SOURCE: The St. Petersburg Times
DATE: Issue #1307 (73), Tuesday, September 18, 2007
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TITLE: Bolsheviks On Trial For Protest
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Two members of the National Bolshevik Party are facing up to five years in prison for rushing into the debating chamber of the St. Petersburg parliament and throwing leaflets protesting against low pensions and poor welfare programs. In the leaflets the activists called local deputies “fat, useless lawmakers, who sit through the sessions doing nothing” and declared speaker Vadim Tyulpanov an “enemy of St. Petersburg.”
The charges relate to an incident in November 2006 when five National Bolshevik activists stormed into the city’s Legislative Assembly during a session, tossing leaflets and shouting provocative slogans denouncing the deputies.
Four activists were arrested on the spot and given 15 days in custody for hooliganism but their targets felt the punishment was not strong enough, and filed a criminal suit against the intruders. 
As a result, Sergei Chekunov and Mikhail Bashin are now on trial.
Human rights lawyer Olga Tseitlina, who represents the defendants, said the leaflets did not contain criminal or extremist content. She insists the case must be closed because the accusations are groundless and the prosecutors are pursuing a case that “has gone far beyond the edge of reason.”
“Yes, the leaflets called the parliamentarians ‘fat’ and ‘good-for-nothing’ but they contained democratic slogans and reasonable demands, which any sane person would share,” Tseitlina said. “For example, the activists demanded to put an end on the practice of in-fill construction; they insisted on a substantial increase of pensions and campaigned against construction of the Gazprom tower. Many local citizens actually support such ideas.”
The case has received nationwide prominence and deputies from the Kremlin-backed United Russia party, including Tyulpanov, who had initially thrown their weight behind bringing a criminal case, took a step back this month by sending a letter to the city’s prosecutor’s office in which they claim the intruders did not actually commit a felony.
“Yes, we probably overreacted when we asked for a criminal case to be brought against the young men,” said United Russia politician Vadim Lopatnikov, a witness in the case and former lawmaker. “The incident needs to be viewed as a violation of the administrative code, and not as a crime.”
Lopatnikov accused the National Bolsheviks of trying to disguise themselves as martyrs, use the case to win compassion among ordinary Russians and gain political strength. However, he acknowledges that lawmakers went over the top.
Tyulpanov did not attend the hearing, citing a tight schedule. The judge ruled that the speaker, along with other parliamentarians who signed the letter, must be present and give evidence at the next hearing on Oct. 5.
But Yury Vdovin, a prominent Russian human rights advocate and deputy head of the St. Petersburg branch of the Citizens’ Watch human rights organization, said the trial shows that Russia has revived the practice of imprisoning people on political grounds.
“A series of recent trials of environmentalists and scientists fit well into the picture,” Vdovin said. “And remember another group of National Bolsheviks who have just been released after spending several years in jail for ‘mass disorders,’ which, in reality, meant breaking a few chairs in a government building and throwing a portrait of Putin out of the window.”
Andrei Dmitryev, National Bolshevik leader in St. Petersburg, described the behavior of two police officers giving evidence against the activists at the first hearing on Sept. 14, as “nervous” and their testimonies “contradictory and lacking consistency.”
“The testimonies sounded shaky, and they were different from the original information the officers had earlier provided to the investigation,” Dmitryev said. “Basically, they could not accuse our guys of anything more than pushing them aside as they broke into the parliament’s building. No physical assault or beatings were reported.”
Similar trials may lie in store for opposition activists, critics warn. 
In late July President Vladimir Putin signed a series of amendments that the majority party, United Russia, claims are targeted against nationalists and those planning violence. But the opposition critics warn that the new clauses will amount to a crackdown on freedom of expression.
Under the new legislation 13 aspects of extremism will become offenses. They include “public slander of state officials,”  “hampering the lawful activity of state organizations,” “humiliating national pride,” and “hooliganism committed for political or ideological motives.”
“The security services have received green light to tap the phones of anyone suspected of extremism,” said political analyst Boris Vishnevsky, a member of political council of the local branch of the democratic party Yabloko. “In most democracies it takes reasonable suspicion of plotting serious offenses like terrorism, murder, or kidnapping to justify phone bugging.”

TITLE: Lugovoi to Run on Zhirinovsky List
AUTHOR: By Kevin O’Flynn
PUBLISHER: Staff Writer
TEXT: MOSCOW — Andrei Lugovoi, the former Federal Guard Service officer wanted in Britain for the murder of Alexander Litvinenko, could soon have immunity from prosecution, all thanks to Liberal Democratic Party leader Vladimir Zhirinovsky.
Zhirinovsky said Lugovoi would be named to the No. 2 spot on the LDPR’s federal list for December’s State Duma elections, Interfax reported.
Should the party get the minimum 7 percent of the vote necessary to qualify for seats in the Duma, Lugovoi would be eligible for a seat — and the immunity that goes with it.
“I will take part in the party conference tomorrow,” Lugovoi said in a telephone interview Sunday, confirming his desire to run for office. He refused to comment further.
The millionaire businessman denies that he killed Litvinenko, blaming the accusations, as well as the poisoning, on British intelligence services and exiled tycoon Boris Berezovsky.
“We’ve known him for a long time,” Zhirinovsky said, “and we have the chance to include him on the party list.”
He added that Lugovoi would take up his place in the parliament, if won, and not pass the spot on to someone else, which is common with politicians at the top of party lists.
Zhirinovsky dismissed the murder accusations, saying, “The whole story with Britain — it is an attempted provocation against our citizen.”
The No. 2 spot on the LDPR list formerly belonged to Alexei Mitrofanov, Zhirinovsky’s equally flamboyant deputy, who wrote the script for a soft-porn movie that starred look-alikes of Georgian President Mikheil Saakashvili and Ukrainian opposition politician Yulia Tymoshenko. Mitrofanov recently defected to the Kremlin-backed A Just Russia party.
The last place in the top three will go to Zhirinovsky’s son, Igor Lebedev.
Litvinenko, a Kremlin critic who had political asylum in Britain, died Nov. 23 of radiation poisoning, just three weeks after meeting Lugovoi in a London hotel. On his deathbed, Litvinenko accused Putin of organizing his murder. Litvinenko’s friends say he suspected Lugovoi of poisoning him.
The killing soured relations between the countries after a request to extradite Lugovoi by the British government was turned down. Four diplomats were expelled from each country in tit-for-tat expulsions.
Russia has repeatedly said its Constitution forbids the extradition of its citizens and that its prosecutors are investigating the murder.
Analysts said Zhirinovsky’s offer to Lugovoi should play well with the LDPR constituency. Even if Lugovoi does not make it on the list, the publicity will give the party a boost for December’s vote.
“It is a successful tactical maneuver from Zhirinovsky. It will bring him new votes,” said Vladimir Pribylovsky, head of the Panorama think tank.
Lugovoi is a perfect fit because LDPR voters enjoy the showmanship and bravado of the move. They are also more likely to see Lugovoi as a hero for allegedly killing someone they see as a traitor, Pribylovsky said.
The move could be a PR coup for Zhirinovsky, a showman who combines ultranationalist bombast with a reputation as a politician ready to do the Kremlin’s bidding.
“If he doesn’t wake up his voters, they won’t vote, so he needs to give his electorate a carrot to get it to vote,” Pribylovsky said.
Sergei Mitrokhin, head of Yabloko’s party list in the Moscow district, chuckled when informed of the move.
“This is simply Zhirinovsky working according to his own style,” he said. “The party has replaced one scandalous figure [Mitrofanov] with another to maintain the nationalist hysteria that gets the party votes.”
“I do not comment on the behavior of Zhirinovsky or others of his kind,” Berezovsky said in a telephone interview from Britain.
The British Embassy and the British Foreign Office did not return calls asking for a comment.
Lugovoi would not be the first person suspected of murder to be a candidate for the Duma. 
In 1999, when the LDPR was unable to run under its own name because two of the first three people on its party list submitted improper property declarations, one of the names on the list was Anatoly Bykov.
Bykov, a Krasnoyarsk metals magnate, was arrested in Hungary in November 1999 on an international warrant for murder, money laundering and gun running.
Apart from attending the LDPR conference, Lugovoi will be busy Monday meeting with his lawyers in a 20 million ruble ($790,000) libel case he has brought against Kommersant in Moscow’s Tverskoi District Court.
Lugovoi is suing over an article that referred to Litvinenko as “his victim,” his lawyer Tatyana Stukalova said Sunday, Interfax reported. 
The article, published July 9, was a slur on the “honor and dignity of Lugovoi,” Stukalova said.
Kommersant editor Andrei Vasilyev said Lugovoi was within his rights to complain.
“I agree that the phrase was incorrect,” he said, Interfax reported.
The paper is ready to apologize publicly if Lugovoi agrees to drop the court case, Vasilyev said. He added that going to court would make it look like Lugovoi was trying to “make money” off his involvement in the Litvinenko affair, and that the publicity would “undermine the LDPR.”
Lugovoi has not shied away from publicity since the charges for Litvinenko’s murder were brought. He has been a regular at society events, including the party for Ekho Moskvy radio’s 17th anniversary last week, where British Ambassador Anthony Brenton was also a guest.

TITLE: Big Beasts To Roam in New City Zoo
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: At least five elephants, a herd of zebras and thousands more animals from St. Petersburg’s zoo will find a new spacious home near the Yuntolovsky reserve by 2011.
A decision on the construction of the new zoo in the Primorsky district was announced by Governor Valentina Matviyenko last week at a meeting of City Hall.
“It should be done in such a way that the animals will be living not in ‘communal apartments’ [cramped multi-family residences common in downtown St. Petersburg] but in luxurious separate accommodation,” Matvienko said. That way, she said “we can watch them with pleasure.”
“The city needs a zoo that is part of nature and not the one trapped in the center of the city,” she said.
The old zoo, still known as the Leningrad Zoo and located near Peter and Paul Fortress, will remain open to house small animals and an educational center on ecology, said Galina Afanasyeva, scientific secretary of the zoo.
The new zoo will occupy 300 hectares of land compared to 7.3 hectares at the current zoo.  The bigger space will allow for the enlargement of the animal collection from the current 2,000 individual animals to 8,000  representing 1,500 species as opposed to the   current 400, Afanasyeva said.
“The limited space of the current zoo prevents us from providing the natural way of life for many of our animals. Big animals need much more space to be able to walk longer distances. Besides, many of them need to live in herds whereas our current space allows us to have only one representative of a species,” she said.
“In the old zoo there is just one zebra whereas in nature these animals live in herds. When the zoo moves to its new location the zoo plans to buy the whole herd of zebras,” Afanasyeva said.
The bigger space will also allow the zoo to finally keep elephants, a long-held dream for the city’s children. The zoo plans to have at least five elephants — four female and one male — to simulate the feeling of being in a herd, Afanasyeva said.
“We also want to build a swimming pool for elephants,” she said.
Natalya Girgilyevich, assistant to the zoo’s director, said that at the new zoo they “want to show the animals from all over the world.”
“Plus we want to imitate the geographical conditions of where they live in the wild,” Girgilyevich said, adding that they may also organize a safari there.
The new zoo also plans to get rid of notorious cages and bars, Afanasyeva said.
“Strangely, animals don’t suffer that much because of the bars that surround them,” Girgilyevich said. “However, it’s often stress for many people to see animals behind the bars.  Therefore we want to change the bars for pits and glass.”
While zoo workers and managers are said to be happy about the construction of the new zoo, there was still some controversy about its location, Afanasyeva said.
The city originally planned the new zoo for Olgino park, and zoo experts found the site suitable. But later the city changed its plans and switched the proposed location to territory near the Yuntolovo reserve. 
Despite the zoo’s objections to the second site, the city has stuck to its its decision.
“We worried about Yuntolovo’s location because it’s swampy, and we fear that draining may take too much time.  Besides, we are afraid the draining may hurt the climatic situation of Yuntolovo reserve.  Secondly, the reserve hosts migrating birds, and we’ll always need to be on alert for bird flu,” Afanasyeva said.

TITLE: U.S. Military Visit Azeri Radar Base
AUTHOR: By Alexander Osipovich
PUBLISHER: Staff Writer
TEXT: MOSCOW — U.S. military experts will visit the Gabala radar station in Azerbaijan on Tuesday to study the feasibility of incorporating the Russian-run facility into a shield, an army official said over the weekend.
The Americans will hold technical discussions with their Russian and Azeri counterparts, Major General Alexander Yakushin, the first deputy head of the Space Forces, told reporters Saturday. The meeting is the most concrete step yet toward implementing a June proposal made by President Vladimir Putin.
“On Sept. 18, we will move from words to concrete actions,” Yakushin said.
In a surprise move three months ago, Putin said the United States could use the Gabala facility, which Russia leases from Azerbaijan, instead of new installations that the United States wants to build in Poland and the Czech Republic.
Washington’s plans to put those installations in Eastern Europe have angered Moscow, which believes they are directed against Russia. U.S. officials said it was directed against Iran.
Yakushin dismissed that argument as “unconvincing” on Saturday and said Gabala was ideal for monitoring Iranian missile launches.
Some U.S. officials have said the Soviet-built facility is out of date and cannot be used with the missile shield. But Russia is willing to modernize the facility in consultation with the United States if the two sides can reach an agreement, Yakushin said.
The general said the U.S. side seemed “extremely interested.”

TITLE: Putin Mulls Presidential Candidates
AUTHOR: By Nabi Abdullaev and Kevin O’Flynn
PUBLISHER: Staff Writers
TEXT: MOSCOW — President Vladimir Putin said five people stood a real chance of succeeding him and identified three of them as Prime Minister Viktor Zubkov, Yabloko leader Grigory Yavlinsky and Communist leader Gennady Zyuganov, said a U.S. professor who spoke with Putin.
Putin, however, did not mention acting First Deputy Prime Ministers Sergei Ivanov or Dmitry Medvedev until he was prodded on the sidelines of a meeting with foreign experts, said the professor, Marshall Goldman of Harvard.
Putin spoke during a visit Friday with about 40 academics and journalists at the presidential retreat in Sochi. During the three-hour meeting, the president also reiterated that he would remain in politics after his term ends next year, and he said he had not decided whether he would run for president in 2012, attendees said.
Putin’s comments about the five candidates were his clearest signal yet about the shape of March’s presidential election. He mentioned Zubkov during a question-and-answer session with the group. Goldman said he approached Putin later and asked him for more information.
“I asked who were the five. That’s where it was very funny,” he said by telephone.
Putin named Yavlinsky and Zyuganov, he said. “Then I said, ‘What about Ivanov?’ and he said, ‘Yeah, yeah, Ivanov too,’” Goldman said. “But he did not mention Ivanov or Medvedev [at first]. ... It was a bit strange.”
Putin told the entire group that Zubkov had every right to run for president. “Zubkov, like any Russian citizen, can run for the presidency,” Putin said in remarks shown on state television. “Zubkov said he did not rule out running. I think that was a calm and balanced answer.
“Now, at least five people have been named who could really stake their claim to be elected president in March 2008. Well, if another real candidate appears, then the Russian people will be able to choose among several people,” he said.
Zubkov, a previously obscure technocrat who was confirmed as prime minister Friday, said earlier in the week that he could not rule out a run for president. He is the first ally of Putin to publicly express interest in running. Political analysts said Zubkov would not have dared to make the suggestion without Putin’s approval. Some of them speculated that this might be a Kremlin decoy to cloud further the succession strategy.
Yavlinsky’s spokeswoman said Sunday that she had heard that Putin had named Yavlinsky but dismissed the information as “a joke.”
“If Putin had really named Yavlinsky among the five, a big scandal would have been created,” said the spokeswoman, Yevgenia Dillendorf.
Communist officials could not be reached for comment Sunday afternoon.
Putin — possibly worried about accusations of authoritarianism — might be backing away from an earlier promise to name a preferred successor and will offer voters a choice of three or four of his loyalists, said Sergei Mikheyev, a political analyst with the Center for Political Technologies.
“And it is possible that after eight years of an active and relatively young Putin, Russia’s cautious voters would prefer the aged and conservative Zubkov over the younger and dynamic Medvedev and Ivanov,” said Dmitry Orlov, an analyst with the Agency for Political and Economic Communications.

TITLE: New Look is Chosen For Pulkovo Airport
AUTHOR: By Evgenia Ivanova
PUBLISHER: Staff Writer
TEXT: Glass bridges and a wave-like roof to integrate the domestic and international flight terminals at Pulkovo airport are the hallmarks of a new design by British architectural firm Nicolas Grimshaw and Partners Limited that was revealed by the airport on Thursday. 
The revamp is intended to improve the airport landside, airside and security zones, and to accommodate an ever-increasing numbers of passengers, German construction company  Hochtief, who consulted Pulkovo on the matter, said in September last year.
 “A connecting terminal which maintains the characteristic flair of the existing architecture will enable the airport of St. Petersburg-Pulkovo to solve its capacity problems quickly,” Hochtief spokeswoman Donatella Gasser said in 2006 explaining the recommendation put forward by her company.
“This proposal complies with the client’s explicit wish to incorporate Pulkovo’s present characteristic silhouette, with its striking domed roof lights, into any future overall design. Combining essential new functionality with established architecture is also in accord with the St. Petersburg philosophy of preserving its historical heritage,” Gasser said in a telephone interview to the St. Petersburg Times.
According to Grimshaw and Partners’ representatives, giving a presentation of their proposals in St. Petersburg in May, it was the “majestic bridges and islands of St. Petersburg”, that influenced their design. 
The estimated cost of the revamp of 149 square-meter airport is $471 million, Interfax news agency reported on Thursday.
A thoroughly developed retail area and the possibility of preserving the historical building of Terminal I were the factors that persuaded Pulkovo to choose Grimshaw and Partners’ plan, managers said.
“The project by the British architectural bureau offers the carefully considered methods of passenger service,” the general director of Pulkovo Airport Andrei Murov was quoted in a Pulkovo press release as saying. 
Terminal I, with its distinct domes that let in natural light,  was designed by Alexander Zhuk in the 1970s and was considered an influential architectural landmark at the time.
 “The fact that the process of building of the new terminal won’t affect the functioning of Pulkovo I terminal that is to operate normally until the new building is constructed was also an important factor [in choosing the project],” Murov said. 
According to Interfax, the renovated airport will represent an international hub, able to compete with the Moscow airports of Sheremetyevo and Domodedovo, the news agency quoted Governor Valentina Matviyenko as saying at Thursday’s ceremony summarizing the results of the architectural competition.

TITLE: Yavlinsky Tops Yabloko List In Upcoming Poll
AUTHOR: By David Nowak
PUBLISHER: Staff Writer
TEXT: MOSKOVSKY, Moscow Region — Yabloko announced Sunday that leader Grigory Yavlinsky would top its federal list for December State Duma elections, and Yavlinsky told party faithful that a spot in the next Duma was within the party’s reach.
Polls suggest that the party will struggle to reach the 7 percent barrier necessary to win seats. But Yavlinsky, who said earlier this year that he would also run in the March presidential election, spoke confidently about Yabloko’s chances at a party conference held Saturday and Sunday.
Analysts, however, said Yabloko would have to ensure that all of its core voters went to the polls to have a chance.
“People always ask me, ‘Do we have a real chance?’” Yavlinsky said in concluding his address to around 150 party delegates Sunday, when the results of Saturday’s votes were announced. “I tell them we do, but only if we are honest and competent.”
In a conference venue where Yabloko youth party members dressed in white sweatshirts and held apples — a reference to the party’s name in Russian — Yavlinsky stressed that the party had to stick to its traditional policies.
He said openness and honesty would help it survive and lambasted the Kremlin for wielding more power than it should be permitted to wield in a democracy.
“The authorities are not trying to solve relevant problems but are intent on maintaining their power at any cost,” he said.

TITLE: Presidential Hopeful Repackaged for Election Season
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: KEMEROVO — They must be Russia’s busiest men these days.
Acting First Deputy Prime Minister Sergei Ivanov has been meeting workers, inspecting mines and opening sports complexes across the country. And for every move he makes in front of state television cameras, acting First Deputy Prime Minister Dmitry Medvedev seems to be vying for similar coverage with a jam-packed schedule of his own.
The difference between the two, both seen as leading presidential candidates, is that only one is being groomed to succeed President Vladimir Putin, political commentators said.
That person is Ivanov.
“The play has been written, and those who wrote it know the script,” said Olga Kryshtanovskaya, who tracks Kremlin politics at the Russian Academy of Sciences. “Ivanov is the No. 2 person in the country.”
The sudden resignation of the government and nomination of a little-known technocrat as prime minister Wednesday appeared to support the notion that it is too early for Putin to announce his favored successor. While many in the government were caught off guard by the nomination, Ivanov wasn’t.
“He absolutely didn’t look like a person who felt disappointed,” said Ariel Cohen, an analyst with the Washington-based Heritage Foundation who attended a meeting of foreign experts with Ivanov hours after news of the shake-up broke.
In recent months, public opinion polls consistently have named Ivanov as the favorite to succeed Putin in the March presidential election. He’s even considered the top bet by major foreign bookmakers such as Britain’s Unibet.
People in Ivanov’s inner circle are keeping a close watch on his image, right down to his popularity among bookmakers. “This causes nothing but a smile,” an Ivanov aide said of the betting.
Ivanov’s camp has good reason to smile. In a matter of months, he has made the difficult transition from a tough-talking, sour-faced defense minister to a silver-tongued, meticulously dressed darling of the electorate.

Buffing Ivanov’s Image
The transformation got off to a bad start, and at least one Russian reporter learned the hard way that covering Ivanov can be a risky business. The reporter’s mistake was that she reported Ivanov’s comments about Private Andrei Sychyov, whose legs and genitals were amputated following a hazing in January 2006. Asked about the incident during a Jan. 26 trip to Armenia, Ivanov, then defense minister, dismissed it as “nothing very serious.”
“Otherwise, I would have surely known about it,” he said in comments carried by RIA-Novosti, the only news agency that reported the statement.
The quote came at the worst possible time. Medvedev, who had been made first deputy prime minister just two months before, was basking in the media spotlight with promises to allocate money to schools and hospitals as part of his portfolio of overseeing the four national projects. Ivanov, already competing for media time with Medvedev, came across to the public as a callous, heartless tyrant.
“Everybody was outraged. Ivanov was ostensibly outraged,” said the RIA-Novosti reporter, who had covered Ivanov for two years. “For me, of course, it was my last trip.”
The reporter, who spoke on condition of anonymity, citing the sensitivity of the issue, said she had called in the quote because it “seemed interesting to me.”
Following her expulsion from Ivanov’s closely knit pool of journalists, RIA-Novosti sent her on a three-month stint abroad before bringing her back to Moscow to cover a different beat.
More important, the incident appears to have sped up a looming shuffle in the Ivanov camp. Sergei Rybakov, who had handled media coverage for Ivanov, was moved to an analytical position, and officials from the presidential administration took over his duties.
Ivanov’s handlers are striving to make sure the public sees Ivanov in the best possible light. They keep a close eye on his media engagements, his adherence to protocol and his interactions with ordinary people. Those who know him say they have noticed improvements — right down to his blond hair.
“When he was at the Defense Ministry, he had a horrible haircut,” the RIA-Novosti reporter said. “Today it’s an ideal coiffure.”

On the Campaign Trail?
Like Putin, Ivanov also has grown media savvy. On a visit to an open pit mine in the Kemerovo region last month, Ivanov whipped off his jacket and climbed into a giant, 130-ton BelAZ truck. He presented its driver with a watch, started the engine and let it idle for a few minutes. Television reporters asked him afterward whether he had enjoyed the experience.
“The driver has the same name as me, Sergei, and said he has driven it for 10 years and likes it,” Ivanov replied with a smile.
A day earlier, Ivanov made a beeline for a waiting camera crew and reporters after his Il-62 jet touched down at the Kemerovo city airport. En route, he asked a spokesman for the regional administration, “Can I go up [to them]?” Apparently receiving an affirmative signal, Ivanov turned on the charm.
Ivanov’s aide denied that posing for cameras and frequent trips across the country had anything to do with the presidential election. “These are routine working trips. If it were the campaign trail, it would have a different format,” said the aide, who asked for anonymity to speak candidly about the inner workings of Ivanov’s staff. He said he joined the team a couple months before Ivanov’s promotion from the Defense Ministry to first deputy prime minister in February. He declined to disclose his previous position.

A Fake Contest
The notion that Medvedev is competing against Ivanov is exactly what the Kremlin wants people to believe, said Anna Kachkayeva, a media analyst with U.S. Congress-funded Radio Free Europe/Radio Liberty. “This is a sham competition,” she said.
In the absence of free and democratic elections, the semblance of a contest between the two top officials is helping Putin keep the whole country in suspense and making it more difficult for various Kremlin clans to rally around a single candidate, she said. “Somebody has devised an ingenious plan,” she said, adding that television officials were trying to give Medvedev and Ivanov roughly equal airtime.
Or so it would seem.
Media monitoring company Medialogia says Ivanov is getting more airtime on national television, which is all state controlled. The company found that from November to August, Ivanov received 2,178 mentions on television, while Medvedev got just 1,621.
Television is expected to play a deciding factor in who will be elected president, perhaps explaining why Medvedev trails Ivanov in the opinion polls. Some people vote with their hearts, but Russians “have grown another body organ, and it is called television,” said Boris Dubov, a senior researcher at the Levada Center, an independent polling agency.
Kryshtanovskaya, of the Russian Academy of Sciences, said the Kremlin was further increasing the suspense between Ivanov and Medvedev by throwing other senior officials into the electoral ring, including acting Deputy Prime Minister Sergei Naryshkin, Russian Railways chief Vladimir Yakunin and Rosoboronexport head Sergei Chemezov, and now prime minister designate Viktor Zubkov. Most of the officials have been getting prominent coverage on television.
Although some of the officials have ambitions of their own, they appear to know they have no chance of winning the presidency, Kryshtanovskaya said. “It seems to me that it was made known in advance that Ivanov would win,” she said.
She described Ivanov as a member of a kind of Politburo that runs the country; the other members are Putin, Federal Security Service director Nikolai Patrushev, Kremlin deputy chief of staff Igor Sechin and Kremlin adviser Viktor Ivanov.
“The Politburo is betting on itself” in the election, she said, comparing the situation within the group to the “mad tea party” from Lewis Carroll’s “Alice in Wonderland.”
“They all sit at one table and will move one place over to clean cups,” she said.
Ivanov’s aides denied repeated requests for an interview with Ivanov, citing his tight schedule.

Friends Speak Warmly
People who have known Ivanov for years speak about him warmly, if somewhat guardedly. Galina Nerush, a museum curator at St. Petersburg School No. 24, where Ivanov studied, said he liked jazz and that when he started smoking, his mother and a teacher, Valentina Klifus, tried to get him to quit. Ivanov is said to be a heavy smoker now, although he is rarely seen smoking in public.
In a brief phone conversation, Klifus said she had taught Ivanov from the fourth to 10th grades and helped raise him. His father died when he was young. Klifus, now in her mid-80s, praised Ivanov, saying, “I wish everybody was like him.” 
She declined to talk further, saying she was not feeling well.
Ivanov’s fortunes have closely mirrored Putin’s over the years. President Boris Yeltsin appointed Putin as FSB director in July 1998, and Ivanov became his deputy a month later. Three months after Yeltsin promoted Putin to prime minister in August 1999, he named Ivanov as the head of the Security Council.
During his career in the KGB, Ivanov served three lengthy tours in Europe and Africa. His longest stay was in Finland, where he worked from 1984 to 1990 as third and later second secretary of the Soviet Embassy in Helsinki, Finland’s Helsingin Sanomat newspaper reported April 1, citing documents issued in Ivanov’s name from the archives of the Finnish Foreign Ministry’s protocol department. The newspaper published a photo of the ministry’s card on Ivanov.
Ivanov cut a modern, European figure and stood out from the rest of his colleagues, said Peter Stenlund, who met regularly with Ivanov as secretary of the Swedish People’s Party in the 1980s. The party is one of Finland’s oldest and represents the country’s Swedish-speaking minority. Ivanov speaks fluent English and some Swedish.
Stenlund, now Finland’s ambassador to Norway, declined to comment on Ivanov’s current activities.
Kremlin spokesman Dmitry Peskov said Ivanov’s chances of being elected were high because he oversaw a range of important issues in the government. But he said Ivanov was not a sure bet and ordinary Russians would have the final say at the ballot box.
While Ivanov seems to be walking and talking like a future president these days, whether he will end up in the Kremlin is anybody’s guess for now, said Kachkayeva, of Radio Liberty.
“Everything has been decided,” she said. “Or nothing has been decided yet.”

TITLE: Prokhorov To Return To Norilsk
PUBLISHER: Bloomberg
TEXT: MOSCOW — Mikhail Prokhorov, who is struggling to agree on a division of assets with business partner Vladimir Potanin, plans to rejoin the board of mining giant Norilsk Nickel six months after he quit.
Prokhorov also nominated four people from his company Onexim Group for the board. Potanin nominated four people from his Interros Holding, but did not nominate himself. The board met Thursday to review the nominations, Norilsk, the world’s largest nickel and palladium producer, said Friday in an e-mailed statement.
“Prokhorov will likely re-enter the board,” said Vladimir Zhukov, an analyst with Alfa Bank. “With his 28 percent to 29 percent stake in Norilsk, he can have three or four directors on the board.”
The two men have disagreed on how to split their holdings, which include Norilsk as well as Polyus Gold, Vedomosti reported Friday. A division proposed by Prokhorov may incur $1.3 billion in taxes, Vedomosti said.
Prokhorov stepped down as Norilsk’s CEO in March as part of a plan for he and Potanin to split their assets. He has now raised his shareholding in Norilsk to as much as 29 percent, Kommersant reported. Prokhorov also increased his stake in Polyus, the country’s biggest gold miner, to more than 25 percent, Vedomosti said.

TITLE: E.On, Gazprom Join Forces to Get Power
AUTHOR: By Yuriy Humber
PUBLISHER: Bloomberg
TEXT: MOSCOW — German utility E.On and Gazprom agreed to spend a combined 217.6 billion rubles ($8.6 billion) to gain control of a power generator apiece as the state exits the industry.
The companies made the highest offers in separate bids for shares in two units of national utility Unified Energy System. E.On bid for at least 69 percent of OGK-4 and Gazprom for a minimum of 47 percent in TGK-1, UES chief executive Anatoly Chubais said Saturday.
“The Russian, or Soviet, power industry has never seen anything like this; it’s a record,” Chubais told reporters Saturday. 
E.On offered $753 per kilowatt of installed power capacity, the highest bid ever submitted in Russia, he said.
The government will split up UES by July to increase competition and raise $120 billion needed to upgrade and expand power generation and the grid. The state utility raised more than $8 billion from four share sales in three generating companies, or gencos, before Saturday’s transaction.
“With increases of 5 percent annually, Russia is one of the largest and fastest growing energy markets in the world,” E.On said in a statement. “E.On’s long-term goal is to build up a strong position” in Russia. 
Sales of Moscow-based OGK-4 and TGK-1, based in St. Petersburg, are being conducted in two parts. The next stage will be the sale of new shares by the power companies. The government on Friday auctioned its stakes, which it owns via a 52 percent holding in UES.
The country’s power industry needs more investment in its infrastructure, said Lüder Schumacher, an analyst with Dresdner Kleinwort in London who has a “buy” rating on E.On shares.
“President Vladimir Putin has said that not having sufficient power capacity has cost the country 5 percent of GDP growth in recent years,” Schumacher said. “An awful lot of investment is needed in the power sector in Russia. I think this gives you a certain amount of political protection.”
E.On offered 3.35 rubles (13 cents) per share in OGK-4. The Düsseldorf-based utility will pay Russia 100 billion rubles for 29.8 billion state-owned shares and bid for all of the newly issued shares. UES will retain 22.5 percent in OGK-4.
E.On probably made the investment because of OGK-4’s earnings potential in four years, said Dmitry Tsaregorodtsev, an analyst with KIT Finance. “Once Russia liberalizes electricity prices by 2011, the company is not a golden hen but a diamond one.”
Apart from selling power plants, UES has also put its 23-story Moscow headquarters up for sale. Spokesman Timur Belov said in August that the company plans to sell the building and the lease to the 2.5-hectare lot on which it stands in the fourth quarter.
Gazprom offered 0.035 rubles per share for TGK-1, or $710 per kilowatt of capacity. The gas producer will pay the state 38.7 billion rubles ($1.5 billion) for 1.1 trillion shares and seek to buy as many as 925.7 billion new shares. UES’s stake will drop to 13.6 percent in TGK-1.
“I’m happy with the OGK-4 price, it’s an old asset and there are a lot of uncertainties,” said David Herne, a former UES director who manages $500 million including power assets at Halcyon Advisors in Moscow. “This is embarrassing” for TGK-1, he said. Herne estimated TGK-1’s value at $900 per kilowatt of capacity. 
Enel, Italy’s biggest utility, paid $669 per kilowatt of installed capacity for genco OGK-5 in a June auction. Norilsk Nickel’s price for genco OGK-3 was $601 per kilowatt, and the rest were sold at about $500.
The final figures for the size of the stakes Gazprom and E.On will acquire will be announced Sept. 25, Yury Makushin, chairman of OGK-4, said at Saturday’s briefing.
“UES wants to see one, single strategic investor acquire control in each company,” Makushin said.

TITLE: Russia’s Risks Don’t Scare Investors
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Despite the political uncertainty that makes investors concerned about risks, Russia still attracts foreign investment. The country could even be seen as “a safe haven of stability” compared to other economies, experts said Monday at the Fourth Annual Baltic Investor Conference: Rebuilding Russia – Russia’s Infrastructure Boom.
“Zubkov, the former head of the financial  intelligence service, is unknown to the general public.  Therefore his appointment as prime minister proves that the governmental administration will stick to its current political policy,” said Igor Yurgens, first vice president of Renaissance Capital investment group, chairman of the board of Renaissance Credit.
The Russian government is likely to keep increasing its participation in the national economy, Yurgens said, especially in the situation of budget surplus.
“Zubkov’s expressed ideas about state capitalism will be realized. Russia has no other choice, considering the demographic situation. The population is decreasing but the country has to support a large number of pensioners and children,” he said.
If Zubkov becomes president, the  state will play an even larger role in the economy, the expert said. If a younger candidate like Dmitry Medvedev wins, Russia will keep a balance between the liberal economy and state dominated economy, Yurgens stated.
Yurgens forecasted that German Gref and Alexei Kudrin, known for their adherence to the ideas of liberal economy, could lose their jobs. “It could signal a change of political policy, further redistribution of assets and an inflow of state managers and financial resources into military and industrial enterprises,” he said.
“Major companies like Surgutneftegaz and Alrosa could become a part of state holdings,” Yurgens added.
Although the personality of the president has a larger impact on the national economy in Russia compared to western democracies, the Kremlin has nothing to gain from a crash or any serious changes on the Russian fund market, the experts assured foreign investors at the conference.
Roland Nash, senior strategist and head of the analytical department at Renaissance Capital, forecasted that volatility on the Russian fund market is likely to remain in the mid-term future.
Nash indicated that many factors that made the Russian economy grow were outside the control of the Russian government, including high oil prices, global economic growth and expanding credit.

TITLE: Usmanov’s Gazmetall to Sell Loans
PUBLISHER: Bloomberg
TEXT: MOSCOW — ABN Amro Holding NV and BNP Paribas are selling $1 billion of loans for ZAO Gazmetall, the iron ore producer partly owned by Russian billionaire Alisher Usmanov, as the company refinances existing debt.
The five-year loans are Moscow-based Gazmetall’s first transaction in the international debt market and commitments from lenders are due in three weeks, according to a person familiar with the situation.
The company’s loans will pay an initial interest margin of 100 basis points above the London interbank offered rate, or Libor, said the person, who declined to be identified because the transaction is private.
Usmanov controls Metalloinvest, the world’s fourth-largest iron-ore producer, as well as Urals Steel and the Oskolsk Special Steel plant that annually produce 6 million tons of crude steel.

TITLE: Financial Watchdog Seeks Permission to Wiretap Phones
AUTHOR: By Tai Adelaja
PUBLISHER: Staff Writer
TEXT: MOSCOW — A senior official in the government’s financial markets watchdog has called for investigators to be allowed to wiretap phones in an effort to crack down on illegal insider trading, but analysts said the measure would lack teeth due to weak legislation. 
Bembya Khulkhachiyev, deputy head of the Federal Service for Financial Markets, said Wednesday that the service was planning to legalize wiretapping but was “not seeking [to take on] criminal investigative functions,” Nezavisimaya Gazeta reported.
Khulkhachiyev said that even though the service reported about 800 cases of illegal insider trading to the Interior Ministry per year, they never led to criminal charges being filed.
It was not immediately clear, however, whether Khulkhachiyev had support for his comments from the head of the service, Vladimir Milovidov.
The call for the state to eavesdrop on financial institutions comes as the watchdog has proposed new legislation to the State Duma that would tighten the rules on disclosure of insider information.
Among other measures, the bill will seek to increase the maximum fine for illegal insider trading to 1 million rubles ($39,000) for legal entities and make company officials responsible for the practice liable for prosecution.
Under Russian law, insider trading is illegal if information is passed to a third party who then profits from it. But a loophole in the legislation means that someone who personally profits from privileged information from his own organization may not be acting illegally if that organization does not expressly forbid the practice.
Ivan Manayenko, an analyst at Veles Capital, said that while insider trading was a “daily occurrence, there is no mechanism to bring erring traders to book. Many traders regularly record their conversations with brokers, but the recordings are of little use because offenders cannot be prosecuted.”
Alfa Bank strategist Erik DePoy said cases of illegal insider trading were not frequent enough to scare away investors.

TITLE: X5 Group’s Profits Soar
AUTHOR: By Maria Ermakova
PUBLISHER: Bloomberg
TEXT: MOSCOW — X5 Retail Group NV, Russia’s largest supermarket chain, said profit climbed 53 percent in the first half of 2007 on new stores and higher spending per customer.
So-called “gross profit’’ rose to $617 million in the six months through June, Moscow-based X-5 said in a statement Monday, without defining the figure or providing net income. Sales jumped 49 percent to $2.35 billion.
X5 Retail added 50,000 square meters (538,000 square feet) of selling space in the first half and plans to expand by almost a third this year to capitalize on higher consumer spending in Russia. The average wage has increased at an annual pace of more than 13 percent every month this year, fuelled by the country’s ninth consecutive year of economic growth.
Earnings before interest, taxes, depreciation and amortization advanced by 74 percent in the first half to $212 million. Ebitda margin, or earnings as a percentage of sales, widened by 1.3 percentage points to 9 percent. The company will release full earnings, including net income, on Sept. 24, spokesman Gennady Frolov said Monday.
 Sales at stores that have been open at least a year increased by 23 percent in U.S. dollar terms, X5 said Monday. Sales at the Pyaterochka chain, which runs discount stores, climbed by 44 percent to $1.3 billion, and revenue at more upscale Perekriostok supermarkets gained 54 percent to $1 billion.
X5 plans to open its first superstore next year and aims to build as many as 120 in coming years, Chief Executive Officer Lev Khasis said Sept. 6.

TITLE: In Brief
TEXT: <b>Porsche Enters Russia</b>
MOSCOW (Bloomberg) — Porsche AG, the maker of the 911 Carrera and Boxster sports cars, opened a 17 million-euro ($24 million) service center in Moscow as Russian purchases surge.
Porsche’s Russian sales for the 12 months ended July 31 nearly doubled to 1,900 cars and sport-utility vehicles, the Stuttgart, Germany-based carmaker said in a statement Sunday.
Russia, along with China, is one of the fastest growing markets for Porsche, the carmaker said in the statement. Porsche plans to boost its Russian network by 50 percent to 24 dealerships within the next two years.

<b>Bank Growth to Slow</b>
MOSCOW (Bloomberg) — Russian banks will grow at half the current pace next year as higher borrowing costs following the credit slump curb expansion, Kommersant reported.
Russian banking assets will grow by 22 percent in 2008, from current annual growth of 46 percent, the newspaper said, citing an ING Groep NV report.
VTB Group, Bank of Moscow and MDM Bank have put off sales of bonds, some of which were backed by Russian mortgages and auto loans, Kommersant said.
The ruble bond market is not developed enough to fund Russian corporate borrowing, the newspaper said. Ruble-denominated bonds for Russian companies are worth $10 billion, while bonds denominated in foreign currencies total $300 billion.

<b>Bill Limits Investment</b>
MOSCOW (Bloomberg) — Russian lawmakers on Friday approved in the first of three required votes a bill limiting foreign investment in “strategic sectors’’ of the economy. The bill was passed by 330 votes to one.
The draft law, subject to revision, governs deals that would give a foreign company a majority stake or control of a venture in 39 industries, including aerospace and defense.
Putin this week criticized U.S. legislation limiting some foreign investment and said Russia may “have to take steps to protect its interests.’’

<b>Rexam’s Offer Rejected</b>
MOSCOW (Bloomberg) — Rexam Plc’s bid for Rostar, a Russian beverage-can maker, was blocked by Russia’s antitrust authorities on the grounds that it would limit competition, Vedomosti reported, citing the authority.
Rexam was seeking to buy two Rostar plants, the newspaper cited Alexei Uluyanov, head of the watchdog’s industrial control unit, as saying. Rostar and Rexam control more than 90 percent of Russia’s beverage can market, the Moscow-based newspaper said.
Rexam announced the $297 million acquisition in July and said it should be completed by the fourth quarter.

<b>Economy Cars Planned</b>
MOSCOW (Bloomberg) — General Motors Corp. may make economy cars in Russia with billionaire Oleg Deripaska’s OAO GAZ, the maker of the Volga sedan, Kommersant reported.
The carmakers are discussing the assembly in Russia of an $8,000 economy model that could also be exported to developing markets such as India, the Moscow-based newspaper said Monday, without saying where it got the information.
GM Chief Executive Officer Rick Wagoner and Deripaska held talks on the venture last week, Kommersant reported. A formal announcement may come by the end of the year, the newspaper said.
The deal is among six preliminary accords, worth $1.7 billion, that Russia’s Economy Ministry signed with international carmakers on Sept. 14, Kommersant reported. The automakers include Fiat SpA, Isuzu Motors Ltd., and SsangYong Motor Co., the newspaper said, citing the Economy Ministry.

<b>Airline CEO Resigns</b>
MOSCOW (Bloomberg) — Lloyd Paxton resigned as chief executive officer of Malev Zrt., the Hungarian airline owned by Russian billionaire Boris Abramovich, two months after taking the post, Napi Gazdasag said, citing his successor, Peter Leonov.
Paxton left the position for personal reasons, Leonov told the newspaper in an interview. Abramovich in July gave Paxton one year to halt the airlines’ losses and publicly warned him mistakes would not be tolerated, Napi Gazdasag said. 
Leonov aims to make Malev profitable by the end of next year and plans to add as many as 300,000 passengers by expanding flights to Russia, he told the newspaper. Abramovich recently raised Malev’s capital by 18 million euros ($25 million) and intends to add at least 12 million euros more, Napi Gazdasag said.

<b>Imperial Enters Tomsk</b>
MOSCOW (Bloomberg) — Imperial Energy Plc, the London-based oil and natural gas explorer operating in Russia, agreed to form a natural gas-supply venture with the local government in the Tomsk region after finding “significant’’ deposits there.
The Tomsk Administration will own 26 percent of the venture, to be called Imperial Energy Tomsk Gaz, and a unit of Imperial will hold the rest, the U.K. company said in a statement distributed through the Regulatory News Service on Monday. 
Imperial expects a “material increase’’ in its gas reserves, the company said.

<b>Gazprombank Bonds</b>
MOSCOW (Bloomberg) — Gazprombank, the banking arm of Russian gas producer OAO Gazprom, plans to sell at least $1 billion of bonds this year, Interfax reported, citing a person it didn’t identify.
Gazprombank hired Barclays Capital and Citigroup Inc. to arrange the sale, Interfax said. The bonds will be sold in two parts of at least $500 million each and will be presented to investors after mid-October, the Russian news agency said.
Gazprombank, based in Moscow, was Russia’s second-biggest bank by assets at the end of the first half of 2007, Interfax said, citing its own internal rankings table.

<b>Economy Independent</b>
MOSCOW (Bloomberg) — Deputy central bank chairman Konstantin Korishchenko said that changes to Russia’s Cabinet will not affect the nation’s financial standing, Interfax reported.
Political events have a “limited’’ effect on Russia’s financial position, the Moscow-based news service quoted Korishchenko as saying Monday. Russian and foreign investors assess the current situation as stable, he said, Interfax reported. 
Russian President Vladimir Putin last week dismissed the government and named Viktor Zubkov, chief of Russia’s money-laundering watchdog, as the new premier. Legislators confirmed Zubkov as prime minister on Sept. 14.

TITLE: Russian Hackers Arrested
AUTHOR: By Tai Adelaja
PUBLISHER: Staff Writer
TEXT: MOSCOW — German police have arrested 10 people, including Russian and Ukrainian citizens, on suspicions of defrauding victims out of hundreds of thousands of dollars in an Internet scam, the country’s Federal Police Office said in a statement Thursday.
The group, which police say had links with an international organized crime organization, was tracked down after an 18-month hunt across several German cities, including Düsseldorf, Cologne and Frankfurt.
The suspects, who also include German citizens, were believed to be involved in a crime commonly known as phishing, which involves tricking Internet users into revealing personal or financial details.
Police are holding eight of the 10 arrested, including two women and six men aged 20 to 36.
The group targeted bank customers with e-mails purportedly from organizations such as eBay and Deutsche Telekom, the police said in the statement. Some of the e-mails were even made to appear as though they had been sent by the Federal Police Office. The group also operated bogus web sites that lured victims by mimicking the appearance of authentic corporate sites, the statement said.
The gang gained access to some of the acquired funds by recruiting medium-sized financial agencies, which then forwarded the money onward to Russia and Ukraine, the statement said.

TITLE: Zubkov Vows to Stamp Out Corruption
PUBLISHER: Combined Reports
TEXT: MOSCOW — Russian President Vladimir Putin’s new prime minister, Viktor Zubkov, said fighting corruption and raising living standards will be the top priorities for his government.
Zubkov, nominated by Putin on Wednesday and confirmed by parliament Friday, criticized as “useless” the outgoing government’s implementation of social policies, and said he would shuffle the Cabinet.
Putin surprised Kremlin watchers by sacking his government and naming Zubkov, who turned 66 Saturday, a low-profile financial regulator, as the new premier. Analysts said the move was part of a strategy by Putin, 54, to still wield power after he steps down following March elections. Zubkov said Thursday that he may run for president next year. Investors took the appointment of Putin’s third prime minister in stride.
“Mr. Putin could have nominated his horse, and the market would not have reacted,” said Eric Kraus, managing director of the Moscow-based Nikitsky Russia Fund, in a telephone interview. “Russians have been assuming that there will be relative stability, and there is nothing so far to impeach that notion.” 
The State Duma, or lower house of parliament, approved Zubkov’s candidacy by 381 votes to 47, with eight abstentions. The ruling United Russia party, which has a two-thirds majority in the 450-member chamber, backed his candidacy. Only the opposition Communists opposed it.
In his speech before the vote, Zubkov said he would work to lower inflation and taxes while raising pensions. Zubkov, who previously headed the government’s money-laundering watchdog, also called for a new law on corruption and a federal agency to lead the fight against graft.
Russia, as the world’s largest oil and natural gas exporter, should use its resources to better help the population, he told lawmakers.
“Russian oil, natural gas, our timber, fish and other natural riches and resources should bring far greater benefit,” Zubkov said.
Putin said Thursday that he wanted the new government to ensure continuity after Dec. 2 parliamentary elections and the March presidential vote. Russia’s Kommersant newspaper, in a front-page article Friday, said this indicated Zubkov would remain as premier under a new president in the next administration to protect Putin’s interests.
 Zubkov is part of Putin’s inner circle comprising those who worked with him in the St. Petersburg mayor’s office in the 1990s or who know the president from his time in the KGB.
The Security Council is to meet in October to discuss the findings of an interdepartmental working group on how to tackle corruption, Vedomosti reported. The group, which is preparing a package of anti-corruption legislation, is headed by Kremlin aide Viktor Ivanov.
But analysts said combating graft was beyond any single official.
“Corruption is ubiquitous in Russia. It is the very texture of Russian life,” said Masha Lipman, an expert at the Carnegie Moscow Center. “It would need a deep restructuring of the whole political system and the process of policymaking. What drives corruption is the large-scale involvement of the state.”
“Everything here is rotted by corruption. I don’t think Zubkov ... is going to position himself as a reckless warrior against corruption,” said Stanislav Belkovsky, head of the Council for National Strategy and a former Kremlin adviser. “[His appointment] is just a public relations campaign. It is designed to concentrate people’s minds on the problem of corruption and distract them from other issues.” 
Kirill Kabanov, head of the nongovernmental National Anti-Corruption Committee, said he did not see any efforts by the government to address corruption other than at the lowest levels.
“I would like to see issues such as systemic corruption and the independence of the judiciary tackled,” he said. 
Zubkov “will look to establish his credentials with a high-profile corruption arrest of a senior bureaucrat,” said Chris Weafer, chief strategist at UralSib. “This will set up him nicely to keep Putin’s seat warm.”

Bloomberg, SPT

TITLE: Local Raiders Targeted
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: During the last year about 60 people were detained in St. Petersburg on suspicion of organizing raiders’ attacks on local enterprises, according to police officials, who believe that the latest arrests and criminal cases have made business activity in the city more transparent and safe.
“At the moment a number of criminal cases are being referred to court. They are related to the Tambov criminal group, the Badri Shengelia criminal group and Andrei Leukhin’s criminal group, as well as the activities of the city’s 15th tax inspection service,” Vladimir Sych, deputy head of UBOP (a special police task force for investigating economic crimes), said at a press conference Friday.
He said that the police identified five criminal groups operating in the city, who had taken over several dozens of enterprises in St. Petersburg. Three of these groups were especially dangerous, Sych said.
“We started receiving mass complaints about criminals taking over private companies as early as 2004. However we could not stop them by investigating each particular case separately. We could not find enough evidence against the organizers,” Sych said.
All three groups cooperated and agreed on their areas of interest, he said. They were interested mainly in real estate.
When all the cases were combined and the General Prosecutor’s Office and Ministry for Internal Affairs took them under control, the police managed to detain the suspects and compile cases against them.
Out of the Tambov criminal group about 40 people were detained, Sych said, including local entrepreneur Vladimir Barsukov (Kumarin). The police suspect them of 16 crimes and the illegal takeover of 13 local companies, including properties on Nevsky Prospekt.
Many victims, who were forced to sell their property to raiders below the fair market price, were afraid of giving evidence against them, Sych said. The police faced strong resistance. The suspects, in their turn, tried to accuse investigators of criminal actions. Kumarin, who is suspected of raider attacks, organizing a criminal group, money laundering and assassination, accused one of the investigators of kidnapping.
“At the moment we do not have raiders in the city in the sense that we had before. We have only corporate conflicts,” Sych said. Local business people were less optimistic about the results of anti-raiders campaign.
“The enemy is not defeated. The process is under control now, so the raiders will start acting more carefully. Obviously, we will not see blatent takeovers with the participation of armed private security forces any more,” said Viktor Masalov, director for industrial policy at the St. Petersburg Union of Industrialists and Entrepreneurs.
Masalov saw the main problem as being the imperfections of corporate legislation, which allows raiders to take over companies legally from a formal point of view.
Masalov considered the activities of the city committee for security and its expert counsel to be a useful option for local entrepreneurs in case of an attack.
“The committee makes raiders’ attacks a public case, which is the first step in resisting them. The expert counsel consists of specialists from courts, the Federal Security Agency, Ministry of Internal Affairs, Chamber of Trade and Industry and other bodies. It is impossible to bribe them all,” he said.

TITLE: Juggling Fashion Design with Homework
AUTHOR: By Alexander Osipovich
PUBLISHER: Staff Writer
TEXT: MOSCOW — Kira Plastinina wants to be taken seriously.
By many measures, she already has a highly successful career. She is the chief designer for a rapidly growing chain of clothing stores aimed at teenage girls. The first Kira Plastinina shop opened at Moscow’s Yevropeisky mall in February, and the chain now has 28 locations throughout Russia, with a dozen more slated to open by the end of the year.
The problem, perhaps, is that Plastinina is only 15 years old.
Many have grumbled that Plastinina — who is touted as the world’s youngest fashion designer — only made it because her father, Sergei Plastinin, is the millionaire co-founder of Wimm-Bill-Dann, Russia’s largest dairy and juice producer.
In a recent interview at her company’s headquarters in Moscow, Plastinina admitted that her father’s wealth had made the stores possible, but stressed that she wasn’t just a rich girl looking for attention.
“It’s not like I just went to my dad and said, ‘I want a store,’ and he gave me a store with my name on it and I don’t do anything,” said Plastinina, who was dressed in a pink and purple top.
“I’m always coming to work, and my thoughts are constantly absorbed in work. I always think about work, day and night. Sometimes I even draw designs in school.”
Plastinina, a 10th-grader at the Anglo-American School in Moscow, said she hoped to continue her studies at the Central Saint Martins College of Art and Design, a London institution that has produced such fashion gurus as John Galliano and Hedi Slimane, who both led divisions of Christian Dior before starting their own labels.
Some contributors to Internet forums have suggested that Plastinina could follow the path of Ksenia Sobchak or the singer Alsu, whose powerful fathers gave them a springboard into pop-culture stardom. 
But Plastinina firmly rejected that idea. “Well, I can’t sing, so I won’t become a singer,” she said with a laugh. “But really, no, I want people to perceive me as a designer, and not just as a creative person who drifts from one thing to another.”
Still, Plastinina is poised to become a familiar face in Russian television. This season, she is the official designer for “Star Factory,” the Channel One talent show where would-be pop singers compete for stardom, much like in the popular U.S. show “American Idol.”
Even as a small child, Plastinina said, she had aspirations of being a fashion designer. “As far back as I can remember, I was always drawing things, either clothing or horses,” she recalled. “But mostly clothing.”
Her father took notice. Plastinin, who quit his job as CEO of Wimm-Bill-Dann last year to focus on other assets, came up with the Kira Plastinina brand and made his daughter the chief designer. Now he manages the company’s commercial side while Plastinina runs the creative side.
Although it has been rumored that she only plays a figurehead role, Plastinina said she is truly in charge and ultimately responsible for the company’s designs. “We have a very friendly team and we all work together,” she said, “but I come up with most of the ideas and I draw the models.”
The result is a broad assortment of teen-oriented clothes, shoes and accessories that are playful and unabashedly girly. Common touches include hearts and frills, not to mention the liberal use of pink and purple. 
While the items on sale at Kira Plastinina are not for bargain hunters, they lack the stratospheric price tags seen at many high-end Moscow boutiques. A typical blouse goes for 1,949 rubles, or about $75, according to theWeb site.
So is Plastinina the future of Russian fashion?
“I think she has excellent, very cheerful clothes for teenage girls, and they are fairly high-quality,” Alisa Dmitriyenko, a stylist for Glamour magazine, said in a telephone interview.
She added that Plastinina Is well positioned to take on foreign brands.

TITLE: Norilsk Faces Fine Over Waste
PUBLISHER: Bloomberg
TEXT: MOSCOW — Norilsk Nickel “distorted” figures on the amount of waste it dumped into rivers at its main site and may be fined, the Natural Resources Ministry said in a statement Thursday.
The company breached by as much as 2,400 times the permitted level of discharge for metals and chemicals such as iron, nickel, phosphate and chloride, and failed to meet deadlines to cut pollution, the ministry said in a statement.
“It’s absolutely clear; the figures on the documents they submitted and those that our tests show differ,” ministry spokesman Nikolai Gudkov said. The data used in initial checks have been “distorted,” he said.
Norilsk Nickel said it had sent “reasoned objections” on the results of the investigation to the Krasnoyarsk region’s branch of the environmental inspectorate. The company said in a statement Thursday that it expected them to be taken into account as part of an environmental review.
Inspectors concluded after more than a month of tests that Norilsk had failed to meet targets to cut water pollution, said Oleg Mitvol, deputy head of the Federal Service for the Inspection of Natural Resources Use. 
“We’re talking about fines and compensation for impact on the environment,” Mitvol said. Iron levels in the Shchuchya River, near Norilsk, exceeded accepted levels by 220 times, nickel by 630 times, and copper by 2,400 times, when tested Aug. 15, Mitvol said.

TITLE: MTS Plans Expansion To Armenia
AUTHOR: By Lyubov Pronina
PUBLISHER: Bloomberg
TEXT: MOSCOW — Mobile TeleSystems, the country’s largest mobile phone company, will spend up to 310 million euros ($430 million) to buy control of Armenian operator VivaCell, continuing expansion beyond the saturated Russian market, CEO Leonid Melamed said Friday.
Mobile TeleSystems, or MTS, bought 80 percent in the parent company of K-Telecom, which operates under the VivaCell brand. MTS paid $546 per subscriber, Melamed said in a conference call from Yerevan.
The price “implies high multiples with a market capitalization of $791 per subscriber,” Aton Capital Group said in a research note. “We believe the valuation is justified by high growth potential in Armenia,” where mobile phone penetration is 39 percent.
Russian mobile phone companies, led by MTS, had about 162 million users in Russia at the end of July, 20 million more than the country’s population, and are looking at other markets to sustain growth. MTS has more than 78 million subscribers in Russia, Ukraine, Uzbekistan, Turkmenistan and Belarus.
“This acquisition fully complies with our strategy to capture growth opportunities in the fast-growing CIS markets,” Melamed said, referring to the Commonwealth of Independent States, which includes 12 former Soviet republics. “We expect the company will show a double digit growth in the future.”

TITLE: U.K. Bank Customers Withdraw Savings
AUTHOR: By D’arcy Doran
PUBLISHER: The Associated Press
TEXT: LONDON — Ignoring government assurances that their money was safe, hundreds of customers lined up outside branches of a British mortgage bank for a second day on Saturday to withdraw their savings. 
Police had to be called in some cities to steer the panicked crowds away as Northern Rock bank branches closed for the day. 
Fears have spread over the bank’s request earlier in the week for an emergency Bank of England loan amid global financial turmoil. 
Customers withdrew 1 billion pounds ($2 billion) from Northern Rock, Britain’s fifth-largest mortgage lender, on Friday, The Financial Times reported, citing an unidentified person close to the situation. The bank — the first British bank in 15 years to be bailed out by regulators — declined to confirm the figure, which represents 4 percent of its deposit base. 
Treasury chief Alistair Darling and the country’s Financial Service Authority tried to assure customers that there was no doubt over Northern Rock’s solvency and that there was no need to panic. 
The authority “has reiterated yet again tonight that it is satisfied that Northern Rock is solvent, can carry on doing business and, crucially, paying out money if people want to withdraw their funds,” Darling said on Channel 4 television Saturday night. 
But The Sunday Telegraph said Northern Rock was preparing itself for a sell-off. Citing sources whom it did not identify, the paper said one plan would divide the bank’s mortgage portfolio among other major banks in what would be a private-sector rescue of the lender. 
Many people appeared to ignore Darling’s message Saturday as lines stretched around the block at some of the bank’s 76 branches in Britain, and the bank extended its hours to deal with the situation. 
“Yes, we are making matters worse, but I do think people need some reassurance from Northern Rock and the government and financial services that their money is safe,” account holder Jane Taylor told Sky News while waiting outside a branch in Kingston-upon-Thames, west of London. 
But others said they had faith in the bank and financial authorities and watched the lines in disbelief. 
“It’s mostly, in my opinion, ignorance, and that’s why they’re panicking,” said another bank customer named Tom, who gave only his first name. “I’m leaving [my money] there.”
Police were called to branches in Sheffield and Glasgow to help bank employees deal with the customers that they turned away as the branches closed for the day. 
In Manchester, branch manager Pauline Longstaff chose a gentle approach. She handed out chocolates and personally reassured customers that they would be taken care of. The waiting customers, like those waiting outside branches elsewhere, were mostly elderly people concerned about their life savings. 
Under Britain’s Financial Services Compensation Scheme, deposits of up to $63,900 are guaranteed should a bank default. 
Although Northern Rock requested substantial emergency funds at a penalty rate, the bank said it had billions of pounds in cash at its disposal. It has yet to draw on any emergency funding. 
The bank made the request Thursday because it relies heavily on wholesale money markets for cash and had been unable to borrow the amounts it required from other banks since the money markets choked up last month.

TITLE: Bourses Warn That Global Crunch May Have Consequences for IPOs
AUTHOR: By Catrina Stewart
PUBLISHER: Staff Writer
TEXT: NAKHABINO, Moscow Region — Representatives from leading bourses sounded a note of caution Friday, predicting that the bull rush of Russian initial public offerings might be hit in the near term by the turmoil that has rocked global markets this summer.
“Some brokers have temporarily taken their foot off the accelerator,” Jon Edwards, senior manager responsible for international business development at the London Stock Exchange, said on the sidelines of a seminar at the Moscow Country Club. 
His words were echoed by Gennady Margolit, deputy general director of the MICEX exchange. “Maybe some companies will put off their placements [this year], but not all,” Margolit said. 
The stakes are high. Ahead of the presidential election in March, some shareholders covet the added security a foreign shareholder base will bring. In the short term, the political situation looks quite stable. President Vladimir Putin brought in a new broom to the Cabinet last week in the shape of little-known technocrat, Viktor Zubkov, and the markets barely batted an eyelid. 
“There’s a strong sense of confidence that the electoral season will be fine,” said Chris Weafer, chief strategist at UralSib. “But you never know.”
Investors have been expecting a raft of IPOs in the second half of this year. Of the projected $30 billion-worth for 2007, $25 billion has already been raised, $12.5 billion of that from IPOs in London. 
United Company RusAl, the metals heavyweight majority-controlled by billionaire Oleg Deripaska, has been widely expected to come to market later this year. The company’s management has done the necessary groundwork and should make a final decision come October. Analysts say it could raise $7 billion in the right conditions. 
Tom Mundy, equity strategist at Renaissance Capital, said the environment for pushing an IPO was currently less favorable. But, he said: “The Russian IPO process has been very resilient. Investors have an awful lot of cash, and people want to get back into Russia.”
Investors are currently waiting on a batch of economic data, which will provide a better idea of just how deep the turmoil on the global markets, set off by the U.S. subprime crisis, will go. 
“If the numbers are good, they could spark another strong rally,” Weafer said. 
Utilities could yet help the 2007 IPO figure past the $30 billion mark. 
But so far the power sector sales, such as those announced Saturday of stakes in OGK-4 and TGK-1 to Germany’s E.On and Gazprom, respectively, for a total of $8.6 billion, have gone to strategic investors — not in IPOs.
“If [the OGKs] come to market, it is reasonable to expect there will be buyers. They won’t be too hung up on price,” the LSE’s Edwards said. 
VTB, which went public in May, raising $8 billion, was this week looking pretty sorry for itself. Since listing, its share price has fallen 20.7 percent, while its global depositary receipts trading in London have slid by 19.98 percent to $8.45. Its share price closed Friday at 10.78 kopeks, the lowest since the IPO. 
Analysts said the bank, the country’s largest after Sberbank, was a victim of its own success. “Even though they raised a lot of money, a lot of that money came from Russian investors,” Weafer said. “Very few [portfolio] investors are looking to support it.”

TITLE: Should Russia Be Concerned Over The U.S. Crisis?
AUTHOR: By Anna Shcherbakova
TEXT: The local business community is worried about the American mortgage crisis. The rumors that some Russian banks have banned new mortgage loans are troubling bankers as well as construction companies, which sell an increasing proportion of new apartments through mortgage deals. Interest rates are going up, especially at banks that borrow money abroad. They have stopped the securing of mortgage loans abroad and prefer other sources of money. Those who have enough sources of money within the country will probably not keep the rates at their lowest level.  Indeed, why should they?  Despite the claims of state-owned retail bank VTB-24 and the subsidiary of Morgan Stanley, Gorodskoi Ipotechny Bank, that they have lowered rates by several percentage points, their colleagues are not in a hurry to follow them.  
In its fear of the American scenario of unpaid subprime loans, Russian banks have reduced ‘free lunches’ such as loans without an initial payment, or loans to borrowers who cannot officially confirm their income. Half a year ago, such deals were very popular and helped banks to increase their range of clients. However, the number of people who work at companies with transparent accounting and have 100 percent ‘white’ salaries is limited. Incidentally, the income of a prospective borrower must be over $1500 a month. I assume everyone who satisfies these conditions and needs a new apartment has already been to the bank for a loan. Banks have relaxed their terms and conditions in order to attract new clients. Long term mortgage deals are the best way for them to increase their profit and portfolio. They are also guaranteed by the property, making them more secure than other consumer-goods lending.  In April-June this year, the top eight banks based in St. Petersburg increased the amount of loans given to private borrowers by 46 percent to almost 34 billion rubles ($1.34 billion), while over half of them were loaned for three or more years.
The construction industry is also interested in new borrowers. Sales of residential property developments have slowed down while prices have rocketed. The number of those in the city who can afford a new apartment for over $2000 per square meter is also not so large, with the average salary amounting to around $600 a month. Construction companies make agreements with banks that serve their clients with loans.  Therefore the construction industry will also suffer from the restriction of borrowing conditions, so the echo of the overseas crisis sounds a dangerous note for businesspeople. 
Surprisingly, I haven’t seen any worried borrowers yet. There are about 20,000 people in St.Petersburg who have borrowed money using their apartment as security within the last two and a half years. The average amount of the loan increased from about 1 million rubles in 2005 to 2.7 million in the first half of 2007.  People who survived hyper-inflation and devaluation within the last 15 years have the nerve to live under the pressure of a mortgage loan. Last year about $19 billion was given out for mortgages in St.Petersburg, and this year experts predict the amount could double. 

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

TITLE: Falling Satellites As a Way of Negotiating
PUBLISHER: Vedomosti
TEXT: The Baikonur Cosmodrome, gas from Turkmenistan and the Black Sea Fleet in Ukraine are all issues of national interest located outside the country’s borders that have of late become the subject of negotiations with other members of the Commonwealth of Independent States.
While the other countries hold some serious bargaining chips in these negotiations, Russia is not dealing entirely from a position of weakness.
A Proton-M booster rocket carrying a Japanese JCSAT-11 commercial satellite crashed recently after lifting off from Baikonur, with some of the debris coming down 50 kilometers outside the city of Dzhezkazgan. The Kazakh government has already prohibited the launching of any version of the Proton rocket until the reasons for last week’s accident have been determined. In keeping with the rental agreement for the site, Russia will be required to pay for any environmental damage caused by the accident. Viktor Khrapunov, Kazakhstan’s emergency situations minister, said last week that levels of contaminants contained in rocket fuel at the site where the Proton-M fell were from 1,100 to 5,200 times higher than normal, and that the full damage from the mishap had yet to be determined.
The matter doesn’t end there: Kazakh Prime Minister Karim Masimov pointed indignantly to the fact that the launch occurred at the same time that Kazakh President Nursultan Nazarbayev was visiting Dzhezkazgan. The Kazakhs have subsequently prohibited any launch when the president is in an area falling under a rocket’s planned trajectory, and they have indicated that they want an agreement with the Russian side on “securing the safety of the president of Kazakhstan during launches from Baikonur.”
These announcements look like they were made as a signal that the Kazakh government is getting ready to lodge some serious complaints with Moscow. The complaints will undoubtedly come with a price tag.
Russia currently pays Kazakhstan $115 million per year in rent for the Baikonur site. The latest Proton launch alone was insured for $300 million, and the Federal Space Agency generates significant revenues from commercial launches. The Kazakh government wants to make sure that it gets its fair share.
There are a few strategies Kazakhstan might use to put a little pressure on Moscow. The temporary moratorium on Baikonur launches, for example, could force the space agency to alter its schedule. Four more Proton rocket launches are planned for the remainder of the year, carrying international satellites and elements of Russia’s global navigation satellite system, which President Vladimir Putin has identified as a priority project.
Evidence that the Kazakhs are likely to be more demanding this time around can also be found in an example from another sector. Not long ago, the government suspended work on the country’s largest oil field. The AgipKCO consortium, which was developing the Kashagan field, was hit with charges of a number of environmental violations. This came not long after the authorities announced that they wanted to review the conditions of the production-sharing agreement with the consortium, as the government has become concerned over the pushing back of the start date for production and rising costs.
The government’s hard line can be explained by the threats to its plans for increased oil exports and the country’s difficult financial situation, as it has significant exposure to the global liquidity crisis because of its banking sector’s significant external debts and a growing current account balance deficit.
This appeared as an editorial in Vedomosti.

TITLE: Black September Anniversaries
AUTHOR: By Alexei Bayer
TEXT: The post-Soviet era in Russia began in August 1991 with a failed coup against perestroika. Since then, important events — mostly disasters — have tended to take place in August, such as the debt default in 1998, the sinking of the Kursk in 2000 and the bombing of two passenger airliners in 2004.
These events have a certain logical progression, but the emblematic tragedy of Putin’s Russia actually took place in September. It is, of course, the Beslan hostage crisis, resulting in the deaths of 334 people, most of them school children.
September is also the month of the fundamental event in U.S. history of the 21st century — the Sept. 11, 2001, terrorist attacks. 
Although the tragedies were very different, there are stark parallels between them just under the surface. They were representative of each country’s culture and values. Beslan showed the same, age-old disregard for ordinary citizens when pitted against the exigencies of the Russian state, embodied in the person of an infallible autocrat. The state would never demean itself by talking to terrorists.
Beslan mirrored another special forces operation — the storming of the Dubrovka theater in 2002, in which about 130 hostages were poisoned by a still-unknown gas pumped in through the air ducts. Both rescues hark back to Russian history, to the building of St. Petersburg or the construction of the Moscow-St. Petersburg railway, in which uncounted numbers of serfs died for the glory of the state.
The Sept. 11 tragedy, meanwhile, was quintessentially American. The terrorists, though all Arabs, displayed uncanny Yankee ingenuity while taking full advantage of U.S. democracy, technology, transport infrastructure and mass media. 
It was indicative of the U.S. regard for its own citizens’ lives that the remains of the 2,996 victims have been, whenever possible, identified and their families have been compensated with seven-figure payouts. Meanwhile, hundreds of thousands of Iraqis dying because of the U.S. invasion of their country will never even be counted properly.
In Russia, no one was dismissed or disciplined for the botched Beslan rescue effort. Either it was performed to Putin’s satisfaction or loyalty among team members counts for more than competence. 
Similarly, no dismissals or resignations followed Sept. 11 in the United States, even though subsequent reports have shown that high-level government officials had advance warnings and even clear descriptions of the plots.
For the past five years, these two nations have been content to ignore politics and to enjoy the fruits of a liquidity bubble permeating the global economy. Americans have created that bubble, by exporting trillions of paper dollars in exchange for the goods, services and commodities they consume, whereas Russians have been lucratively selling their natural resources into the global bubble economy.
Financial markets have tottered in July and August, and this September may mark the moment when the global liquidity bubble finally bursts. This could bring both Russians and Americans back to reality. The interesting question is whom they will then start to blame for their problems.

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

TITLE: The Optimism Bubble
AUTHOR: By Christopher Caldwell
TEXT: For six months, Americans assumed the testimony of General David Petraeus about the effectiveness of the U.S. troop surge in Iraq would be a cathartic moment — either showing that new tactics for policing an insurgency were possible or setting the stage for a painful retreat. It surprised most Americans last week when neither happened. It appears now that there will be no bold change of direction in Iraq. Barring the unforeseen, Iraq policy will continue as it has been going, with piecemeal successes here and there. 
There is, however, a shift in U.S. political sentiment, and Iraq may be at the root of it. For almost a century, optimism has been the semiofficial mood of presidential candidates. This has been as true in bad times as in good. Even in April 1968, weeks after Martin Luther King’s assassination and at the very nadir of the Vietnam War, former U.S. Vice President Hubert Humphrey announced his candidacy by saying, “Here we are ... the way politics ought to be in America, the politics of happiness, the politics of purpose, the politics of joy.” 
The people shooting for the highest office this time, whether they approve of the war in Iraq or not, are speaking in tones of gloom unprecedented in a presidential campaign. “The course we’re on,” said Democratic Senator Barack Obama, an Iraq skeptic, on U.S. television last week, “is unsustainable.” 
That the sunniest candidate always wins is a dogma that has united campaign consultants of both parties. The two most successful presidents of the last century — Franklin Roosevelt and Ronald Reagan — are also remembered as the most optimistic. “We have nothing to fear but fear itself,” Roosevelt said in 1933. “America’s best days, and democracy’s best days, lie ahead,” said Reagan in 1984. From Reagan’s time until a few months ago, the use of forward-looking rhetoric has been formulaic. Bill Clinton, with his “bridge to the 21st century,” excelled at it. In 2004, journalist Michael Kinsley noted with amazement that George W. Bush’s campaign was running an anti-John Kerry advertisement titled “Pessimism,” and Kerry was countering it with one about his campaign called “Optimists.” 
This year, the only candidate who has sought consistently to accentuate the positive is Mitt Romney, the Republican former governor of Massachusetts. At a June debate in New Hampshire, Romney said (drifting out of a discussion on abortion): “America is a land of opportunity. And our future is going to be far brighter than our past.” Then (drifting out of a discussion on immigration) he said: “We are the party of the future, and we have to stop worrying about the problems and thinking we can’t deal with those. We have to focus on the future and our opportunity to make America a great place for our kids and grandkids.” 
Once optimism becomes the dominant mood of oratory and policymaking, it is hard to shake. In a democratic society, optimism tends to be unfalsifiable. Who, after all, would doubt capabilities that the president has vouched for? No one but a bunch of naysayers. Pessimists are derided as people who underestimate either the ingenuity of the U.S. businessman, the generosity of the U.S. taxpayer or the valor of the U.S. military. Pessimism carries with it a whiff of deficient patriotism. 
In the case of Roosevelt and Reagan, optimism is the quality that their supporters focused on after the fact to recast a divisive partisan hero as a unifying national one. Their former opponents collude in this. Anti-Roosevelt Republicans prefer to think that Roosevelt’s great achievement in the face of the Depression was his happy talk, not his policies. Anti-Reagan Democrats prefer to believe that Reagan won because he bamboozled people with pie-in-the-sky promises, not because their own party had run out of ideas. 
While voters have always seemed to like optimism, what they really like is something else. What they like is good judgment. Good judgment is looking at a situation where opportunities and risks exist and avoiding the risks. Bad judgment is looking at the same situation and ignoring the risks. Optimism can be the outward manifestation of either, but this is less obvious when opportunities are many and risks are few. 
Optimism was bound to be revealed eventually as a faulty index of presidential mettle. But the Iraq war accelerated the process. Whatever one may think of the war, it is, of all policy initiatives in recent decades, the one that most bears the mark of presidential optimism. One could even say cock-eyed optimism, given the low amount of planning and manpower that were deemed necessary for its success. 
In his 1991 masterwork “The True and Only Heaven,” the late U.S. historian Christopher Lasch drew a contrast between optimism and what he called hope. “Progressive optimism rests,” Lasch wrote, “on a denial of the natural limits on human power and freedom, and it cannot survive for very long in a world in which an awareness of those limits has become inescapable. The disposition properly described as hope, trust, or wonder, on the other hand ... asserts the goodness of life in the face of its limits. It cannot be defeated by adversity. In the troubled times to come, we will need it even more than we needed it in the past.” 
Christopher Caldwell is a senior editor at The Weekly Standard. This comment appeared in the Financial Times.

TITLE: Stacking Odds For Putin’s Man
TEXT: President Vladimir Putin’s “democracy” put on quite a show last week. On Wednesday, Putin accepted the abrupt resignation of the prime minister and announced the nomination of an obscure bureaucrat and personal pal, Viktor Zubkov, whom most people had never heard of.  On Friday, the parliament duly voted Zubkov into office by a count of 381-47. As an Associated Press reporter described it, “Lawmakers praised Zubkov, posed easy questions and gladly accepted his responses in rote exchanges” reminiscent “of Soviet-era Communist Party meetings.” 
Outside the chamber, Russian and Western Kremlinologists feverishly debated the meaning of the event, which comes six months before Putin’s term-limited mandate as president expires. Was Putin preparing to install Zubkov as a puppet successor? All agreed that only the great ruler himself knew the answer to their questions. 
Which, of course, is precisely the point: Putin’s exercise demonstrated that he is free to impose any diktat on the people, at any time of his choosing, unconstrained by a genuine opposition, free media or civil society. If he likes, he can hand over the presidency to one of the relatively seasoned politicians in his government — acting First Deputy Prime Ministers Sergei Ivanov or Dmitry Medvedev. Or he can pick someone like Zubkov, who has been one of his cronies since his days in the St. Petersburg municipal government 15 years ago. State-controlled television and the re-empowered state security agencies will ensure that, competent or corrupt, charismatic or colorless, Putin’s choice is “elected” next March. 
Last month, the president proudly announced that long-range bombers had resumed continuous patrols for the first time since the end of the Cold War. Putin once said the collapse of the Soviet Union was “the greatest geopolitical catastrophe” of the 20th century. Step by step, he is bringing back the politics and the priorities of that state. 

This appeared as an editorial in The Washington Post.

TITLE: The Real Campaign
AUTHOR: By Yulia Latynina
TEXT: The parties are all ready for the upcoming campaign season. I’m not talking about those running in the elections made official by President Vladimir Putin’s decree in Rossiiskaya Gazeta. I mean the more important parties in the endless campaigns to win money and influence.
Moscow’s Tverskoi District Court, for example, froze the assets of oil company Russneft on Aug. 9. Why? Two people were trying to get hold of Russneft — Igor Sechin, deputy chief of the presidential administration and chairman of state-owned oil major Rosneft, and Oleg Deripaska, the Kremlin-friendly tycoon who heads the holding company Basic Element. With Putin’s blessing, Deripaska wants to buy Russneft.
Deripaska would likely sell Russneft to the state later. So why arrest the shares?
One reason may have been concern that, should either of the first deputy prime ministers, Dmitry Medvedev or Sergei Ivanov, become president, Deripaska might turn around and sell Russneft to a company controlled by Sechin. Preventing Deripaska from selling after the elections could diminish Sechin’s political clout.
This analysis suggests that the battle for Russneft is not just commercial in nature: At stake is the political influence of people within Putin’s political circle — influence measured in the billions of dollars.
There was also the arrest of Vladimir Barsukov, a wealthy businessman and reputed former crime boss, in August in St. Petersburg. The city deserves the epithet “the criminal capital” not because it is full of bandits, but because bandits comprise the city’s business and political elite. Judging by the composition of the group that orchestrated Barsukov’s arrest, it looks like a major victory for Sechin’s siloviki over those of his enemies’ clan.
Not just businesses but entire regions are being snapped up: Putin installed a governor with connections to Gazprom in the Sakhalin region and one with ties to state monopoly arms exporter Rosoboronexport in the Samara region.
New state corporations are hastily being created, complete with generous perks and privileges for their managers. Putin is handing state corporations to his friends at about the same pace that Catherine the Great handed out estates.
This is the real campaign, where the battle is not for votes, but for billions. Nobody knows who Putin’s successor will be, but everybody understands that under any successor there will be a fundamental change in the way property and influence are distributed. Ahead of this, each Kremlin clan is trying to pocket as many assets from state and private sources as possible, acquiring those seized by the government in the hope that they will add to their political clout —measured in billions of dollars. Thus, regardless of who the next president is, he will have to reckon with this imposing force capable of squashing, buying and even destroying.
And the leaders of the official political parties, like A Just Russia’s Sergei Mironov and United Russia’s Boris Gryzlov, have no more place in this high-stakes campaign than the gaudily dressed women of 19th-century palace balls had in the Battle of Austerlitz. What has to be understood is that the State Duma has become a cipher: not because it does not include any opposition parties, but because powerful clans don’t do business there. Having accrued their wealth and status clandestinely, they despise publicity — even in the form of operating through the political parties they have in their pockets. Whether Rosneft gains control of Russneft will not be decided by United Russia. Similary, Mironov will not determine if Rosoboronexport acquires the Magnitogorsk Iron and Steel Works.
If you want to know the real political lay of the land, don’t look at the Duma. Better to look at who was recently jailed in Lefortovo prison or the verdicts passed down by Moscow’s Basmanny District Court.

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

TITLE: The Best War Is the One That Is Never Fought
AUTHOR: By Wesley K. Clark
TEXT: Testifying before Congress last week, U.S. General David Petraeus appeared commanding, smart and alive to the challenges that his soldiers face in Iraq. But he also embodied what the Iraq conflict has come to represent: an embattled, able, courageous military at war, struggling to maintain its authority and credibility after 4 1/2 years of a “cakewalk” gone wrong. 
Petraeus will not be the last general to find himself explaining how a military intervention has misfired and urging skeptical lawmakers to believe that the mission can still be accomplished. The next war is always looming, and so is the urgent question of whether the U.S. military can adapt in time to win it. 
Today, the most likely next conflict will be with Iran, a radical state that the United States has tried to isolate for almost 30 years and that now threatens to further destabilize the Middle East through its expansionist aims, backing of terrorist proxies such as Lebanese group Hezbollah and even Hamas in Gaza and the West Bank and far-reaching support for radical Shiite militias in Iraq. As Iran seems to draw closer to acquiring nuclear weapons, almost every U.S. leader — and would-be president — has said it simply won’t be permitted to reach that goal. 
Think another war can’t happen? Think again. Unfazed by the Iraq fiasco, hawks in U.S. Vice President Dick Cheney’s office have been pushing the use of force. It isn’t hard to foresee the range of military options that policymakers face.  
Iran is not the only country where the next war with the United States might erupt. Consider the emergence of a new superpower (or at least a close competitor with the United States). After China shot down an old satellite in January, this became a wake-up call that underscored the risks inherent in the U.S. reliance on space. The next war could also come from somewhere unexpected. If you’d told most Americans in August 2001 that the United States would be invading Afghanistan within weeks, they would have called you crazy. 

Any future U.S. wars will undoubtedly be shaped by the experiences in Iraq and Afghanistan, however painful that might be. Every military refights the last war, but good militaries learn lessons from the past. Here, the lesson from Iraq and Afghanistan couldn’t be more clear. Don’t ever, ever go to war unless you can describe and create a more desirable end state. And doing so takes a whole lot more than just the use of force. 
The lessons from past conflicts aren’t always obvious. After the demoralizing loss in Vietnam, the United States went high-tech, developing whole classes of new tanks, ships and fighter planes and new operational techniques to defeat then-enemy No. 1 — the Soviets. 
After the 1991 Persian Gulf War, the U.S. military embarked upon another wave of high-tech modernization — and paid for it by cutting ground forces, which were being repeatedly deployed to peacekeeping operations in places such as Haiti, Bosnia and Kosovo. Instead of preparing for more likely, low-intensity conflicts, the United States was still spoiling for the “big fight,” focusing on such large conventional targets as Kim Jong II’s North Korea and Saddam Hussein’s Iraq. And now it lacks adequate ground forces. Bulking up these forces — perhaps by as many as 100,000 more active troops — and refitting and recovering from Iraq could cost $70 billion to $100 billion. 
Somehow, in the past decade or two, Americans began to think of themselves as “warriors.” There was an elemental purity to this mind-set, a kill-or-be-killed simplicity that drove U.S. commanders to create a leaner force based on more basic skills — the kind that some generals thought were lacking in Vietnam and in the early years of the all-volunteer military. Now, in an age when losing hearts and minds can mean losing a war, the United States finds itself struggling in Iraq and Afghanistan to impart the sort of cultural sensitivities that were second nature to an earlier generation of troops trained to eat nuoc mam with everything and sit on the floor in preparation for their tours in Vietnam. 
In addition, the United States needs generals who are well educated, flexible and culturally adept men and women — not just warriors, not just technicians. Why aren’t more military leaders sent to top schools such as Princeton, the way Petraeus was, or given opportunities to earn doctorates, as did U.S. Defense Secretary Robert Gates’ military assistant, Lieutenant General Peter Chiarelli? For years, Congress has whacked away at military education budgets, thereby driving gifted officers from the top-flight graduate schools where they could have honed their analytical skills and cultural awareness. 
Still, let’s not be overly critical. As an institution, the U.S. armed forces stands head and shoulders above any other military in skill, equipment and compassion, and its leaders are able, conscientious and loyal. 
But shame on political leaders who would hide behind their top generals. It was hard not to catch a whiff of that during last week’s hearings. The U.S. Constitution, however, is not ambivalent about where the responsibility for command lies: The president is the commander in chief. 
Surely, here is where some of the most salient lessons from recent wars lie: in forcing civilian leaders to shoulder their burdens of ultimate responsibility and in demanding that generals unflinchingly offer their toughest, most-seasoned advice. U.S. General Tommy Franks embarked on the 2001 Afghanistan operation without a clear road map for success, or even a definition of what victory would look like. Somehow, that was good enough for him and his bosses. So Osama bin Laden slunk away, the Taliban was allowed to regroup, and Afghanistan is now mired deep in trouble and sinking fast. 
In Iraq, U.S. President George W. Bush approved war-fighting plans that hadn’t incorporated any of the vital 1990s lessons from Haiti, Bosnia or Kosovo. Nation building, however ideologically repulsive some may find it, is a capability that a superpower sometimes needs. 
At the same time, the United States’ top generals must understand that their duty is to win, not just to get along. They must have the insight and character to demand the resources necessary to succeed — and have the guts to either obtain what they need or to resign. If they get their way and still don’t emerge victorious, they must be replaced. That is the lot they accepted when they pinned on those four shiny silver stars. 
Above everything else, Americans must understand that the goal of war is to achieve a specific purpose for the nation. In this respect, the military is simply a tool of statecraft, one that must work in tandem with diplomacy, economic suasion, intelligence and other instruments of U.S. power. How tragic it is to see old men who are unwilling to talk to potential adversaries but seem ready to dispatch young people to fight and die. 
Washington needs to tweak its force structure, hone its leadership and learn everything it can about how to do everything better. But the big lesson is simply this: War is the last, last, last resort. It always brings tragedy and rarely brings glory. Take it from a general who won: The best war is the one that doesn’t have to be fought, and the best military is the one capable and versatile enough to deter the next war in the first place. 

Wesley K. Clark, the former supreme commander of NATO, is the author of “A Time to Lead: For Duty, Honor and Country.” This comment appeared in The Washington Post.

TITLE: Russia’s Joy at Sporting Success
AUTHOR: By Gregory Sandstrom 
PUBLISHER: Special to The St. Petersburg Times
TEXT: It was a memorable weekend for Russian sports, with national teams taking two out of three major titles Sunday against southern European rivals. 
The Russian women’s tennis team won the WTA Federation Cup tournament against Italy in Moscow, the men’s volleyball team fell to Spain in the European Championship final in Moscow and the men’s basketball team not only made the European Championship final game Sunday for the first time in more than 10 years, it won the tournament. Favorite Spain didn’t expect to lose in the final to the underdog team, which received an automatic qualifying berth to the Olympic Games in Beijing next August.
A pressing question for fans of Russian sports is: how has Russia managed to maintain such successful sports programs and not just a single team or talented individual players? 
One explanation was expressed by First Deputy Prime Minister Sergei Ivanov, who watched Federation Cup final. 
“For 10 years, people have been asking: Is it worthwhile or not to hire a foreign trainer?” Ivanov asked. For the men’s basketball team, the answer was clearly “yes.”
In tribute to the feat they had just accomplished, the Russian team lifted their American Coach David Blatt off the ground to celebrate the victory. 
“Think of the trainer as the conductor of a symphony,” Ivanov, who is considered a possible successor to President Vladimir Putin, said. “I give special credit to the trainer… honestly speaking , I didn’t believe that our team would reach the final of the European Championship and no one thought they would do it.” 
Ivanov added he had been “glued to the T.V. set” watching the semi-final game between Russia and Lithuania, which Russia won 86-74.
In Sunday’s final, Spain jumped out to an early 15-4 lead. But as the game progressed, Russia chipped away at the lead, with solid performances by Viktor Khrapa and U.S. National Basketball Association (NBA) all-star and tournament MVP Andrei Kirilenko. 
Down one point, but with possession of the ball, Russia’s Jon Robert Holden sank an off-balance 16-foot jump shot with two seconds remaining to seal the victory 60-59. It was an exhilarating ending to an incredible tournament for the Russian team.
American-born Holden, Moscow CSKA point guard and a new citizen of the Russian Federation, made the difference to put Russia in a place it hadn’t been for more than a decade. 
With the Euro League title and some of the best players in world basketball outside of the NBA, Russia is establishing its reputation on the world stage in basketball. 
Meanwhile, in the Fed Cup on Sunday, Svetlana Kuznetsova fell behind to Italian Francesca Schiavone in the third tie, after both Anna Chakvetadze and Kuznetsova had won their first matches. 
St. Petersburg-born Kuznestova called it “the most important match I’ve won in such a pressure-full situation. This is a great victory for the Russian team.” 
Sports minister Vyacheslav Fetisov tipped his hat to team trainer Shamil Terpishev, noting that “professionalism lead to the result.” 
Kuznetsova applauded the Russian fans that supported her and her compatriots to their third title in four years. 
“Our home fans have a great appetite for sports,” Vesti sport commentator Dmitry Gurbenyev wrote. “We have optimism and are looking forward to the Olympic Games.” 
With a roster including Nadia Petrova, Yelena Vesnina and Maria Sharapova, as well as alternatives such as Anastasia Myskina and Yelena Dementieva, Russia’s dominance in the women’s game looks secure for years to come.
The Russian men’s volleyball team had fans on the edge of their seats during most of the tournament, falling behind in several matches only to climb back in from behind. The final match against Spain followed a similar pattern as Russia dropped the first set, won the second, but fell behind 24-21 in the third. 
With three strong blocks Russia fought back and took a decisive lead heading into the fourth set. In the deciding set, the Russian were behind 14-12 and fought back to 14-14, only to fall 16-14 and settle for silver.

TITLE: Plane Crash in Phuket, Thailand, Kills 89
AUTHOR: By Sutin Wannabovorn
PUBLISHER: The Associated Press
TEXT: PHUKET, Thailand — Authorities on Monday found the two flight data recorders from a plane that crashed and killed 89 people — mostly foreigners — on Thailand’s resort island of Phuket, while an airline official said wind shear may have doomed the flight.
The budget One-Two-Go Airlines flight was carrying 123 passengers and seven crew from Bangkok to Phuket when it skidded off a runway Sunday while landing in driving wind and rain, catching fire and engulfing some passengers in flames as others kicked out windows to escape.
Deputy Transport Minister Sansern Wongcha-um told reporters that 89 people, including 53 foreigners, were killed in the crash, and 41 others were injured. The crash was Thailand’s worst air accident in a decade.
Kajit Habnanonda, president of Orient-Thai Airlines, which owns One-Two-Go, said wind shear — the rapid change in wind speed which can impact takeoffs and landings — was a possible cause of the accident. Heavy rains could have contributed to the plane skidding off the runway, Kajit added.
At least four Americans were among the foreign tourists killed and one survived the crash, according to a U.S. Embassy spokesman in Bangkok who spoke on condition of anonymity citing protocol.
An Israel Embassy official who spoke on condition of anonymity for the same reason said there were 10 Israelis on the passenger list. Two were injured, the official said.
Passengers from France, Sweden, Iran and Australia also were killed, as were the plane’s Indonesian pilot and Thai co-pilot, according to the airline’s list of dead passengers, which was obtained by The Associated Press.
Survivors described how the McDonnell Douglas MD-82 was preparing to land in heavy rains when it suddenly lifted off again and then came crashing down on the runway. It rammed through a low retaining wall and split in two after it crashed.
“I think he realized the runway was too close or he was too fast or the wind had hit him,” Robert Borland, a survivor who lives in Australia, told The Associated Press. “He accelerated and tried to pull out. I thought he is going around again and the next thought was everything went black and there was a big mess and we hit the ground.”
Borland, 48, managed to drag himself to an exit where he was pulled by another survivor from the plane to safety.
“People were screaming. There was a fire in the cabin and my clothes caught fire,” he said.
Parinwit Chusaeng, who was slightly burned, said some passengers were engulfed in flames.
“I stepped over them on the way out of the plane,” Parinwit told The Nation TV channel. “I was afraid that the airplane was going to explode, so I ran away.”
Parts of the twisted plane lay smoking at the side of the runway, while officials wearing masks carried bodies wrapped in white sheets to an airport storage building.
Transport Minister Theera Haocharoen said the plane’s black boxes would be sent to the United States for analysis.
“Hopefully, we will learn in a few weeks the cause of accident,” he said.
Many of the passengers had been planning to vacation at Phuket, a popular beach resort.

TITLE: Isinbayeva Shares Golden League Jackpot
AUTHOR: By Kevin Fylan
PUBLISHER: Reuters
TEXT: BERLIN — Russian pole-vaulter Yelena Isinbayeva and American 400 meters runner Sanya Richards secured half shares in a $1 million jackpot when they completed perfect Golden League seasons on Sunday.
Cheered on by a crowd of over 70,000 at Berlin’s Olympiastadion, Isinbayeva, the Olympic and double world champion, cleared 4.82 meters to see off Monika Pyrek of Poland and fellow Russian Svetlana Feofanova.
Richards, the only other athlete still bidding for a sixth win in Golden League meetings, won on the blue track in 49.27 seconds, the fastest women’s 400 of the year and more than a second ahead of Britain’s world champion Christine Ohuruogu.
Victory capped a second jackpot season in succession for Richards, who scooped a $250,000 share of the money last year.
“I always say I spend too much so the goal this year is to invest it,” Richards said at a news conference. “But it’s my mum’s birthday tomorrow so she’ll get a nice birthday gift.”
The Berlin meeting took place two days after Friday’s event in Brussels and there were no serious world record attempts.
With the money in her sights, the 25-year-old Isinbayeva secured victory with a minimum of fuss.
She entered the competition at 4.62, clearing it at the first attempt, and then went over first time at 4.77 and 4.82.
With Pyrek failing at 4.77 and Feofanova bowing out at 4.82 it left Isinbayeva to have a go at her own world record of 5.01.
The Russian set the bar at 5.02 but did not get near to clearing it. If she was disappointed Isinbayeva hid it well, as she celebrated with a back flip on the landing mat.
“It was a lot of hard work but I was always confident,” the peerless Russian told reporters.
“I now want to share the money with some poor kids, starting with my home town of Volgograd. I don’t know how yet but I have the security to do that.”
Richards had missed out on competing in the 400 at the world championships in Osaka, after failing at the U.S. trials, but she gained ample compensation with Sunday’s victory.
The American led from the start, built up a lead of more than five meters going to the home straight and crossed the line with her arms raised and half a million dollars richer.
“No one knows how hard it was this season with my illness but I’ve come through to have a great year,” Richards said.
Croatian high jumper Blanka Vlasic had come to Berlin with an eye on a world record but had to be content with winning the competition with a jump of 2.00 meters.
Richards’s win apart, it was a low-key meeting on the track.
With Asafa Powell and Tyson Gay absent, Jaysuma Saidy Ndure won the men’s 100 meters for Norway in 10.14, a hundredth of a second ahead of Britain’s Marlon Devonish.
Jeremy Wariner ran 44.05 to easily win the men’s 400, but fellow American Bernard Lagat, double world champion in Osaka, was beaten into second place in the 1500 meters by Daniel Kipchirchir Komen of Kenya.
“The last lap killed me,” Lagat told reporters. “I’ve run so many kilometers this season. I need a rest.”

TITLE: Pakistani President Quits Army
AUTHOR: By Zeeshan Haider
PUBLISHER: Reuters
TEXT: ISLAMABAD — Pakistani President Pervez Musharraf plans to quit as army chief to become a civilian leader, removing a main objection to his proposed re-election in October, a senior ruling party official said on Monday.
“We expect that after his re-election process next month, God willing, General Musharraf would take his oath of office as a civilian president before Nov. 15,” Senator Mushahid Hussain Sayed, secretary-general of the Pakistan Muslim League (PML), told Reuters.
U.S. ally Musharraf retained the post of army chief after he seized power in a military coup in 1999, despite calls from the opposition to quit the dual office.
His acquiescence could be seen as a victory for Benazir Bhutto, who has said that any power-sharing arrangement with Musharraf would depend, among other things, on him becoming a civilian president.
Bhutto’s Pakistan People’s Party announced on Friday the two-time former prime minister would return to Pakistan on October 18, ending more than eight years of self-exile.
Giving up the army role would undoubtedly dilute Musharraf’s power in a country that has been ruled by generals for more than half the 60 years since it was founded.
It will also be a wrench for a life-long soldier who described his uniform as a “second skin.” But aides say Musharraf has been reconciled to quitting the army for months.

TITLE: New Talents Emerge At World Cup
PUBLISHER: The Associated Press
TEXT: SHANGHAI, China — The quarterfinals will be set in a few days for the Women’s World Cup. One thing is already very clear.
New powers are emerging in the women’s game, and Brazil and North Korea are two of them. Neither has won this tournament, which has been dominated by the United States (two titles) and European teams — Germany is the defending champion and Norway won in 1995.
The final is Sept. 30 in Shanghai, and nobody would bet against those two quick, attacking teams contesting that game.
Brazil is nearly certain to win Group D after its impressive 4-0 victory over China on Saturday behind two goals by Marta, the tournament’s top scorer with four.
“The gap has closed a lot between teams at the top,” said Silvia Neid, Germany’s coach.
The Brazilian women play like their male counterparts, who have won an unprecedented five World Cups. They’re flashy, open up other defenses with backheel passes and attack with one-on-one superiority.
“It’s not only Marta on Brazil, they have many ‘small Martas’ too,” China coach Marika Domanski-Lyfors said. “They have good qualities, every player.”
Brazil, which faces Denmark on Wednesday in its final group game, will probably face Australia or Canada in the quarterfinals in Tianjin on Sept. 23. Those two teams face off Wednesday with Australia needing only a draw to grab second place in Group C.
The winner of Group C is likely to be Norway, though Australia could also win it. The top team in that group will probably be up against China on Sept. 23 in Wuhan. China faces New Zealand in the final group game on Wednesday. New Zealand has lost its first two games and has yet to score.
The tougher Groups A and B are still unclear.
Defending champion Germany is tied with Japan atop Group A with four points. The two play Monday in Hangzhou with Germany heavily favored. The Germans would win the group with a victory. England seems likely to take second place. It faces Argentina on Monday — the South Americans have lost two games — and could claim second place with a victory.
Japan has played well in the tournament and a victory or draw against Germany would throw Group A into a three-way struggle for two places.
The No. 1-ranked United States and No. 5-ranked North Korea seem sure to get the two places from Group B. The U.S. finishes group play against Nigeria on Tuesday in Shanghai. North Korea faces Sweden on Tuesday in Tianjin.
Through two games, North Korea and the Americans are even on the first three criteria FIFA uses to break ties in the standings: points, goals and goal difference.
The winner of Group A plays the No. 2 team in Group B on Sept. 22 in Wuhan. The second-place team in A plays the No. 1 team from Group B on the same day in Tianjin.

TITLE: Greenspan Puts Iraq War Down to  Oil
AUTHOR: By JoAnne Allen
PUBLISHER: Reuters
TEXT: WASHINGTON — Clarifying a controversial comment in his new memoir, former Federal Reserve Chairman Alan Greenspan said he told the White House before the Iraq war that removing Saddam Hussein was “essential” to secure world oil supplies, according to an interview published on Monday.
Greenspan, who wrote in his memoir that “the Iraq War is largely about oil,” said in a Washington Post interview that while securing global oil supplies was “not the administration’s motive,” he had presented the White House before the 2003 invasion with the case for why removing the then-Iraqi leader was important for the global economy.
“I was not saying that that’s the administration’s motive,” Greenspan said in the interview conducted on Saturday. “I’m just saying that if somebody asked me, ‘Are we fortunate in taking out Saddam?’ I would say it was essential.”
In his new book “The Age of Turbulence: Adventures in a New World,” Greenspan wrote: “I’m saddened that it is politically inconvenient to acknowledge what everyone knows: The Iraq war is largely about oil.”
U.S. Defense Secretary Robert Gates on Sunday rejected the comment, which echoed long-held complaints of many critics that a key motivating force in the war was to maintain U.S. access to the rich oil supplies in Iraq.
Appearing on ABC’s “This Week,” Gates said, “I have a lot of respect for Mr. Greenspan.” But he disagreed with his comment about oil being a leading motivating factor in the war.
“I know the same allegation was made about the Gulf War in 1991, and I just don’t believe it’s true,” Gates said.
“I think that it’s really about stability in the Gulf. It’s about rogue regimes trying to develop weapons of mass destruction. It’s about aggressive dictators,” Gates said.
Greenspan retired in January 2006 after more than 18 years as chairman of the Fed, the U.S. central bank, which regulates monetary policy.
He has been conducting a round of interviews coinciding with the release of his book, which goes on sale on Monday.
In The Washington Post interview, Greenspan said at the time of the invasion he believed like President George W. Bush that Iraq had weapons of mass destruction “because Saddam was acting so guiltily trying to protect something.”
But Greenspan’s main support for Saddam’s ouster was economically motivated, the Post reported.
“My view is that Saddam, looking over his 30-year history, very clearly was giving evidence of moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day passing through,” Greenspan said.
Even a small disruption could drive oil prices as high as $120 a barrel and would mean “chaos” to the global economy, Greenspan told the newspaper.
Given that, “I’m saying taking Saddam out was essential,” he said. But he added he was not implying the war was an oil grab, the Post said.

TITLE: France Annihilates Namibia, Now Faces Tougher Rivals
PUBLISHER: Reuters
TEXT: TOULOUSE — With two contrasting World Cup outings, France has enhanced its reputation as a side capable of thrilling performances as well as dismal shows.
The question is which France will turn up to face Ireland on Friday in Paris for a match the hosts need to win to keep alive their chances of reaching the quarter-finals.
The team which beat England twice and Wales once in warm-ups and recorded its highest win ever with an 87-10 demolition of Namibia on Sunday would have to be regarded as favorites.
However, if the French stick to the wrong game plan and keep dropping the ball like they did in their 17-12 upset loss to Argentina in the tournament opener, they could face the prospect of an embarrassing early exit.
“Only after the Ireland match will we know where we stand,” said coach Bernard Laporte, who realizes that crushing a largely amateur Namibia team reduced to 14 men for an hour is of little relevance.
At least France showed by running in 13 tries against the helpless Namibians that they could still enjoy themselves playing rugby, which had been far from obvious in their struggle against Argentina.
“We wanted to show our true face to ourselves and to our fans,” said lock Sebastien Chabal, who scored two tries.
“The score is what we wanted it to be and so was the way we played. We restored pride and that’s what mattered.”
If France wins its remaining Pool D games against Ireland and Georgia with a bonus point each time, the team will advance to the last eight and might even win the group.
The problem is that if Argentina beats Ireland, France will probably finish second and face the prospect of a likely quarter-final clash with New Zealand.
Australia and the Springboks would then probably be the next obstacles if they were to survive against the All Blacks.
“The World Cup has now really started for us but the hardest bit lies ahead,” said Laporte.
The party atmosphere in Toulouse, the heartland of French rugby, and the flashes of brilliance that pleased the crowd were nevertheless a relief for players who were under tight scrutiny after their stumble against Argentina.
Still, they know they must not get carried away and have everything to prove.
“Let’s refrain from using superlatives and keep in mind who we have just beaten,” said scrumhalf Jean-Baptiste Elissalde, who captained the side on Sunday and was outstanding.
Both Namibia coach Hakkies Husselman and his captain Kees Lensing said they felt France were a much better side than Ireland.

TITLE: Raikkonen’s Belgium Grand Prix Victory Caps F1’s Turbulent Week
PUBLISHER: The Associated Press
TEXT: SPA-FRANCORCHAMPS, Belgium — So what if Fernando Alonso only finished third at the Belgian Grand Prix? The world champion survived the most turbulent weekend of his career and came out stronger.
His finish behind Ferrari drivers Kimi Raikkonen and Felipe Massa was still one above his teammate Lewis Hamilton, and his aggressive, audacious driving to deny Hamilton a way through on the opening lap of the Belgian Grand Prix got the official blessing from McLaren chief Ron Dennis.
After he was directly implicated late Friday as the source that led to the record $100 million fine for his team in the spying scandal, McLaren embraces him now as much as anytime throughout the whole troubled season.
As of Monday, only one thing counts — with only three races remaining, Alonso closed the gap in the world standings with Hamilton to 97-95 and has kept the momentum going his way, against all odds.
“It was very important to be in front,” Alonso said after he first cut off Hamilton ahead of the opening hairpin and then forced him way wide onto the safety track to keep him at bay. 
The Spaniard said he was forced into the block of his teammate because of the maneuver of Massa in front of him.
Hamilton had his doubts and thought initially he was the target. 
“I thought ‘Oh thanks’ but I guess these things happen when you fight for the world championship,” Hamilton said.
It was the double world champion showing a 22-year-old rookie the rough edges of the trade.
“When you have two great drivers like Fernando and Lewis fighting for the world championship, you have to expect maneuvers like we saw today at the start,” Dennis said.
After Hamilton’s temper flared, the team said the incident would be discussed between the two drivers.
Dennis is getting used to these “family” fights.
And Sunday’s incident was minor compared to the tongue wagging that led to the record fine and suspension from the constructor’s championship.
Dennis admitted over the weekend that Alonso, during a team dispute at the Hungarian Grand Prix, had threatened to divulge controversial e-mail exchanges regarding the spy scandal to FIA.
The McLaren team leader preempted him, informed FIA and indirectly set off an investigation which led to the severe penalties.

TITLE: O.J. Simpson Busted Over Robbery
PUBLISHER: The Associated Press
TEXT: LAS VEGAS — An apparent audiotape of O.J. Simpson’s standoff with men he accused of stealing his memorabilia begins with the ex-NFL star demanding, “Don’t let nobody out this room. ... Think you can steal my [expletive] and sell it?”
Simpson was arrested Sunday and booked at a county jail on charges connected with what police described as a robbery at a Las Vegas hotel. A judge ordered Simpson be held without bail, Sergeant John Loretto said. A court date was set for Thursday.
In an audiotape released Monday by the celebrity news Web site TMZ.com, Simpson is heard shouting questions while other men shout orders to the men in the room.
TMZ said the recording was made on a handheld recorder belonging to Thomas Riccio, co-owner of the auction house Universal Rarities. Riccio did not immediately return a call for comment Monday.
Simpson has said Riccio called him several weeks ago to say some collectors were selling some of his items. Riccio set up a meeting with collectors under the guise that he had a private collector interested in buying Simpson’s items.
Riccio told the site he believed Simpson was planning to confront Alfred Beardsley, who was allegedly planning to auction off Simpson memorabilia. The site said the objects of Simpson anger were Beardsley and another collector, Bruce Fromong.
Simpson was accompanied by men he met at a wedding cocktail party, and they took the collectibles. Fromong said Simpson was the last of the men to enter the hotel room.
“O.J. was the last person I was expecting to see and when I saw him I was just thinking, ‘O.J., how can you be this stupid?’” Fromong told CBS’s “The Early Show.”
He said Simpson left him a voice mail message after the alleged robbery telling him some of Fromong’s things were “mixed up” with his and asking how he could give them back.
“It’s like a bad dream,” said Beardsley. “I’m sad that O.J. is in custody.”
Simpson said the dispute was merely a confrontation with no guns. He said autographed sports collectibles, his Hall of Fame certificate, a photograph with former FBI director J. Edgar Hoover and video from his first wedding were all his, and that they were stolen from him and were about to be fenced by unethical collectors.
Police said they were not sure who owned the memorabilia. But they say the manner in which the goods were taken was under investigation.
“Whether or not the property belonged to Mr. Simpson or not is still in debate,” Lt. Clint Nichols said Sunday. “Having said that, the manner in which this property was taken, we have a responsibility to look into that, irregardless of who the property belonged to.”
After being whisked away in handcuffs, Simpson was booked Sunday night on two counts of robbery with a deadly weapon, two counts of assault with a deadly weapon, and conspiracy to commit a crime and burglary with a firearm, police said.
The district attorney said he expected Simpson to ultimately be charged with seven felonies and one gross misdemeanor.
If convicted of the booking charges, Simpson would face up to 30 years in state prison on each robbery count alone.
Simpson attorney Yale Galanter told The Associated Press late Sunday that he would fight the charges vigorously.
“We believe it is an extremely defensible case based on conflicting witness statements, flip-flopping by witnesses and witnesses making deals with the government to flip,” Galanter said.