast town has welcomed the Russian delegation, but an estimated 1,700 demonstrators interrupted a peaceful Sunday afternoon. They called for the impeachment of Bush and an end to the war in Iraq.
Bush, who feels Putin has tried to muzzle free speech, would have approved of a chant led by one demonstrator.
“Tell me what democracy sounds like,” she yelled to her followers.
“This is what democracy sounds like,” they screamed.

TITLE: Kidnapped Children Freed Safely
AUTHOR: By Evgenia Ivanova
PUBLISHER: Staff Writer
TEXT: Two children kidnapped in St. Petersburg in May have been released unharmed with no ransom paid, the prosecutor’s office said Monday.
The girl was freed on Thursday and the boy was released on Sunday, Yelena Ordynskaya, the chief assistant to the St. Petersburg prosecutor responsible for dealings with the media, told The St. Petersburg Times on Monday.
Both children were in a  “normal” physical condition and “relatively” good psychological state, Ordynskaya said in the telephone interview. 
Ordynskaya confirmed that no ransom was paid, but declined to talk about whether it was the kidnappers’ decision to free the children without payment or whether there were other reasons why no money was paid. 
“It just happened this way. I think it is too early to talk about it now. These circumstances are all evidence in the case,” she said. The kidnappers have not been found yet and an investigation is under way, Ordynskaya said.
The girl, who was identified as 11-year old Sasha Borodulina by Fontanka.ru news, said in a video posted to the site that her kidnappers were “gentle” and that she and her brother had not been hurt.
Asked whether the kidnappers shouted or verbally abused her or her brother, the girl said “of course not,” in the video reportedly shot a few minutes after the girl was set free in southern St. Petersburg at the meeting point of Yuzhnoye Shosse and Bukharestskaya Ulitsa.
Six-year old Dima Borodulin was released at the entrance of a hospital on Avangardnaya Ulitsa in south-west St. Petersburg. 
The children were kidnapped May 15 in central St. Petersburg while walking home with their father. Pavel Borodulin, a businessman, was attacked by unidentified assailants who took his children, and demanded 10 million euros ($13.6 million) for their return, Fontanka.ru, the website run by the Agency of Journalistic Investigation (AJUR), reported. 
According to Fontanka.ru, the police asked AJUR head Andrei Konstantinov to help negotiate with the kidnappers. He managed to reduce the ransom demand to $1 million through “difficult and even dramatic” talks.

TITLE: In Brief
TEXT: <b>Gender-Based Tickets</b>
MOSCOW (SPT) — Russian Railways is allowing passengers to choose male, female or mixed compartments on long-distance traims, Fontanka.ru reported. 
Tickets bought using the new service went on sale from Sunday at all booking offices. Prices do not vary for the different sexes. 
The service was piloted from January on eight routes, including Moscow to St. Petersburg and Nizhny Novgorod to St. Petersburg. 
The service was put into operation following numerous requests from women, Russian Railways was reported as saying. 

<b>Traffic Law Reforms</b>
MOSCOW (SPT) — The State Duma Committee on Constitutional Legislation has recommended the adoption of a draft law toughening up penalties for road traffic violations, RIA Novosti.
The State Duma will give the bill its second reading on Thursday, with penalties for overstepping speed limits by 20-30 kilometers per hour set to be raised from 1,000 to 1,500 rubles ($38.7 to $58.1). 

<b>Ryazan Rally Stopped</b>
MOSCOW (AP) — Authorities broke up an anti-government rally in Ryazan on Saturday, detaining more than a dozen opposition activists, organizers said.
Some 70 members of the banned National Bolshevik Party and liberal activists had gathered in a central square in Ryazan, some 200 kilometers southeast of Moscow, to hold a demonstration.
But police rounded up 15 protesters and prevented others from going ahead.

TITLE: Berezovsky Tried In Absentia
AUTHOR: By Henry Meyer
PUBLISHER: Bloomberg
TEXT: MOSCOW — Exiled Russian billionaire Boris Berezovsky went on trial in absentia Monday in Moscow over charges that he defrauded state airline Aeroflot in the 1990s.
A district court is to hold a closed-door preliminary hearing, the Moscow City Court’s press office said.
Berezovsky, who denies the charges and says they are politically motivated, has instructed his defense team not to represent him at the trial, the businessman’s Moscow-based lawyer Andrei Borovkov said Monday by telephone. The court may decide to appoint a legal team to defend Berezovsky, he said.
“Berezovsky took this decision because he considers this trial in Russia is a farce and he wants nothing to do with it,’’ Borovkov said.
The 61-year-old businessman, who is worth $1.1 billion according to Forbes magazine, was a Kremlin power broker under President Boris Yeltsin in the 1990s and has become a vocal critic of President Vladimir Putin since fleeing to London in 2001 and being given asylum in 2003.
Berezovsky is accused of embezzling more than 214 million rubles ($8.3 million) from Aeroflot. He used to own a stake in the airline and is also accused of laundering more than 16 million rubles. The charges carry a maximum prison sentence of 10 years.
Berezovsky told Bloomberg News by telephone on June 29 th the trial “has no legal validity because it is being held in my absence.’’

TITLE: Opposition Activist to Run for President
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Sergei Gulyayev, a former lawmaker in the St. Petersburg Legislative Assembly and the founder of a new liberal political movement with a nationalist twist, has announced that he will run for president as an opposition candidate.
Gulyayev is the fourth opposition figure to declare his intention to compete for the post of president. Others include former Prime Minister Mikhail Kasyanov, former Central Bank chief Viktor Gerashchenko and Soviet-era dissident Vladimir Bukovsky, who currently resides in London.
Gulyayev’s movement, known as Narod or The People, held its founding congress in Moscow at the end of June. It was created with the goal of filling a long-vacant niche in Russia’s political landscape: a liberal party that can appeal to voters with a nationalist bent.
Maria Matskevich, a political analyst and senior with the Institute of Sociology of the Russian Academy of Sciences said she sees Gulyayev’s declaration to stand for president as an effort to publicize his newborn movement.
“Liberal politicians have long been talking about the unused opportunity of exploiting the nationalist idea to a certain degree and converting some of the nationalist-minded voters toward democratic values,” Matskevich said. “Gulyayev’s initiative makes the first attempt.”
But the analyst said the movement lacks the resources to become a genuine nationwide political force. 
“Gulyayev as a leader lacks political authority,” she said. “Another problem is the actual membership. The appetite for a liberal party is still rather low in the country. Even much more experienced Moscow politicians who head large parties are struggling for support, and their ratings successes are scarcer than hen’s teeth.”
Gulyayev stressed he is not attempting to form a mass-membership party.
“There most probably will not be any official membership: any holder of a Russian passport who shares our views can consider themselves a member,” Gulyayev said.
Gulyayev has been active in The Other Russia, an opposition umbrella group that has organized protest rallies around the country. 
He was violently detained by riot police during the March 3 Dissenters’ March in St. Petersburg after authorities used force to break up the rally. A lawmaker in the city’s parliament at the time, Gulyayev — who suffered a broken arm during his detention — is suing the police for physical assault. 
Previously an independent, Gulayayev ran in regional parliamentary elections earlier this year on the Yabloko party list. Yabloko was controversially excluded from the regional elections in St. Petersburg on a technicality. 
The presidential election is scheduled for March 2008.

TITLE: Hugo Chavez Prefers Russian Oil and Lenin
AUTHOR: By Steve Gutterman
PUBLISHER: The Associated Press
TEXT: NOVO-OGARYOVO, Moscow Region — Venezuelan President Hugo Chavez took several parting shots at the United States as he wrapped up a visit to Moscow on Friday, suggesting that he preferred Russian oil companies to U.S. ones and that life was more than Superman.
Chavez arrived in Moscow last week amid widespread speculation that he wanted to sign a major arms deal, and President Vladimir Putin said the weapons trade was among the topics of talks late Thursday when he met with Chavez. On Saturday, Chavez stopped by the Rostov Helicopter Plant in Rostov-on-Don. But no announcements were made about any military deals during the three-day visit.
Chavez told Russian business leaders on Friday that he expected development of a “road map” that would boost and diversify Russian-Venezuelan business ties — especially in the energy sector, including construction of a natural gas pipeline and oil refineries.
“We are very satisfied with the presence of Russian companies in our oil industry, and will do our best to develop this cooperation further,” he said in an address to the Russian Chamber of Commerce and Industry.
He said that at dinner Thursday night with Putin, they had agreed to create a fund to support joint projects. With Russia’s help, Venezuela is ready to build four oil refineries and plans another 13, he said.
He also invited Russian oil companies to help develop the Orinoco River basin, recognized as the world’s single-largest known oil deposit, potentially holding 1.2 trillion barrels of extra-heavy crude.
U.S. giants ExxonMobil and ConocoPhillips refused to sign deals last week to keep pumping heavy oil under tougher terms in the basin, signaling their departure from the deposit as Chavez tightens state control over the oil industry.
Other major oil companies Chevron of the United States, Britain’s BP, France’s Total and Norway’s Statoil accepted the terms, taking new minority stakes.
Chavez, who has called U.S. President George W. Bush a devil, a donkey and a drunkard, again lambasted the United States and its “imperialist” policies.
“U.S. companies act like Count Dracula, like vampires bleeding our country dry,” he said.
Chavez urged Russian companies to invest in construction of an 8,000-kilometer natural gas pipeline to Argentina, retrofitting Venezuela’s dilapidated seaports, and developing its gold mining and chemical and industries.
“For the Americas, Venezuela is like Russia for Europe and Asia — a source of oil and natural gas,” Chavez said.
Both Venezuela and Russia have revisited contracts signed in the 1990s with major oil companies, and slapped back tax claims on private companies.
At the Thursday night talks with Putin, Chavez told the president about the opening of a Venezuelan cultural center named for the South American revolutionary hero Simon Bolivar earlier that day in Moscow. He said he spoke with Mayor Yury Luzhkov during the cultural center’s opening about “the leading trends in history, about the need to return geopolitical ideas” — echoing earlier remarks in which he railed against imperialism and told Russians they should revere and revive the ideas of Vladimir Lenin.
“We should remember ... Lenin and come back to his ideas, especially when it comes to anti-imperialism,” he said.
He said the cultural center’s opening was part of Venezuela’s efforts to fight U.S. cultural domination throughout the world. U.S. popular culture, he said, is centered on “the American way of life, Superman, Batman and Robin.”

TITLE: Adamov Seeks U.S. Apology
AUTHOR: By Natalya Krainova
PUBLISHER: Staff Writer
TEXT: MOSCOW — Former Nuclear Power Minister Yevgeny Adamov said Friday that a U.S. court ruling had vindicated him of charges of stealing $9 million, and he demanded an apology from the United States.
A Pittsburgh court on Thursday sentenced Adamov’s former associate Mark Kaushansky to 15 months in prison for tax evasion but cleared him of the charge of conspiring with Adamov to steal aid money meant to boost nuclear safety in Russia.
Adamov said the Americans responsible for the “baseless accusations” and his “illegal detention” had to be punished, and he said he wanted compensation for his legal expenses and for the damage to his reputation and business.
He said an agreement could be reached if the United States dropped charges against him.
“Otherwise a trial of Adamov vs. U.S. will be unavoidable,” he said on Ekho Moskvy radio.
Adamov’s lawyer in Russia, Genry Reznik, told the radio station that the U.S. ruling “completely rehabilitated” his client.
Reznik said the ruling was “transparent” and “could not be interpreted in two ways.”
The U.S. charges against Adamov remain in place, said Margaret Philbin, spokeswoman for the United States Attorney’s Office for the Western District of Pennsylvania.
But the former minister will not be tried in absentia, she said by telephone from Pittsburgh.
Adamov, 68, has given a written pledge not to leave Russia. He faces abuse of power and fraud charges in Russia, but the start of his trial has been postponed repeatedly.
Adamov was fired in 2001 by President Vladimir Putin and was later accused by a parliamentary committee of creating companies illegally.

TITLE: Scientists: Russia  Can Claim Land
PUBLISHER: The Associated Press
TEXT: MOSCOW — Scientists say Russia could lay claim to millions of square kilometers of territory under the Arctic Ocean, following their discovery of a link between a major underwater ridge and Russia’s coastal shelf.
The Arctic and Antarctic Research Institute said an expedition had determined that the Lomonosov Ridge running across the North Pole was an extension of the Eurasian continent, Izvestia reported Friday.
The six-week expedition on a nuclear icebreaker measured 700 square kilometers of seabed and conducted a series of detailed scans and acoustic measurements of the relief, the newspaper reported.
“The Lomonosov Ridge forms an inalienable part of Russia’s Siberian platform,” institute deputy director Viktor Posyolov said, Itar-Tass reported.
The discovery could not be independently confirmed and no Russian officials could be reached for comment Friday.
The reports said the find meant that Russia could potentially claim an area the size of Germany, France and Italy combined, which may contain up to 10 billion cubic meters of hydrocarbons, along with diamonds and metal ores.
International law says a country can claim rights to seabed within 320 kilometers of its continental shelf.
Russia has repeatedly claimed wide swaths of undersea Arctic territory, though four other polar countries — Norway, Denmark, Canada and the United States — have objected to its bid, which was first presented to the United Nations in 2001.

TITLE: Rain Stops Play for Live CNN Show
PUBLISHER: The St. Petersburg Times
TEXT: A live global television broadcast from St. Petersburg on Friday by international cable news network CNN was hit by a sudden downpour that cut short the half-hour show and left its presenter soaked.
The show, which went live at 6.30 p.m., was the final broadcast in a week of special programming on CNN International that focused on Russia and featured live broadcasts from Moscow and St. Petersburg.
News anchor Jim Clancy presented Friday’s show about Russian art and culture from Novo-Konyushenny Bridge with the Church on the Spilt Blood as a backdrop.
Fearing rain, the CNN crew had erected a small tent on the bridge to protect its cameras. However, a string quartet from the Conservatory which had been invited to perform on the show used the tent to shelter its instruments and passersby crowded the tent when an unexpected rainstorm erupted. 
“I have never seen anything like it,” Senior Editorial Producer Sasha Walek said after the live broadcast was abandoned and Clancy was left drenched. “Rain stopped play.”
Clancy had earlier interviewed a curator from the State Russian Museum as dozens of revelers from numerous wedding parties crossed the bridge as part of traditional celebrations that often include a trip to the Eternal Flame on nearby Marsovoye Pole. On hearing the U.S. television crew speaking English shortly before the broadcast went on air, one wedding guest shouted “Yankee Go Home!” toward Clancy.
Prerecorded interviews with Governor Valentina Matviyenko,  Mariinsky Theater soprano Anna Netrebko, and St. Petersburg film director Alexei Balabanov were also aired.

TITLE: Lukashenko Given Support
PUBLISHER: The Associated Press
TEXT: MINSK — Venezuelan President Hugo Chavez called for a strategic partnership with Belarus, saying Belarussian leader Alexander Lukashenko is a “brother-in-arms” and lamenting the pressure he said the United States was putting on Minsk and Caracas.
Chavez told Lukashenko that economic and military ties between them were developing, and he referred to the United States as “the Empire.”
“There are few nations in the world that are put under as strong pressure from the Empire as Belarus,” Chavez said. He called on Lukashenko to develop relations in the form of a union and a strategic alliance.
“The enemy’s forces are trying to turn the world into a unipolar world. We must overcome many obstacles from these forces. The Empire that has called us dictatorships, it wants to create a world dictatorship,” he said.
Chavez also joked about what he said were the many successes the two countries had seen since his last visit to Belarus, in 2006.

TITLE: Russian Plans to Inspire Rivals
AUTHOR: By James G. Neuger
PUBLISHER: Bloomberg
TEXT: OHRID, Macedonia — Plans for a natural gas pipeline across the Black Sea by Gazprom of Russia and Eni of Italy were adding to pressure on a U.S.-backed group to complete a rival project in southern Europe, an official with the U.S. State Department said.
Gazprom, the Russian gas monopoly, and Eni would compete against a planned Turkey-to-Austria pipeline backed by the United States and European Union as a way of pumping central Asian gas to Europe without going through Russia.
The U.S. deputy assistant secretary of state, Matthew Bryza, said the announcement last month of the Russian-Italian venture could inspire countries along the southern corridor to move ahead quickly to build the pipeline.
“The urgency of this latest development maybe will spur the countries and companies to say: Enough, it’s time to show our cards to each other and get on with the transit agreements and the other legal agreements,” Bryza said during an interview during a NATO conference in Ohrid, Macedonia.
The pipeline diplomacy comes as the North Atlantic Treaty Organization and European Union countries search for ways to enhance their energy security, with President Vladimir Putin of Russia asserting greater control over Russian oil and gas resources.
Gazprom and Eni plan to spend 10 billion euros, or $13.4 billion, to build a 900-kilometer, or 560-mile, link under the Black Sea that would compete against the 5 billion euros project, known as Nabucco, favored by Washington.
Stretching 3,300 kilometers, the Nabucco line would tap into the same gas fields in Kazakhstan and Turkmenistan that the Russian-Italian venture was eyeing. Nabucco is led by OMV of Austria, with partners including Botas of Turkey, Bulgargaz of Bulgaria, Mol of Hungary and Transgas of Romania.
Speaking of the effect of the Gazprom-Eni pact on Nabucco, Bryza said, “I just hope it will become a catalyst for the various parties to say: You know what we need to overcome our self-doubt, our doubt of the other side and reach these agreements.”
Bryza said it was unclear how well Gazprom and Eni would manage to pull off “a really expensive project” that would need to look elsewhere for gas once the Siberian fields are exhausted.
The United States was not looking to block the Russian-Italian project, Bryza said, which would add a Balkan link to a web of Russian pipelines that already supplied a quarter of natural gas for the European Union.
“We’ve never tried to frustrate any pipeline projects in Europe,” Bryza said. “We don’t see a zero-sum game. If we were playing a zero-sum game, we would try to block those alternative pipelines. We don’t.”
Russia has flexed its energy muscles by halting supplies of gas and oil to Europe twice in the past two years, in disputes with Belarus about crude oil at the start of 2008 and with Ukraine about gas in 2007.
At the NATO conference, alliance leaders took the first steps toward sketching out an energy security strategy in response to appeals by former Soviet-dominated countries like Poland and Lithuania.

TITLE: Turkmen Leader Vows To Increase Gas Exports
PUBLISHER: The Associated Press
TEXT: ASHGABAT, Turkmenistan — Turkmenistan’s president has vowed to increase natural gas exports to Russia, state media reported Saturday.
Gurbanguli Berdymukhamedov also said his country would develop a U.S.-backed undersea Caspian pipeline along with a gas pipeline that runs along the seashore favored by Moscow, signaling a desire to balance relations with key powers and maintain neutrality.
“We will increase exports of our gas through the Caspian shores to Russia,” Berdymukhamedov said in televised comments, without elaborating. Turkmenistan currently sells 50 billion cubic meters (1.7 trillion cubic feet) of gas to Russia per year.
Berdymukhamedov was referring to an agreement last month to build a Moscow-backed pipeline that would carry gas from Turkmenistan into Europe along the shores of the Caspian sea.
But the Turkmen leader also said his nation would develop a U.S-favored pipeline across the Caspian Sea to the west that would tap into the gas pipelines that cross the South Caucasus, bypassing Russia. 
Washington is intent on building the pipeline because it meets a U.S. and European strategy of securing sources of crude and gas outside the Middle East, and drawing Caspian states away from Russia and closer to the West.
“Without joining any political alliances we will continue efforts to build pipelines to China, to Pakistan and India through Afghanistan, and to Europe through the Caspian,” Berdymukhamedov said in televised comments.
“That way we will maintain mutually beneficial relations with Russia, the United States, with European countries and other neighbors.”
The United States and Russia are jockeying for influence in Turkmenistan, which has the second-biggest gas reserves among all ex-Soviet republics after Russia, and whose resources are playing an increasingly important role in regional politics.

TITLE: Severstal Income Up 83%
AUTHOR: By Yuriy Humber
PUBLISHER: Bloomberg
TEXT: MOSCOW — Severstal, Russia’s largest steelmaker, said profit jumped 83 percent in the first quarter on higher prices and increased production at its Italian unit.
Net income advanced to $396 million, or 39 cents a share, from $217 million, or 24 cents a share, a year earlier, the Cherepovets-based company said Monday in a statement. Sales climbed 35 percent to $3.68 billion.
The Italian unit, Lucchini SpA, exceeded expectations, earning more in the quarter than in the second half of last year, said Sergey Donskoy, an analyst with Troika Dialog in Moscow. “This is looking surprisingly good,’’ said Donskoy, who has a “hold’’ rating on the shares.
Severstal is among Russian steelmakers that have expanded in foreign markets. It has also gained from a boom in the construction industry and Russia’s expanding car market that have buoyed steel prices. Severstal said it passed on rising raw-material and energy costs to its customers.
Lucchini’s earnings before interest, tax, depreciation and amortization, or ebitda, jumped 40 percent. Severstal’s U.S. unit’s ebitda increased 6.3 percent, and the mining unit’s earnings advanced 50 percent.
Severstal said it benefited from the building of oil and gas pipelines in Europe, selling 70 percent more steel plate, which is used to make pipes.
“We’ll see a push in profits when the market for wide-diameter pipes really takes off,’’ said Kirill Chuiko, an analyst with Uralsib Financial Corp. in Moscow. “For now, it’s the strong market for long-products that supports the profit rise.’’
Shares of Severstal rose 10.93 rubles, or 3 percent, to 372.98 rubles ($14.51) as of 2:18 p.m. local time. Severstal will pay a dividend of 2.6 rubles per share for the first quarter.

TITLE: Court Targets Internet Cafes
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Internet cafes and computer game clubs will be required to hold special licenses to rent out game software, the Supreme Arbitration Court said in statement posted on its web site.
The court said it would approve an instruction to arbitration courts on considering such intellectual property rights cases on July 16. 
The requirement would make it difficult for the country’s 15,000 Internet clubs to rent out even legally licensed computer game software unless they conclude special license agreements with the copyright holders.
Some 80 percent of existing Internet cafes will require such licenses to operate, as most of them rely on the income from renting out game software, industry players said. 
If implemented, the measure would require Internet cafes to pay fines of 10,000 rubles ($390) to 5 million rubles ($195,000) as compensation to copyright holders, whether or not any profit is made on the transaction.

TITLE: Norilsk Gets 90% in LionOre
PUBLISHER: Bloomberg
TEXT: MOSCOW — Norilsk Nickel said Friday that it had acquired about 90 percent of LionOre’s shares.
About 201.1 million shares were deposited to its offer, Norilsk said in a statement. Norilsk, the world’s largest nickel miner, extended its $6.4 billion cash bid for the remaining stock to July 10.
“Norilsk will be less affected by perceptions of political risk associated with Russia,” Alexei Belkin, who manages $400 million at Aton Capital, said Friday. Norilsk trumped a rival bid from Zug, Switzerland-based Xstrata to seal the biggest-ever foreign acquisition by a Russian metals producer. Xstrata said June 4 that it would not increase its offer. The transaction enables Norilsk to expand into South Africa and Botswana, and adds to the company’s Australian operations. 
LionOre is Norilsk’s fourth overseas acquisition.

TITLE: Russia Gets Ready to Roll Out 3G
AUTHOR: By Eric Pfanner
PUBLISHER: The Associated Press
TEXT: LONDON — On a recent visit to London to meet with investors, the Mobile TeleSystems chief executive, Leonid Melamed, explained its plans to roll out 3G.
While telecommunications companies elsewhere spent billions on 3G licenses at the height of the technology bubble, the Russian operators got their licenses for a token fee. Though consumers have been reluctant to embrace some of the new services in markets where they are up and running, Melamed is optimistic about the prospects in Russia.
“We really believe that our case could be more effective than in Western Europe,” he said. “There is a certain need, due to a lack of fixed-line penetration.”
Because fixed phone lines remain relatively scarce — even in Moscow, penetration is only 24 percent, according to Mobile TeleSystems, or MTS — many Russians may turn to mobile devices for broadband connections, Melamed said.
Irina Astafieva, an analyst at J’son & Partners, a consulting firm in Moscow, predicts that there will be 15 million 3G users in Russia by 2012.
MTS, a publicly traded subsidiary of AFK Sistema, the business empire controlled by the billionaire Vladimir Yevtushenkov, is counting on 3G to generate new revenue as growth in some existing services slows.
MTS plans to invest as much as $1 billion in its 3G network over the next three years, rolling it out in up to 43 urban markets. Because prices of telecommunications equipment have fallen along with the going rate for licenses, MTS and its rivals will get more for their money, Melamed said.
“It’s nothing like what happened in other places a few years ago,” he said.
But the Russian market also has some idiosyncrasies. For starters, the frequencies that they have been awarded are already being used in many areas by Russian military organizations. Now that MTS, VimpelCom and MegaFon hold the licenses, they will have to negotiate the use of these frequencies. In some cases, Astafieva said, the mobile operators may have to bear the cost of moving the current users to new equipment or frequencies.
Terebenin, the MTS spokesman, said the company had held “productive talks” on freeing the frequencies. MTS says 3G service will be up and running in Moscow by the end of this year, with several other cities set to start in early 2008.
Assuming that occurs, the advent of 3G could change some longstanding practices in Russia, analysts say. Unlike cellular operators in Western Europe, for example, mobile networks in Russia have typically avoided subsidizing the cost of phones to get them into consumers’ hands. But in order for 3G to take off, operators will have to get more sophisticated — and more expensive — phones into consumers’ hands. And that might mean mobile operators will have to offer more subsidies, something that some operators have been trying to move away from in other markets.

TITLE: MTS Sends Out Warning
PUBLISHER: Bloomberg
TEXT: Mobile TeleSystems has warned rival VimpelCom and its shareholder Telenor against buying a phone operator in Kyrgyzstan, whose assets it disputes in court.
MTS has sent letters to VimpelCom and Telenor saying it may take legal action against whoever buys Sky Mobile, a unit of billionaire Mikhail Fridman’s telecoms arm Altimo. Altimo is the biggest investor in VimpelCom.
According to MTS, Sky Mobile bought the former assets of Bitel, a Kyrgyz phone company whose offices MTS says were seized in 2005 by people linked to Altimo, three days after MTS said it bought control of the company. Altimo denied wrongdoing.
MTS is already suing Altimo for at least $150 million over the Bitel takeover. It says that Altimo is offering to sell Sky Mobile.
Telenor spokeswoman Anna Ivanova-Galitsina declined to say whether the company got the letter or comment any further. Altimo vice president Kirill Babayev said he would not comment before he saw the letter.
VimpelCom CEO Chief Alexander Izosimov called the litigation around Sky Mobile “a soap opera.” “Altimo says one thing, MTS says something totally different,” Izosimov told reporters.
“If there is a possibility to enter the Kyrgyz market in any way, through an acquisition or a license, then it is a very interesting market for us,” he said. “But any acquisition or getting a license has to be clean enough, as we don’t want to get bogged down in legal disputes.”

TITLE: AGM Choice Limited To Cash or Questions
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: The country’s five biggest blue chips — Gazprom, Rosneft, LUKoil, Sberbank and Unified Energy System — all held their AGMs last week along with a handful of other firms, and an interesting pattern emerged.
On the whole, the stronger the state’s hold over a company’s board of directors, the more dividends it decided to pay, as if to appease demands for more independence and transparency with a wad or two of cash. 
The most glaring example was Sberbank, whose March public offering of about 18 percent of its capital should really have opened it up to some fresh voices. But none are going to be heard on its board during the next financial year, and the Central Bank, as the sector’s regulator, will still play the two-faced role of policing the bank from the outside and supervising it from within.  This year’s dividend payments, however, were upped by a hefty 64 percent. 
Only Gazprom topped this figure, paying 70 percent more in dividends than last year, while making no changes to its Kremlin-wed board of directors.
Rosneft, on the other hand, increased dividends by less than 7 percent, but has opened up significantly since its initial public offering last year, with three independent directors and a U.S.-born vice president for finance. 
As for LUKoil, the country’s biggest nonstate firm, its dividends also did not impress, even though last year’s financial results broke company records. But its board will still have four out of 11 outsiders, including a law professor and a retired vice chairman of Chevron.
Of course, the dividends are tempting, but if it comes down to a choice, analysts say better management should pay off in the end. 
“To put it bluntly, the value of an asset is different in different people’s hands,” said Al Breach, head of research at UBS. “In state-run companies, the managers are usually not significant shareholders. They have the incentive to have a steady life, make some money, perhaps even steal some money. But it’s not particularly obvious that they want to make things run better.”
Merrill Lynch drove this point home on Friday, the day of Gazprom’s annual shareholders’ meeting, when it released a bullish report about the gas giant with one big caveat: a lack of independence is putting the company’s value at risk. 
For an investor, risks always come at a price, and it is one of the biggest challenges of an analyst to quantify these risks and see whether they are worth taking. “When we model a company, there is a line-item for the risks associated with corporate governance, and depending on how bad it is, the company’s value can shrink by 1 percent or 2 percent,” said Svetlana Borodina, head of governance services at Standard & Poor’s.  It may not sound like much, but 1 percent or 2 percent shaved off of Gazprom’s stock, which closed at 267 rubles ($10.34) per share on the MICEX exchange Friday, would trump this year’s dividend payment of 2.54 rubles per share.

TITLE: In Brief
TEXT: <b>Pumping Oil</b>
MOSCOW (Bloomberg) — Russia’s oil output in June rose 2 percent from a year earlier  as export duties advanced, encouraging oil companies to refine more crude inside Russia.
Russia produced 9.85 million barrels a day (40.3 million tons) in June, according to preliminary data from CDU TEK, the Energy Ministry’s information center. Output increased 0.4 percent from May.
Transneft, the state oil-pipeline monopoly, exported 4.25 million barrels a day, 9.1 percent less than a year earlier and 6.9 percent less than in May.

<b>Fridman in Iran</b>
MOSCOW (Bloomberg) — Russian billionaire Mikhail Fridman has been trying to buy an Iranian mobile-phone company called Iraphone for nine months, Fox News reported, citing internal documents from Fridman’s holding company Alfa Group.
Altimo, Alfa’s telecommunications arm, is offering to invest as much as $300 million to help develop Iran’s wireless market, Fox said on its web site June 30. Former Iranian President Ali Akbar Hashemi Rafsanjani owns shares in Iraphone, Fox said.
Alfa calls its effort in Iran “1979 Project,’’ according to Fox. Altimo Vice President Kirill Babayev couldn’t be reached immediately for comment.

<b>Adviser’s Energy</b>
MOSCOW (Bloomberg) — Nicholas Roditi, a former adviser to George Soros, owns at least 1.5 percent of Unified Energy System, making him the third-largest minority shareholder in the state-run Russian utility, Vedomosti reported Monday.
South African-born Roditi started buying Unified shares seven years ago and his stake is now worth about $868 million, the newspaper said, citing an unidentified person familiar with the matter.
Gazprom owns 10.5 percent of Unified and GMK Norilsk Nickel owns 3.5 percent, according to the newspaper.

<b>Oil Duty</b>
MOSCOW (Bloomberg) — Russian oil export duty will rise to $223.9 a ton beginning on Aug. 1, RIA Novosti said.
The export duty will rise from $200.6 a ton, the state-run news service said, citing Alexander Sakovich, chief of the customs payments department at Russia’s Finance Ministry.
The government reviews oil export duties once every two months, RIA said.

<b>Lukoil Stake </b>
MOSCOW (Bloomberg) — Lukoil, Russia’s second-biggest oil producer, raised its stake in Ritek to 74.9 percent by combining it with another unit.
Lukoil raised its stake from 64 percent after Ritek acquired it wholly owned subsidiary Nazymgeodobycha unit, Lukoil said in a statement distributed by the Regulatory News Service Monday.
Prosperity Capital Management, a Ritek shareholder, opposed the merger, saying in November that Lukoil offered terms unfair to minority shareholders.

<b>Gazprombank Profit </b>
MOSCOW (Bloomberg) — Gazprombank Group, which includes the banking arm of Russian gas export monopoly Gazprom, said profit almost tripled last year to a record.
Net income advanced to $1.3 billion from $457 million a year earlier under internationals Financial Reporting Standards, Moscow-based Gazprombank said in an e-mailed statement Monday.

TITLE: Officials Urge Eni To Develop New Assets
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — The government wants Italy’s Eni to be quick about developing its new Russian oil and gas assets, and will check up on its progress in a few months.
ArcticGaz and Urengoil, which Eni bought recently at a Yukos bankruptcy auction, have spent almost nothing on developing their fields in the past three years.
Officials plan to inspect the companies in the first half of next year, the Natural Resources Ministry said Friday, after its officials met with Eni senior vice president Marco Alvera and other executives. 
“The company must demonstrate active work at the fields by that time,” Vladimir Smolin, deputy head of the ministry’s Federal Service for the Inspection of Natural Resources Use, said in a statement.
This service played a leading role in the recent campaigns that resulted in Gazprom’s takeovers of international oil and gas projects such as Sakhalin-2 and Kovykta. As part of these campaigns, officials threatened to withdraw licenses or seek environmental damages. 
But Eni is less at risk of government action because it is on friendly terms with state-owned Gazprom, which has an option to buy control in both oil and gas units within two years. 
Gazprom and Eni are partners in an agreement to build a gas pipeline under the Black Sea to supply Europe, signed in June. Eni hopes to use the pipeline, dubbed South Stream, to transport gas from ArcticGaz and Urengoil.
Another agency that supervises compliance with license terms, the Federal Subsoil Resource Use Agency, also urged Eni to act promptly in improving the performance of its new assets. 
“Half a year is too short to catch up with the work that hasn’t been done for three years,” the agency’s deputy head, Pyotr Sadovnik, said in the statement. “But it’s necessary to start as early as today to implement the requirements to develop the fields.”
Both officials made their comments at the meeting with Eni, which took place late Thursday. 
Eni’s Alvera said in the ministry’s statement the fields’ current condition did not meet license requirements. He called for a review of these requirements, saying they were a thing of the past. Eni has already contracted geological research institutions to resume exploration, he said. 
The government can change the license terms if it agrees with Eni, Deputy Natural Resources Minister Alexei Varlamov said at the meeting.
Eni spokespeople in Moscow and Italy were not immediately available for comment Friday.
The latest available public data say that in 2003, ArcticGaz produced 200,000 tons of oil equivalent and Urengoil produced half that amount.
While Gazprom has delayed its purchase of both companies until next year, Eni will have to invest in them as much as needed, said Artyom Konchin, an analyst at Aton. The companies have probably foreseen the situation and for Eni “the amount that they will have to spend will hardly be a surprise,” he said.
Present at the meeting were also Eni’s chief in Russia, Ernesto Ferlenghi, and Paolo Formica, director of Eni Neftegas, the company that actually bought the assets at the auction.

TITLE: Gazprom Targets 
‘Big Acquisitions’
PUBLISHER: Bloomberg
TEXT: Gazprom shareholders on Friday approved a dividend payout of one-sixth net income as the company reaped a record profit last year.
The vote was taken at the annual shareholder meeting, where First Deputy Prime Minister and Gazprom chairman Dmitry Medvedev said the company planned “big acquisitions” in Europe and hoped to work with BP on liquefied natural gas projects in a joint venture worldwide.
The meeting approved a payout of 2.54 rubles (10 cents) per ordinary share, or 17.5 percent of last year’s net income, the company said in an e-mailed statement Friday. 
Gazprom said Thursday that profit increased 97 percent to 613.3 billion rubles ($23 billion).
Shareholders also approved a change to the company charter allowing dividends to be paid quarterly, the company said.
Gazprom may seek “big acquisitions” in Europe to sell fuel directly to consumers, First Deputy Prime Minister and company chairman Dmitry Medvedev told reporters on the sidelines of the meeting.
“As far as big projects, big acquisitions are concerned, they are possible as long as our partners are ready,” Medvedev said. 
“We would be happy about such acquisitions because they unite us” with consumers, he said. 
“The first results” of the 900-kilometer South Stream pipeline under the Black Sea planned by Gazprom and Italy’s Eni will come in three to four years, Medvedev told reporters.
Leonardo Maugeri, director of strategy and development at Eni, Europe’s fourth-largest energy company, said Wednesday that link might become operational by 2010.
Gazprom is considering “both upstream and downstream projects, including liquefied natural gas” as part of a global venture it plans to form with BP, Medvedev told reporters.
“They are certainly a very serious player in the LNG market,” Medvedev said. 
“So far, we are only considering their proposals.”
TNK-BP last month agreed to sell Gazprom its stake in the Kovykta gas field in eastern Siberia. As part of the deal, BP and Gazprom said they would form a venture pooling assets worth at least $3 billion. BP has LNG projects around the world, including Trinidad and Tobago and Indonesia.
On domestic issues, Medvedev also said Gazprom was not seeking to become the dominant player in the country’s power industry after national utility Unified Energy System is broken up and sold off.
“Gazprom isn’t seeking a monopoly or even a leading position in the power sector,” Medvedev told reporters after the meeting.
Vedomosti reported in May that Gazprom wanted to control one-fifth of Russia’s electricity capacity, citing two unidentified members of UES’ board. 
Gazprom already owns 10.5 percent of UES directly and controls Mosenergo, the dominant supplier to Moscow.
“Gazprom considers power a core business alongside oil and gas,” Medvedev said. 
Medvedev was reelected chairman, as were the other board members. 
He addressed reporters instead of CEO Alexei Miller, who is suffering from a kidney ailment.
Miller was quoted in an interview with Kommersant, published Friday, saying Gazprom would consider using as much as 25 percent of its oil unit to form a “new international alliance.” 
Gazprom will first exercise an option to buy 20 percent of Gazprom Neft from Eni, Miller told the newspaper.
Gazprom Neft will remain a publicly traded company, Miller said in the interview.
Gazprom could become a participant in the Nabucco gas pipeline, a rival project to South Stream, “in the future,” Miller told the newspaper.
The Russian company is in “constant” contact with the partners in the Nabucco project, Miller told the newspaper. 
Gazprom may form a joint venture with Rosneft to develop the Sakhalin-3 offshore oil and gas project, Medvedev told reporters.
“Everything is going forward,” Medvedev said. 
“There will be joint ventures. We’re thinking about Sakhalin-3 and other projects, including offshore projects.”

TITLE: Rosneft Sets Out Plans, Faces Angry Questions
AUTHOR: By Lucian Kim and Greg Walters
PUBLISHER: Bloomberg
TEXT: MOSCOW — Rosneft on Saturday set out plans to reduce its debt by 40 percent and expand refining capacity ninefold at its first annual shareholder meeting since its initial public offering last July.
The gathering was presided over by Igor Sechin, President Vladimir Putin’s deputy chief of staff, who fielded a barrage of sometimes-angry shareholders’ questions during his first public appearance as company chairman.
More than 900 shareholders packed into an auditorium at Moscow’s ExpoCenter to hear from Sechin and CEO Sergei Bogdanchikov and vote on the dividend. In the share sale, the government appealed to citizens’ patriotism and convinced 115,000 Russians to take part in a so-called “people’s IPO.”
The state-run company will sell bonds to reduce bank loans and sell noncore assets to trim $10 billion from its $25 billion of debt by 2010, CEO Sergei Bogdanchikov told the meeting. 
Rosneft may also build new refineries abroad to meet its refining capacity target by 2015, he said.
“We don’t need some of our assets, and we’ll sell them,” Bogdanchikov said. 
The company will start presenting a eurobond issue to investors in the United States and Europe at the end of next week and complete the sale by the middle of next month, he said.
Rosneft became the country’s top producer and refiner of crude this year after a state onslaught that led to the dismantling of Yukos, claiming more than $30 billion in back taxes. 
Rosneft borrowed $22 billion to buy assets from bankrupt Yukos at liquidation auctions this year. 
Bogdanchikov said in May that Rosneft plans to sell as much as $5 billion of bonds in the second half of the year, and about $4 billion of noncore assets bought in the Yukos auctions.
Rosneft’s refining capacity increased fourfold after it bought five Yukos refineries. Rosneft will increase capacity to between 90 million and 95 million tons per year by 2015, Bogdanchikov said. Rosneft refined about 11 million tons last year.
“We’re considering the addition of new oil refining capacity in China and other East Asian countries,” Bogdanchikov said. “This will help fully balance refining with production.”
Sechin told the meeting it was “strategically important to expand the company’s presence on the most promising foreign markets.”
Sechin has overseen Rosneft’s growth from a second-tier oil company to the country’s biggest producer and refiner after it acquired assets of bankrupt oil firm Yukos. Jailed billionaire Mikhail Khodorkovsky has accused Sechin of masterminding the fall of Yukos, a charge the Kremlin denies.
More than a dozen shareholders stood up to complain to Sechin and others that the 2006 dividend was too low in comparison with remuneration of managers and directors.
For Sechin “to be taking abuse from little old ladies is the supreme irony,” said Kim Iskyan, co-head of research at UralSib. “It’s ironic that one of the people responsible for the closure of Russia’s political system is being taken to task because of market mechanisms.”
Rosneft’s shares in London have risen 41 cents since the initial public offering to $7.96, while the dividend recommended by the board was 1.33 rubles per share.
Some shareholders complained Saturday about a lack of information about the shares and said the board’s answers were unsatisfactory.
“Let’s forfeit our dividends, and you forfeit your bonuses,” one elderly shareholder said, addressing Sechin and other directors. “Chairman, why do you keep calling on us to understand things that you yourself don’t understand? Don’t do that, we’re not that stupid!’’
Sechin responded by asking Bogdanchikov and other executives to reply to the concerns, and later provided shareholders with a phone number to call with questions.
“Any wishes, suggestions, recommendations and even criticism from shareholders help the company adjust its positions,” Sechin said. 
He assured the gathering that the company’s “new values” included greater transparency and stronger corporate governance.

TITLE: East German Hotel Revives the Communist Touch
AUTHOR: By Jacob Comenetz
PUBLISHER: The Associated Press
TEXT: BERLIN — The four clocks behind the reception desk of Berlin’s new budget hotel Ostel show the hour in Moscow, Berlin, Havana, and Beijing. Time, however, appears to have stopped here sometime before 1989, when communism was still entrenched in all four capitals.
The Ostel offers a renewed whiff of life in the former German Democratic Republic, welcoming travelers with portraits of communist leaders adorning the walls.
Furnishings — except for mattresses, bed linens, sink and toilets — are the real thing, dug up by founders Daniel Helbig and Guido Sand from flea markets, friends, family and eBay.
But Helbig made clear it was not about pining for a return to the police state.
“We had the idea of preserving a bit of GDR culture ... [but] we are not crying for the East German regime,” said Helbig, who grew up in East Berlin and experienced its restrictions on freedom of expression and movement first hand.
Germany was divided into two after World War II, the capitalist West and communist East, and nowhere was the split more acutely felt than Berlin, where communist authorities built a wall through the city to prevent its citizens from leaving. The wall fell in 1989, and Germany was officially reunified in 1990.
The Ostel, which opened on May Day — the traditional worker’s holiday under communism — represents a broader phenomenon known as Ostalgie, or fascination with life in the former East Germany. Ostalgie, like Ostel, is a play on the German word for east — ost.
Ostalgie primarily focused on communist-era pop culture, including television shows such as “Sandman” that several generations of children grew up with, and the Trabant automobile, an East German clunker that families waited for years to be able to own.
The Ostel, located in an old Communist-era building just steps from the East Side Gallery, the longest remaining stretch of the Berlin Wall, takes pains to be as authentic as possible.
Hotel guests can have an experience right out of the 2003 hit film “Goodbye Lenin!” in which a young man tries to spare his mother the shock of learning of the Berlin Wall’s fall after she awakes from a coma by supplying her with the sparse comforts of life in the GDR.
There are rooms that replicate bedrooms from typical East German apartments, from about $50. At the other end of the scale, $12-per-bed Pioneer Camp dorm rooms feature two bunk beds and Spartan living conditions evocative of the summer camps of the Free German Youth, the party youth organization.
Socialist Unity Party functionaries such as party General Secretary Erich Honecker and Prime Minister Horst Sindermann peer down from portraits in most rooms, giving the impression that one is under constant surveillance.
Helbig and Sand plan on expanding their East German hotel project with a series of eight East German-style vacation apartments near the Ostel.
Ostel employee Liliana Lehmann, 25, whose early childhood was spent under communism in East Berlin, said the hotel was a break from the bustle of today’s capitalist capital.
“We try to create a community feeling,” she said. “It’s a contrast to today’s dog-eat-dog world.”
The nostalgia vibe appealed to one traveler from the east German city of Rostock, who wrote in the guestbook: “Great place and many memories from back then!”

TITLE: EBRD’s New Target is the Russian Graduate
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Bruno Balvanera, head of the North West Federal District office of the European Bank for Reconstruction and Development, speaks on EBRD’s expansion in the Northwest region and across Russia as a whole.

Why is the bank suddenly focusing on Russia?
The bank was created in the early 1990s to support the transition to a market economy. The bank’s mission was always meant to be a temporary one. Ten countries with which we have worked are about to complete this transition — they have joined the European Union i.e. the three Baltic States, Poland, the Czech Republic, Hungary and Slovenia, Rumania and Bulgaria. Each country is to decide if it wants to graduate from our system. This year three countries have decided to graduate and close their EBRD offices — these are Estonia, Latvia and the Czech Republic.
At the same time, over the last five to seven years the economies of Russia, Ukraine and Kazakhstan have seen tremendous growth. So on the one hand, work in our traditional markets has been decreasing and on the other there has been a growth of opportunities in Russia — you’ll understand why we are concentrating more and more on Russia.
In the early 1990s, Central Europe represented 40 percent to 50 percent of our activity; now it represents 20 percent. A few years ago Russia represented 25 percent of our activity. Last year it represented 42 percent.

What is the current volume of investment into Russia?
The bank has been very successful over the last few years. The total volume of money invested by the bank in 2006 was 5.5 billion euros. Normally, when we invest one euro, we find partners that will invest two euros. These are normally commercial banks, sponsors, equity funds, export agencies. So, last year in the 28 countries where we operate we mobilized investment of about 15 billion euros.
In Russia last year we doubled our investment compared to 2005 — we invested about $2.5 billion. We have increased our resources in the region. For example, when I joined last September there were only six members of staff in the office. Now we have more than doubled that number and will increase it still further. In Moscow we used to have 40 people — now we have 70.
About a third of what we invest in Russia is allocated to the Northwest.

Can you be more specific about EBRD’s plans for Russia and the Northwest region?
We have agreed upon a very detailed strategy with the Ministry for Economic Development and Trade. We have three areas of activity in Russia. The first and most important is infrastructure. During the very successful St. Petersburg World Economic Forum we signed a memorandum of understanding with German Gref. EBRD will take a leading role in the financing of PPPs.
For us infrastructure is transport, roads, airports, railways and services related to transport, for example, the leasing of transport vehicles. We also finance what we call “municipal infrastructure,” for instance, our work with Vodokanal here in St. Petersburg — we have been financing the city’s water treatment works. St. Petersburg has almost five million people, it’s the fourth largest city in Europe and demand for water is huge. We have also been financing district heating, municipal transport and housing. A very important area of infrastructure is electricity. If you talk to the business community or to the people, they make one single demand and that is to have more electricity, more capacity. And finally a very important part of infrastructure is telecommunications. We have participated in the financing of basically all the country’s mobile phone networks — Northwest GSM, MTS, Vimpelcom. The amount of investment was extraordinary. The level of mobile penetration in Russia is now almost at 100 percent. 
The port of St. Petersburg accounts for 52 percent of the country’s imports. You need to improve the ports at Primorsk, Vyborg, Ust-Luga, Lomonosov. If you go to the Volga region, you see people who have to wait three hours to cross to Samara because there is no bridge. If you go to other areas you’ll see that there is no airport. You’ll understand why infrastructure is the most important need of the economy. 
The second area of our strategy is to develop the corporate sector. We are talking about any sort of business from furniture processing to automobiles to retail to real estate. We have very few areas in which we cannot participate, which are tobacco and weapons.
A few years ago Russia needed to rebuild its banking sector, which is today the third major area into which we invest. Today the banking sector is working properly, and the main economic task is related to infrastructure. 

What about the contract you signed with GM?
We signed a contract with General Motors several years ago, in which we invested in the joint venture they created with AvtoVaz in Nizhny Novgorod. Now we are discussing financing GM’s expansion in St. Petersburg.
Another example is Toyota. We hold 20 percent of shares of Toyota in St. Petersburg. Now they are in the process of equipping the plant in Shushary. We expect that the first cars will be produced in December this year.
We also recently signed a contract with Volkswagen to hold 20 percent of the equity of their Tula venture. We recently signed an agreement with American glass producer Guardian.
All these are foreign names, but we support local companies as well. During the St. Petersburg Forum we invested into Sukhoi. We have offered them 100 million euros to continue the development of its medium-range carrier. It will have capacity of 150 passengers and will cover a distance from 1,500 to 2,000 kilometers. What is important is that this is Russian technology. We are very proud to finance a traditional Russian company working in a strategic sector.
Another good example of a local company is supermarket chain Lenta. We have been working with Lenta for seven years. We offered them medium-term financing for their development in St. Petersburg. In October last year we signed a new long-term agreement on financing. We asked them what else we could do for them, and they said they were looking for additional investors and thinking about an IPO. We asked, before going for an IPO why don’t you offer us a piece of your equity? The process will be easier than an IPO — we make fewer demands, we know you and we can process this deal very quickly. In the specific case of Lenta we got approval for the deal from the bank in just six weeks.

How does the bank leave a business when it holds equity in it?
Our mission is temporary investments. Every time we invest into equity we agree the different ways of how and when we are going to sell. If the company is planning an IPO, we will agree at the beginning that when the main shares are being sold at an IPO we will put in the same package our shares to be sold to the market. When there is no intention to do an IPO – for example, with Toyota – we agree that we will be shareholder only for a limited number of years – from seven up to twelve years. And during these years we will have the options to sell to the main shareholder the shares at a preagreed price or at a market value price. The third scenario will be something like the joint venture that we entered into with AvtoVaz. We agreed that by 2010-2012 we will sell half of our shares to General Motors and half our shares to AvtoVaz. In each case we adapt to the specific project.

How much profit did the bank make last year and what is your average return on investment?
In 2006 we made 2.5 billion euros in profit, which is a huge amount. This was the third or fourth year in a row that we made such a large profit.
We have two types of products. The first one is loans, which account for roughly 80 percent of what we do both in Russia and the rest of the world. Our return there is limited, because it’s secured and guaranteed. An average return is about 10 or 12 percent a year. In addition to that we have equity. Return there is unlimited because you take risks, and if the shareholders do very well you do very well with them. Our return there across all the regions and all the different types of activities is 25 to 30 percent. Globally it is a very good time for equity. All the markets are going up. The value of the companies is increasing.
Most of our equities are in banks. Today we have about 30 banks in Russia in which we have invested in equity between five to 20 percent. They are large, medium, small or very small banks. And it is not the time for us to sell because this business is relatively new. The oldest of them are just approaching five years, but many of them are two to three years old.

If we look at the contracts signed at the St. Petersburg Economic Forum, they are not about investment into the high-tech sector but rather into car assembly. It was not a Russian company that sold something to Boeing, it was Boeing that sold 22 planes to a Russian company. How can that strategy contribute to the development of the national economy?
If you look at the decree that regulates the activity of the automotive sector, there is an obligation for car companies to increase the local content and parts over the first few years. Suppliers will come here and they will set up local production and they will need to bring the latest technologies with them. And suppliers will not necessarily be foreign companies. The Boeing contract also stipulates that Russian companies will act as suppliers to the Boeing plant in Seattle.
I understand that people are frustrated at investment into R&D not increasing as fast as they’d hoped for. But this is just the first step and it will change in the future.

Do you have any plans to invest into technoparks or innovative companies?
High-tech start-ups are renowned for a high death rate. In total our non-performing assets are below 1.5 percent of our portfolio. You cannot invest into high-tech high risk ventures and maintain a portfolio of that quality. We invest in venture capital funds that themselves invest in the high-tech industry.

Do you invest into educational or medical centers?
Social investment is not our mandate. However a few years ago we financed an MBA together with ABN Amro. We financed about 80 percent of the total cost of the MBA. The level of payback was very high, and now ABN Amro continues to finance it independently.
We have held a number of conversations with private investors into clinics. In St. Petersburg you have Medem, American Clinic, Northern Clinic. There is a niche in the market, still not very big, for people who can afford private health care. The health insurance system is also developing quickly. We met private investors that want to invest in hospitals of 40 to 80 beds. Such hospitals cost about $30 million. We are open to that idea and are discussing  it with potential partners.

What major projects will you be financing in the near future?
We now have very large projects here in St. Petersburg. One of them is the Western High-Speed Diameter. We had a road-show for investors at our headquarters in London. Another one is the Orlovsky Tunnel. The road-show in London is scheduled for September. In the future we will probably also work on the Overland Express and on the redevelopment of Pulkovo airport.

TITLE: A Power Lunch with the State
PUBLISHER: Vedomosti
TEXT: The problems created for the country’s investment climate by the Kovykta gas field have now been resolved. The delay in rendering a decision on the revocation of the TNK-BP license to exploit the field had provided cause for hope that some kind of unexpected resolution to the conflict between the state and the energy company could be found, but the result was in line with what had long been expected by most analysts. Control over Rusia Petroleum, which holds the license to operate the field, was transferred to Gazprom.
TNK-BP representatives are trying to present the deal in a positive light, and they maintain that the development of the field would have been impossible without the participation of Gazprom. For TNK-BP, the result of the deal can doubtless be considered a success: Bringing Gazprom on board is better than losing its license and the money it has already sunk into the project. The company had already invested more than $400 million. TNK-BP maintains an option to buy a 25 percent, plus one share, blocking stake in Rusia Petroleum, and there is talk of plans for the creation of a joint global venture between BP and Gazprom.
One interesting question is the discount on the value of the assets that Gazprom is enjoying when buying into the project. The controlling stake the company bought in Sakhalin Energy at the end of last year cost $7.45 billion, a price that various analysts said represented a 20 percent to 34 percent discount over the likely market price for the assets. The value of the Kovykta deal is still not clear. What is clear is that the price of strategic deals of this type has very little to do with market factors. Any field that is having problems with environmental regulators, as the experience with the Sakhalin project demonstrated, is going to end up changing hands for a much lower price than one not facing prospect of environmental charges.
The Kovykta deal underlines yet another important tendency. On June 15, without bothering to wait for a decision about the fate of the field’s license, the Industry and Energy Ministry went ahead and issued a statement outlining its ideas for the future of field. Deputy Industry and Energy Minister Andrei Dementiyev said the field would go into production at some point after 2017. That date also occupies an important place in Gazprom’s preliminary plans for the future. In fact, a number of state officials have acknowledged that there is no need to develop the field quickly. All of this comes, of course, after one of the main complaints against Rusia Petroleum’s work at Kovykta was that the development of the field was coming along too slowly.
In another interesting announcement, after the new agreement had been reached, Gazprom deputy head Alexander Medvedev said gas from the Kovykta field could ultimately be destined for China. This was the very same strategy that TNK-BP had proposed to follow, but the company was unable to turn this into a reality — Gazprom holds a monopoly on the right to export gas. Characteristically, the Natural Resources Ministry has also expressed its willingness to work for compromise: After the discussions on the agreement between TNK-BP and Gazprom, the ministry’s press service announced it was expecting an offer from the new owner within the next two weeks. It said it would decide whether to revoke the license for the development of the field after receiving the new proposal.
It was the same case with Sakhalin-2. The international shareholder and operator of the project, Sakhalin Energy, had to step aside and hand a controlling stake to Gazprom as a result of environmental charges that were serious enough to threaten the suspension of the project. The deputy head of the Natural Resource Ministry’s environmental watchdog estimated that the cost of repairing the environmental damage caused by the project was $50 billion. Japan’s Ministry of Economy, Trade and Industry then announced that, as a result of the inspections, the shareholders in Sakhalin Energy would have to spend an additional $20 billion on environmental protection measures. After Gazprom bought its way into the project, the state approved an environmental protection plan that it said would eliminate all of the environmental risks. No one, of course, is talking about multibillion-dollar payments anymore. The sharp criticism over environmental concerns leveled at Yuganskneftegaz, formerly the main production unit at now-bankrupt Yukos, also disappeared immediately after it was bought by state-owned Rosneft.
The manipulation of prices for oil and gas assets by way of pressure from state regulatory agencies has become part of the standard mechanism for the transfer of property and ownership in Russia.

This appeared as an editorial in Vedomosti.

TITLE: The Flip Side of the Arches
AUTHOR: By Mark H. Teeter
TEXT: A precocious 4-year-old named Alyona was the star attraction in our compartment on a train back to Moscow not long ago. As articulate as she was appealing, Alyona explained to her fellow passengers that she was actually 4 1/2 now and could write lots of numbers and letters. Her grandmother obligingly produced crayons and paper, and Alyona painstakingly churned out letter after letter to our approving nods. When she made a capital M, however, one passenger objected, “Alyonochka, the loops should be at the bottom of the letter, not the top.” The child looked puzzled, but grandma explained the situation: “Oh, she doesn’t write ‘M’ our way. She learned to make it like that at McDonald’s.”
No one leaped up shouting “Cultural imperialism!” In fact, no one said anything beyond “Oh,” and “Uh-huh.” McDonald’s, I realized, had become part of the landscape.
The question of how a foreign restaurant so quickly became ubiquitous here is no question at all to those who remember Soviet fast food, which was neither. If you had an attack of the munchies in Moscow 20 or 30 years ago, you got suspect doktorskaya sausage on a slab o’ white, with an optional swath of sinus-clearing mustard. No one ever remarked, “I’m lovin’ it.”
Food and its commercial preparation were problems for most of the Soviet period. The famines of the early 1920s and 1930s, induced or exacerbated by the national government, irrevocably linked food supplies with politics in a system bad for both. The service end of the Soviet food chain, as with all consumer-related sectors, remained woefully underdeveloped: Restaurant patrons could generally skip the menu and simply ask the traditionally surly waiter, “What have you got?” The luckiest answer may have been “nothing” judging by one European’s description of Soviet restaurant fare of the early 1980s: “This was not food that could be digested or even eaten by normal people.”
With this grim reality setting the stage, McDonald’s entry into the late Soviet market was practically doomed to success. The chain offered on-demand hot food made of recognizable ingredients served in a clean environment by personnel trained not to despise their customers. This was a revelation to the Soviet public, and one for which it was clearly grateful. During its first months in operation, the McDonald’s off Pushkin Square became the busiest in the world and probably the cleanest: All the food wrappers, utensils, and paper cups were taken home by happy customers as souvenirs.
The key to McDonald’s continued success in Russia is the same as it is everywhere: The restaurant sells both processed food and the process of eating it. In the United States, home of the pursuit of happiness, this has meant a relentless and successful campaign to get consumers, and especially children, to associate Mickey D’s not simply with eating but with fun. A clown is the company symbol, and the Happy Meal its flagship product. In Russia, the “extras” of speed, cleanliness and polite service already represented a cultural breakthrough — and may even have constituted “fun” to a society with no word for it. That an affordable restaurant would also offer play areas, birthday party catering and giveaway toys was, in Russia, simply off the known social scale and into a new dimension of previously unimaginable consumer bliss.
The other good news from McDonald’s prosperity here is that a high McTide has raised other boats. Following the U.S. giant’s lead, such step-up foreign competitors as T.G.I. Friday’s, Sbarro and Benihana have arrived and prospered, as have Russia’s own Yolki-Palki and Mu-Mu. This has benefited both the national economy and local consumers — except those who overconsume or consume indiscriminately.
This, of course, is the real and present danger of McDonald’s and its ilk, to Russians and all of us: Processed food isn’t very good for you, and the more ingested, the less good it does. So the success of McDonald’s in Russia represents a step in both right and wrong directions at the same time. If the Happy Meal signals an advance in consumer standards, hapless Russians eager to consume too many of them are a danger signal — this country already suffers from obesity and related health problems.
Producing a Russian version of the cautionary bestseller “Fast Food Nation” should be a priority item for the Public Chamber. And in the meantime, perhaps McDonald’s Russia should crown its success by redesigning the company logo so the loops are at the bottom of the M.

Mark H. Teeter teaches English and Russian-American relations in Moscow.

TITLE: The Snitching Tradition
AUTHOR: By Georgy Bovt
TEXT: The Federal Tax Service has come out with an interesting new initiative. In an effort to identify people renting out apartments without paying taxes, they have asked people to report any “suspicious” people in their buildings.
More than 100,000 apartments are rented out in Moscow alone, and the majority of landlords don’t pay the relatively low 13 percent tax on the income. The authorities have not been able to find a solution other than calling on neighbors to be vigilant.
One well-known liberal figure who is founding a new political party told me he doubts the initiative will work. He said that the Communist period had so inoculated the population against the practice of informing on each other that few people will volunteer to help the authorities.
He may be partly right. People don’t trust authorities much, and they distrust law enforcement agencies the most. But informing is a tradition with deep roots in the culture. And the authorities have been making special efforts to praise people for their “openness.” During the Kremlin’s recent campaign against Georgians, for example, fliers were circulated in schools encouraging people to report children with Georgian surnames. There is also the long-standing practice of reporting structural repair work on neighboring apartments, the hiring of illegal immigrants, and so on.
Informing has gradually became almost a reflex, and the two main features of the practice of informing began to crystallize from the very beginning of Russian history.
First, the practice was directed not so much at bringing social justice as at protecting the interests and security of the ruling regime. Second, social discord was often the chief motive, as informing came to be more a means of settling accounts with people than of establishing the rule of law.
The Communist authorities elevated this to the level of a social virtue. Neighbors snitched on neighbors, spouses on spouses, and children on their parents. There was a monument erected in Moscow to a peasant boy, Pavlik Morozov, who informed on his prosperous peasant father. The father was shot and Pavlik became a hero in Soviet textbooks.
Informers were encouraged in every way, including with bonuses and promotions at work.
No sooner had Soviet citizens gained the right to travel abroad than denunciations of “improper” behavior outside the country’s borders began to pour in. There was a professional stool pigeon in every Soviet group traveling abroad who would file a report on arriving home.
Some estimates put the number of people working as informers for the secret police at more than 2 million. How many more would rat colleagues and neighbors out informally will probably never be known.
As a result, it’s hard for me to believe in the “inoculation” theory — if for nothing else, because the saying “It’s not so bad to have no cows, if your neighbor’s cows have all died” is still around in the Russian language.

Georgy Bovt is a Moscow-based political analyst.

TITLE: Anti-Tobacco Measures Long Overdue
AUTHOR: By Andrei K. Demin
TEXT: A global movement is under way to reduce tobacco use — and thereby save millions of lives each year. Unfortunately, Russia has so far chosen to remain on the sidelines in the fight against this preventable public health epidemic.
Russia is not among the 147 nations of the world who have signed and ratified the international agreement known as the Framework Convention on Tobacco Control. After Indonesia, Russia is the most populous country not taking part in the World Health Organization treaty. Most former Soviet republics have joined. Tajikistan, Turkmenistan and Uzbekistan also have not.
The WHO treaty calls on participants to take several tried-and-true measures to curb smoking — such as sharply increasing taxes to raise the price of cigarettes, banning tobacco ads and eliminating indoor smoking except in private homes.
This official indifference comes with tragic consequences. More than 300,000 lives are lost each year as a result of tobacco use, in a nation with a population that some demographers warn could plummet to 100 million from its current 143 million by 2050.
Russia needs to join the global movement against smoking. A good first step would be for its leaders to sign and ratify the Framework Convention on Tobacco Control as soon as possible.
Unfortunately, Russia will be missing from the list of nations whose representatives are meeting in Bangkok, Thailand, from June 30 to July 6. Participants in the WHO conference are gathering to plan the next global strategies to combat smoking.
One focus of this year’s meeting is how better to protect people from exposure to cigarettes by banning nonresidential indoor smoking. Exposure to second-hand smoke remains a serious problem, as non-smokers are still routinely subjected to the damaging health effects of inhaling other people’s cigarette smoke in restaurants, bars and workplaces.
The statistics are grim: Nearly 65 percent of adult men smoke, one the highest rates in the world. Life expectancy for Russian men is 59 years. Some alarming estimates suggest that almost 50 percent of young people smoke.
But progress is being made.
Government officials, celebrities and public health advocates are uniting and speaking out as never before — people like parliamentary leaders Boris Gryzlov and Nikolai Gerasimenko, Mayor Yury Luzhkov, singer Iosif Kobzon and actor Yevgeny Gerasimov.
Most important, President Vladimir Putin has started talking directly about the issue, a hopeful signal that the Kremlin is ready to do battle. Putin’s prepared remarks were read by Gryzlov at the opening of a two-day “Tobacco or Health” forum in Moscow, just ahead of World No Tobacco Day on May 31.
Putin’s words are worth putting up on a billboard or printing on every pack of cigarettes: “The damage caused by smoking is obvious, affecting not only smokers, but also the people around them and, most seriously, the young generation,” Putin said. “We can only successfully address this serious issue if the state, civic organizations and the business community join forces. There is a need for more legislative measures as well as more intensive prevention and education work.”
The task for all Russians is to convert this momentum into a popular movement that convinces lawmakers to make meaningful changes in public policy. Evidence suggests that the tobacco industry should in no way be part of the business community with which Putin said the others should join forces. The transnational tobacco industry has already turned into a “globalized public bad” that is shaping not only Russian, but also regional and global tobacco policies for its own benefit. Our efforts cannot be co-opted or disrupted by the foreign-dominated tobacco industry, as they have so often been in the past.
Polls demonstrate that Russians are receptive to taking the tough measures needed to curb smoking and to protecting themselves from the harmful effects of second-hand smoke.
Let’s not forget that only 21 percent of Russian women smoke. That means the vast majority are non-smokers, an inconvenient fact for those who argue that smoking is an integral part of the culture.
Smokers’ rights are not under threat. Smokers are free to engage in their harmful habit if they do so outside and start paying the full costs of the health burdens created by their addiction. Those who want to quit smoking should get the help they need. The issue is protecting the right of people who want to breathe clean air.
Tobacco industry sympathizers point to recent steps by the Duma to raise excise taxes on cigarettes and create partial smoking bans in restaurants and other public places. Don’t be fooled. These are weak measures. Only comprehensive, 100 percent bans are effective and enforceable.
There will never be any progress on the problem if, as Gryzlov astutely observed, cigarettes remain cheaper than ice cream and more readily available.
The political will to adopt proven anti-tobacco measures will lead to a healthier Russia. There is no easier way to improve health than by reversing the dramatic toll of the tobacco epidemic. One way to start is finally to join with other nations and become part of the World Health Organization’s Framework Convention on Tobacco Control.
The time to act is now.

Andrei K. Demin is president of the Russian Public Health Association, a professor at the I.M. Sechenov Moscow Medical Academy and the coordinator of the National Coalition for a Tobacco Free Russia.

TITLE: Europe’s Most Important Country
AUTHOR: By Richard Lourie
TEXT: It will be up to the next presidents of Russia and the United States to repair the relationship between their two countries. That relationship is worse than need be, and some improvement can come fairly quickly with the new atmosphere that new administrations usually bring.
There will, however, be a better chance for that improvement if each side has a policy based on a clear perception of the real dynamics of the other’s situation. Though the dynamics that drive both Russia and the United States are the direct result of the end of the Cold War, they could scarcely be more different.
The United States’ historical task is to learn how to operate as the first unrivaled superpower in history. Like the super rich, superpowers get everything but sympathy. And yet the task has stressful challenges to which the past can offer precious little guidance. In the past, most great powers had other great powers to balance them out and spur them on. Historian Martin Kenner has said the civil rights movement in the United States probably made faster progress because there was a Soviet Union to take the United States to task for hypocrisy.
Russia’s situation has its unique aspects as well. Usually once a country is shorn of its empire, it does not return to great power status, becoming instead one of the middling nations. Russia may yet prove a two-time exception to that rule. The tsarist empire that collapsed in 1917 was reborn as Soviet Russia. The collapse of the Soviet Union in 1991 resulted in a much weaker Russia but one that still has nuclear weapons and whose gas and oil give it economic power it could not otherwise derive from its own economy.
And that leads to the question of what is the dynamic driving post-Soviet Russia? Is it haltingly seeking its way to a more “normal” and “civilized” society, to use a couple of current buzzwords? Former Polish President Aleksander Kwasniewski was expressing the hope of many of Russia’s neighbors when he said: “Now that Russia is not so big and not so influential in the world, it can focus on creating democracy and civil society.” But Poland’s current leadership betrays anxieties about Russia’s intentions in its alacrity to allow U.S. anti-missile bases on its territory. NATO membership and U.S. missile bases — what better guarantee of a secure future for Poland?
Russia’s most anxious neighbor is Ukraine, which unlike Poland is not in NATO. Yulia Tymoshenko, former prime minister and current leader of the parliamentary opposition, worries about “Russia’s long-standing expansionism and its present desire to recapture its great-power status at the expense of its neighbors.”
Ukraine has cause for concern. If Russia is driven to regain great-power status, Ukraine has to be the chief target. With Ukraine under its control, Russia would be mighty again. And there are historical claims — Kiev is the mother of Russian cities, as every Russian schoolchild knows. Almost half the country is Russian-speaking. There are contested territories.
Control would not be exerted in an obvious and old-fashioned way with artillery and infantry. Daniel Fried, U.S. assistant secretary for European and Eurasian Affairs said recently: “We do not want a weak Russia, but a strong Russia must be strong in 21st-century, not 19th-century, terms.” But that’s just the problem. Russia will use more contemporary methods — energy blackmail and media manipulation — to achieve those old ends.
Democracy is certainly weak in Russia, but society has become stronger. People start businesses, worship, travel abroad and live without fear of the state. The other dynamic at work in Russia is the urge to be a superpower again, and that tendency is most likely to be manifest in relation to Ukraine. For that reason Ukraine is right now the most important country in Europe.

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

TITLE: Azeri Press Restrictions 
Not Making the News
AUTHOR: By Matthew Collin
TEXT: There wasn’t much point traveling to Azerbaijan for the freedom of speech demonstration in Baku in June. It was never likely to happen, and in the end, it didn’t. The authorities in the Azeri capital don’t often give permission for protests these days, and if they do, they tend to specify a remote area of town where any impact on public awareness is minimal.
Nevertheless, there’s no problem with freedom of expression in Azerbaijan — at least according to officials. Seven journalists are currently in jail in the country, most charged with libel. But the authorities say that as long as journalists obey the law and don’t misuse free speech to insult officials, they’ve got nothing to fear.
Not surprisingly, Uzeir Jafarov doesn’t agree. He’s one of 25 Azeri journalists seeking political asylum in the West. He says his newspapers, Gundalik Azerbaijan and Realny Azerbaijan, which have been highly critical of the government, were effectively shut down when their computers were seized in a raid. The newspapers’ founder is serving a 2 1/2-year sentence for libel, and there are rumors that he might also be tried again under anti-terrorism laws.
A spokesman for Azerbaijan’s governing party recently said the journalists’ bid for asylum was no more than a political show and that supposedly independent newspapers were actually serving opposition parties’ interests. But when I met Jafarov and some of his asylum-seeking colleagues, he insisted that the situation had simply become intolerable. “From the beginning we made it clear that this was a protest,” he said. “But then officials said, ‘Let them go.’ They showed they were glad that inconvenient journalists were leaving the country. Of course we don’t want to leave forever, but it’s impossible to live and work here normally.”
Jafarov explained that his colleagues couldn’t get work at other newspapers to support their families. One has been working in construction, another as a security guard. The last time they held an unauthorized protest in Baku, they announced a false venue to throw the police off. It only lasted a few minutes before a police car arrived and several demonstrators were dragged away.
All the usual international media-freedom groups have condemned what’s going on in Azerbaijan — and been ignored. The oil-rich republic is seen as an increasingly important source of energy supplies for Western markets, and one of the journalists seeking political asylum told me he believed that oil realpolitik meant that Western governments would not get tough with Azerbaijan over freedom of speech. “Western countries have double standards,” he said sadly. “We’ve lost all faith that they’ll do anything to help us.”

Matthew Collin is a Tbilisi-based journalist.

TITLE: EU Back to Its Old Tricks
AUTHOR: The Wall Street Journal
TEXT: Europe is back, the papers and politicians tell us, thanks to the Reform Treaty agreed in Brussels in the wee hours of last Saturday morning. “What counts for us,” says German Chancellor Angela Merkel, “is that we are moving out of stoppage, out of reflection. We have begun to move.”
Europe is back, all right — back to its old tricks and undemocratic sleights of hand. It is quite clear that the “reflection” the European Union imposed on itself after French and Dutch voters rejected its constitution two years ago amounted to nothing more than a long look in the mirror. 
This resuscitated constitution, albeit with a different name, negates the results of those free votes. Just as worrying, the price of the compromise in Brussels will erode the free-market principles on which the European Community was founded 50 years ago. 
As a measure of European politicians’ disregard for their constituents’ wishes, the new treaty is unparalleled. Despite the overwhelming popular sentiment against it in many member states, and outright rejection in two, the stillborn constitution has been largely transposed to the new Reform Treaty, which the EU hopes to ratify in all member states by 2009. 
A few items were excised from the rejected 2004 document, such as plans for a common anthem. But others persist. The planned “union minister for foreign affairs” is replaced by a “high representative of the union for foreign affairs and security policy,” as if adding a few words would make it sound less threatening to national sovereignty. The new office of EU president remains.
Poland fought over changes to voting procedures and got a promise to delay the implementation of a new system until 2014. Britain demanded opt-outs from certain provisions, such as on home affairs. After their narrow interests were addressed, both holdout countries signed off on the deal. 
In the meantime, French President Nicolas Sarkozy sneaked in a change that deals a serious blow to the single European market. Claiming to speak for those in France who voted down the constitution in 2005 over worries about globalization, Sarkozy persuaded Merkel to drop from the new treaty’s list of EU objectives the establishment of “an internal market where competition is free and undistorted.” 
At the very least, on a practical level, it will now be harder for Brussels, already fighting an uphill battle, to win antitrust or market-opening cases in EU courts. On a philosophical plane, the EU has just legitimized protectionism. 
Sarkozy understands well that the change in language is more than symbolic.“The word ‘protection’ is no longer taboo,” he said, adding the changed language “might … give a different jurisprudence to the [European] Commission [and] a competition that will therefore favor the emergence of European champions.”
Is this the same Sarkozy who has pledged to modernize France since winning the presidency last month? 
The EU’s success in keeping Europe at peace, and prosperous, in the past 50 years stems directly from the Treaty of Rome’s creation of a single market, for goods and people and capital. European citizens have always been wary of giving Brussels a bigger political say over their lives, which was behind the 2005 debacle over the constitution.  The EU has now shown that it learned nothing from that episode by, in one stroke, weakening the economic pillar and boosting the long-held French-German dream of a closer political community. It has also pawned the EU’s best legacy of economic freedom for the sake of an expedient deal on a treaty Europe doesn’t even need.
There will be enormous pressure on all EU leaders not to allow mere citizens to muck up the plan devised in Brussels. Sarkozy himself shows no inclination to hold a repeat referendum in France. 
He and others on the Continent will lobby Gordon Brown, who takes over as British prime minister on Wednesday, to follow suit and avoid putting the treaty to voters. Brown has indicated that he’ll ask the parliament to ratify, not British voters. 
It is hard to imagine a worse start to Brown’s than to see him wave through the EU’s Reform Treaty without popular support. The real lesson of the 2005 votes in France and the Netherlands is that citizens wouldn’t sign off on an ambitious expansion of EU political prerogatives. They took full advantage of a rare opportunity to say so. Applying a few cosmetic changes and moving forward as if nothing happened makes a mockery of democracy.

This comment appeared in The Wall Street Journal.

TITLE: European Trains Take On Planes
PUBLISHER: The Associated Press
TEXT: BRUSSELS, Belgium — London to Frankfurt by train? It’s possible, it can be as fast and as easy as flying and it’s far better for the environment, a group of European high-speed rail companies claimed Monday.
Eurostar, Germany’s Deutsche Bahn AG and France’s SNCF joined Dutch, Austrian, Swiss and Belgian train companies to form a rail alliance, Railteam, that aims to make international train bookings far easier and simpler.
They want to attract at least 25 million travelers by 2010 — 10 million more than now — taking a 5 percent chunk out of the short-haul airline market by promoting four-hour business trips and up to six-hour leisure journeys across western Europe.
They said rail travel can and will compete with low-fare airlines such as Ryanair and easyJet that have revolutionized European travel by encouraging people to fly more often and take weekend trips away.
Lower-stress, lower carbon emission rail journeys are already attracting people away from airlines, they claim, after extra security checks lengthened lines at airports.
Eurostar, which runs trains from London to Paris and Brussels, said it already saw a 39 percent jump in sales of tickets that connect its services to French high-speed services that bring travelers to the Mediterranean and the Alps.
It said more corporate clients have been asking them to compare the carbon footprint of train travel and have calculated that their trains, on average, release 10 times less CO2 than flying. 
Eurostar is also aiming to make its trains carbon neutral, offsetting emissions that it can’t reduce.
The western European high-speed rail network already links 100 cities and 120 million people in the region but many travelers are unaware that they can travel abroad by train — and many are unable to find information on rail links, prices and bookings outside their own country.

TITLE: Uphill All the Way in the Andes
AUTHOR: By Joshua Goodman
PUBLISHER: The Associated Press
TEXT: BOGOTA, Colombia — It’s the most punishing cycling race you’ve never heard of. Stretching 15 days, the Tour of Colombia traverses the length, width and — most challengingly — the height of the mountainous landscape in this violence-wracked nation.
Reaching head-piercing altitudes thousands of feet beyond anything found in the Tour de France, the race, whose 57th edition begins July 28, is a test of stamina that would likely leave even Lance Armstrong gasping for breath.
The suffer-fest’s toughest stage is a 10,875-foot pass known forebodingly as “La Linea” (“The Line”) — in which riders setting off in a lush, tropical valley must grind their way 13 miles up to the freezing, oxygen-starved Andean plateau before embarking on a treacherous, winding descent back into the jungle heat.
In addition to the leg-numbing climbs, there are also stray mules to dodge and the forced detours caused by mudslides. Menacingly near to the road, leftist rebels may also hide in wait, though except for a three-hour delay when a platoon was spotted near La Linea during the 1962 Tour, the presence of the four-decade old insurgency has been more feared than felt.
With a first-place prize of barely $10,000 — versus $600,000 for the Tour de France winner — the Tour, or Vuelta as it’s known in Spanish, has been all but shunned by the sport’s top European and American riders.
Instead, it’s become a showcase for the unique brand of hardened riders known in Colombia as Los Escarabajos - the beetles - for the “beetle-like” determination that they use to haul themselves up almost any mountain.
Almost universally, the beetles hail from peasant families in the heavily Indian, mountainous regions of Colombia. Ironically, their gaunt-like, stringy physiques — the result of poorly nourished upbringings — are a source of their aerodynamic strength in the saddle.
True to their modest roots, the beetles have created a niche for themselves as climbing specialists among Europe’s premiere pedaling squads, acting as domestiques, or “servant” pace setters, to star teammates, among them Armstrong.
“They’re like moths drawn to light — no amount of logical reasoning can explain how or why they do it,” said Matt Rendell, an English author of “Kings of the Mountains,” which chronicles the travails on-road — and off — endured by Colombia’s cycling heroes.
As difficult as completing the Tour may be — and only 83 of last year’s 133 entrants did — for many, just making it to the starting line is a steep challenge.
To fund a strict training regiment that begins every day before dawn, Juan Carlos Benavides, 23, works as a day laborer digging potatoes near his peasant family’s modest home on a high-altitude plateau outside Bogota. Other racers must sell raffle tickets to pay the nominal entry fee. Almost all of them, before the Vuelta, will take their bikes to church to be blessed.
“My goal is just to finish the race,” said Benavides, whose bare-boned team Sabana Centro trains outside Bogota for its first-ever Vuelta.
Part of the race’s allure — and the reason why riders well into their 40s still compete — is its rich tradition. Nowhere else in Latin America does cycling figure so prominently in the national culture.
In the 1950s and 1960s, winners were feted like superstars — with one legend, Ramon Hoyos, being immortalized in 1955 in a series of chronicles written by then journalist and future Nobel Prize-winning author Gabriel Garcia Marquez.
The fame associated with the Tour’s early years has been steadily eroded by the popularity of soccer, car racing and other sports. But live radio broadcasts of the Tour still saturate airwaves nationwide and entire villages can still be counted to cheer on the passing peloton.
The wholesome look of the Tour can be deceiving, however. The pressure to win, and catch the eye of a European team, makes the competition fierce.
As with major European races, doping is widespread. In last year’s race, seven riders were disqualified for abnormally high red blood cell counts, three of them, including the race leader, hours before the final stage.
And although the prize money is negligible, in a country where half the population survives in poverty on less than $355 a month, it’s still a significant carrot.
“Cycling in Colombia pays barely enough to live day to day whereas in Europe even a second-division rider can make at least 25,000 euros ($33,000) a year,” said Gianni Savio, coach of Italian team Selle Italia DiQuiGiovanni, one of four foreign teams confirmed to compete this year.
This year’s favorite to be crowned with the traditional “collar de arepa,” a wreath made up of fried maize pancakes, is former world champion Santiago Botero. The Colombian native, who stands out from his compatriot beetles for his middle-class background and speed on the flats, is riding in his first Vuelta in a decade after he was dropped last year by Swiss-based team Phonak, for his connection to a short-lived Spanish doping probe.
“It’s the toughest race course in the world,” said Botero, one of only four riders to ever outpace Armstrong in a Tour de France time trial.
Hoping to stealing the limelight, and the great hope for the future of Colombia’s cycling, is 21-year old Fabio Duarte, who was invited by Savio to compete to Europe after finishing fourth in his 2006 Tour debut.
Breaking into the cycling big leagues isn’t easy — the beetles’ reputation within their sport is surpassed only by the black mark of drug trafficking that immigration officers all too often associate with their passport.
The government-sponsored “Colombia is Passion” team was barred last year from competing at the prestigious Tour de l’Avenir, in France, after visas for the team were rejected. The rebuff may have arisen from the fact that during the heyday of Colombian cycling in the 1980s, several cyclists — among them the brother of deceased cocaine kingpin Pablo Escobar — were known to smuggle drugs stashed inside bike frames.
Even though Europe remains the goal of most cyclists, in the wake of doping scandals at the Tour de France and the unsung role Colombians play on most teams, the dream has lost some its glitter.
Juan Pablo Forero, 23, who won three stages at last year’s Tour, said he turned down an offer to race for a Belgian team in order to compete at home. “For any racer in Colombia, there’s no greater achievement than the Tour.”

TITLE: Yahoo’s More Personalized Sell
AUTHOR: By Michele Gershberg
PUBLISHER: Reuters
TEXT: NEW YORK — Internet media company Yahoo Inc. will offer its marketing clients tools to create more personalized advertisements to Web users as it strives to build its share of graphical display advertising. 
Yahoo is due to unveil on Monday a new system dubbed SmartAds that allows advertisers to compile ads on the spot based on a Web user’s Internet profile, including such data as their location, recent product searches and, in some cases, age or household income. 
“It starts to marry the concept of targeting ... with the construction of the ad,” Todd Teresi, Yahoo’s senior vice president of display marketplaces, told Reuters. 
The aim, he said, is for “consumers to view advertising to be as relevant as the content they’re looking at.” 
Internet advertising companies have built up technologies to better identify consumers visiting specific Web sites and serve them ads that directly relate to what they may want to purchase. 
One such method is behavioral targeting, which tracks the sites a user has visited online and suggests products to them based on their stated interests. 
The market for such targeted ads is expected to nearly double to $1 billion in 2008 from this year, and surge to $3.8 billion by 2011, according to research firm eMarketer. 
SmartAds takes such targeting methods a step further, allowing advertising agencies to create a template for ads with several variables, then compile those elements on the spot to suit a specific reader. 
For example, a Web user who has shown an interest in certain car models and who logged on from a computer in Los Angeles could receive an ad for that vehicle that combines information on their nearest dealership and a real-time feed of inventory levels, Teresi said. 
Yahoo’s bigger rival in Web search, Google Inc., also aims to compete for display advertising dollars. 
Last week, Yahoo said it would merge its display and Web search advertising businesses to address client requests for campaigns that combine both types of ads. 
Yahoo will start to roll out the SmartAds system for travel-related clients, beginning with two leading airlines. The company aims to offer the system to up to four different advertising segments by the end of the year. 
SmartAds will operate on Yahoo’s network of Web sites as well as in its advertising partnerships with eBay Inc., major U.S. newspaper publishers and cable operator Comcast Corp.

TITLE: Italian Cyclist Explains Doping Case
PUBLISHER: Reuters
TEXT: ROME — Cyclist Alessandro Petacchi spent two hours with Italian anti-doping officials on Monday in a bid to explain why he tested for excessive levels of salbutamol during the Giro d’Italia in May.
Petacchi, desperate to take part in the Tour de France starting on Saturday, has a medical certificate to use a set amount of salbutamol in his asthma inhaler and was heard by Ettore Torri, the Italian Olympic Committee’s doping prosecutor.
“I tried to explain my case scientifically and the good faith in which it happened,” the sprinter told reporters as he left the hearing.
“Now it is all in the hands of the prosecutor. The Tour? It depends on the prosecutor.”

TITLE: Karstadt, Debenhams Deal Still Possible
AUTHOR: By Rajiv Sekhri
PUBLISHER: Reuters
TEXT: FRANKFURT — A merger between German group Arcandor’s KarstadtQuelle department stores and British retailer Debenhams may have limited scope for synergies but they may do a deal anyway, analysts and bankers said on Monday.
KarstadtQuelle, on the lookout for acquisitions, confirmed on Sunday it had held talks with Debenhams after a British paper reported Debenhams was seeking a merger partner in Europe.
“I see some synergies on the sourcing side,” said one London-based retail analyst. “But my feeling is that you would be adding one problem to another and ending up with two problems. It does not look particularly compelling.”
KarstadtQuelle operates around 90 department stores and 32 sports stores across Germany. 
In the past year it has restructured and while sales rose 3.5 percent to 4.9 billion euros in 2006 and core profit more than doubled, analysts say the department stores need to become more profitable.
A London-based banker said: “Each of these two businesses has some issues. I think a combination might actually help, and I think there would be a temptation from both sides to try to put something together.”
Debenhams announced its third profit warning in four months in April. It operates about 140 stores across the United Kingdom and Ireland and 35 franchisee stores abroad.
The company, which returned to the stock market in May 2006 after 2-1/2 years in private equity hands, recorded sales of 1.7 billion pounds in the year ended Sept. 2, 2006.
“Department stores is not a sector the market loves, admires, understands or respects,” the banker said. “I think a combination of Karstadt and Debenhams is better than Karstadt on its own. If I were a Karstadt shareholder, it would reduce my exposure to the German market and there would be benefit from some real skills from (Debenhams CEO) Rob Templeman.”
Arcandor Chief Executive Thomas Middelhoff told Reuters in June that he could merge his department stores with a rival within 18 months as a prelude to listing the retail business.
While the department store sector has consolidated of late in the United States, Spain and the Netherlands, there has not been much international activity.
International mergers are more difficult because cost synergies are harder to achieve and given taste differences among consumers from different countries, analysts say.
Arcandor shares were down 2 percent at 24.53 euros by 1048 GMT, among the top losers on the midcap MDAX index, which was down 0.5 percent. Debenhams shares were down 0.2 percent at 129.5 pence.
Among other department stores, Italy’s La Rinascente said on Monday it had had no contact with Debenhams for a possible partnership. 
And a Galeries Lafayette spokeswoman said: “We don’t have anything more to say than that Galeries Lafayette has been contacted by Debenhams.” 
She declined to give any details.
No one at Debenhams was immediately available to comment.

TITLE: Venus Proves She’s Got It at Wimbledon
AUTHOR: By Steven Wine
PUBLISHER: The Associated Press
TEXT: WIMBLEDON, England — Venus Williams faced 23 break points, double-faulted 14 times, trailed 3-5 in the third set, drew criticism from her dad, and still won Monday at Wimbledon. The three-time champion rallied past Akiko Morigami 6-2, 3-6, 7-5 in a third-round match suspended Saturday.
Williams will next face 2004 champion Maria Sharapova, one of only two players to win Saturday in a rain-abbreviated schedule. Williams trailed 1-4 in the second set when her match was halted.
“If Venus moves up to the ball and takes it off the bounce instead of waiting behind the baseline, she’ll be the only one here, including Sharapova,” said Williams’ father and coach, Richard. “She’s not going to beat anyone if she’s not moving into the ball.”
Top-ranked Justine Henin, seeking the only Grand Slam title she has yet to win, became the first woman to reach the quarterfinals by beating No. 15-seeded Patty Schnyder in 56 minutes, 6-2, 6-2.
“I was a little bit surprised that the match was that quick,” Henin said. “I was ready to have a good fight.”
Henin has lost 15 games in four rounds.
“I did my job perfectly until now,” she said.
In the completion of third-round matches suspended Saturday, No. 5-seeded Svetlana Kuznetsova beat Agnieszka Radwanska 6-2, 6-3; No. 6 Ana Ivanovic defeated Aravane Rezai 6-3, 6-2; No. 11 Nadia Petrova swept Virginia Ruano Pascual 6-3, 7-6 (3); No. 12 Elena Dementieva lost to 16-year-old Tamira Paszek of Austria 3-6, 6-2, 6-3; and No. 14 Nicole Vaidisova beat Victoria Azarenka 6-4, 6-2.
In men’s third-round play, No. 7 Tomas Berdych beat Lee Hyung-taik 6-4, 7-6 (2), 7-6 (3).
The start of play was delayed nearly an hour by showers — the sixth time in seven days there has been a rain interruption.
Only three players had Monday off — Sharapova, defending champion Amelie Mauresmo and Roger Federer. 
Williams, seeded 23rd, struggled with her serve in windy weather and double-faulted for the final time to fall behind 3-5 in the last set. Morigami then lost serve at love, and Williams hit four big serves to hold for 5-all.
With Williams serving for the match at 6-5, rain began to fall and umbrellas popped out in the stands, but play continued. Williams erased two break points — making Morigami 4-for-23 on break points — and closed out the victory on the first match point with a service winner.
The court was then covered for another delay.
When the match resumed in the second set Monday, Williams lost the first seven points. She double-faulted four times serving at 2-5 but still managed to hold, then double-faulted four more times in her next service game.
Morigami needed 10 set points to even the match, finally forcing a third set when Williams hit a forehand wide.
Mauresmo keeps moving forward, and her aggressive game has her in the fourth round.
“I think it comes pretty naturally for me,” the Frenchwoman said. “I don’t feel like somebody’s pushing me to go forward. It’s a little bit the contrary: I really feel that I’m really leaning forward very naturally after the serve and sometimes on the return.”
In an era when most women swing hard from the baseline, Mauresmo’s tactic makes her a throwback. But it also makes her a formidable foe, especially on grass, where she often solves the vexing problem of capricious hops by charging forward to hit the ball before it bounces.
“I like it,” she said. “It took me a little time to adjust to the grass. I was not really sure what I was going to do. Do I need to stay back? Do I need to go in? I was kind of in between.
“Then I got used to it, and the experience probably helped me a lot.”
Mauresmo turns 28 Thursday, which makes her the oldest player among the top women’s title contenders. She remains prone to nervousness, especially at the French Open, where she lost in the third round this year.
But as a two-time Grand Slam champion, Mauresmo also knows how to win the kind of big matches that loom this week.
“It’s still pretty open, this women’s championship,” she said. “But, you know, it has been open for quite a few years now — not only here but in all Grand Slams.
“I’m not thinking, ‘Oh, am I going to be able to go to the end?’ In my mind, I’m confident about how I play, and about what I’m going to have to do in the next match.”

TITLE: Australian Wesfarmers’ Coles Bid
PUBLISHER: The Associated Press
TEXT: MELBOURNE, Australia — Australian conglomerate Wesfarmers Ltd. on Monday offered 21.9 billion Australian dollars (US$18.6 billion) for retailer Coles Group Ltd. — the largest takeover bid in Australian corporate history.
The Perth-based mining, insurance and industrial giant offered A$4.00 cash and 0.2843 Wesfarmers share for each Coles share, valuing the retailer at A$17.25 per share, including a final dividend of 25 cents per unit.
Coles Chairman Rick Allert called the deal “a great outcome for Coles shareholders” and said the board unanimously recommended the offer.
“The recommendation from the Coles board is a big step towards helping end the uncertainty for shareholders, employees, suppliers and customers surrounding the company’s ownership review,” Wesfarmers Chief Executive Richard Goyder said in a statement.
Goyder said he expected the acquisition of Melbourne-based Coles to be complete by October.

TITLE: Sochi Win Touted As Big Boost
AUTHOR: By Karolos Grohmann
PUBLISHER: Reuters
TEXT: GUATEMALA CITY—A victory for Russia’s Sochi in the race to host the 2014 Winter Olympics would affect millions of lives in Russia, leaders of the bid said on Sunday.
Just three days before the International Olympic Committee decides on the 2014 host, Russian bid leaders said it was now or never for a country that has excelled in Winter Olympics but has yet to host the winter edition of the Games.
“We are waiting for this day that can change the lives of people for ever,” Elena Anikina, chairwoman of the bid, told reporters.
Sochi is up against Austria’s Salzburg and South Korea’s Pyeongchang with a decision expected on July 4 during the 119th IOC Session in Guatemala.
“This is the right time,” Russia’s Deputy Prime Minister Alexander Zhukov said. “We have all the guarantees.”
“This is our time and we will not postpone it,” he said when asked whether Sochi would bid again should it lose the vote this time round.
Pyeongchang and Salzburg ran for the 2010 Games that were awarded to Canada’s Vancouver.
Backed by Russian President Vladimir Putin, who will arrive in Guatemala later in the week, and several Olympic champions, bid leaders said Sochi’s mix of palm trees along the Black Sea coastline and snow in the mountains, coupled with a compact bid made it an attractive choice.
“We are confident but not complacent,” Sochi bid CEO Dmitry Chernyshenko said, calling the day of the vote “an historic, dramatic moment.”
“We are not thinking beyond July 4. This (decision) will be a catalyst of redeveloping the region. We have a very compact, solid, efficient, purpose-built Games plan.”
Russia has earmarked $12 billion for the wider Sochi area, irrespective of whether Sochi wins the Games, to revamp slopes, infrastructure and accommodation and turn the city into a winter sports hub for athletes and tourists.

TITLE: Federer Advances to QFs
PUBLISHER: The Associated Press
TEXT: WIMBLEDON, England — Roger Federer got a bye into Wimbledon’s quarterfinals when his fourth-round opponent, Tommy Haas, withdrew from the tournament Sunday with a torn stomach muscle.
The 13th-seeded Haas and four-time defending champion Federer had been scheduled to play in the fourth round Monday.
“To pull out of this match, against Roger on Centre Court — which is why you play the game — is obviously very disappointing,” Haas said. “Can’t even put it in words.”
Now the top-ranked Federer will face 2003 French Open champion Juan Carlos Ferrero or unseeded Janko Tipsarevic for a berth in the semifinals.
Because Haas pulled out before the match, it goes into the books as a walkover, and Federer will not get credit for a victory. So the Swiss star’s winning streak at Wimbledon stays at 31 matches, and his record run on grass courts stays at 51.
Haas said he expects to be sidelined for up to a month with the lower abdominal injury, which flared up during his 1-6, 6-4, 7-6 (5), 6-4 victory over No. 21 Dmitry Tursunov in the third round Friday.
Haas called for the trainer during the second set, when he was treated and given painkillers. The German said the pain felt much worse Saturday and that tests showed the muscle was bleeding.
The match against Federer was to be the 29-year-old Haas’ first in the fourth round at the All England Club.

TITLE: Carlyle Group Makes Virgin Offer
PUBLISHER: The Associated Press
TEXT: LONDON—Virgin Media has received a preliminary offer from private equity firm the Carlyle Group valuing the company at around $11.1 billion, Dow Jones Newswires reported Monday. 
Quoting “a person familiar with the matter,” Dow Jones said that Carlyle has offered between $33 and $35 per share for Virgin Media. The company also has roughly 6 billion pounds ($12.1 billion) in debt. 
Shares in Virgin Media Inc., which is listed on the Nasdaq Stock Market rather than in London, closed on Friday at $24.37 per share. 
Virgin Media could not immediately be reached for comment. 
UBS said that the 5.5 billion pound private equity approach for Virgin Media could result in a reduction of competitive pressure on rival British Sky Broadcasting PLC. 
“It could also result in a more pragmatic approach, with Sky and Virgin finally reaching an agreement on Sky basics which could be in the interests of both groups and Virgin Media customers,” analysts said in a research note. 
Virgin Media, the byproduct of a number of mergers, including the former cable operators NTL Inc. and Telewest and the mobile operator Virgin Mobile, reported its seventh consecutive quarterly loss in May after subscribers defected to rival BSkyB. 
Virgin Media lost customers earlier this year when it stopped airing basic BSkyB channels, dropping popular programs such as “Lost,” “24,” and “The Simpsons,” as the result of a battle over fees during negotiations to renew a distribution agreement. 
BSkyB has long dominated pay TV in Britain, accounting for around 70 percent of the country’s pay-TV subscribers. But the arrival of Virgin Media has threatened a shake-up of the status quo, and relations have become increasingly rancorous. 
Entrepreneur Richard Branson is the largest shareholder in Virgin Media with a 10.5 percent stake. He also licenses the Virgin name to the company.

TITLE: 2 More Terror Suspects Arrested in U.K.
AUTHOR: By Rob Harris
PUBLISHER: The Associated Press
TEXT: GLASGOW, Scotland — Police in Glasgow said Monday that two men, aged 20 and 25, have been arrested in the investigation of a fiery attack on the city’s airport. Meanwhile, details emerged that authorities had been close on the trail of the airport bombers, one of whom may have been a local doctor.
Rental agent Daniel Gardiner, whose company leased a Glasgow-area home searched by police, said authorities contacted his firm just ahead of the Glasgow International Airport attack on Saturday.
Meanwhile, British police were sifting through large amounts of evidence from the vehicles and from video surveillance of the scenes where two car bombs failed to explode in central London on Friday and two men rammed a Jeep Cherokee into the Glasgow airport’s entrance the following day.
Police have arrested five suspects while conducting raids across a country on its highest level of alert and are searching for others. None of them have been identified, but British officials have said they are hunting for what they called an al-Qaida-linked network behind the three attempted terrorist attacks.
Security in London was highly visible Monday morning, with long lines of cars forming behind police checkpoints on the London Bridge. Concrete car-blockers were in place protecting the Wimbledon tennis tournament.
“It is clear that we are dealing, in general terms, with people who are associated with al-Qaida,” Prime Minister Gordon Brown said Sunday.
Brown, who replaced outgoing Prime Minister Tony Blair last week, said the threat would be “long-term and sustained” but said the country would not be cowed by the plot targeting central London and Glasgow’s airport.
“We will not yield, we will not be intimidated and we will not allow anyone to undermine our British way of life,” he said in a televised interview.
A British government security official said a loose U.K.-wide network appeared to be behind the attacks but investigators were struggling to pin down suspects’ identities.
“These are not the type of people who always carry identity documents, or who use their real identities,” the official said on condition of anonymity because of the sensitivity of the inquiries.
Gardiner, an official at the Let-It house rental agency in Glasgow, said police contacted his company on Saturday afternoon, just minutes before the airport attacks.
“A card was put through one of my colleague’s door, asking if we would contact them,” he said. The colleague found the note at 3:05 p.m, 10 minutes before the airport attack, Gardiner said.
“A couple of hours later, they (police) came back to us with a name, and we were able to trace their records,” he said. “The police wanted to know why we had dialed a certain phone number. They had the phone records from the situation down in London.”
The unidentified driver of the Jeep is being treated for serious burns at Paisley’s Royal Alexandra Hospital in Glasgow, where he is under arrest by armed police. A 27-year-old man also was arrested at the airport attack by police and was being held at a high-security police station in Glasgow.
Gardiner said the man was seen leaving the house wearing a stethoscope and was thought to be a doctor at the Royal Alexandra Hospital in Paisley on the outskirts of Glasgow. A controlled explosion was carried out Sunday on a car left at the hospital. Police said it was linked to the airport attack.
Residents of homes that were raided by police in central England and Liverpool have claimed suspects arrested were doctors or medical students.

TITLE: Wimbledon Watch
TEXT: <b>Bomb Scare</b>
LONDON (AP) — Security at Wimbledon was increased Friday after British police defused a bomb in central London. “All around the ground the security has been intensified,” Lawn Tennis Association chief executive Roger Draper told BBC Radio.
“We are a high-profile event, and the championships take security very seriously,” Draper said. 
“This year in particular, everything has been tightened up for people out there.”
Police discovered a parked car in central London that was packed with gas containers and a large number of nails and a detonator. The attack would have caused “significant injury or loss of life,” police said.
Superintendent Peter Dobson said officers were carrying out “enhanced checking” of public parking near the All England Club in suburban London.
“I would like to ... state that there is no intelligence that increases the threat to the championships,” he said.

<b>Roger Featherer?</b>
LONDON (Reuters) — At least one happy family was singing in the rain at Wimbledon on Monday.
A mother duck and her four fluffy ducklings have been reunited during a dramatic tournament.
The family were first spotted last week waddling on to one of the outside courts when play was, yet again, interrupted by rain.
The mother flew off in alarm when officials approached the ducks to shoo them off court. So animal protection officers stepped in and took the ducklings to a local sanctuary.
The ducklings were then brought back to Wimbledon and released on the golf course opposite the All England Club.
There was a heart-warming reunion when the mother flew back and the family have now settled in well on the golf course,” a Wimbledon spokesman said on Monday.
The spokesman was quick to insist that the appearance of duck on the menu at one of the tournament’s restaurants was “entirely coincidental.”
British newspapers had a field day with the story when the ducklings were first collected.
The tabloid Sun newspaper named them Boris Beaker, Roger Featherer, John Quackenroe and Andy Rodduck.

TITLE: Limits on Smoking Enforced in Britain
AUTHOR: By Tim Castle
PUBLISHER: Reuters
TEXT: LONDON — England slammed the door on smoking in bars, workplaces and public buildings Sunday in what campaigners hail as the biggest boost to public health since the creation of the National Health Service in 1948.
The chief medical officer Sir Liam Donaldson said there would be teething problems with the change, but he expected people to comply with the new law.
He told BBC TV: “The other places that have introduced it, both overseas and also the other U.K. countries, have had very few problems.
“England is a very big country so there are bound to be some teething problems with implementing it.
“But on the whole, the majority of smokers and non-smokers wanted this change, so I expect people to comply with it very, very straightforwardly.”
He said he expected a reduction of more than 1 percent in the number of smokers as a result of the ban.
Deborah Arnott, director of charity Action on Smoking and Health, welcomed the ban. She said: “Smoking is the single most preventable cause of death.
“Workers have a right to a safe environment and the harm done by tobacco smoke is now known to be significantly dangerous.”
But artist David Hockney, who has been waging a campaign against the ban, called it a “grotesque piece of social engineering” imposed by a “political and media elite.”
The English ban means smoking in enclosed public places such as pubs will now be banned across the entire United Kingdom.
Wales and Northern Ireland outlawed public smoking in April following the lead of Scotland last year.
Ireland and other European countries have also banned smoking indoors, while some parts of Canada and a number of U.S. states have had strict controls on smoking for years.
The legislation is designed to protect people from the effects of second-hand smoke at work, which doctors estimate kills more than 600 people a year.
A quarter of adults smoke, with the level higher among those doing manual and routine jobs.
Individuals lighting up against the law face fines of up to 200 pounds ($400) while businesses can be charged up to 1,000 pounds ($2,000) for failing to display “no smoking” signs in affected areas which also include minicabs, company cars and churches.
Offshore oil rigs, hotel rooms and prison cells are among the few places where public smoking will continue to be permitted. 
People will also still be able to smoke at home.
Not everyone supports the new laws but most are resigned to them.
Richard Lilley, a 37-year old law firm printer relaxing with as cigarette and pint of beer in a pub in London’s Fleet Street said he did not want to give up smoking because he enjoyed it.
“I won’t bother going to the pub, I will drink at home. I enjoy a beer with a cigarette, it’s part of the culture.”
Others will sit or stand outside, with many pubs installing rain awnings and patio heaters to accommodate smokers.

TITLE: Argentina’s First Lady Set To Enter Presidential Race
PUBLISHER: Reuters
TEXT: BUENOS AIRES —The wife of President Nestor Kirchner will run as the government candidate in Argentina’s October presidential election after he decided not to seek re-election, a government spokesman said on Sunday.
The decision ends months of speculation fueled by Kirchner’s public suggestions that either he or his wife, Cristina Fernandez de Kirchner, a prominent senator, would compete in the October 28 vote. Polls show either would easily win.
“Cristina will be the government candidate,” the spokesman told Reuters, speaking on condition of anonymity and confirming a report first published by the daily newspaper Clarin.
She will launch her campaign on July 19, the spokesman said. The government news agency Telam later confirmed Mrs. Kirchner’s candidacy, citing Cabinet Chief Alberto Fernandez.
Kirchner’s decision against running for re-election marks a highly unusual move by a popular leader who Argentines credit with engineering the country’s recovery from a 2001-2002 economic crisis.
The center-left leader has not said publicly why he would want to relinquish office, but analysts have cited reasons ranging from exhaustion to health problems to a plan to compete again in 2011.
Some analysts say the move could be aimed at reinvigorating his government to ensure he remains in control of the ruling Peronist party.
Although his approval ratings hover around 50 percent, Kirchner has recently come under pressure with his government beset by an energy crisis, a public works corruption scandal and accusations it is manipulating the official inflation rate.
Some political commentators say Kirchner and his wife are looking to rotate in and out of power. Argentine presidents are limited to two consecutive four-year terms but can return to office after spending four years on the sidelines.
A Cristina Kirchner candidacy had been seen as increasingly likely in recent months as she has traveled abroad on official visits to raise her profile at home and her chances of becoming the country’s first elected female leader.

TITLE: Mexico Denies Drug Suspect’s Allegations
AUTHOR: By Mark Stevenson and Michael Rubinkam
PUBLISHER: The Associated Press
TEXT: MEXICO CITY — It was the largest seizure of cash in the history of drug enforcement: $207 million, mostly in crisp $100 bills, stuffed into walls, closets and suitcases in the Mexico City home of a Chinese-born businessman.
Zhenli Ye Gon said that most of the money belonged to Mexico’s ruling party. He said party officials delivered it last summer in duffel bags stuffed with $5 million apiece and threatened to kill him unless he guarded their cash.
In a statement Sunday night, the Mexican government called his tale “a perverse blackmail attempt” aimed at getting himself off on drug, weapons and money-laundering charges and at blunting President Felipe Calderon’s war on drugs, which has mobilized the army and extradited a record number of top-level traffickers.
The government says Ye Gon made millions supplying traffickers with the raw material to make a pure, highly addictive form of methamphetamine that has flooded U.S. markets, and said his story “is not only false, it is ridiculous.”
The statement from the attorney general’s office, which was a response to a letter sent by Zhenli’s U.S. lawyer to the Mexican Embassy in Washington, said the lawyer demanded special treatment for Ye Gon and suggested he would go public with his accusations against the National Action Party.
“These lawyers are unscrupulously and uselessly seeking to blackmail the Mexican government with absurd and unbelievable accusations, in an attempt to discourage the government from bringing all the weight of the law to bear against Mr. Zhenli Ye Gon,” it said.
Eleven people, including several of Ye Gon’s relatives, have been charged with drug trafficking and organized crime in Mexico.
Ye Gon met with the AP recently at his lawyer’s New York office. The 44-year-old calmly recounted his version of events, complete with mysterious guards and blood-chilling threats. Most of his story about his alleged relationship with the ruling party hinges on claims that are hard to prove.
Ye Gon said he had no prior relationship with the National Action Party and has no idea why he was chosen to hold the cash. And the name he gave as his main campaign contact doesn’t match that of anyone who worked on Calderon’s national campaign team.
Born in Shanghai, Ye Gon migrated to Mexico in 1990 and became a citizen in 2002. He imported textiles, clothing and shoes, and made a fortune as a reseller of commodities seized by Mexican customs.
He founded a pharmaceutical company, Unimed, in 1997. He said he became one of the nation’s largest importers of pseudoephedrine, an ingredient in cold medicines that is also used to make methamphetamine. After 2004, however, Ye Gon said he stopped importing pseudoephedrine because of the controls placed on the chemical by the Mexican government.
He said he has never sold illegal drugs and doesn’t even know what meth looks like.
Mexico says otherwise. Agents intercepted a ship from China last year that purportedly carried more than 19 tons of pseudoephedrine acetate, all of it illegally imported by Ye Gon. Officials say he was building a massive factory in Mexico to process the component into a form usable to traffickers. 
What isn’t in dispute about Ye Gon is that he lived the life of a high roller.
The married Ye Gon squired his mistress around in a Lamborghini. During frequent trips to Las Vegas, he said he bet $150,000 a hand in baccarat, his favorite game. 
He was such a treasured customer that one of his favorite haunts, The Venetian Resort Hotel Casino, gave him a Rolls-Royce.

TITLE: Israel Transfers Tax Funds To Abbas
AUTHOR: By Dalia Nammari
PUBLISHER: The Associated Press
TEXT: RAMALLAH, West Bank — Israel transferred millions of dollars worth of tax funds to the new Palestinian government, allowing it to pay its workers in full for the first time in a year — while skipping the ones who work for the Islamic Hamas in Gaza.
Transfer of the funds Sunday marked the first concrete gesture of Israeli support for moderate President Mahmoud Abbas since the Islamic militant Hamas took control of Gaza by force last month.
The Israeli government said $119 million was handed over, and Palestinian officials confirmed that they received it. The Israelis said a further transfer would be made in a few days.
The salaries will be paid by Abbas’ Western-backed government, except for government employees hired by Hamas, like members of the 6,000-strong Hamas security force. Abbas expelled Hamas from the Palestinian government after the Gaza seizure and appointed a new prime minister, Salam Fayyad.
Under Hamas, the 165,000 government employees had only received irregular, partial payments because of an international aid boycott imposed on the government headed by the Islamic militants.
In dispensing the salaries, the West Bank-based government was asserting its legitimacy, disputed by the Hamas rulers of Gaza. Members of security forces in Gaza were told they would be paid only if they stayed home and refused to work under Hamas command.
The Fayyad government is also switching the weekend for the public sector from Thursday-Friday to Friday-Saturday, apparently to make it more compatible with the West’s work schedules. In Hamas-ruled Gaza, some government employees were told they should stick to the old weekend and warned they would be punished if they take off Saturdays.
Bilal Qureshali, who works in the Communications Ministry in Gaza, said he would stay home Thursday through Saturday to avoid problems. He said he was told by his Hamas-allied boss to ignore the orders coming from the West Bank and warned he would be punished if he took off Saturday. If forced to take sides, he said he would pick the West Bank government.
Since Hamas came to power in March 2006, Israel had frozen roughly $600 million, mostly customs duties that it collects on behalf of the Palestinians under interim peace accords. Israel said Hamas, which is sworn to Israel’s destruction and has killed hundreds of Israelis in suicide bombings, could use the money to fund attacks.
After Abbas expelled Hamas from the government, Israeli Prime Minister Ehud Olmert said the financial transfers would resume. The tax funds account for roughly half of the Palestinian government’s operating budget.

TITLE: Fanatics Rip Apart New iPhones on Purchase
AUTHOR: By Scott Hillis
PUBLISHER: Reuters
TEXT: SAN FRANCISCO — It took Apple Inc. more than six months to build the iPhone but curious gadget fanatics needed only minutes to tear one apart.
Within hours of the first iPhones going on sale on Friday, enthusiasts scrambled to be the first to discover what makes the devices tick, posting photos and videos of disassembled phones on the Internet.
The information is more than just academic. Apple keeps a tight grip on information about parts suppliers so “tear downs” of its products are closely watched by investors keen to figure out how to place their bets.
In the past, word that a particular part was being used in Apple’s popular iPod music players has sent that company’s shares higher.
“With every new release of an Apple product, the hype and interest ratchets up a notch,” said Andrew Rassweiler, an analyst with market research firm iSuppli.
Rassweiler and his team at iSuppli were working through the weekend to catalog the phone’s guts for a report estimating the cost of every component, crucial for figuring how much it cost Apple to make each iPhone.
“We have had more people thrown at it this week than any other previous product,” Rassweiler said.
Apple is offering the phone in two versions costing $500 and $600 depending on memory capacity, but the high price and limited availability wasn’t enough to stop some people from giving into curiosity.
Some dissected the phones with the clinical skill of a surgeon while others resorted to brute force, enraging those swept up in the hype and winning praise from those gleefully resisting it.
By Sunday afternoon, a video on YouTube showing two guys banging away at an iPhone with a hammer and nail had garnered 56,000 views and was the 13th most-watched clip on the site, prompting some extremely angry comments. Watching the clip, it is difficult to see what was learned from the destruction.
The creator, whose user page identified him only as Rob in Miami, Florida, posted a second clip defending his unorthodox methods.
“We didn’t smash it just to smash it. We smashed it to see what was inside. We were under a time limit,” Rob said. “We resorted to extreme measures.”
Ifixit.com, an Apple parts and repair guide site, conducted one of the most sophisticated dismantlings, posting dozens of high-quality photos alongside technical commentary.
“They’ve done some things that are above and beyond. They did some very innovative things,” site cofounder Kyle Wiens said of the iPhone’s manufacture.
Their efforts yielded a few nuggets of information. The iPhone boasts a main processor and memory chips from Samsung Electronics Co. Ltd., an audio-processing chip from Britain’s Wolfson Microelectronics Plc and a Wi-fi wireless chip from Marvell Technology Group Ltd.
Opening the iPhone was the easy part. For many, the real prize is hacking the phone to get it to do things Apple never intended, such as run on networks other than that of AT&T Inc., the exclusive U.S. service provider.
Some programmers also want to find a way to run their own programs directly on the phone’s operating system rather than being limited to programs run through the Web browser.

TITLE: Son of Chad President Found Dead
AUTHOR: By Pierre-Antoine Souchard
PUBLISHER: The Associated Press
TEXT: PARIS — The son of Chad’s president was found dead with a head wound Monday in the basement of his apartment building in a Paris suburb, and authorities were treating the case as a murder investigation, judicial officials said.
The building’s caretaker found Brahim Deby’s body early Monday, the prosecutor’s office in the Paris suburb of Nanterre said. It said Deby appeared to have died violently and police were investigating the case as homicide. The body was found in a corridor between the underground parking lot and a flight of stairs in the building in Courbevoie, west of Paris.
An autopsy was to be performed later Monday, prosecution officials said.
In Chad, President Idriss Deby’s office said the Chadian leader was aware of the death but had no other details. Brahim Deby, 27, was the president’s oldest son and had no official government post, according to the president’s office, which added that the Chadian president was in Ghana Monday for an African Union summit.
Brahim Deby was convicted of drugs and weapons charges in June 2006. A Paris court gave him a suspended six-month jail sentence for possession of drugs and illegally carrying a weapon.
A poor central African nation, Chad shares a border with the violence-wracked Darfur region of Sudan. Conflict from the Darfur crisis has spilled over into eastern Chad.
Chadian rebels also have challenged the Chadian president, who first came to power at the head of rebel columns.

TITLE: African Leaders Seek Unit at Summit
AUTHOR: By Susan Njanji
PUBLISHER: Agence France Presse
TEXT: ACCRA — African leaders gathered behind closed doors on Monday for a debate on how to beef up its continental system of government with Libya’s Moamer Kadhafi leading a push to create a confederation of states.
Kadhafi was among eight heads of state due to address the grand debate on day two of a conference in Ghana devoted to examining how the 53 countries that make up the world’s poorest continent can forge closer unity.
But while he was likely to get close support from Senegal’s President Abdoulaye Wade in the debate, the new Nigerian leader Umaru Yar’Adua was likely to reflect a reluctance among larger states that a strengthening of current institutions rather than a complete overhaul was the best way forward.
Foreign Minister Sheikh Tidiane Gadio said Senegal was ready to put its name to a new government of the union immediately, saying a breaking down of barriers could only benefit the continent.
“We can even bypass the discussions,” Gadio told AFP. “The African people are ready but the question is are the African governments ready to catch up with their people.”
Kadhafi, who reflects the radical end of the argument, would like to see a common foreign and defence policy in Africa as well as an easing of trade barriers.
South African President Thabo Mbeki is one of those however who believe the troubles experienced by the African Union since it was launched at a summit he hosted in Durban five years ago can best be addressed by strengthening arms such as the current executive, the AU commission.
At the last summit in Ethiopia in January, Mbeki told one delegate there was no point in building the roof over a house without cementing the foundations.
Ghana’s host President John Kufuor and African Union commission chief Alpha Oumar Konare acknowledged at the opening of the three-day meeting that the current executive had to be improved and its remit was ill-defined.
“I am confident that at the end of our deliberations, we should be able to arrive at a common understanding on the sort of continental government we want for ourselves, and a roadmap with timelines on its realisation,” Kufuor said.
Zimbabwe’s President Robert Mugabe, barred from travelling to Europe and the United States but still regarded as a liberation hero by many Africans, is among the heads of state who have invoked the memory of Ghana’s founding father Kwame Nkrumah who was the first champion of African unity.
“To tell you the truth, until and unless we put our act together, organise and start pulling our resources together, we will never ever prosper from any aid from any source outside Africa,” Mugabe told a rally on the sidelines of the summit on Sunday evening.
Although the summit is meant to be devoted to the prospects for closer unity, dubbed by some as the creation of a United States of Africa, the continent’s troublespots are still looming large.
The Darfur conflict, which scuppered Khartoum’s hopes of assuming the presidency at the last summit, also featured heavily on the opening day as Konare called for a United Nations resolution to hammer down a long-promised deployment of a hybrid UN-AU force to the western Sudanese region.
Speakers have shown little inclination to dwell on the problems of Somalia with no new countries coming forward to offer troops to serve in an AU peacekeeping mission in Mogadishu since January’s summit in Addis Ababa.
UN Deputy Secretary General Asha Rose Migiro said the problems of Somalia should not just be left to Africa.
“African leaders are ready to take a role in addressing the Somalia issue but Somalia is of international concern, it’s not an issue for Africa alone,” she told reporters.
Abdikarin Farah, the interim Somalian government’s ambassador to the AU, said a stronger union could help bring peace to his war-torn nation.
“We would not be in the position we are today if we had a union government. Africa would have given more support to the people of Somalia,” he told AFP.
Migiro said the UN welcomed closer union among African states.
“Our message to the AU is that we welcome the efforts the AU is making towards integrating Africa.”
A similar show of support came from the World Bank whose vice president Obiageli Katryn Ezekwesili said economic as well as political integration was needed.
“We support the economic integration ambitions of the continent,” said the former Nigerian cabinet minister.