SOURCE: The St. Petersburg Times
DATE: Issue #1293 (59), Tuesday, July 31, 2007
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TITLE: Abbas To Meet Putin Amid Feud With Rivals
AUTHOR: By Christian Lowe
PUBLISHER: Reuters
TEXT: MOSCOW — Palestinian President Mahmoud Abbas sought Russia’s backing on Monday in his feud with rival faction Hamas for control over the Palestinian territories.
Abbas fired his Hamas-led government after the faction forcibly took control of the Gaza strip on June 14 but Russia — alone among members of the so-called Quartet of Middle East peace brokers — is still in contact with Hamas leaders.
Abbas met Russian Foreign Minister Sergei Lavrov and will hold talks with President Vladimir Putin on Tuesday, their first meeting since Hamas, a militant group that does not recognize Israel, seized control of Gaza.
“We strongly support you as the legitimate leader of all Palestinians. We support all your efforts to restore the unity of the Palestinian people and to resume the peace process in the Middle East,” Lavrov said at the start of his talks with Abbas.
“We are convinced that your meeting tomorrow with President Putin will allow us to mark out a future road map for our cooperation ... and for the Palestinian-Israeli peace process.”
Abbas said Russia was an influential player whose support the Palestinians needed in what he described as a difficult period.
“We have a lot to talk about. There is the question of Palestinian unity, there is the question of Middle East peace and the peace conference,” Abbas told Lavrov via an interpreter.
Washington is planning before the end of this year to hold a conference on the Israeli-Palestinian conflict that it hopes will revive the peace process.
“We will of course discuss all of these issues with President Putin and will discuss with him ways that could help us get out of this internal impasse and political impasse,” said Abbas.
Russia, along with the United States, the European Union and the United Nations, make up the Quartet.
The United States and the European Union have sought to bolster Abbas and sideline the Hamas militant group financially and diplomatically.
Russia has said it wants to keep lines of communication open with Hamas. Lavrov last week had a telephone conversation with Hamas politburo chief Khaled Meshaal. Hamas, which won a Palestinian parliamentary election last year, is considered a terrorist organization by the United States, the European Union and Israel.
Washington has led efforts to isolate the Hamas-dominated government, demanding that it renounce violence, recognize Israel’s right to exist and abide by existing agreements with the Jewish state.

TITLE: Gas and Glory Fuel Race for the North Pole
AUTHOR: By Max Delany
PUBLISHER: Staff Writer
TEXT: MOSCOW — The race for the North Pole is on again, and this time there’s more at stake than pride at seeing a national flag fluttering on the icecap: There’s oil and gas too.
Russia is one of a handful of nations vying to lay claim to the vast untapped resources of the Arctic, and the competition — like the region itself — is likely to heat up as global warming and new technology make previously undreamed-of exploration feasible.
Two deep-sea submersibles made a test dive in polar waters Sunday ahead of a mission to be the first to reach the seabed.
It took an hour for Mir-1 and Mir-2, each carrying one pilot, to reach the seabed at a depth of 1,311 meters, 87 kilometers north of Russia’s northernmost archipelago, Franz Josef Land in the Barents Sea, Itar-Tass reported.
“It was the first time a submersible had worked under the icecap and it proved they can do this,” Anatoly Sagalevich, the pilot of Mir-1 was quoted as saying by Itar-Tass as he left the sub.
As the Arctic icecap thins as a result of global warming, a race is looming to claim ownership of the rich energy resources under the North Pole.
The mission plans to drop a meter-tall, titanium Russian tricolor on the exact spot under the pole to stake a symbolic claim to it and large chunks of Arctic territory for Russia, already the world’s largest country. 
Moscow is seeking to put forward a legal claim to a United Nations commission in 2009 — 100 years after the first explorers claimed to have reached the pole by sled and husky.
“We are going to be the first to put a flag there, a Russian flag,” expedition leader Artur Chilingarov, 68, told a televised news conference before setting off from the northern port of Murmansk last week.
“The Arctic is ours and we should demonstrate our presence,” said Chilingarov, a Duma deputy speaker who heads the country’s Association of Polar Explorers.
Following behind a nuclear-powered icebreaker, the latest deep-sea maneuvers are part of a larger scientific mission to investigate the geology of the under-explored territory. Despite engine trouble delaying the mission temporarily early last Thursday, all seemed back on course later in the day, reporters on board the convoy said.
“We must remind the whole world that Russia is a great polar and scientific power,” said Duma Deputy Vladimir Gruzdev, Chilingarov’s fellow submariner on the trip.
The latest expedition is being widely seen as part of the protracted international scramble for control of the Arctic region.
According to some estimates, the Artic region could hold up to one-quarter of the earth’s remaining untapped oil and gas reserves.
Uppermost in the current debate are the rights to the disputed Lomonosov Ridge, a thin underwater crust that crosses the Arctic Ocean over the pole and stretches from Russia to a point between Greenland and Canada. Estimates suggest that the ridge could contain somewhere in the region of 10 billion barrels of oil.
Currently no one country has exclusive jurisdiction over the Arctic. Under a 1982 UN Convention on the Law of the Seas, five Arctic nations -- Russia, the United States, Canada, Norway and Denmark -- each control a 200-mile (320-kilometer) economic zone beyond their actual borders. This means that no one country controls the pole.
The Jamaica-based International Seabed Authority is in charge of overseeing such international waters.
For Russia, or any other country, to expand its territory in the region, it must prove that the disputed territories are linked to the mainland as part of the same continental shelf.
In 2001, the UN Commission on the Limits of the Continental Shelf rejected claims that the Lomonosov Ridge belonged to Russia, demanding more conclusive scientific proof.
“The UN law of the sea has come to a head in the last few years and all the countries have started competing and claiming things for themselves,” said Richard Scott, a research geologist working on a Cambridge University study of the Arctic shelf.
“The difficulty we have in the Arctic Ocean is that there are a lot of ridges and it is not clear whether they are attached to the continental shelves,” Scott said. “The necessary data is missing at the moment. We have some information, but not very good information.”
Now it seems Moscow is willing to make more money available for Arctic research, in a bid to bolster its case.
“Funding of polar expeditions and large Arctic projects, including a scientific proof as to the external boundary of the Russian Artic shelf, is growing each year,” Chilingarov told the Murmansk news conference, Itar-Tass reported.
A spokeswoman for Chilingarov on Wednesday said he was unreachable for further comment.
Recently another government-funded expedition of 50 scientists spent 45 days scouring the area around the Lomonosov Ridge in an attempt to collate data to back up Russian claims of ownership.
“We have answered all the questions that the UN commission had placed before us,” said Viktor Poselov, the leader of that mission, who is deputy head of the Natural Resources Ministry’s Institute of World Ocean Geology and Mineral Resources.
Russia plans to submit a renewed claim to Arctic territory when the UN Commission meets in 2009, Poselov said.
Asked whether the group’s findings meant that the North Pole belonged to Russia, Poselov said, “The [ownership of the] North Pole is not our question, it is a question for the Foreign Ministry to decide. ... It is a question for the UN.”
Any moves to extend Russia’s boundaries are not about the potential hydrocarbon bonanza in the region, Poselov insisted.
“Just like any other state Russia wants its borders to be clarified legally,” he said, citing a range of other countries that are lodging territorial claims.
Both Canada and Denmark also lay claim to the Lomonosov Ridge, having asserted previously that it is connected both to Canadian territory and to Greenland.
Trine Dahl-Jensen, a researcher at the government-funded Geological Survey for Denmark and Greenland, said in a telephone interview from Copenhagen that investigations are currently ongoing into Denmark’s claims to the ridge.
Denmark and Canada sent out a large joint expedition last spring, Dahl-Jensen said. Denmark has until 2014 to put forward its claims to any additional territory, she said.
Earlier this month Canadian Prime Minister Stephen Harper announced plans to beef up the country’s presence in the region by splashing out over $7 billion on a fleet of purpose-built Arctic patrol ships, a report on his web site said.
“Canada has a choice when it comes to defending our sovereignty over the Arctic. We either use it or lose it. And make no mistake, this government intends to use it,” Harper said in British Columbia.

TITLE: Environmentalists Get on Their Bikes to Map Black Spots
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Members of local environmental groups have ridden bikes across the southern coast of the Finnish Gulf to help create a map of pollution black spots and campaign against environmental pollution resulting from industrial projects.
“The south coast has become a site of gigantic construction works including the Baltic Aluminium Plant, the Baltic Silicon Valley project and a center for the treatment of spent nuclear fuel from the Leningrad Nuclear Power Station (LAES),” said Oleg Bodrov, chairman of environmental group Green World, the rally’s organizer. “These projects, costing more than $20 billion, if fully implemented, are bound to destroy the coastline.”
Bodrov said genetic mutations have already been found in pine trees around the town of Sosnovy Bor where LAES is located, and environmentalists warn that risks for the ecology would immensely increase with the arrival of the new waste processing facility.
“Projects like this have to undergo an independent environmental assessment, but what we had in the case of the LAES’s waste treatment center was fictitious,” Bodrov said. “Vladimir Grachev, head of the State Duma’s Environmental Committee set up a special NGO, titled the Russian Ecological Movement for Concrete Activities which then carried out the assessments with predictably favorable results. No independent environmentalists had a say in the issue.” 
Ecologists claim that chemical wastes and toxic industrial discharge dumped into the air and water by the enterprises will produce highly damaging combinations for the environment.
The bike ride’s participants sought to increase awareness of the risks the new industrial developments involve and the challenges they pose among local people. In addition to Sosnovy Bor, another black spot is the Lebyazhye settlement near Lomonosov.
Alexander Senotrusov, deputy head of municipal council of the Lebyazhye settlement, said the area is rapidly turning into a target for private construction initiatives. Recent amendments to Russian legislation have made it much easier for construction companies to take over valuable land.
“Back in the Soviet area, the coastline up to 100 meters from the water’s edge into the land was protected against any construction but now it has been reduced to 20 meters, and the results are devastating,” Senotrusov said. 
“Beaches in the area stretching for 70 meters inland are left now almost entirely unprotected.”
The Lebyazhye area, inhabited by over 200 species registered in the Red Book of Nature, was a national reserve until the Russian government removed it from the list in 1999. 
In the spring, following negative international reaction, the area regained its status but the territory of the national reserve has shrunk drastically.
“It lost two-thirds of the inland zone,” Senotrusov said. “The area is inhabited by swans during the spring and autumn migration [its name translates into English as “Swan’s Land”]. If it is heavily developed, the land will become unsuitable for swans.”

TITLE: Cargo Plane Crashes Killing Seven
PUBLISHER: The Associated Press
TEXT: A cargo plane built in 1964 crashed Sunday, minutes after taking off from Domodedovo Airport, killing all seven crew members on board, officials said.
The An-12 four-engine turboprop belonging to the private Atran carrier went down at 4:22 a.m., just after taking off from southeast of Moscow, Emergency Situations Ministry spokesman Viktor Beltsov said.
The plane slammed into a field, scattering debris over a wide area. There were no injuries on the ground, Beltsov said. The cause of the crash was not immediately clear.
Rescue teams have recovered both of the plane’s cockpit recorders, vital to investigators determining the cause of the crash, Beltsov said.
The plane, bound for Bratsk, in eastern Siberia, was carrying 9 tons of cargo, well below the 20-ton maximum, Beltsov said.
Overloading has caused many crashes of cargo planes in Russia, and experts say many carriers have routinely forged flight documents to get more cargo on board, neglecting safety.
The An-12 was designed in the 1950s and produced in large quantities for both military and civilian transport. More than 100 such planes are still in service in Russia and other countries.
The plane was to be discarded later this year, aviation authorities told RIA-Novosti.
n On Saturday, a small private helicopter crashed in the Ural Mountains region of Udmurtia, killing all five people on board, Beltsov said.
Also on Saturday, a Boeing 757 of Russia’s private VIM-Avia carrier bound for Naples, Italy, had to return to Moscow after a crack was discovered in its windscreen, the Interfax news agency reported. It landed safely.

TITLE: Rolling Stone Ronnie Shows Paintings
AUTHOR: By Jennifer Davis
PUBLISHER: Special to The St. Petersburg Times
TEXT: Ronnie Wood, the legendary guitarist with The Rolling Stones, is a true Renaissance man. 
Despite a grueling tour schedule, numerous recording sessions, and ongoing work on his memoirs, due out next year, Wood still finds time to draw and paint. In conjunction with the first-ever Rolling Stones’ concert in St. Petersburg on Saturday, the D137 Gallery is holding an exhibition of Wood’s latest work.
“I feel lucky that I’m able to express myself both as an artist and a musician,” said Wood.  “In my paintings, I’m trying to capture the physical movement and energy of the moment.” 
An alumnus of Ealing Art College in London, Wood has proved himself an accomplished and prolific painter, celebrated in several exhibitions in Japan, Brazil, the U.S. and throughout Europe. 
Wood is foremost a portrait painter, and has had the unique opportunity to paint some of the most famous musicians of the twentieth century, including all the members of The Rolling Stones, Rod Stewart, Eric Clapton, and even Madonna. He always carries a sketch book with him on the road.
The exhibit is not limited to musical themes however. Wood has included several portraits of his wife and a series of oil paintings of ballerinas. 
“I just recently started painting dancers,” he said. “ In London, I had the opportunity to sit in on rehearsals and sketch.” 
Wood launched his illustrious rock career playing with The Jeff Beck Group in the mid-sixties, before joining the Small Faces with Rod Stewart in 1969. However, Wood was always a huge fan of the Rolling Stones and claimed he always knew he would join the band one day. He recorded the hit single, “It’s Only Rock n’ Roll” with the Stones in 1974 and became an official member of the group in 1975. The Rolling Stones has been traveling for the past two years on The Bigger Bang Tour which wraps up in August. 
“I’ll finally have a chance to rest,” said Wood. “But rest for me means more painting.” “The band just keeps getting better and better or else we wouldn’t be doing it,” he said. “I think we’re all better friends now than ever. Every day is a new adventure. We get on the plane together, go different places. We’re like a bunch of kids.”
The Rolling Stones’ concert on Palace Square last weekend drew an estimated 50,000 people. “We still get nervous before we go on,” said Wood. “It’s so exciting.”

“Ronnie Wood: Rock Star and Painter” runs through Friday at D137 Gallery, 90-92 Nevsky Prospekt.

TITLE: Gorbachev Blames U.S. for Bad Relations
PUBLISHER: The Associated Press
TEXT: Former Soviet leader Mikhail Gorbachev on Friday laid the blame for the current low in Russia’s relations with the West squarely at Washington’s door, accusing the United States of making “major strategic mistakes” that threw the world into a period of “global disarray.”
Russia has fallen out with the United States on a raft of issues, clouding relations and leading some commentators to draw parallels with the Cold War.
Gorbachev expressed support for President Vladimir Putin’s stance on most questions and traced the roots of the chill with the West to the collapse of the Soviet Union, which, he said, put Washington in an imperial mood.
After the Soviet collapse, “the idea of a new empire, of sole leadership, was born,” he said at a news conference. “Unilateral actions and wars followed,” he added, saying that Washington “ignored the Security Council, international law and the will of their own people.
“These are major strategic mistakes,” Gorbachev said.
Gorbachev, whose policies of glasnost and perestroika set in play democratic forces that led to the collapse of the Soviet Union, echoed Putin’s frequent endorsement of a so-called “multipolar world.”
“No one, no single center, can today command the world. No single group of countries, like the G8, can do it,” Gorbachev said. “There is no option other than to build a multipolar world order, no matter how complicated this is.”
That, he said, would not be achieved until after the administration of George W. Bush. “Under the current U.S. president, I don’t think we can fundamentally change the situation as it is developing now,” he said. “It is dangerous. The world is experiencing a period of growing global disarray.” The Kremlin says the Bush administration’s plans for a missile defense system in eastern Europe could spark a new arms race. It has refused to back Washington’s draft Security Council resolution on Kosovo’s independence and has suspended its participation in a key treaty on arms reduction in Europe.
Moscow is also in the midst of a bitter diplomatic squabble with Britain over Russia’s refusal to extradite a suspect in the killing of former Federal Security Service officer Alexander Litvinenko.
Addressing the diplomatic dispute with Britain, Gorbachev called for calm. “What’s done is done -- we need to stop and return to a dialogue and continue developing ties,” he said.
Still, he said the case was “politicized” and, therefore, “someone needs it to be so, and to spoil relations.” He said Britain “tries to be a good friend only to the United States.”

TITLE: Cosmonauts Shocked by Drunk Space Flight Claims
PUBLISHER: Combined Reports
TEXT: Russian cosmonauts have reacted with shock and disbelief to allegations by an independent medical panel that a U.S. astronaut was drunk aboard a Russian spacecraft.
The independent U.S. panel reviewing astronaut health issues said Friday that it was told about multiple instances involving alcohol, including a case involving an astronaut flying aboard a Soyuz spacecraft from the Baikonur Cosmodrome to the international space station.
Panel chairman Air Force Colonel Richard Bachmann, cited unverified interviews and said it was not the panel’s mission to investigate the allegations.
The Federal Space Agency denied the allegations Saturday.
“This is absolutely impossible at Baikonur in the days leading up to a launch,” Federal Space Agency spokesman Igor Panarin said. “Astronauts are under the constant watch of medics and psychiatrists.”
Cosmonaut Anatoly Solovyov said the tight medical requirements and the demands of the job ahead made it inconceivable that astronauts or cosmonauts would fly drunk.
‘’The responsibility dominates your thoughts ... and directs all your actions,” Solovyov said. “For me this is nonsense.’’
Cosmonaut Grigory Grechko also found the reports difficult to believe.
“The launch is a very dangerous moment ... when your complete attention is on the flight,” he said. 
AP, SPT

TITLE: Paratroopers Defend ‘Disorderly’ Holiday
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: The Leningrad Military District Airborne Unit will for the first time in the post-Soviet era celebrate its holiday with legally-sanctioned events on Thursday, following the passage of a law by the St. Petersburg parliament earlier this month that recognizes the 77-year-old Paratroopers’ Day in line with the Army and Navy Days.
The Russian Navy marked its national day on Sunday.
“We have been tirelessly fighting for legal recognition to enable us, among other things, to secure funds from the St. Petersburg administration to support the day’s event,” said retired paratrooper, Lieutenant General Vladimir Sukhoruchenko at a news conference last week. 
Asked whether the paratroopers, whose hard-man antics during the holiday on the streets of St. Petersburg has lead to a fearsome reputation, were acting illegally before the passage of the law, Sukhoruchenko said: “It’s more a question of administrative regulations, rather than legislative in its strict sense.”
City Hall has for the first time contributed 300,000 rubles ($11,500) to the day’s events, Sukhoruchenko said. 
He declined to disclose the total budget of the occasion, but said the majority of it is made up of contributions from non-commercial military organizations such as the Union of Afghan War Veterans and the Blue Berets’ Military Patriotic Club.
“We are role models for youngsters who would otherwise be considered social outcasts and show how they can be transformed into real and brave men, patriots who are proud of their country and ready to give their lives for the sake of the motherland,” said ex-paratrooper Valery Andreyev, the director of a club that recruits future paratroopers from the ranks of under-privileged children in St. Petersburg and the surrounding area. 
“Some of these kids have even spent terms in prison, but we help make them grow into loyal and useful citizens after laws, prisons and traditional methods have failed,” he said.
Public opinion is traditionally mixed about the way paratroopers celebrate their day, with some people perceiving their presence on city streets as threatening. 
But Sukhoruchenko said the widely perceived notion of paratroopers on a “drunken spree, going on the rampage, causing public disorder and violent street confrontations with policemen” were wrong and called upon the public to distinguish between real paratroopers and imposters. 
“The police are right… they are doing their job in dealing with bunches of hooligans who dress like us and pose as paratroopers to tarnish our image,” he said.
Paratroopers wear distinctive blue berets and striped jerseys, but other armed forces units wear the jerseys and other parts of the uniform can easily be obtained.
About 9,000 police will be deployed in Palace Square and the Central Park of Rest and Culture, or TsPKO, to maintain public order, said Sukhoruchenko, who is also the current deputy chairman of City Hall’s Committee for Security, Law and Order. 
Police will also be deployed on Millionnaya Ulitsa where a march to Marsovo Pole is expected to be staged. 
Thursday’s events, according to Sukhoruchenko, are also dedicated to the 100th anniversary of the birth of Airborne Commander Vasily Margelov, a revered military scientist who commanded the division during the Siege of Leningrad during World War II.
Events planned include parachute maneuvers on Krestovsky Island, martial arts and the related sports competitions involving participants from Europe and Asia, a motor rally, musical entertainment and theatrical shows on Palace Square and TsPKO. 
The Soviet Airborne Division was born out of a small parachute-training unit, which was set up at an airfield near Voronezh in central Russia on August 2, 1930. But it was in the Leningrad suburban town of Pushkin where the small group of paratroopers grew into a brigade, marking the beginning of one of the Soviet Union’s most powerful military divisions. 
Currently, there are about 32,000 paratroopers including new recruits and 2,500 members of related organizations in the St Petersburg Military District, Sukhoruchenko said.

TITLE: Gutseriev: State Pushed Him into Sale
AUTHOR: By Torrey Clark
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russian billionaire Mikhail Gutseriev said he’s selling out of Russneft because of attacks on the company and management by tax and law enforcement agencies.
“I was advised to leave the oil business `on good terms.’ I refused,’’ Gutseriev said in a letter to Russneft’s employees, published Monday by Vedomosti newspaper. “Then to make me more amenable the company was subjected to unprecedented hounding.’’
Russneft spokesman Eduard Sarkisov confirmed in a telephone interview in Moscow that Gutseriev wrote the letter. 
Russneft’s shares have been frozen since June as the government claimed the company owed back taxes and sought control of the stock. The tax authorities, prosecutors and Interior Ministry officials have been investigating the company and management for two years, said Gutseriev, who was accused of “illegal entrepreneurship’’ in May.
President Vladimir Putin’s government used tax claims to bankrupt and dismantle Yukos and jail former Chief Executive Officer Mikhail Khodorkovsky. State-owned Rosneft bought most of Yukos’s assets, sold at forced auctions, to become Russia’s largest oil company this year.
“I can’t allow the futures of people who believed in Russneft, who followed me, to be destroyed,’’ Gutseriev said. “I will give control of the holding company to a new owner, whose appearance, I am sure, will help resolve all of the problems that have arisen for Russneft.’’
Calls made by Bloomberg News to Russia’s Federal Tax Service, Prosecutor General’s Office and the Interior Ministry’s investigative committee went unanswered Monday.
Russian billionaire Oleg Deripaska’s Basic Element plans to buy Russneft to expand its energy business, Sergei Rybak, a spokesman for the investment company, said Monday in a telephone interview. A unit of Basic Element applied to the competition authorities for permission to acquire the oil company last week and expects a decision within a month, he said.
Shareholders would be “happy’’ if Basic Element became the new owner, Mikhail Shishkhanov, Gutseriev’s business partner and the head of Binbank, said yesterday in remarks relayed by Sarkisov.
Gutseriev will receive at least $3 billion, while the new owner will pay off $2.8 billion in debt to Swiss commodities trader Glencore International AG and Sberbank, Russia’s state savings bank, as well as 20 billion rubles ($782 million) of tax claims, Vedomosti reported today, citing an unidentified person close to the deal. Rybak declined to comment on the price.
Deripaska told the Financial Times earlier this month he would cede control of United Co. Rusal, the world’s biggest aluminum producer, to the Russian state if the government asked.
Deripaska, billionaire Viktor Vekselberg and Glencore formed the company earlier this year in a three-way merger.

TITLE: Gazprom Snaps Up 2 Generating Companies
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: At Friday’s UES board meeting, it began to seem almost axiomatic: What Gazprom wants, Gazprom gets. 
The prize Gazprom had set its eyes on this time was control of two of the country’s largest electricity generating companies, and after putting up a dogged fight, Unified Energy System could not resist the pressure.
The UES board voted to give Gazprom the exclusive right to swap its stake in state-owned Hydro-OGK, Europe’s largest producer of hydroelectricity, for control of OGK-2 and OGK-6, which jointly produce more than 8 percent of the country’s non-nuclear electricity.
Once the swap is complete, Gazprom will own 52 percent of OGK-6 and 55 percent of OGK-2, UES chief executive Anatoly Chubais said. After both generating companies hold share sales this year, Gazprom’s stakes will be diluted to about 42 percent, but analysts said it would easily regain control by buying up shares in the sales.
“As you know, we had a very long and difficult discussion on this issue, but we have finally concluded it, and now the matter is fully clear,” Chubais said during a conference call Friday evening. 
The picture that has emerged flies in the face of Chubais’ plan for liberalizing the power sector through carefully managed sell-offs. UES has been trying for the last five years to welcome a range of foreign and local investors that would compete to make the sector more efficient and help provide $120 billion in investments needed to revamp it. 
Instead, Gazprom has steadily moved toward its goal of controlling the country’s entire energy market. With the largest single holding of electricity generating assets in its hands, it will be very well placed to influence prices, investment and other strategic issues.
Alexander Branis, a member of the UES strategy and reform committee, said in an e-mailed response to questions that he hoped there would still be room for Western investors in the power sector. “We don’t like acquisitions by Gazprom, as Gazprom is a very inefficient and corrupt company,” Branis said in his response.
UES has so far only been able to stall Gazprom’s takeovers, not stop them. The gas giant already controls Mosenergo, the country’s largest fossil-fuel generating company and the provider of power to the capital, along with various smaller generation and distribution stakes worth more than $10 billion. 
Gazprom also struck a deal in February to pool its power assets with the Siberian Coal and Energy Company — which owns significant stakes in 27 energy companies and a 2 percent stake in UES — to form a $12 billion electricity holding, the country’s largest by far.
Ahead of the UES board meeting, Renaissance Capital on Wednesday attacked the proposed stake swaps, saying they were “not market-friendly,” and “operate to the disadvantage of other UES minority shareholders.” 
“The message possibly to be gleaned from Friday’s UES board meeting is not whether power sector reform is beginning to lose its market credentials ... but how seriously,” the bank said in a note to investors.
However serious the outcome for minority stakeholders, it could have been worse. Chubais and other UES officials succeeded in preventing Gazprom from swapping its shares in the Federal Grid Company for generation assets, which would have brought it even closer to dominating the entire power sector. 
The previous two board meetings ended in a stalemate over the question of stake swaps.
“To put it off further would have jeopardized the time frame of the reforms,” said Yelena Yushkova, an electricity analyst at Finam brokerage. The reforms are to be concluded by next July, when UES will cease to exist after selling off all its assets. 
“I have to say we expected this outcome in favor of Gazprom,” Yushkova said. “Because of its influence, it probably couldn’t have turned out any other way.” 
OGK-2 and OGK-6 will be the biggest losers from the decision to allow the swaps, Yushkova added, as the shares being given to Gazprom would otherwise have been sold to investors, potentially earning the companies billions of dollars.
If the swaps had been prevented “the price of the upcoming share emissions would have been significantly higher,” she said. “Now they will not get this money. ... The market’s interest in these companies will go down after such a decision.” 
But OGK-6 spokesman Dmitry Filatov said the generating company should still make enough to carry out its construction plans. 
“If that’s what [UES] decided, that’s what we will do,” Filatov said Saturday. “Of course you won’t hear any criticism of Gazprom from us. Who would want to criticize their future master?”
Gazprom spokesman Denis Ignatyev declined to comment on the stake swaps Saturday. 
 Chubais has quadrupled his personal stake in UES to 0.0082 percent of the ordinary shares, according to data posted Friday on E-disclosure.ru. At current prices, the stake is worth $4.55 million.
The board also decided to penalize the owners of gencos that fail to meet their investment commitments in terms of new capacity. Other gencos will have to provide the capacity, and the cost will be charged to companies that failed to do so, board member Yury Udaltsov said during the conference call.

TITLE: New Lottery Just The Ticket for City Hall
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: City Hall has found a new way of taxing the credulity of the poor. Instead of gaming halls, which are to be banned from Jan. 1, 2008, gamblers are being offered a state lottery alternative. Funds raised through the lottery will be used to finance social projects, local officials claim.
Nevskoye Loto lottery was inaugurated on May 27 this year with the backing of the Committee for Economic Development, Industrial Policy and Trade (CEDIPT).
“Lottery draws are to be held weekly. The number of participants has already increased by 50 percent. The prize fund is growing. Somebody could win over 200,000 rubles ($8,000) in one of the upcoming draws,” CEDIPT said last week in a statement.
The statement emerged in response to negative media speculation concerning the lottery and its organizers.
The fact that the National Reserve Bank (NRB) provides accounting services for the lottery was the object of most suspicion. Former president and shareholder of NRB Alexander Lebedev is known for his uncompromising position in relation to the gambling business. As a State Duma deputy he was one of the most active promoters of the law that prohibits gambling in Russian cities.
Some media said that Nevskoye Loto Ltd. is affiliated with NRB. The bank, however, denied any connection to the lottery’s organizers.
“None of the documents available to CEDIPT show any connection between State Duma deputy Alexander Lebedev and the organizer of the state lottery Nevskoye Loto,” the CEDIPT statement said.
Local officials claim that the idea of a lottery “that would attract non-budget funds for social projects and allow citizens a real chance of winning money” emerged in CEDIPT two years ago.
CEDIPT expects nostalgia for the popular soviet weekly lottery Sportloto will ensure that this project is successful.
Funds raised by Sportloto were used to finance the development of sports activities. Nevskoye Loto, according to CEDIPT, will raise funds for “social needs and the recreational pursuits of city residents.”
Regardless of its social mission, for participating companies the lottery is simply a business venture. The organizers have already ordered over 300 terminals for the distribution of lottery tickets from Unikum company. The terminals were installed in all major retail chains and a number of filling stations, and will soon be installed in metro stations.
Winnings are distributed through Teleforum retail outlets. Meanwhile, CEDIPT is doing everything it can to promote the lottery as a “social project.”
According to its agreement with CEDIPT, Nevskoye Loto will operate the lottery for five years and be exempt from laws on gambling.
“Lotteries are not subject to laws on gambling. These are two different spheres. Gambling is regulated by Law No. 244 while lotteries are regulated by Law No.138,” said Georgiy Pchelintsev, lawyer at Beiten Burkhardt St. Petersburg.
“It’s a state lottery, and I don’t think that lotteries will face any limitations or changes in legislative regulations in the foreseeable future,” Pchelintsev said.
He claimed that the separate regulation of lotteries and gambling is normal practice in most European countries.
“And in St. Petersburg it’s not the first initiative of its kind. The city has organized lotteries in the past,” Pchelintsev said.

TITLE: In Brief
TEXT: <b>Authorized Doubling</b>
ST. PETERSBURG (SPT) — International Bank St. Petersburg has doubled its authorized capital stock, Interfax reported Friday.
The bank issued about 288.6 million new shares distributing them through a closed subscription. As a result, the bank increased authorized capital stock up to 578.7 million rubles ($22.63 million).

<b>Baltic Surrender</b>
LONDON (Bloomberg) — Baltic Oil Terminals, a British-registered company that operates in Russia, is surrendering two licenses to explore for oil in Russia’s Kurgan region, which borders Kazakhstan.
Baltic Oil Terminals will continue its exploration program, focusing on its licenses to the Privolny and Mokrousovsky deposits, the London-based company said in a Regulatory News Service statement Monday.

<b>Capital Rising</b>
ST. PETERSBURG (SPT) — Bank St. Petersburg plans to increase its authorized capital stock by 20 percent, up to 302.3 million rubles ($11.8 million), Interfax reported Friday.
The bank will raise 50.8 million rubles ($1.9 million) to finance regular operations. The shares will be distributed through a closed subscription.

<b>Eni Warning</b>
MOSCOW (Bloomberg) — Kazakhstan could revise a contract with Italian oil company Eni SpA for the development of Kashagan, the country’s biggest oil deposit, Interfax reported, citing Kazakh Prime Minister Karim Masimov.
Masimov said he was warning the company through the media that a delay in the field’s development will be dealt with as a revision to a contract that the government regards as unalterable, Interfax reported Monday.

<b>Plastic Plans</b>
ST. PETERSBURG (SPT) — Baltika brewery has invested over six million euros ($8.19 million) into a new production line in Voronezh, the company said Friday in a statement.
The new line will produce plastic bottle beer increasing the production capacity of the plant in Voronezh by 64 percent. In Voronezhskaya Oblast Baltika holds 44 percent of the beer market.

<b>Sistema-Hals Loan</b>
MOSCOW (Bloomberg) — Sistema-Hals, the property unit of Russian billionaire Vladimir Yevtushenkov, got a $500 million credit line from VTB Bank.
The money will be used to refinance bridging loans obtained from Deutsche Bank AG, UBS AG and Nomura International before Sistema-Hals sold shares to the public in November 2006, the company said in a statement distributed Monday by the Regulatory News Service.

<b>Isuzu Venture</b>
TOKYO (Bloomberg) — Isuzu Motors, Japan’s only independent truckmaker, will set up a joint venture to make trucks in Russia, where economic growth has increased demand for commercial vehicles.
Isuzu will set up a venture next month, capitalized at 1.6 billion yen ($13.5 million), with Severstal-Auto, the company said in a release Monday. The venture initially plans to make and sell 5,000 trucks a year in Russia and expand production and sales to 30,000 units a year in the future, it said.

TITLE: TNK-BP Concern Over Tax Burden
AUTHOR: By Dmitry Zhdannikov
PUBLISHER: Reuters
TEXT: MOSCOW — Russia’s No.3 oil firm TNK-BP, half owned by BP, wants to gain footholds in Kazakhstan and Turkmenistan amid concerns over a heavy Russian tax burden.
“Kazakhstan and Turkmenistan are those places where Russian companies with international characteristics can prosper,” Chief Executive Robert Dudley told reporters over the weekend.
“We are not talking about anything like Kashagan,” he said referring to the huge Kazakh offshore field. 
“We can work in other parts, like onshore for example. There could be mature fields to help develop as we did in Russia. It would be a good start,” he said in comments cleared for publication on Monday.
TNK-BP is not active in Kazakhstan, where almost all big oil majors apart from BP have a heavy presence.
Dudley also said the company was considering projects in the Russian Caspian Sea sector near Kazakhstan, but did not elaborate: “Places like Ashtrakhan — we have good experience in developing these environmentally sensitive areas.”
The company, which has previously remained focused on Russia, is looking to increase its portfolio elsewhere as it says Russia has surpassed Norway as the country with the heaviest taxation in the oil industry. Next year, TNK-BP plans to boost investments in Russia for a fifth straight year to $4.0-$4.5 billion from $3.4 billion in 2007.
But that behavior could change as Dudley says he could find it more and more difficult to persuade BP and the Russian shareholders to approve investments.
“The profitability is squeezed and at some point it will begin to change peoples’ decisions,” said Dudley.
“It won’t be a huge change, it will be project by project. It will be gradual, like a move by a supertanker.
“At the point it begins to be uneconomic, it will be difficult to invest,” he said, adding that decisions will still be made project by project rather than on a country basis.
TNK-BP is responsible for one-fifth of BP’s production, but brings only a tenth of its profits. Dudley said Russian reserves would still remain a key attraction.
“It will result in more reserves in the longer term. I have experience in other places in the world and I can say Russia is a very good place to invest money,” he added
“It is still profitable, not as profitable as around the world but it is still offering reasonable rates of return.”
Inflation and the fast appreciation of the ruble are adding to cost pressure, Dudley said: “I believe that economic strength is such that appreciation is inevitable. But they have to make sure the appreciation is not very rapid.”

TITLE: Planting The Seed Of Super Grade Zinc
PUBLISHER: Reuters
TEXT: MOSCOW — Russia’s biggest zinc producer, Chelyabinsk Zinc Plant, said on Monday it produced 80,385 tonnes of super high grade metal and its alloys in the first half of 2007, a 14.6 percent increase year-on-year.
“Chelyabinsk Zinc Plant is on course to meeting its year-end production expectations of 165,000 tonnes of SHG zinc and zinc-based alloys,” a Chelyabinsk statement quoted board chairman Sergei Moiseyev as saying.
London-listed Chelyabinsk is responsible for approximately 60 percent of Russian zinc production. 
In 2006, it produced 148,384 tonnes of SHG zinc.
Chelyabinsk said it supplied 49 percent of its January-June output to the domestic market.
Chelyabinsk’s subsidiary, Nova Zinc LLC, the operator of Akzhal zinc and lead ore mine in Kazakhstan, processed 649,155 tonnes of ore in the first half of 2007, 7.9 percent more than in the same period of 2006.
Average zinc content in the ore declined to 2,7 percent in the first half of 2007 from 2.96 percent a year ago and lead content to 0.59 percent from 0.72 percent.
Production of zinc concentrate rose 0.8 percent to 29,725 tonnes, while lead concentrate production fell by 12.1 percent to 4,701 tonnes.

TITLE: Handling Russia With Care - Made for the Top Post
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: It is not difficult to see in Daniel Kearvell someone for whom success comes easily. Only 26, yet Kearvell has already established himself as one of St. Petersburg’s brightest foreign stars. Having already been founder and director of the Russo-British Chamber of Commerce (RBCC) in St. Petersburg and the Russian Northwest, Kearvell’s current challenge is as area manager for one of the world’s largest companies, DHL.
Born in 1980 in the English town of Peterborough, at the age of four Kearvell started playing rugby and always dreamed of becoming a professional player. And it was rugby which sent him in 1989 to Russia for the first time for a match against Lokomotiv in Moscow.
 “It was a difficult time for Russia. There was no food in the stores. We didn’t even have any water to drink during the match, but, anyway, I was impressed by the hospitality of the Russian people. Since then Russia has always been my interest, my hobby and eventually it became my life.” It became Kearvell’s ambition to return to Russia at some point in the future. 
He started reading Russian literature and finding out as much as possible about the country, going on to study 20th century Russian history at Nottingham University. At the end of his first year he went to Yaroslavl and then during his third year spent four months in Voronezh, traveling a lot around the country in the process. 
“For me it was a huge adventure. We visited Yekaterinburg, Samara, Volgograd and some cities in Northern Russia. It was extremely exciting, something very, very new — a unique opportunity to see the ‘real’ Russia. That time has a special place in my heart,” Kearvell said. “This is the thing about Russia — some people from my group liked it, others wanted to get back home. Personally I’ve always thought that it’s good to be open-minded and have new experiences with foreign cultures.”
During the second half of his third year at university Kearvell moved to St. Petersburg where he taught English to Russian students aged 6 to seventeen. 
In 2000, back in the U.K. to complete his studies, Kearvell worked at the Events Department of the RBCC in London. “During my penultimate year at university I came on several business trips to St. Petersburg to look for opportunities for the Russo-British Chamber of Commerce who wanted to open an office here. Even at this very early stage of my career I had a very special feeling about St. Petersburg, which is a great city with a lot of potential. It was my ambition to come back here,” Kearvell said. 
However, in 2002 Kearvell started work in Moscow where he was appointed the RBCC’s Advertising and Marketing Manager. A year later he was promoted to Commercial Manager and a year after that it was Kearvell himself who opened the RBCC office in St. Petersburg, becoming responsible for attracting British companies to set up business in Russia. 
Of course for most young foreigners finding work in Russia is a challenge. Out of the 109 other British students who studied in Russia with Kearvell, just five or six of them came back, he said. 
“Although the Russian economy is growing extremely quickly and there was big demand for Western professional assistance and management expertise in the 90s, that is no longer the case,” Kearvell said. 
“Russian specialists are growing more and more qualified. Now they are pretty much on the same level as their British counterparts. The young generation is extremely bright. They travel and study abroad, some speak English even better than we do. That’s what makes me positive about Russia’s future.”
Kearvell believes that Russia is a country of big opportunities. “If you are bright and practical, Russia gives you the opportunity to learn and succeed very quickly,” he said. As a foreigner living in Russia, Kearvell strongly believes that he has his own special obligations. “Firsty, I think if you are an expat in Russia and you respect the country you live in, you should speak the Russian language, even though it is difficult to learn. We should also not forget that here we are representing the country of our birth. I would never deny the fact that I’m an Englishman. Moreover, my previous job was representing the British-Russian business community in Russia.”
At the same time, when he returns to the U.K, Kearvell said that he feels like an ambassador for Russia. 
“Many people in Britain occasionally have an incorrect view about what is happening here in Russia. So I try to give them the full picture, tell them what the country is really like,” he said. 
Kearvell is certainly finding his current line of work satisfying. “DHL is a great company to work for. It has very good HR processes and I see very much my role as a regional manager throughout the whole of the North-West. My job is building a strategy but also includes people management which means that I am making people understand what we expect from them at work.” 
“And DHL has practical, ambitious employees who are able to take responsibility and decisions on their own,” Kearvell said. 
As an experienced manager, Kearvell thinks that sport is a very good background for management. “If you are a captain in team sport, you look at the team, put the players in the right position, try to motivate them in the right way, and it’s exactly the same as a manager,” he said. In June 2004, he started his own rugby team “The White Knights in St. Petersburg.” It consists of Russian and foreign amateur rugby players who regularly gather together for training and matches.

TITLE: Self-Interest and British-Russian Relations
AUTHOR: By Roland Nash
TEXT: In early 2000, the British Embassy in Moscow took a bit of a gamble. They persuaded then-Prime Minister Tony Blair to meet with the new face in the Kremlin and heir apparent — then-acting President Vladimir Putin. This was one of Blair’s first major foreign policy initiatives. At the time, it was a bit of a shocker — a popular, powerful, top-level, democratically-elected leader meeting with an unelected, unknown, KGB spy who was failing to manage a bankrupt country overrun by shady oligarchs. 
The irony of the current situation is that it illustrates what a far-sighted step the British Embassy took at the time. In early 2000, Putin was weak and Russia was dangerously unstable. Britain’s influence in Russia was somewhat limited during the ‘90s by the much firmer relationship between Boris Yeltsin and former German Chancellor Helmut Kohl. As Russia gradually emerged from the hangover of the ‘90s, and a shockingly competent Putin began to find a place for Russia on the global stage, the British-Russian relationship helped both sides. For a brief period from 1999 to mid-2002, Britain was perhaps Russia’s closest Western ally. Putin benefited from Britain’s political recognition and Britain remains Russia’s most important partner in finance and business. The recent expulsions of diplomats is important partly because the British-Russian relationship matters so much to both sides. 
Blair’s successor seems equally keen to use Russia to demonstrate independence in its foreign policy. While Blair was the first world leader to publicly accept a post-crisis Kremlin, British Prime Minister Gordon Brown appears to be the first to draw a definitive line in the sand. It has been a long time coming, but the expulsion of the four diplomats sent a clear message to the Kremlin: The long era of making allowances for the post-Soviet mess is ending. Strangely enough, this may be partially beneficial for the Kremlin. As long as investment continues to flow in both directions, tit-for-tat diplomat expulsions play well politically to the domestic audience and demonstrate an international equality of sorts. 
The immediate cause of the squaring-off between Russia and Britain is something of a red herring. There was no way that Russia was ever going to hand over Andrei Lugovoi for trial in Britain. The decision in the end was political, not legal. It reflects the far from incomprehensible stance that if London will not countenance the extradition of Boris Berezovsky and Chechen rebel envoy Akhmed Zakayev, then there is no good reason to cooperate with Lugovoi. London’s argument that Britain’s refusal to extradite is legal, not political, seems only as relevant to Moscow as the Kremlin’s argument that Lugovoi cannot be extradited because it is against the Constitution.
The Britain-Russia standoff is the latest symptom of a larger conflict — a jockeying for position as Russia reasserts its interests globally. Defining the confrontation as a new Cold War is misleading. Relative to the grotesque East-West confrontation during the Soviet era, the current tension in British-Russian relations is a fairly petty affair. It is a conflict of realpolitik that is messy, irritating and ugly, but not globally destabilizing — more of a global cold sore than a global Cold War. 
Russia has in recent years proven rather inventive at getting what it wants. For example, it appropriated Yukos, renegotiated the Kovykta and Sakhalin oil and gas deals, while inviting Total into the huge Shtokman project in the Barents Sea and inviting Germany to join the Baltic Sea gas pipeline. Moreover, it criticized the United States and Britain in the Middle East, while keeping options open with Iran. It is also building stronger ties with China while demonstrating a willingness and ability to cut energy supplies to Europe. 
In addition to these inventive initiatives, there have been the downright irascible: hounding the British ambassador in Moscow, Tony Brenton; allegedly attacking government and tourist web sites in Estonia; banning wine and water imports from Georgia; and taking the visa registration process to a new level of bureaucratic absurdity.
Of course, both sides will argue that the other is at fault. Certainly, Russia’s lack of institutional flexibility and the resulting difficulty in efficient implementation of policy leaves Russia looking less polished. Similarly, the limited checks and balances in the political system and the consequent lack of input into the decision-making process explains some of Russia’s mistrust and occasional myopia. 
But Russia would probably argue that the final justification for its current tactics is that they work. Unlike the Baltic states, Georgia and Ukraine have so far been prevented from moving closer to NATO. The bellicose threats to retarget Russia’s nuclear arsenal has slowed plans to install a missile defense system in Eastern Europe. 
While relations with Britain are tailspinning, those with France are improving, following Total’s exclusive invitation to join Shtokman. Last year was the Year of Russia in China, and 2007 is the Year of China in Russia. BP is looking for new partnership opportunities with Gazprom. Rosneft has been the best-performing large Russian hydrocarbon stock since its initial public offering. Foreign policy under Putin seems to reflect popular opinion closely.
The tougher stance of Brown’s new government is therefore interesting. Britain’s recent willingness to see its political relationship with Russia deteriorate to new post-Soviet lows is the most extreme example of a what seems to be a new determination on the part of at least the United States and Britain to act more firmly toward Russia. While Italy and France still seem keen on erring toward engagement, German Chancellor Angela Merkel also seems more willing to push back than her predecessor. 
The Western political community seems ready and willing to be more aggressive toward Russia. The hope that the Kremlin’s prickliness was a passing phase on the transition to a Western model seems to have faded. This will likely have consequences. Russia will continue to kick back hard on Georgia and Ukraine. Any support over Iran will be linked to Kosovo. The missile defense plan is a terrific provocation given what Moscow views as broken assurances from NATO regarding expansion into Eastern Europe. The retargeting of missiles and the tearing up of arms agreements are designed to upset the West to the same degree. I don’t believe that the trial balloon of threatening the Bank of New York over alleged money laundering was a casual undertaking. 
But the deteriorating politics do not need to have an impact on business or finance. On the same day Britain announced that it was expelling the diplomats, the Russian equity market posted its highest close ever. With $12 billion of investment, Britain was the second biggest foreign investor in Russia in 2006, and most of the investment was in retail, communication, trade and construction. BP announced recently that it wanted to increase cooperation with Gazprom to invest more into Russia. Purportedly, 50 percent of all apartments sold in London for more than 1.5 million pounds ($3.1 million) are bought by Russians. There is no sign of any decline in the desire of Russian firms to list in London and vice versa. 
Outside of oil and gas, Russia needs massive foreign financing for the investment needed to retool after 20 years of underinvestment. Russia will be the largest car market in Europe by 2010, by which time it could be a bigger car producer than Britain. China expects to quadruple trade with Russia to $80 billion by 2010. 
Britain was right and far-sighted to engage with a weak and uncertain President Putin in 2000. Engagement then helped create the strong and self-confident Russia that it is today. As a result, Russia is able to push for its own interests internationally and to become an increasingly important and integral part of the global financial and business community. 
Britain is probably taking the correct position when it shows its willingness to face up to a stronger Russia. Politics based on self-interest are evolving and are likely to continue to look rather ugly, particularly given Russia’s institutional weaknesses and peculiarities. But by the same token, the business and financial relationship is likely to continue to deepen because that is also where the mutual self-interest lies. 

Roland Nash is managing director and head of research for Renaissance Capital.

TITLE: The Smerdyakov Effect
AUTHOR: By Richard Lourie
TEXT: Even by Russian standards, the Litvinenko affair has been exceptionally murky. But, paradoxically, it has also been marked by a heightened sense of mirror-image symmetry. Either President Vladimir Putin is the villain or anti-Putin tycoon Boris Berezovsky is; Andrei Lugovoi was either the killer or himself a victim. 
The Litvinenko affair is a mystery thriller in and of itself. What’s more, the case is linked to two other puzzling cases. In early January 2004 in Hertfordshire, near London, retired Lieutenant Colonel Robert Workman, 83, was killed in his doorway by a shotgun blast. No items of value were taken from the home of the former antiques dealer. Workman had led a secret gay life, but it is hard to imagine a British homosexual in his 80s eliciting such passions.
Another explanation that had currency in British foreign-service circles was that Workman had been killed by mistake. He may have been confused with Chief Magistrate Timothy Workman of London, who had enraged the Kremlin by refusing to extradite Berezovsky, and Chechen rebel envoy, Akhmed Zakayev. A Russian assassin might assume that a judge would hold a military rank just as many officials in the Soviet judiciary had. Also, according to Alexander Litvinenko himself, as cited in Alex Goldfarb’s valuable and revealing book “Death of a Dissident,” such screw-ups were common in the FSB.
The case, named Operation Sacristy by the Hertfordshire police, remains unsolved and most likely will never be solved. Chances are it was a local matter. But it does seem odd that it has not been mentioned in any official statements or news accounts in connection with the Litvinenko murder. If a Russian assassin had been dispatched to kill a British judge on British soil because his rulings had displeased the Kremlin, shouldn’t that avenue of investigation be kept open as long as the case remains open?
And there is another part to this puzzle. In early June 2007 Scotland Yard warned Berezovsky that a Russian hitman was in England to kill him and the billionaire would be well advised to leave the country. Scotland Yard apprehended the would-be assassin, held him for two days then turned him over to the emigration authorities who promptly expelled him. The official explanation for this action was that the killer was in the country “illegally.”
And if he had been in the country legally?
To release such a suspect at this particular moment in British-Russian relations is simply mind-boggling. Perhaps the calculation was that the political conflicts had been resolved with the tit-for-tat expulsion of four diplomats by each side. No sense in escalating tensions, which would only jeopardize the very lucrative trade relations between the nations. And for what? The murders of a gay antiques dealer, an ex-FSB man? Mere territorial integrity? 
In Dostoevsky’s novel, “The Brothers Karamazov,” it is the demented half brother Smerdyakov who senses his brother’s murderous rage toward their father and carries out his secret wish by killing the old man. Maybe something of the same sort happened with Litvinenko — ex-security people carried out their president’s secret desires without needing any explicit instructions. Three goals were achieved: Litvinenko’s treason to the FSB was avenged, a message was sent to Berezovsky by eliminating someone near him and deniability was maintained.
Russia has a golden opportunity in the Litvinenko affair. Unlike the Anna Politkovskaya case — and too many others — where there are no suspects, the Litvinenko case has suspects who had motive and opportunity. There is also the weapon, polonium-210, undoubtedly produced in Russia. 
Russia should not be pressured to disregard Article 61 of its Constitution, which prohibits extradition. But instead of playing petty games of injured national pride, Russia should mount a serious investigation and open trial. If Russia wants to be treated like a great nation, let it act like one.

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

TITLE: New British PM Meets Bush in U.S.
AUTHOR: By Caren Bohan and Adrian Croft
PUBLISHER: Reuters
TEXT: CAMP DAVID — British Prime Minister Gordon Brown was expected to walk a fine line in talks that took place on Monday with U.S. President George W. Bush, keeping some distance on issues like Iraq while preserving the “special relationship” with the United States.
During a two-day meeting at the Camp David retreat in Maryland’s Catoctin Mountains, Brown sought support for a package of measures to try to end the conflict in Sudan’s Darfur region.
The Iraq war, concerns about Iran’s nuclear program, climate change and the effort to revive the Doha round of world trade talks was on the agenda.
The Camp David meeting was the first between the new British prime minister and Bush since Brown succeeded Tony Blair last month.
The reserved, somewhat formal Brown is seen as unlikely to form the kind of close bond that his gregarious predecessor had with Bush. At their first meeting, Bush famously remarked that he and Blair used the same brand of toothpaste.
Brown will be keen to avoid any association with the label of “America’s poodle” that the British media gave Blair, who stood shoulder to shoulder with Bush after the Sept. 11, 2001 attacks and during the 2003 invasion of Iraq.
Blair’s closeness to Bush angered the British public and contributed to his decision to step down early.
Still, U.S. and British officials have sought to play down any notion of a cooling in ties between their countries.
As Brown arrived at Camp David on Sunday evening, he told Bush he was glad to be there because of the history associated with the retreat.
The two dined together and on Monday they were due to hold more meetings, followed by a news conference and a lunch of cheeseburgers, french fries and banana pudding.
Speculation that Brown may want to end Britain’s military involvement in Iraq resurfaced on Sunday with a report in the Sunday Times newspaper that Brown’s chief foreign policy adviser had sounded out U.S. foreign policy experts on the possibility of an early British withdrawal.
Brown’s spokesman said the prime minister would not unveil a plan to pull out British troops and said there had been no change in the government’s position.
Aides to Brown say he wants to focus on ending the Darfur conflict and breaking a deadlock in the global trade talks.
Brown, with the support of French President Nicolas Sarkozy, is proposing a package of measures to try to end the conflict in Darfur.
It includes a United Nations Security Council resolution for an African Union-United Nations peacekeeping force, an immediate cease-fire, restarting a peace process and an economic aid package for Darfur, a British government source said.

TITLE: Contador’s Victory Caps Troubled Tour
AUTHOR: By Jamey Keaten
PUBLISHER: The Associated Press
TEXT: PARIS — Three years ago, Alberto Contador was lying in a hospital bed recovering from a brain aneurism. He drew inspiration from reading a book about Lance Armstrong, the cancer survivor and seven-time Tour de France champion.
Now Contador has his own inspiring comeback story that, like Armstrong’s, ended with a victory in the Tour de France on Sunday.
“It’s an extraordinary joy,” said Contador, who collapsed with the aneurism during a race in Spain in 2004. The Spaniard kissed his winner’s yellow jersey on the podium against the backdrop of the Arc de Triomphe.
Contador’s victory ride provided a brief moment of celebration for a Tour that has been battered by two weeks of doping scandals and allegations.
Contador, 24, was this year’s unlikely winner for Discovery Channel after former race leader Michael Rasmussen was sent home earlier in the Tour for allegedly lying to his team and the pre-race favorite Alexandre Vinokourov failed a doping test.
Contador high-fived and hugged his teammates at the end. His original goal was to take the white jersey for the best young rider. In the end, he got both white and yellow.
Asked on French television about his surgery, Contador took off his yellow cap and showed a large scar running down the side of his head.
“It really marked me for life,” Contador said, “but allowed me to better savor this moment.
“This year, I hoped to win the white jersey. I did not know that with the white jersey, the yellow one would come, too.”
From its start in London on July 7, when millions of spectators turned out, fans’ signs like “No to Doping” increasingly lined the course.
Even for an event whose winners since 1996 have either battled doping claims or admitted to them, this Tour’s fallout from doping was instantaneous — often overshadowing the racing itself.
“Suspicion is everywhere,” Tour president Christian Prudhomme said Sunday on France-2 television. “We could have doubts about everyone.”
Organizers hoped this would be the year of rebirth after 2006 winner Floyd Landis’ positive doping test. In the end, they may have settled for simply keeping the race going amid unending doping scandals.
Nor was it Vinokourov’s year to step up — as fans who painted his name on French roads had hoped.
The big sporting surprise was Contador. Seen as a promising but not yet mature rider, he blended explosive acceleration in the mountains and a dose of luck as the field was whittled down.
“We’ve seen the future of Spanish cycling and perhaps international cycling,” seven-time Tour winner Armstrong said of Contador.
It was a remarkable personal comeback for Contador, who suffered the aneurism while racing in the Tour of Asturias and fell to the ground from his bike with severe convulsions. Emergency surgery saved him from possible brain damage.
Contador eclipsed the leader of his Discovery team, American Levi Leipheimer, who finished third. Contador was the youngest champion since Jan Ullrich of Germany in 1997, and the first Spaniard to win since the last of Miguel Indurain’s five titles in 1995.
In an unplanned irony, the 91-mile route Sunday to Paris’ fan-lined Champs-Elysees took riders through the town of Chatenay-Malabry, home to the French anti-doping laboratory that has exposed several riders this year. Sunday’s stage was won by Daniele Bennati of Italy.
Contador’s victory margin — 23 seconds ahead of Cadel Evans of Australia — was the second-narrowest in the Tour’s 104-year history, after about 3,500 kilometers (2,200 miles) of cycling through Britain, Belgium, Spain and France. Leipheimer was third, 31 seconds back.
Contador had seemed destined for second place until the Tour was hit by the ouster of Rasmussen. His Rabobank team accused the Dane of having lied about his whereabouts before the Tour to evade doping controls.
Discovery sports manager Johan Bruyneel, who mentored Armstrong’s seven wins, said inheriting the victory like that was bittersweet.
“It’s not a nice feeling. You don’t want to win like that,” Bruyneel told The Associated Press. “The way things were, most likely he [Rasmussen] would have won the Tour de France.”
Landis did not defend his crown because of doping charges hanging over him. This Tour turned into a circus after it emerged that Rasmussen was competing despite missing doping controls in May and June, and after Kazakh star Vinokourov and Cristian Moreni of Italy failed doping tests. They and their teams left the race, and police raided their hotels, searching for doping products.
A split emerged as Tour organizers blamed the sport’s governing body, the UCI, for not telling them that Rasmussen had missed doping tests. The organizers said they would have prevented him from taking the start had they known. 
Some newspapers in France declared the Tour dead and said it should be suspended until the sport cleans up. Some members of the International Olympic Committee warned that more scandals could jeopardize cycling’s place in the Olympics.
The first week of the Tour’s 94th edition was dominated by sprinters and marked by multiple crashes. Fabian Cancellara of Switzerland took the lead on day 1 and wore the yellow jersey for the first week.
But the doping demon quickly returned.
First came news that Patrik Sinkewitz of Germany tested positive for the male hormone testosterone, in a sample taken in June while he was training for the Tour.
Then, over 48 dramatic hours in the last week, came successive punches of Vinokourov’s test for a banned blood transfusion, Moreni’s positive test for testosterone and Rasmussen’s ouster — a race-changing decision that emerged late at night.
On Rasmussen’s last day of racing before he was sent home, cyclists from French and German teams refused to ride off with him at the start, protesting against the scandals in the race.
Vinokourov denied doping, although a follow-up test confirmed the positive result given from the first. Vinokourov has hired Landis’ lawyer to defend him.
Rasmussen also insisted that he never used performance-enhancing drugs and was left ruing Sunday what might have been.
“Every day I’m going to wake up and think about not being allowed to win the Tour de France — the race that defines me as a cyclist,” he told Danish broadcaster TV2. “I will never get over it... I believe it equals getting a Picasso painting stolen. I was working on the greatest piece I could achieve and it was taken away from me.”
Contador was not spared suspicions. He missed last year’s Tour when his former team was disqualified because he and four other riders were implicated in a Spanish blood-doping investigation known as Operation Puerto.
Contador said Saturday that his name mistakenly turned up in the Puerto file — and that the International Cycling Union, or UCI, attested to that.

TITLE: Japanese Leader Stays Despite Poll Disaster
AUTHOR: By George Nishiyama
PUBLISHER: Reuters
TEXT: TOKYO — Hawkish Japanese Prime Minister Shinzo Abe vowed to stay in his post despite a crushing defeat for his ruling camp in an upper house election, but policy gridlock loomed and Abe’s grip on his job was uncertain.
Voters outraged at a string of government scandals and gaffes and government bungling of pension records stripped Abe’s coalition of its upper house majority on Sunday in his first big electoral test since taking office 10 months ago.
“The election expressed the frustrations of the people. He really needs to accept the results of the election and think about the future. This might include quitting,” said Akihiro Kodaira, a 38-year-old civil servant.
Abe reiterated on Monday his intention to stay on.
“We must take these results very seriously and reflecting on what we must reflect on ... I want to fulfill my responsibility to proceed with reform to build the nation and promote economic growth that the people can feel,” Abe told a news conference.
Abe’s bloc will not be ousted from government by the upper house defeat, since it has a huge majority in the more powerful lower chamber, but he said he would reshuffle his cabinet in an effort to win back voter trust.
Abe has also pledged to boost Japan’s global security profile and rewrite its pacifist constitution, but his conservative agenda may have to take a back seat.
“Constitutional reform is important, but we need to clearly show that we care about issues close to home, like life in regions and social disparities,” Akihiro Ota, head of the junior ruling party New Komeito, told reporters.
Critics had said Abe was out of touch with voters concerned with bread-and-butter issues such as pensions and health care.
Ichiro Ozawa, head of the main oppositions Democratic Party and a pugnacious veteran who bolted from the ruling Liberal Democratic Party (LDP) 14 years ago, had pledged in the campaign to shrink income gaps and help farmers, long LDP supporters.
Ozawa has vowed to make the upper house win a step towards an early general election, but media warned that his party’s public image could suffer if it takes too obstructionist a stance.
Ozawa, who suffers heart problems, has not appeared in public since Sunday’s victory. Party officials said he was resting after a tough campaign, but his absence cast doubt on his ability to keep leading his often fractious party.
The Democrats are a mix of ex-LDP lawmakers, former socialists and young conservatives, some of whom are seen as ripe for poaching.
No lower house poll need be held until late 2009, and Abe said he was not considering calling a snap poll anytime soon.
But the soft-spoken, once-popular Abe could face pressure to quit from within his own party, which has ruled Japan for most of the past five decades.
“The truth is that we were defeated. He needs to take responsibility,” said Ryosuke Hara, an executive of LDP’s local branch in western prefecture of Hyogo.

TITLE: Unity, Joy  In Iraq After Cup Win
AUTHOR: By Hamza Hendawi
PUBLISHER: The Associated Press
TEXT: BAGHDAD — Tens of thousands of Iraqis from the Shiite south to the Kurdish-dominated north poured into the usually treacherous streets Sunday to celebrate a rare moment of joy and unity when the national team won Asia’s most prestigious soccer tournament.
The revelers spanning the country’s sectarian and ethnic divisions danced, sang and waved flags and posters of the team after Iraq beat three-time champion Saudi Arabia 1-0 to take the Asian Cup.
Chants of “Long live Iraq” and “Baghdad is victorious” rang out across the country as Iraqis basked in national pride. Some of the revelers — mostly men — took their shirts off to display the red, white and black colors of the Iraqi flag painted on their chests.
Reporters of the state Iraqiya television wrapped themselves with the national flag as they interviewed people celebrating in the streets. Some joined in the chanting.
Within seconds of the final whistle, celebratory gunfire echoed across Baghdad and elsewhere despite a government ban and the threat of arrest by authorities.
At least four people were killed and scores wounded by the gunfire. But as night fell on the country, there were no reports of bombings such as those that killed at least 50 and wounded dozens in Baghdad during celebrations of Iraq’s semifinal win over South Korea on Wednesday.
Authorities said they foiled a potential car bomber in southwestern Baghdad after he refused to stop at a checkpoint and appeared headed toward a crowd of revelers. Iraqi authorities had banned vehicles in and around the capital from shortly before the game began until early Monday to prevent a repeat of last week’s violence.
“The victory of our Iraqi soccer team is a wonderful gift to Iraqis who have been suffering from the killing, car bombs, abductions and other violent acts,” said Falah Ibrahim, a 44-year-old resident of Baghdad’s predominantly Shiite Sadr City district.
Sunday’s dramatic win capped a three-week campaign by Iraqi team, nicknamed “The Lions of the Two Rivers.” Iraqis were captivated and spoke of hope, even as years of violence and sectarian strife have many asking if ethnically and religiously divided Iraq can survive as one nation.
The team’s players do not live in Iraq and earn their wages playing for teams across the Middle East. Because of tenuous security at home, wars and U.N. sanctions, the team had not played a home game in 17 years and must train and practice abroad.
“We are celebrating because this team represents all Iraqi sects,” said Awas Khalid, one of the thousands of Kurds who celebrated the win in the city of Sulaimaniyah in the Kurdish north, where secessionist sentiment has been on the rise.
“This team is for everyone,” Khalid said, as revelers around him waved Iraqi and Kurdish flags and chanted “Baghdad is victorious” in Arabic instead of their native Kurdish language.
The mixed makeup of the winning national team was interpreted by many Iraqis as proof that politicians are more concerned with their narrow sectarian agendas than national interest, thus preventing reconciliation among rival factions.
“The politicians have divided us and these athletes united us,” said 24-year-old Shiite Tareq Yassin, taking a break from dancing with hundreds of people in the streets of Amin, a southeastern Baghdad neighborhood. “I am usually very shy. Today, I forgot my shyness and everything else and I could only think of Iraq.”
Prime Minister Nouri al-Maliki tried to use the team’s success to shore up support for his embattled government.
During Sunday’s final, state television reported that he would reward every player with a $10,000 bonus. Soon after the final whistle, the station reported that al-Maliki was congratulating team members on the telephone. But live coverage showed the entire squad celebrating on the pitch.
Al-Maliki later issued a statement on the team’s win in flowery Arabic.
“There is a big difference between The Lions of the Two Rivers who struggle to put a smile on the faces of their people and those who work in dark corners strewing death and sorrow in the paths of innocent people. We are proud of you. You deserve all our love and respect,” it said.
President Jalal Talabani, a Kurd, ordered an additional $10,000 reward for the players and twice that for Sunday’s goal scorer Younis Mahmoud, a Sunni Arab, who scored on a pass from Mulla Mohammed, the team’s only Kurdish player.
Even Iraq’s squabbling political factions set aside their disputes, if only temporarily.
The largest Sunni Arab bloc said it would delay a planned response in its war of words with the Shiite-dominated government to avoid poisoning the joyous atmosphere. The Accordance Front has suspended its membership in al-Maliki’s government and threatened to quit altogether this week if the prime minister does not meet certain demands. The government said the move amounted to blackmail and that the Sunni bloc had helped create some of the very policies it now criticized.
Accordance Front spokesman Salim Abdullah said his group would issue a reply on Monday “because we don’t want anything to spoil the day’s joy for the people of Iraq.”
Its demands include a pardon for security detainees not charged with specific crimes, a firm commitment by the government to uphold human rights, the disbanding of militias and the inclusion of all parties as the government deals with Iraq’s chaotic security environment.
Most of the team’s other players are Shiites. But any links between the soccer game and Iraq’s sectarian violence Sunday remained largely tenuous, with national pride, joy and hope the overwhelming sentiments.

TITLE: Director Ingmar Bergman, Film Legend, Dies Aged 89
PUBLISHER: The Associated Press
TEXT: STOCKHOLM — Swedish director Ingmar Bergman, an iconoclastic filmmaker widely regarded as one of the great masters of modern cinema, died Monday, local media reported. He was 89 years old.
Bergman died at his home in Faro, Sweden, Swedish news agency TT said, citing his daughter Eva Bergman. A cause of death wasn’t immediately available.
Through more than 50 films, Bergman’s vision encompassed all the extremes of his beloved Sweden: the claustrophobic gloom of unending winter nights, the gentle merriment of glowing summer evenings and the bleak magnificence of the island where he spent his last years.
Bergman, who approached difficult subjects such as plague and madness with inventive technique and carefully honed writing, became one of the towering figures of serious filmmaking.
He was “probably the greatest film artist, all things considered, since the invention of the motion picture camera,” Woody Allen said in a 70th birthday tribute in 1988.
Bergman first gained international attention with 1955’s “Smiles of a Summer Night,” a romantic comedy that inspired the Stephen Sondheim musical “A Little Night Music.”
“The Seventh Seal,” released in 1957, riveted critics and audiences. An allegorical tale of the medieval Black Plague years, it contains one of cinema’s most famous scenes — a knight playing chess with the shrouded figure of Death.
“I was terribly scared of death,” Bergman said of his state of mind when making the film, which was nominated for an Academy Award in the best picture category.
The film distilled the essence of Bergman’s work — high seriousness, flashes of unexpected humor and striking images.
In an interview in 2004 with Swedish broadcaster SVT, the reclusive filmmaker admitted that he was reluctant to view his work.
“I don’t watch my own films very often. I become so jittery and ready to cry ... and miserable. I think it’s awful,” Bergman said.
Though best known internationally for his films, Bergman was also a prominent stage director. He worked at several playhouses in Sweden from the mid-1940s, including the Royal Dramatic Theater in Stockholm which he headed from 1963 to 1966. He staged many plays by the Swedish author August Strindberg, whom he cited as an inspiration.
The influence of Strindberg’s grueling and precise psychological dissections could be seen in the production that brought Bergman an even-wider audience: 1973’s “Scenes From a Marriage.” First produced as a six-part series for television, then released in a theater version, it is an intense detailing of the disintegration of a marriage.
Bergman showed his lighter side in the following year’s “The Magic Flute,” again first produced for TV. It is a fairly straight production of the Mozart opera, enlivened by touches such as repeatedly showing the face of a young girl watching the opera and comically clumsy props and costumes.
Bergman remained active later in life with stage productions and occasional TV shows. He said he still felt a need to direct, although he had no plans to make another feature film.
The date of the funeral has not yet been set, but will be attended by a close group of friends and family, the TT news agency reported.