SOURCE: The St. Petersburg Times
DATE: Issue #1347 (11), Tuesday, February 12, 2008
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TITLE: University Denies ‘Political’ Closure
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: St. Petersburg’s European University has dismissed claims that it has been closed down for political reasons, saying that a court ordered it to halt its operations because of fire code violations at the institution.
The University temporarily stopped its activities on fire safety grounds after the Dzerzhinsky Court handed down a decision on Thursday.  
But media reports over the weekend speculated that the University was closed because it “trained election observers” with a 673,000 euro grant from the European Union. 
President Vladimir Putin has warned of what he sees as foreign influence on the upcoming presidential election and has placed limitations on foreign election observers that led the OSCE to pull out of monitoring the March 2 vote last week.
The European University election observers project closed on Jan. 31 but Nikolai Vakhtin, head of the University, said it was wrong to connect the University’s subsequent temporary closure with it. 
The political link was “the fantasy” of media sources, Vakhtin said, referring to Monday’s article in the Kommersant daily.
Vakhtin said the University’s activities were stopped for a week because of the fire safety code violations that a state fire inspection registered at the institution.
A Jan.18 inspection revealed the lack of an essential fire alarm system and instructions for emergency evacuations, Alla Samolyotova, a manager at the University, said. 
After the Thursday court decision, the administration of the University acted to correct the violations and appealed to the court to order another inspection so that the University can resume operations.
“We would like to resume studies as soon as possible: this semester we are to teach 150 Russian and 20 foreign students,” Vakhtin said.
Meanwhile, Maxim Reznik, head of the St. Petersburg branch of the Yabloko party, said the court order was clearly political. 
“No doubt, it’s about politics. Fire inspections are just an excuse,” he said, adding that the real reason was the project.
“The situation surrounding the European University is just another link in the chain. It’s another example of the authoritarian regime moving up a gear toward totalitarianism.  Previously it allowed people not to like it, but now it doesn’t allow even that,” Reznik said.
Reznik said the project in question was not a threat to the authorities and was scientific. However, the fact that it was funded by the European Union could have raised suspicions in the eyes of the state, he said.
Grigory Golosov, head of the project, said that the project had caused resentment among some United Russia deputies in the State Duma. As a result, the Scientific Council of the University took the decision to close it, he said.
“However, I want to repeat that we were not training observers for the elections. It wasn’t an educational project, either. It was rather informative activities for all people wanting to know more about elections,” Golosov said.
Golosov said they invited different experts to talk about the topic at seminars that were open to people from various political parties.  About 25 people usually attended, he said.
“Our idea was to provide people with more information about the electoral process. I can say that currently information about the issue in Russia is insufficient.  However, we were not pursuing any political goals,” Golosov said.
Meanwhile, the project caught the attention of the city election committee, the Central Election Committee, and later the State Duma, Kommersant said.  In June, Gadzhimet Safaraliyev, a United Russia deputy in the State Duma, called for an inquiry into the University.
The deputy was outraged that the grant was given “for organizing a network of election observers” instead of for scientific and educational purposes, Kommersant said.
“It should be considered as an attempt by the European Union to directly interfere in Russian election campaigns in 2007-2008,” the newspaper wrote.
Golosov said he was “sad” about the closure of the project.  He said the European Commission also regretted the decision.
The European University, a non-state educational institution for post-graduate education, was opened in St. Petersburg in 1994 by a group of prominent Russian scientific and cultural figures and with the support of the city authorities.  It focuses on social and humanitarian studies in Russia.

TITLE: President Sees Lower Taxes, Fewer Bribes
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — With three months left in his presidency, Vladimir Putin on Friday called for tax cuts, a downsizing of bureaucracy and less state involvement in the economy — reforms that he said should allow Russians to live longer and better.
“Russia should become the most attractive country to live in,” Putin told a State Council meeting, which for the first time was broadcast live in its entirety on television.
Putin used the 50-minute speech to lay out his vision for the country through 2020. His protege and preferred successor, Dmitry Medvedev, listened attentively as he sat in the front row beside Prime Minister Viktor Zubkov. Medvedev, who is expected to easily win the March 2 election, has not unveiled an economic platform yet, but it is likely to follow the 12-year plan presented by Putin on Friday.
Putin touted the revival of the country’s economic might during his eight years in office, but he reiterated his earlier calls to wean the economy off oil and gas and reduce bloated bureaucracy and the state’s involvement in the private sector.
There is too much state involvement in businesses, causing “excessive administrative pressure on economy” to become a major obstacle for the country’s development, Putin said.
He said some 25 million people, or one-third of the work force, are employed in the state sector. “It’s obvious that the state cannot support and does not need such a colossal state sector,” he said.
Finance Minister Alexei Kudrin praised Putin’s call, but when asked by a reporter why some state corporations, such as Russian Technologies, are expanding, he said, “State corporations are being created in the sectors where the state is needed.” Russian Technologies, controlled by Putin’s close ally Sergei Chemezov, holds stakes in AvtoVAZ, the country’s largest carmaker, and VSMPO-Avisma, the world’s largest titanium producer, among others.
Corruption remains a big problem, Putin said. “To this day, it’s impossible to start a business within months. You have to go to every office with a bribe: firefighters, hospital orderlies, gynecologists, you name it. It’s just a nightmare,” he said, eliciting laughter from the hundreds of guests, including governors, ministers, billionaires, television personalities and newspaper editors, in the Kremlin’s lavish St. George Hall.
Communist leader Gennady Zyuganov scorned the renewed appeal over corruption. “With the level of corruption seen these days, no law can work. He hit the nail on the head: The bureaucrats have strangled everything. But these are [Putin’s] bureaucrats,” he said.
Putin called for tax breaks for pension funds and companies investing in health and education, adding that the value-added tax rate should be unified and reduced by as much as possible. He did not specify by how much. Russia now has two VAT rates, of 10 percent and 18 percent.
Companies have lobbied for a reduction of VAT, but a group of government officials led by Kudrin have opposed the measure.
Alexander Murychev, first executive vice president of the Russian Union of Industrialists and Entrepreneurs, or RSPP, the big business lobbying group, said Kudrin would probably have to bow to Putin over VAT. “I think they’ll spend the weekend reworking” the documents, he said of Kudrin’s group.
Kudrin told reporters that the VAT rate would be reduced in the next 12 years but said it was too early to discuss a specific timeframe.
Putin said the size of the middle class should reach at least 60 percent of the population and that the “unacceptable” gap between the rich and the poor must be narrowed by 2020.
He said one-third of the population had been living in poverty when he became president. Over the past eight years, he said, real incomes have increased by 2.5 times, the stock market’s capitalization by 22 times and foreign investment by seven times.
He referred to the Russia of the 1990s as a rich country of poor people — reprising an expression that he first used during his 2000 presidential campaign.
Russia’s “top national priority both now and in the long term” is to invest in medicine, education and people, Putin said.
Among the country’s sorest problems are low labor productivity and low life expectancy, he said. He offered few specifics but said that under his plan, productivity would quadruple and life expectancy would grow to 75 years by 2020. “Today, every other man doesn’t have the chance to live to be even 60 years. What a disgrace!” he said.
The average life expectancy for men is 59, while the average for women is just over 70. The gap between the two is the widest in the word, said Viktoria Zotikova, a Moscow-based representative for the United Nations Development Program.
She praised Putin’s focus on life expectancy. “The business community is very worried about this situation,” she said.
When asked about his favorite part of the speech, Federal Security Service director Nikolai Patrushev said he liked how Putin had described the chaotic 1990s and the reforms he had ushered in afterward.
Murychev, a big business lobbyist, called the speech an “address to the people.”
“It is only logical that, after eight years in office, he leaves in a dignified manner and lays out his vision for the country,” he said.

TITLE: Putin’s Presidency Boosted Power, Prestige of KGB Successor
AUTHOR: By Francesca Mereu
PUBLISHER: Staff Writer
TEXT: It was a typical December night in Moscow. The cold was biting, the snow thick and dry.
In the Federal Security Service’s headquarters on Lubyanskaya Ploshchad, hundreds of intelligence officers met as they did every year to celebrate the founding of the Cheka, the Soviet secret police. Champagne glasses tinkled as the officers spoke in jubilant tones. Classical music played softly in the background.
The hall grew quiet as Vladimir Putin — the former FSB director who had been appointed prime minister a few months earlier — stood to speak.
“Dear comrades,” Putin said. “I would like to announce to you that the group of FSB agents that you sent to work undercover in the government has accomplished the first part of its mission.”
Everyone in the room knew what the second part entailed, said an FSB officer who attended the event and related what took place.
“We knew that the second part was to become president and to appoint former KGB colleagues to top government posts,” the officer said.
In the speech, Putin assured the people in the room that he would not forget them once he reached the pinnacle of power, the officer said.
“There are no former agents,” Putin declared, giving a new twist to a common joke among KGB officers.
The listening FSB officers raised a toast to Cheka founder Felix Dzerzhinsky and Yury Andropov, the longest-serving KGB chief.
That night, they had one more reason to celebrate, the FSB officer said: After years of humiliation, the intelligence services were on the brink of being restored to their former prestige.
It was Dec. 20, 1999, just 11 days before Boris Yeltsin abruptly resigned and named Putin as acting president. Three months later, Putin won a snap presidential election.
Now, as Putin prepares to leave the Kremlin eight years later, he has kept the promise made that night in FSB headquarters. An astounding 78 percent of the country’s leadership has links to the KGB or FSB, according to estimates by Olga Kryshtanovskaya, a leading sociologist who tracks Kremlin politics and the security services. 
Twenty-six percent of the officials acknowledge their involvement, while the rest give themselves away “by the holes in their resumes,” Kryshtanovskaya said.
In addition to filling government and company posts with intelligence officers, Putin has restored to the FSB much of the power and glory enjoyed by the KGB.
At the same time, a kind of spy mania has swept the country, with the FSB seeming to see enemies in every corner and accusing dozens of scientists of espionage.
Rise of FSB
Yeltsin abhorred the omnipresent KGB, and he decided after the Soviet breakup in 1991 that it would be dangerous to leave national security in the hands of a single organization.
Inspired by the U.S. model, Yeltsin broke the KGB up into a half dozen agencies that he believed would prove more efficient and provide him with more sources of information about what was going on in the country. (See table, page 4.)
As Yeltsin wanted, none of the agencies boasted a monopoly on information. In fact, the FSB, the main domestic intelligence agency, and the others often had to fight for the president’s ear.
On economic security issues alone, the FSB found itself competing with three other agencies — the Federal Tax Police, the Interior Ministry and the Federal Agency of Governmental Communication and Information, or FAPSI. In fact, Yeltsin set up the tax police in 1993 to balance the growing clout of the FSB’s economic security department.
Also, Yeltsin initially only empowered the FSB to carry out preliminary investigations, although he later allowed it to establish a full-fledged investigative branch.
“At first glance the system seems huge and inefficient, but it allowed the president to avoid being unduly influenced when making decisions,” said Andrei Soldatov, director of Agentura.ru, a nongovernmental agency that monitors the intelligence services.
Rivalries among the various branches of the intelligence services often led to internal fighting and the embarrassing release of compromising material.
All this changed in March 2003 when Putin signed a decree disbanding FAPSI and the Tax Police, the FSB’s main rivals. 
Most of FAPSI’s duties were handed over to the FSB, while 40,000 tax police officers were sent to the newly created Federal Drug Control Service, headed by former FSB deputy director Viktor Cherkesov.
(Exactly a year later Putin appointed the former head of the tax police, Mikhail Fradkov, as prime minister. Fradkov is now the head of the Foreign Intelligence Service.)
Putin’s 2003 decree also put the State Border Service under the control of the FSB. The agency of 400,000 armed border guards had operated under the KGB during Soviet times.
Another Yeltsin-era agency, the Presidential Security Service, was folded into the Federal Guard Service. Yeltsin had essentially used the Presidential Security Service as his personal intelligence agency, and it had compiled reports that balanced those provided by the other intelligence agencies.
The FSB’s powers expanded further in 2006, when a Putin-backed anti-terrorism law gave the agency the lead role in fighting terrorism — a clear effort to centralize command over counterterrorism activities. Previously, the FSB and the Interior Ministry had divided duties in fighting terrorism.
Also in 2006, the Kremlin created the National Anti-Terrorist Committee, which is under the FSB’s control.
After the kidnapping and killing of four Russian diplomats in Iraq in June 2006, a Putin-backed law was approved that allows the FSB to eliminate enemies abroad. Until then, the intelligence officers could only gather information abroad, said Andrei Soldatov, the intelligence expert.
Under Putin, the FSB has become more powerful in some ways than the KGB, Soldatov said. The KGB was an instrument in the hands of the Communist Party and did not take part in the decision-making process, but the FSB has managed to obtain the powers of both the KGB and the Party, he said.
The FSB refused to comment for this report. Many current and former intelligence officers and other people contacted for this article were reluctant to discuss the rebirth of the FSB under Putin. Most of those who agreed to talk asked for anonymity, citing fear of reprisal from the FSB.

All the President’s Men
The FSB seems to have a presence in all walks of Russian life these days. In the Kremlin alone, more than half of the senior staff has links to the intelligence services, according to estimates by Kryshtanovskaya. The officials include presidential aide Viktor Ivanov, a KGB colonel general, and perhaps Igor Sechin, a Kremlin deputy chief of staff who once worked as a Portuguese translator in Mozambique.
These Kremlin officials are split into two main competing clans.
The FSB is believed to control many federal agencies. Intelligence officers are usually named deputy ministers and charged with checking how the ministries are carrying out their activities, Kryshtanovskaya said.
Former Defense Minister Sergei Ivanov, a KGB and FSB veteran, brought a number of FSB colleagues to the ministry during his six years there, including Deputy Defense Minister Nikolai Pankov; Andrei Chobotov, head of the ministry’s personnel department; and Sergei Rybakov, head of the ministry’s information department. Ivanov is now a first deputy prime minister.
The interior minister, Rashid Nurgaliyev, served in the KGB as a criminal investigator and later in the FSB.
Former officers also fill the ranks of regional governments and state companies.
More than 10 percent of lawmakers in the State Duma and 20 percent in the Federation Council have ties to the FSB, Kryshtanovskaya said.
Every once in a while a surprise pops up. Putin has chosen First Deputy Prime Minister Dmitry Medvedev, who does not have a background in intelligence, as his successor, paving the way for him to become the next president. But the former agents who have seen their stars rise under Putin are unlikely to fade under Medvedev, a former intelligence officer said.
“Under Medvedev, we are likely to see less of the paranoia typical of the KGB and FSB, but the current Kremlin clans will continue to rule the country,” he said.

In Private Business
Current and former FSB officers work in large private companies as well. Another former FSB official said the Kremlin wanted the officers to make sure the companies do not act against Russia’s interests.
“Big companies in Russia consult with the Kremlin before striking any big deal. The officers working for those companies are there to make sure that things are done properly or the way the Kremlin wants,” the official said.
The companies, who pay generous salaries to the officers, feel they get their money’s worth. The officers make sure they do not have problems with the Kremlin.
“All big companies have to put people from the security services on the board of directors,” said a banker with a large private bank. “Many are appointed as directors or deputy directors. They are called ‘active reserve agents,’ and we know that when Lubyanka calls, they have to answer them.”
FSB headquarters is commonly referred to as Lubyanka. There are no estimates for how many officers with links to intelligence work in private companies.
“It works like a pyramid: Big state and private companies hire KGB and FSB big shots, medium-size companies hire medium agents, and small companies employ ordinary officers,” the former FSB official said.
Medium and small companies hire former KGB and FSB agents to protect their businesses from corrupt tax or fire inspectors and to cut through bureaucracy, he said.
“Before, the protection job was done by the mafia, but now its role has been taken over by the agents,” he said.

Spin and Spy Mania
The FSB, meanwhile, has brought back a Soviet-era tradition of honoring actors, writers and journalists who portray agents in a good light. The tradition, which was discontinued in 1989, resumed in 2006.
Last December, the creator of the television show “Operation Agent.ru,” Sergei Medvedev, won the first prize of 100,000 rubles ($4,000). Historian Roy Medvedev took second place and 50,000 rubles for his book “Andropov,” while Vladimir Shmelev, director of the film “Under the Apocalypse,” won 25,000 rubles.
Despite the positive spin, the FSB seems to be facing the same occupational hazard as the KGB — seeing spies and enemies everywhere. Over the past five years, the FSB has accused more than a dozen scientists of selling classified information to foreign countries.
One physicist said he now seeks the FSB’s advice before publishing articles or attending conferences to avoid being accused of spying.
“All of a sudden it was like going back to the past, to the Soviet Union,” he said. “When I’m not sure what I should do, I just ask them. I have to.”
He refused to elaborate on how the FSB monitors scientists. “I’d prefer to keep that to myself,” he said.
He added, however: “With the chekists in power, it seems that our country has enemies everywhere. Poland sells us bad meat, Georgia and Moldova sell bad wine, and Ukraine steals our gas. This is what television is feeding us.”
However, the FSB officer who told of Putin’s speech in FSB headquarters said Russia had faced a very real threat and that the Kremlin had needed to act “to save the country.”
“President Putin has done so much for us, “ he said. “He took us out of the decay of the Yeltsin period, when the country was in complete chaos, the security services were disbanded, and Russia was in danger.”
He said Putin had realized that economic reforms were needed but that the reforms could not be implemented without a stronger FSB.
“He is the best president we have ever had,” the officer said.

TITLE: Ivanov Calls for New Arms Regime in Nuclear Sphere
AUTHOR: By David Rising
PUBLISHER: The Associated Press
TEXT: MUNICH, Germany — The United States and Russia should set aside Cold War arms-control treaties and replace them with new, multilateral agreements to combat nuclear proliferation, First Deputy Prime Minister Sergei Ivanov said Sunday at a security conference in Munich.
Ivanov said the time had come “to open this framework for all leading states interested in cooperation in order to ensure overall security.”
One year after President Vladimir Putin in an address to the same conference called Washington to task for what he characterized as a reckless and dangerous foreign policy, Ivanov said, “Russia-U.S. ties will certainly retain their significance.”
Russia and the United States have been at odds recently over Washington’s plan to install missile defense sites in Poland and the Czech Republic as part of a larger system.
Ivanov told reporters after a Munich security conference that he and U.S. Defense Secretary Robert Gates held “constructive” talks and indicated there were still many proposals on the table acceptable to Russia.
But, he said, if the United States should go ahead with its plans despite Russian objections, Moscow would be forced to counter somehow the systems being built close to its borders.
“Certainly we will take certain measures, but we will not be hasty,” he said, noting that the U.S. system would take four to five years to build.
He did not elaborate on the measures, except to say that they would be “effective and adequate and much cheaper than this third positioning region” of the U.S. defense system.
Earlier, Ivanov told the gathering of the world’s top defense officials that Russia’s burgeoning economic power did not represent a threat to other countries. But he said the West must get used to Moscow’s growing influence in world affairs.
He said Russia expected to be among the world’s five biggest economies by 2020, but added, “We do not aim to buy the entire Old World with our petrodollars.”
“Getting richer, Russia will not pose a threat to the security of other countries. Yet our influence on global processes will continue to grow,” he said.

TITLE: AGENTS IN POWER
TEXT: The number of current and former intelligence officers employed by the state has increased significantly under President Vladimir Putin. Here are some senior figures linked to the security services.

The Kremlin
Vladimir Putin, president, KGB lieutenant colonel. He was recruited by the KGB in 1975 and served in the First Department of the Leningrad Directorate (foreign intelligence) until 1983. He served as a spy in Dresden, East Germany, from 1985 to 1990.
Igor Sechin, Kremlin deputy chief of staff, Rosneft chairman. In what experts say was an undercover KGB job, he worked as a Portuguese translator in Mozambique. He is believed to have played a key role in the legal assault on Yukos, once Russia’s biggest oil company.
Viktor Ivanov, presidential aide; chairman of Aeroflot and Almaz-Antei, KGB colonel general. He has served as FSB deputy director and head of the FSB’s economic security department.
Vladimir Osipov, head of the Kremlin’s personnel department. He formerly worked for the Federal Agency of Governmental Communication and Information, or FAPSI.
Igor Porshnev, head of the Kremlin’s information department. In what experts say was an undercover KGB job, he worked as a journalist for Gosteleradio (State Television and Radio) in India.
Alexei Gromov, head of the Kremlin’s press service, Channel One television board member. He is a career diplomat believed to have links to the security services.

The Government
Sergei Ivanov, first deputy prime minister; head of United Aircraft Corporation, the state aviation holding; controls the country’s military-industrial complex. He worked for Soviet foreign intelligence in Africa and Europe and served as FSB deputy director from August 1998 to March 2001. Defense minister from 2001 to 2007.
Nikolai Pankov, deputy defense minister. He graduated from the KGB Higher School in 1980 and served at the agency for many years. He headed the State Border Service in 1997 and 1998. In 2001, he was appointed head of the Security Council’s secretariat. Sergei Ivanov brought him to the Defense Ministry.
Andrei Chobotov, head of the Defense Ministry’s personnel department. He is a former KGB and FSB agent and a close ally of Sergei Ivanov.
Rashid Nurgaliyev, interior minister. He was hired as a KGB investigator in 1981. In 1995, he worked at the central office of the Federal Counterespionage Service, or FSK. He later served as an FSB chief inspector and head of the FSB’s internal security department. 
Arkady Yedelev, deputy interior minister, police colonel general. He served in the KGB and FSB.
Yevgeny Shkolov, head of the Interior Ministry’s economic security department. He served in the KGB and FSB.
Yury Draguntsov, head of the Interior Ministry’s internal security department, KGB major general. He served in the KGB and FSB.
Viktor Cherkesov, Federal Drug Control Service chief. He served in the KGB and FSB.
Konstantin Romodanovsky, Federal Migration Service chief. He attended the KGB school in Minsk.
Sergei Veryovkin-Rokhalsky, chief of the Federal Agency for Financial and Tax Crimes, KGB colonel general. He worked for the KGB in the Leningrad region and for the FSB in various Russian regions.
Yury Zubakov, Security Council deputy secretary. He served as a KGB officer and was ambassador to Moldova.
Mikhail Barsukov, head of the Security Council’s military inspection department. A former FSB director.
Sergei Poltavchenko, presidential envoy to the Central Federal District, a KGB lieutenant general.
Grigory Rapota, presidential envoy to the Southern Federal District. He served in the KGB and as deputy head of the Foreign Intelligence Service from 1994 to 1998. He also served as Security Council deputy secretary and secretary-general of the Eurasian Economic Community, a union of Russia, Belarus and Kazakhstan.
Anatoly Safonov, presidential counterterrorism envoy. He has served as deputy foreign minister and head of the KGB’s branch in Krasnoyarsk.
Murat Zyazikov, Ingush president, KGB general.
Vladimir Kulakov, Voronezh governor. He headed the KGB’s and later the FSB’s branch in Voronezh.
Valery Potapenko, Nenets governor. He served in the KGB and FSB. Putin appointed him to the post after the previous governor was accused of fraud.
Sergei Lebedev, CIS executive secretary. He formerly headed the Foreign Intelligence Service.
Nikolai Bordyuzha, secretary-general of the Collective Security Treaty Organization. He has worked in the KGB and FAPSI, headed the State Border Service, and served as ambassador to Denmark.

State Companies
Valery Golubev, Gazprom deputy chairman. He served in the KGB.
Alexander Medvedev, Gazprom deputy chairman, head of Gazexport, RosUkrEnergo board member. In what experts say was an undercover KGB job, he worked for Soviet bank Donaubank in Vienna at the same time as Andrei Akimov, now Gazprombank’s chief. 
Konstantin Chuichenko, head of Gazprom’s legal department and executive director of RosUkrEnergo. He served in the KGB.
Sergei Ushakov, deputy head of Gazprom’s management committee. He served in the KGB.
Yury Shamalov, head of Gazflot, the Gazprom subsidiary that is exploring the Arctic shelf and plans to handle future Gazprom shipments of liquefied natural gas. He served in the KGB and FSB from 1987 to 2007.
Andrei Akimov, Gazprombank chief. In what experts say was an undercover KGB job, he worked for Vneshtorgbank in Switzerland and for Donaubank, another Soviet bank, in Vienna. He worked at Donaubank at the same time as Alexander Medvedev, now Gazprom’s deputy chairman.
Yevgeny Plyusnin, head of Gazprombank’s personnel department. He served in the KGB and FSB.
Sergei Ivanov, Gazprombank vice president and son of First Deputy Prime Minister Sergei Ivanov.
Alexander Ivanov, Vneshekonombank manager, FSB officer, son of First Deputy Prime Minister Sergei Ivanov.
Andrei Patrushev, Rosneft aide, FSB officer, son of FSB director Nikolai Patrushev.
Sergei Chemezov, head of Russian Technologies. In what experts say was an undercover KGB job, he worked for an obscure company in Dresden, East Germany, in the 1980s. He told Itogi magazine in 2005 that Putin was his neighbor in Dresden.
Vladimir Yakunin, head of Russian Railways. In what experts say were undercover KGB jobs, he worked in the Soviet Committee for Foreign Trade Relations and later in the Soviet mission to the United Nations.
Source: SPT Research

TITLE: BREAKUP OF THE KGB
TEXT: Feeling it was dangerous to place national security in the hands of a single organization, President Boris Yeltsin split the KGB into around a half dozen agencies in the early 1990s. Here’s what they were.
• The Federal Security Service, or FSB. This is the main domestic counterespionage agency. Its initial task was to operate only on Russian territory, including in its embassies abroad.
• The Foreign Intelligence Service, or SVR. It has a mandate to operate only abroad.
• The Federal Agency of Governmental Communication and Information, or FAPSI. Its most important function was to provide safe and secure communication channels for top government officials. Like the U.S. National Security Agency, it also tapped telephone conversations and monitored Internet activities. Putin disbanded the agency in 2003 and passed most of its tasks to the FSB.
• The Federal Border Service. This agency took more than 400,000 armed border guards away from the KGB._Putin put the agency under the auspices of the FSB in 2003.
• Federal Guard Service. This agency was intially called the Main Guard Directorate and provided security for government officials.
• The Presidential Security Service. This powerful agency was set up to provide security for the president, his retinue and family, but eventually became an in-house security service whose officers also prepared reports for Yeltsin that balanced the information from the other intelligence agencies. Putin put the agency under the Federal Guard Service in 2003.
— SPT

TITLE: Vote Commission Seeks To Give Boost to Turnout
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: Amid fears of a low turnout in March 2 Russian presidential elections, the St. Petersburg Election Commission announced last week it will prepare personal invitations to more than three million registered voters in the city to “boost public awareness.” 
St. Petersburg is the only place in Russia that will conduct the unusual door-to-door mail campaign, according to commission chief Alexander Gnyotov. 
Evasive of elaborating on the motives behind the move, Gnyotov told journalists Tuesday, “we want to avoid public confusion arising from inadequate information about where, how and what to do in the election process... after all it’s the revival of the long forgotten tradition.”  
St. Petersburg, the hometown of both the outgoing president Vladimir Putin and main contender Dmitry Medvedev, is also a base for Russia’s opposition parties.
Branding the elections as a “farce” and a “comedy” in which “everything has been predetermined, and nothing depends on the people who are asked to vote,” the regional head of the Union of Right Forces (SPS), Leonid Gozman, said on Friday that his party would wage a massive campaign for people to boycott the poll. 
“We don’t even have a democratic representative — Mikhail Kasyanov’s candidacy was favored for Boris Nemtsov, but in the long run [Kasyanov] was [barred from running] — and no sane man would consider Andrei Bogdanov as a serious presidential candidate,” said Gozman.
Apart from Medvedev, Communist party leader Gennady Zyuganov, ultra-nationalist leader Vladimir Zhirinovsky and political newcomer Bogdanov are expected to contest for the presidential seat in the upcoming elections.
“We are currently courting support from other democratic movements to boost our campaign,” Gozman said, adding, “even if we fail to win their full support, we’ll gather about 2 million signatures just to prove how unpopular the elections are.”

TITLE: Rapist’s Murder Stirs Debate
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: As a retired local boxer stands trial for killing an assailant who was caught attempting to rape his adopted child, the city parliament is calling for increased penalties for pedophilia.
The Just Russia faction of the St. Petersburg Legislative Assembly has drawn up a draft amendment to Russia’s Criminal Code that envisages increasing the imprisonment for pedophiles to a maximum of up to 25 years in jail or a life sentence without possibility of release.
On last New Year’s Eve, Alexander Kuznetsov caught 20-year old Uzbek native Bakhtishod Khairillayev sexually attacking his 8-year-old adopted son in the stair well of his apartment building. The boy was naked and unconscious. Ex-boxer Kuznetsov then beat Khairillayev to death. 
If tried and sentenced for raping a person under the age of consent (18 years old), Khairullayev would have received up to 10 years in prison.
Earlier this month the city parliament sent an appeal to the St. Petersburg prosecutor Sergei Zaitsev asking to extend the scope of the investigation into the circumstances Khairillayev’s death by conducting a psychiatric evaluation of Kuznetsov.
“This information will play a crucial role in deciding this case and qualifying the actions of Kuznetsov,” saidViktor Yevtukhov, a United Russia lawmaker with the St. Petersburg Legislative Assembly.
The Kuznetsov case, which has recently been reclassified from murder to premeditated grevious physical assault causing accidental death, has stirred heated discussions across Russia, with some politicians voicing out the idea of sterilization of pedophiles, and the Russian Orthodox Church backing the idea of a life sentences.
Kuznetsov is facing between five and fifteen years in prison.
Speaking to reporters in Moscow, archpriest Vsevolod Chaplin, deputy head of the External Relations Department of Moscow Patriarchate said he found Kuznetsov’s actions “understandable.”
“I find it appalling that there are people in Russian society capable of such a dirty crime as the rape of an 8-year-old boy,” Chaplin said. “A softly-softly approach and compassion toward such assailants is intolerable, and punishments meted out to them must be heavy and unavoidable. Had the father known that the criminal would get his due in full, he would most certainly not have faced such a tragic and horrendous choice.” 
St. Petersburg ombudsman Igor Mikhailov is convinced the Kuznetsov case shows the weakness of Russian legislation which he argues “cannot protect its citizens from assailants.”
“I would like everyone to take a broader, unbiased look at the situation: a law-obiding citizen is facing trial as a result of a failure of the state’s inflexible judicial system that could not protect his child,” Mikhailov said. “If you look at the boxer’s case from this angle, he should be fully acquitted without even a suspended sentence.”
The ombudsmen went on to suggest that the state must “find an adequate way of admitting its failure.”
But local human rights groups have criticized Mikhailov’s approach and accused the ombudsman of justifying mob law and putting political pressure on the investigators. 
Moscow City Prosecutor Yury Syomin warned on Friday against “turning the boxer into a heroic figure.”
“Whatever the circumstance may have been, nobody gave the man the right to take another person’s life,” Syomin said.

TITLE: U.S. Pastor To Be Held For Two Months for Investigation
AUTHOR: By David Nowak
PUBLISHER: Staff Writer
TEXT: MOSCOW — A Moscow court has ordered a U.S. pastor to remain in detention for two months while prosecutors investigate him on suspicion of smuggling ammunition into the country, a U.S. Embassy spokeswoman said Sunday.
Phillip Miles, a pastor of the Christ Community Church in Conway, South Carolina, was detained at Sheremetyevo Airport on Feb. 3, days after rifle rounds were discovered in his luggage.
Miles remained on Sunday in the airport holding cell where he was taken after being detained, the spokeswoman said, speaking on customary condition of anonymity.
At Friday’s hearing, the Golovinsky District Court, which has jurisdiction over Sheremetyevo, ordered Miles be moved to a different, “interim facility,” the spokeswoman said. It was unclear when that would happen.
“After [Friday’s] preliminary hearing, Miles remains in detention on charges that may include trafficking, with a potential sentence of a monetary fine or four years imprisonment, and smuggling, with a potential sentence of three to seven years,” the spokeswoman said.
Airport officials seized the ammunition when Miles entered Russia on Jan. 29. Officials allowed Miles to continue on his trip to Perm, where he met fellow church members, on the proviso that he check in with them at Sheremetyevo on the way back to the United States.
When he did, he was detained on suspicion of smuggling the ammunition, which he admitted he failed to declare, as required by law, according to friends.
The bullets were a gift for a pastor in Perm, who was a fellow hunting enthusiast, according to the embassy spokeswoman and Miles’ associates.
Neither the law enforcement body that detained Miles nor the location of the court could be established as of Sunday. The embassy spokeswoman did not have immediate access to the information and calls to prosecutors, the Federal Security Service and the Moscow City Court went unanswered.
Two lawyers contacted Sunday said authorities’ treatment of Miles was within the law.
“If he was unsure, all he had to do was approach a customs official and ask if he should declare the bullets,” Sergei Melnikov, a lawyer who specializes in customs and immigration issues, said on Sunday.
“Checking one box on the declarations form could have saved him all this trouble,” Melnikov added.

TITLE: Liberal Opposition to Meet in Search of Unity
AUTHOR: By Natalya Krainova
PUBLISHER: Staff Writer
TEXT: MOSCOW — Representatives of the fractured liberal opposition will meet next month to discuss the creation of a broad liberal alliance and the development of a coordinated political platform, opposition leaders said Friday.
Around 150 participants are expected at the March 22 conference in St. Petersburg.
Members of Yabloko, the Union of Right Forces, Vladimir Ryzhkov’s disbanded Republican Party, Garry Kasparov’s United Civil Front, Mikhail Kasyanov’s Russian People’s Democratic Union and several human rights activists will be taking part in the conference, said Maxim Reznik, head of Yabloko’s St. Petersburg branch.
The liberal camp has been plagued by bickering and infighting in recent times and has drifted largely into irrelevance as President Vladimir Putin consolidated power during his two terms in office.

TITLE: Lukin Criticizes the Courts
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Human rights ombudsman Vladimir Lukin said his efforts to defend citizens’ rights were being hampered by courts that lack independence and that issue poor rulings.
In an interview published Friday in government daily Rossiiskaya Gazeta, Lukin singled out Moscow courts for delaying his work.
“Moscow courts ... believe that the ombudsman has no right to defend citizens’ rights in court,” Lukin said.
He cited as an example a suit he tried to file against the city transportation committee over the fact that tickets for aboveground transport are cheaper when purchased at a ticket booth than on a bus, trolleybus or tram. “This is a violation of the rights of Muscovites and guests in the capital,” Lukin said.
Both the Presnensky District Court and the Moscow City Court refused to hear the case, saying a human rights ombudsman “should initiate a parliamentary investigation and not go to court,” Lukin said.
Lukin said he had filed a complaint with the Supreme Court, which he hopes can resolve the issue.
Spokespeople for the Moscow City Court and the Presnensky District Court said Friday that they could not immediately comment.
Red tape, a lack of independence and poor rulings are other problems in the country’s judicial system, Lukin said.

TITLE: Local Bank Urges Clients To Use Internet Banking
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Bank St. Petersburg has launched an Internet banking system that managers expect will reduce operational expenses and attract new clients. So far, registering and using the system have been provided for free. However, only 10,000 clients regularly use Internet banking, which has been available since November last year.
“We expect to attract new clients with this Internet banking system - people looking for a way to make various sorts of payments without paying burdensome commissions or standing in lines,” Pavel Philimonenok, deputy chairman of the board of Bank St. Petersburg, said Monday at a press conference.
Bank St. Petersburg serves 560,000 individual clients. By the end of the year Philimonenok expects 50,000 clients to be using Internet banking and up to 200,000 people by 2010.
Internet banking allows clients instant access to all their accounts with the bank and provides them with a history of transactions performed and debt repayments for any period in the past, as well as enabling them to perform new transactions and file loan applications.
“Do not assume that this option will be popular among young people only. Internet banking is a simple solution that can be used by people of any age,” said Indrek Neivelt, chairman of the advisory board of Bank St. Petersburg.
In Scandinavian countries over 50 percent of transactions are made via the Internet, Neivelt indicated, and only five percent at banks. Cash machines and terminals service nine percent of transactions, and direct debit payments account for 30 percent.
“In a few years we expect half of all transactions to be made via the Internet and 5-10 percent in actual banks. Up to 70 percent of loan applications will be filed via the web,” Neivelt said.
By introducing Internet banking, the bank will reduce the cost of processing a client’s request from $2 to $0.1, Neivelt said. “Needless to say, it will be more convenient for the client,” he added.
Bank St. Petersburg has invested 20 million rubles ($0.81 million) into Internet banking and has also redesigned its web site in cooperation with Bank’s Soft System (BSS) software development company, CSBI software integrator and Molinos marketing agency.
“Several hundred thousand people could use the system simultaneously, and they would not experience any breakdown or slowing of speed. We have made the systems capable of dealing with larger numbers of users than even the bank’s marketing department expects,” said Alexander Monosov of BSS.
A number of software companies offer Internet banking solutions for banks, including R-Style Softlab, ASoft, Bifit and Diasoft.
“Internet banking is one of the most advanced bank services. Recently there has been considerable progress in this area. According to statistics, over 80 percent of bank transactions could be done via Internet banking systems,” said a report issued by BusinessVision.
By the end of 2005, over 350 banks offered Internet banking (about 30 percent of Russian banks), according to BusinessVision.
“The fewer clients come to the bank itself and the more transactions clients make remotely, the smaller the bank’s services expenses are,” Fort-Ross agency cited Vladimir Petrov, vice-president of Convers Group as saying at the “Business Solution: Banking” conference.
“Any bank that developed through acquisitions from a small retail financial institution into a larger bank will be faced with this problem when it has to provide services across Russia,” Petrov said.
From March, Bank St. Petersburg will launch an advertisement campaign in the media and will promote Internet banking among its existing clients.
“We will introduce commissions later. But these commissions will still be much smaller than the commissions charged for processing the same requests at the bank,” Philimonenok said.

TITLE: Ukraine Ultimatum Extended
PUBLISHER: Agence France Presse
TEXT: MOSCOW — Russian gas monopoly Gazprom on Monday granted Ukraine a few extra hours to pay off debt or face a cut in supplies as tense talks overshadowed a visit here by Ukrainian President Viktor Yushchenko.
Negotiations between the heads of Russian gas monopoly Gazprom and Ukraine’s Naftogaz will continue in Moscow on Tuesday, with a deadline for agreement extended eight hours, Gazprom spokesman Sergei Kupriyanov told AFP.
“The possible cut in gas supplies has been put back to 6:00 pm” (1500 GMT) Tuesday,” Kupriyanov said.
Gazprom has said supplies of Russian-produced gas to Ukraine will be halted if an agreement is not found on a 1.5 billion-dollar (one billion-euro) payment.
Russian-produced gas accounts for around a quarter of deliveries to Ukraine, Kupriyanov said, with the remainder coming from Central Asia.
The dispute echoed a pricing row in 2006 that led to supply disruptions across Europe after Gazprom cut all gas supplies to Ukraine, a major transit route. However this time Gazprom has said vital deliveries to the European Union will not be disrupted.
The row has overshadowed Tuesday’s planned talks between President Vladimir Putin and Yushchenko, a pro-Western leader who has riled Russia by seeking closer ties with the European Union and NATO.
Putin’s likely successor, Dmitry Medvedev, called Monday on Russia’s neighbours to come to terms with the fact that Moscow was no longer interested in subsidising their gas, as was the case for years after the 1991 Soviet collapse.
“Our partners should not think that this is a freebie that comes in pretty plastic pipes,” Medvedev said in televised comments. Medvedev is the overwhelming favourite to win Russia’s March 2 presidential election.
Speaking to reporters in Kiev, Ukrainian Prime Minister Yulia Tymoshenko said her government did not agree with Gazprom about the size of the debt.
“This debt will not be refunded at once,” Tymoshenko said, calling for the debt to be re-valuated and restructured.
Naftogaz said Sunday it was ready to honour the debt to Gazprom if the Russian energy giant dealt with it directly, bypassing the controversial RosUkrEnergo trading company, a Swiss-registered entity 50 percent controlled by Gazprom and 50 percent by two Ukrainian businessmen.
However, Kupriyanov told Echo of Moscow that talks on restructuring the system of Russian supplies to Ukraine would be possible only after the current dispute had been resolved.
“When the current debts are cleared, we can talk about new schemes,” he said.

TITLE: Russia Signs Agreement To Scrap Iraqi Debt
AUTHOR: By Denis Maternovsky
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia agreed to write off $12 billion of Iraqi debt, a move that Finance Minister Alexei Kudrin said will pave the way for increased Russian investment in the oil-rich Middle Eastern country.
“The deal confirms that Iraq and Russia are friends forever,” Iraqi Foreign Minister Hoshyar Zebari told reporters in Moscow after he and Kudrin signed the agreement. “It will open new prospects for cooperation as Iraq is recovering to emerge as the leading Middle Eastern country.”
Russian companies including Lukoil may invest as much as $4 billion in Iraq under a cooperation agreement also signed Monday, Kudrin said.
The debt write-off is part of a deal reached in 2004 with the Paris Club, a group of creditor nations including the U.S., Canada and the U.K., in which Russia and other countries promised to forgive 80 percent of Iraq’s debt following the U.S.-led invasion.
Russia will initially write off 65 percent of Iraq’s $12.9 billion debt, accrued mostly for arms purchases under the late dictator Saddam Hussein. Of the remaining $4.5 billion, 80 percent will be forgiven in two stages by 2009 if Iraq meets economic targets set by the International Monetary Fund, Kudrin said. Iraq will repay $900 million over 17 years from 2011.
Lukoil, Russia’s biggest private oil producer, is among the companies “preparing” to return to the Iraqi market, Kudrin said without elaborating. Other companies include Zarubezhneft, a state-owned oil producer, and Mashinoimport, a supplier of machinery for the energy industry.
Russia, an opponent of the war in Iraq, has been trying to reinstate oil contracts awarded by Saddam Hussein. The Iraqi government has refused to honor Lukoil’s contract to develop the West Qurna-2 oil field, and said last December that the company would have to bid for the contract again after a new energy law is passed.
The West Qurna-2 project, estimated in 1997 to cost $4 billion, may yield 6 billion barrels of oil. Lukoil wants to develop the project jointly with ConocoPhillips. 
“We hope this will help us realize our contract in Iraq,” Lukoil spokesman Dmitry Dolgov said by telephone of the debt-forgiveness deal.
Russian companies, particularly in the energy, power, construction and transportation sectors, are welcome to participate in Iraqi projects “on the basis of competitiveness,” Zebari said.   
“The return of Russian companies has already been expected several times,” Alexei Malashenko, a Middle East expert at the Carnegie Moscow Center, said by telephone. While the debt deal is a “good platform” to develop relations, he said, “I wouldn’t applaud just now and wait to see how the situation develops.”
The Iraqi government has promised to pay “special attention” to previously signed contracts with Russian companies, Kudrin said, adding that Iraq needs to bolster the “legal basis” for protecting foreign investment. 
Malashenko said the return of Russian oil companies to Iraq will largely depend on the position of the U.S., which keeps the authorities in Baghdad on a “short leash.”
“If Russian companies are let in, somebody else will be kept out. It is not a matter of market competition,” he said.

TITLE: Ust-Luga Port Sees Boost
PUBLISHER: Bloomberg
TEXT: Russia’s Ust-Luga port, the country’s fastest-growing Baltic terminal, almost doubled cargo handling last year to more than 7 million tons after President Vladimir Putin hailed the importance of the facility during a 2006 visit.
The port is constructing a new ferry complex and last year laid 7 kilometers of railroad tracks and made other infrastructure upgrades, the Leningrad regional government said Monday in an e-mailed statement.
Russia’s Transport Ministry said earlier this month that 3.3 billion rubles ($133 million) will be spent this year on modernizing Ust-Luga, more than a third of government spending on developing ports in 2008. Russia has sought to recover cargo capacity on the Baltic lost after the Soviet Union’s collapse.
“The Ust-Luga port became a priority for the regional government after the support shown at the federal level,’’ Nadezhda Malysheva, a spokeswoman for St. Petersburg’s transport committee, said in a phone interview.
Primorsk, Russia’s biggest crude oil port, shipped 74.2 million tons of oil last year, 12 percent more than in 2006, and remained the region’s busiest terminal in terms of total cargo, the government said in the statement.

TITLE: In Brief
TEXT: <b>Sea Port Stake Acquired</b>
ST. PETERSBBURG (SPT) — The Dutch company Universal Cargo Logistics Holding B.V. (UCLH) completed the acquisition of a 97.01 percent stake in the Sea Port St. Petersburg open joint-stock company from the former owners, Jysk Stalindustry ApS and Chupit Limited, along with four stevedoring companies belonging to the group, the port’s press service said Monday in a statement.
As a result, UCLH now controls the Sea Port St. Petersburg group of companies as well as the Taganrog Sea and Trade Port open joint-stock company. UCLH is also a co-owner of the Universal Cargo Complex at Ust-Luga port.

<b>More Loans For SMEs</b>
ST. PETERSBBURG (SPT) — CIT Finance investment bank has started issuing loans to small and medium-size enterprises (SMEs) in St. Petersburg, the bank said Friday in a statement.
Loans are granted for up to seven years from $18,240 to $1.2 million, of which loans of up to $81,000 do not require collateral. The basic interest rate is 16 percent a year, and by the end of 2008 CIT Finance will be offering loans to SMEs in Russia’s ten largest cities, including Moscow.

<b>NT To Borrow $46.8M</b>
ST. PETERSBBURG (SPT) — Northwest Telecom, the region’s main landline provider, plans to borrow $46.8 million, Interfax reported Monday.
Northwest Telecom has announced a tender for financial institutions. The company plans to take out four loans of a total value of $46.8 million for a period of 120 days. The results of the tender will be announced on March 18.
TGK-1 Plans Upgrade</b>
ST. PETERSBURG (Bloomberg) — TGK-1, the Russian power generator based in St. Petersburg, will spend 28.9 billion rubles ($1.2 billion) this year to upgrade regional facilities and supply new residential and industrial areas in the city.
The utility plans to invest as much as 154 billion rubles over seven years in a bid to produce an additional 3,225 megawatt-hours of electricity in the region by 2015, TGK-1 said Friday in an e-mailed statement.

<b>Gazprom Drops Plant</b>
MOSCOW (Bloomberg) — Gazprom, Russia’s largest energy producer, canceled plans to build a liquefied natural-gas plant near St. Petersburg after other projects took precedent.
Gazprom decided to drop the Baltic LNG project and instead concentrate on its Shtokman field in the Arctic Ocean and the Nord Stream pipeline to Germany, Chief Executive Officer Alexei Miller said in an e-mailed statement Thursday.

<b>Putin Calls For Tax Cuts</b>
MOSCOW (Bloomberg) — President Vladimir Putin said the government should lower taxes, especially the value-added tax, to spur business growth and reduce Russia’s dependence on oil and gas exports.
“We must introduce tax incentives to develop an innovative economy,’’ Putin said in a televised speech in the Kremlin Friday. “We must strive to reduce the tax burden.’’
Putin called for a single VAT rate that would be “as low as possible.’’ VAT, currently at an average rate of 18 percent, accounted for nearly 18 percent of budget revenue collected in the first 11 months of 2007, according to the Federal Statistics Service.

<b>Eldorado To Hold IPO</b>
MOSCOW (Bloomberg) — Eldorado Group, Russia’s largest electronics retailer, plans an initial public offering to fund expansion in western Europe, the Russian newspaper Vedomosti reported Monday, citing billionaire owner Igor Yakovlev.
Eldorado may sell as much as 30 percent of the company in an IPO in 2009 or 2010 and may sell a stake to an investment bank beforehand, Yakovlev, who is also the company’s president, told the newspaper.
The company is talking with investment banks about buying stakes in international electronics chains, Yakovlev told Vedomosti. The chain, which operates stores in Russia, Ukraine and Kazakhstan, had sales of $6 billion in 2007, the newspaper reported.

<b>Kudrin Ups Forecast</b>
MOSCOW (Bloomberg) — Russian Finance Minister Alexei Kudrin increased his forecast for economic growth this year and said inflation may slow, playing down the impact of subprime losses that are constricting global expansion.
“Our markets are sensitive to the global crises, so we feel it, but their effect on the economic growth of our countries will probably be minimal,’’ Kudrin said Sunday in an interview with Bloomberg Television in Tokyo, referring to Russia, India and China. Russia “can reach 7 percent’’ growth this year, he said, above his previous estimate of 6.6 percent.
Group of Seven policy makers warned this weekend their economies will probably slow, and predicted more financial-market turmoil as the drying up of credit triggered by the collapse of the subprime mortgage market pushes the U.S. economy toward a recession. Still, growth in emerging markets will probably remain “robust,’’ finance ministers and central bankers said.

<b>Kovykta Talks Progress</b>
MOSCOW (Bloomberg) — Gazprom may close a deal to buy the Kovykta natural-gas field in Russia’s Irkutsk region from TNK-BP this month, Interfax reported Monday, citing Regional Governor Alexander Tishanin.
The talks between Gazprom and BP Plc’s Russian venture are in the final stages, Interfax said, citing Alexei Sobol, head of East Siberia Gas Co. Gazprom plans to buy TNK-BP’s 50 percent stake in East Siberia Gas, the regional gas-pipeline developer.

<b>Arctel Goes Extra Mile</b>
MOSCOW (Bloomberg) — Arctel, a company partly controlled by Russian natural-gas exporter Gazprom, became the country’s sixth long-distance telephone operator, Communications Minister Leonid Reiman said.
The ministry issued dialing codes that allow Arctel to offer long-distance and international phone calls, Reiman told reporters in Moscow on Monday.

<b>Oil Shipments Down</b>
TALLINN (Bloomberg) — Russian oil shipments through Estonia fell 24 percent last month from a year earlier as tensions between the former Soviet neighbors showed no sign of abating.
Cargo companies using the tracks of Estonia’s rail-freight operator Eesti Raudtee transported 1.75 million tons of oil and oil products in January, compared with 2.29 million tons a year earlier, the Tallinn-based company said Monday.

TITLE: Trouble At The Top
AUTHOR: By Anna Shcherbakova
TEXT: It may not be obvious to shoppers at Lenta, but the city’s largest retail chain is the object of a serious conflict between its shareholders. 
Lenta was founded in 1993 by the entrepreneur Oleg Zherebtsov and his partners. Along with O’Key and Pyatorochka, it is a local business that has expanded into a national chain. Unlike pricey Moscow-based supermarket chains like Seventh Continent or Perekryostok, Lenta was a classic cash-and-carry that transformed into the sort of economy hypermarket that helps thrifty consumers save both time and money. I can even remember being asked by an arrogant acquaintance: “Don’t you go to Lenta? It’s very fashionable to go there, everyone does.”
Since then, new players have opened their stores in St. Petersburg, Pyatorochka has merged with Perekryostok, and international giants like Wal-Mart and Carrefour are expected to enter the Russian market. But Lenta kept on growing, and retained its clientele.
Zherebtsov was the face of the company. He was available for journalists on his mobile phone almost around the clock. He brought back new ideas from traveling abroad. He alluded to negotiations with Wal-Mart. He changed his partners in all probability, but being a private company, Lenta was not obliged to disclose this information. 
In 2006, Zherebtsov announced his new partner — former deputy prosecutor and San Diego resident August Meyer. We can only speculate on his motives. At the time, he was already committed to being both manager and shareholder — a combination which usually causes deep inner conflict. Presumably he wished to capitalize on his success and move on to other projects. New development requires considerable investment, so Lenta’s founder considered holding an IPO. 
By the end of 2007, all these plans had failed and the former partners had become opponents. It came to light at the beginning of January that Zherebtsov, who owns about 35 pecent of the company, and Meyer, whose share is about 36 percent, have different opinions about who the company’s CEO is and who makes up the board of directors, and are having it out in the courts. Both sides are filtering information about the case through their PR-services, but are quiet concerning the motives of the conflict. I can only imagine that they could not come to an agreement over the future of Lenta. Perhaps one wished to sell it, another to hold on to it. Or possibly their estimations of the company’s value differed, along with their need for cash. It’s a common situation for any business, and over the past few decades we have observed numerous shareholder conflicts in Russian companies, the only difference being that they had usually been privatized, not built from scratch. The involvement of an American prosecutor presents a glimmer of hope that the problem will be resolved without criminal means or governmental interference. 
I’ll dare to predict what will happen next. While the courts are doing their job, both sides will try to dilute their opponent’s share in the company by issuing new shares. A number of new cases questioning the legality of these issuances will follow while both sides will simultaneously exchange a number of accusations. The chain will cease to develop or even regress. Prospective investors will be pleased, since Lenta’s estimated value may well decrease. 

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

TITLE: In Gazprom’s Vice
AUTHOR: By Zeyno Baran and Robert A. Smith
TEXT: It’s now been more than two years since Russia cut off gas supplies to Ukraine. It is threatening to do so again this week.	
Many in the European Union said in 2006 that they had finally woken up to the risks of overdependence on a single supplier. Consequently, the EU began promoting several non-Russian gas pipeline projects to increase diversification and market competition. But in the absence of a unified EU energy-security policy, Moscow has been able to play divide and rule with Europe, cementing its gas-monopoly power on the continent.
Unless the EU starts treating energy as a foreign- and security-policy issue, one that may even have to be dealt with at NATO level, it will continue to be outmaneuvered by countries that do view it that way. In recent weeks, President Vladimir Putin has orchestrated three major energy deals that will increase Europe’s already substantial dependence on Russian natural gas, which Moscow exploits for political and economic gains.
On Jan. 18, Putin secured the commitment of the Bulgarian government for the construction of the massive South Stream gas pipeline. This project would carry Russian gas through Bulgaria into Greece, Italy, Serbia and potentially Hungary and Austria. It is designed to undermine the EU-backed Nabucco pipeline, as well as the Turkey-Greece-Italy, or TGI, pipeline. Both are intended to help the EU diversify its natural gas supply by bringing gas from Azerbaijan and Central Asia to the heart of Europe.
Nabucco and TGI make much more commercial sense than South Stream, whose astronomical costs — because of the large part of the pipeline that has to be built underneath the Black Sea — undermine the project’s financial viability. But Gazprom is happy to pursue noncommercial projects to bolster its monopoly power, as demonstrated by the Blue Stream gas pipeline, which crosses the Black Sea to Turkey, and the planned Nord Stream gas pipeline through the Baltic Sea to Germany. Earning a commercial rate of return or supplying gas at attractive prices is not what a monopolist like Gazprom seeks. Rather, it seeks to stifle competition, even at a significant commercial loss in the short term.
One week after the Bulgaria deal, Russia also secured Serbia’s cooperation on South Stream. For good measure, Belgrade also sold its national oil company, NIS, to Gazprom. The very same day, Austria’s state-controlled energy company, OMV, inked a deal handing over 50 percent of its massive Baumgarten gas-storage facility to Gazprom. This move could be the prelude to a deal between Austria and Russia on South Stream. Austrian Economy Minister Martin Bartenstein has already suggested “integrating” Nabucco with South Stream and filling that pipe with Russian gas. Obviously, such integration would completely undercut the whole point of Nabucco — diversification away from Russia.
Europe has been utterly incapable of putting forward a consistent, unified effort to advance Nabucco, supposedly its “priority” project. Instead, it has allowed its member states and Serbia, which wants to join the EU, to undermine the pipeline’s prospects.
Many European nations are simply afraid of angering Russia. In the late 1990s, the United States, along with Azerbaijan, Turkey and Georgia, took the lead in building oil and gas pipelines from the Caspian Sea to Turkey. Moscow fiercely opposed these projects. At the time, Europeans claimed that the projects weren’t feasible and did little to support them. Yet today, the EU recognizes that these pipelines are vital to its energy security and that without them its dependence on the Kremlin would be even greater.
Strong U.S. support was sufficient to counter Russian opposition and European reluctance in the 1990s. But it won’t be enough today. Thanks to the high energy prices, Moscow is much stronger and more assertive now than it was in the 1990s. What’s more, the EU lacks the resolve to challenge Russia’s monopolistic pressure.
Perhaps it is time for energy security to be more firmly integrated in the NATO treaty, as U.S. Senator Richard Lugar suggested at the organization’s November 2006 summit. That way, when energy is used as a political weapon to pressure a NATO member, the alliance would stand together in support of the beleaguered state. It may also be time to introduce energy into the NATO-Russia dialogue. These are topics that leaders must discuss at the NATO summit in Bucharest this April.
At the end of the day, though, this is a European problem and it requires a European solution. If the EU is to survive as a united and global actor, it needs solidarity on energy security, not dissention.

Zeyno Baran is a senior fellow and Robert A. Smith is a research assistant at the Hudson Institute. This comment appeared in The Wall Street Journal Europe.

TITLE: Business Needs To Play a Role In Fighting HIV
AUTHOR: By Daniel Kashnitsky
TEXT: Russian business leaders are very aware of the negative role that alcohol and drug abuse play on the workplace, but the potential threat that HIV poses to the strength of the private sector is not as high on the corporate agenda. It should be. 
The spread of Acquired Immunodeficiency Syndrome (AIDS) should be a concern to all of us. Russia has the highest number of HIV-positive cases in Europe. 
Failure to address this problem could significantly hamper the ability of companies to effectively operate in the highly competitive global marketplace.
Corporations can protect themselves by integrating education and prevention into workplace health care programs. 
The number of companies with workplace policies on HIV has almost tripled over the past two years, but more needs to be done. 
Only 15 percent of Russian companies have initiated AIDS prevention programs, and only 10 percent have adopted special policies protecting the rights of HIV-positive employees. 
Today, there are more than 300 governmental and nongovernmental AIDS prevention projects in Russia. Most of these initiatives, however, are targeted at either students or other risk groups. Very few of them address the adult working population.
Although many companies have taken action to protect their employees’ health and some even support community initiatives, it’s clear that we have more work ahead of us to convince business leaders that AIDS poses a direct and serious threat to their work force.
More than 74 percent of Russian business leaders say alcohol has a significant negative impact on the competitiveness of their companies, according to a survey that was conducted by the Transatlantic Partners against AIDS and the Russian Managers Association. 
Nearly half of the respondents said drug abuse had a negative effect on their companies’ operations. But only 12 percent of respondents said AIDS was negatively influencing their companies’ competitiveness. 
Many of our Chief Executive Officers and executives have not yet experienced the direct impact of AIDS because most employees who are HIV-positive have not yet developed AIDS-related illnesses. But the epidemic is a ticking time bomb that, if left ignored, will explode in the next few years.
We cannot ignore the fact that Russia faces the fastest growing epidemic in Europe. Corporations need to act now to help our employees remain healthy and disease-free.

Daniel Kashnitsky is an associate at Transatlantic Partners Against AIDS and the Global Business Coalition on HIV/AIDS, Tuberculosis and Malaria.

TITLE: East Timor President Shot in Rebel Coup
AUTHOR: By Guido Goulart
PUBLISHER: The Associated Press
TEXT: DILI, East Timor — Rebel soldiers shot and critically wounded East Timor’s president and opened fire on the prime minister Monday in a failed coup attempt in the recently independent nation. A top rebel leader was killed during one of the attacks.
President Jose Ramos-Horta, a Nobel Peace laureate, was injured in the stomach. He was flown to a hospital in Australia in an induced coma, breathing through a ventilator, a spokesman for the company that airlifted him out of East Timor said.
Prime Minister Xanana Gusmao escaped an attack on his motorcade unhurt.
Army spokesman Maj. Domingos da Camara said rebel leader Alfredo Reinado and one of his men were killed in the attack on the home of Ramos-Horta, while one of the president’s guards also died.
“I consider this incident a coup attempt against the state by Reinado and it failed,” Gusmao said. He called it a well-planned operation intended to “paralyze the government and create instability.”
“This government won’t fall because of this,” he said.
The attacks plunged the tiny country into fresh uncertainty after the firing of 600 mutinous soldiers in 2006 triggered unrest that killed 37 people, displaced more than 150,000 others and led to the collapse of the government.
Reinado was one of several army commanders who joined the mutiny. While most have returned home, Reinado and an unknown number of armed supporters had remained in hiding, refusing pleas to surrender.
Australia announced it would send scores more soldiers to the international peacekeeping force it currently heads in the country, bringing total troop levels to around 1,000. The neighboring nation also pledged more police officers to the 1,400 strong U.N.-led force already there.
“Someone out there tried to assassinate the political leadership of our friend, partner and neighbor,” Australian Prime Minister Kevin Rudd said. “They have asked for some help, and we are about to provide it.”
Ramos-Horta underwent surgery at an Australian army hospital in East Timor before being flown to the northern Australian city of Darwin for further treatment, said Ian Badham, a spokesman for medical evacuation service CareFlight International. Badham said Ramos-Horta was in critical condition, on a ventilator and “in an induced coma.”
Earlier, Gusmao urged the volatile country to stay calm. “I also appeal to the people not to spread any false rumors and information,” he said.
Two cars carrying rebel soldiers passed Ramos-Horta’s house on the outskirts of the capital, Dili, at around 7 a.m. and began shooting, da Camara said. The guards returned fire, he said. Reinado, former head of the military police, took part in the attack and was killed.
Reinado was to go on trial in absentia for his alleged role in several deadly shootings between police and military units during the violence in 2006. He was briefly arrested but broke out of jail later the same year and had since evaded capture.
Despite the outstanding charges, Ramos-Horta had met with Reinado on several occasions in recent months to try to persuade him to surrender.
The attack on Gusmao’s car was led by another rebel commander, Gustao Salsinha, said one of Gusmao’s bodyguards, who spoke on condition of anonymity because he was not authorized to speak to the media.
Australian-led troops restored calm following the 2006 turmoil and Ramos-Horta was elected president in peaceful elections held in May 2007. Low-level violence has continued in the country of 1 million people since then.
Deposed Prime Minister Mari Alkatiri has maintained that Ramos-Horta’s government is illegitimate. His political party immediately condemned Monday’s attacks in a statement released to the media.
East Timor, a former Portuguese colony, gained independence in 2002 after voting to break free from more than two decades of brutal Indonesian occupation in a U.N.-sponsored ballot.
Gusmao, who led the armed struggle against the occupation, has vowed along with Ramos-Horta to tackle rampant poverty and restore damaged relations between the country’s police and army.
The Brussels-based International Crisis Group warned last month that East Timor risked lapsing back into unrest if lingering resentment following the 2006 violence was not addressed by the government and the United Nations.
Analysts predicted Reinado’s supporters may riot in the coming days, but said his death had removed one of the major obstacles to peace in the country. The streets of Dili were calm Monday, witnesses said.
“I’ve always thought that Major Reinado was a pretty dangerous person, very unstable, (but he) has only had a small amount of support in East Timor,” Former Australian Foreign Minister Alexander Downer told the Australian Broadcasting Corp. “Not to wish anyone their death, but the fact he is off the scene altogether will be a good thing for the stability of East Timor.”

TITLE: More States Fall To Obama
AUTHOR: By JoAnne Allen
PUBLISHER: Reuters
TEXT: WASHINGTON — Democrat Barack Obama is riding a burst of momentum into Tuesday’s presidential nominating contests with a string of weekend wins, while Republican John McCain received praise from onetime rival President George W. Bush as he tries to woo conservatives.
Locked in a deadlocked state-by-state battle with Obama for the Democratic nomination, Senator Hillary Clinton replaced her campaign manager after Saturday’s losses to the Illinois senator.
Obama, who would be the first black president, scored a win in Maine on Sunday after sweeping caucuses in Louisiana, Nebraska and Washington a day earlier.
“We have now won on the Atlantic coast, we’ve won on the North Coast, we’ve won on the Pacific Coast, and we’ve won in between those coasts,” Obama said at a rally in Virginia Beach, Virginia after the Maine results were announced.
The Clinton staff shake-up came before the “Potomac Primary” on Tuesday when both parties hold contests in the U.S. capital and in neighboring Maryland and Virginia.
At a rally at a university in Bowie, Maryland, Clinton told the audience their choice “matters this year more than ever” and they should “pick a Democratic nominee who has been tested and vetted and can go the distance against John McCain.”
Clinton, a New York senator who would be the first woman president, did not mention Obama’s Maine victory nor did she discuss the staff shake-up.
Clinton named Maggie Williams, a top aide when she was first lady, to take over as campaign manager from Patti Solis Doyle, who was moved into the role of senior adviser.
Larry Sabato, a political science professor at the University of Virginia, said the shuffle indicated Clinton and her aides are concerned about the direction of her campaign.
“If you’re the ocean liner of the Hillary Clinton campaign and you’re trying to change course, this is how you would do it,” he said. “All of the pieces are changing.”
While Clinton may be in a bit of trouble, “It’s not over,” Sabato said, adding that if she does well in Ohio, Texas and Pennsylvania, she could win the nomination.
Clinton and Obama have been about even in pledged delegates but well short of the 2,025 needed to win the Democratic nomination for November’s presidential election.
Obama was leading in opinion polls and was expected to do well in Tuesday’s balloting. Both Democrats and McCain, an Arizona senator, were due to make  appearances across the region on Monday.

TITLE: Archbishop Says Sharia Law Is ‘Unavoidable’ in Great Britain
PUBLISHER: Reuters
TEXT: LONDON  — Rowan Williams, spiritual leader of the world’s 77 million Anglicans, gets a chance to respond on Monday to a barrage of criticism after saying the introduction in Britain of some aspects of Islamic law is unavoidable.
The Archbishop of Canterbury has remained silent on the subject since his comments on Thursday on the use of sharia in Britain led to calls for him to resign.
The storm is part of a broader debate on integrating the country’s 1.8 million Muslims that has climbed the political agenda since suicide bombings by British Muslims killed 52 people in London’s transport system in July 2005.
Williams may respond to his critics when he makes a speech at 3 p.m. on Monday to open a meeting of the Church of England’s parliament, the General Synod.
A handful of the synod’s 467 members have publicly called for Williams to step down, calling him politically inept.
Leading politicians and churchmen have said Britain can have only one legal system, although some have defended him as a thoughtful man who was trying to open a debate.
Several popular newspapers have attacked Williams, with the best-selling Sun launching a campaign for him to go.
A spokeswoman for Williams said on Sunday that the archbishop was not considering stepping down.
Sharia, the body of Islamic religious law based primarily on the Koran, as well as the sayings and deeds of the Prophet Mohammad, has been attacked by many in the west over its treatment of women and punishments for adultery and apostasy.
It covers a broad range of issues including worship, commercial dealings, marriage, inheritance and penal laws.
In a BBC interview on Thursday, the Archbishop of Canterbury talked about the use of sharia to resolve some personal or domestic issues among Muslims, much as Orthodox Jews have their own courts for some matters.
Asked if sharia needed to be applied in some cases for community cohesion, Williams said: “It seems unavoidable.”
Geoff Hoon, Chief Whip, told Sky News there were opportunities to resolve civil disputes through arbitration, “but there cannot be any kind of debate about the single authority of our single legal system.”
Opposition member of parliament Kenneth Clarke said Williams “should have been advised that even getting on to this topic was going to cause the most monumental row.”

TITLE: Okhta Center To Have Residential Neighbor
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Managers of Kvartira.Ru investment corporation expect a business-class residential complex that the company is constructing on Sverdlovskaya embankment to benefit from the future development of the nearby territory, which is set to include the future Okhta Center skyscraper that will house Gazprom’s headquarters along with other businesses.
“Considering what is being constructed in this area, in just a few years we will be able to advertise this complex as being located at the center of business activity in the city,” Pavel Kanalin, general manager of Kvartira.Ru realtor agency, said Wednesday at a press conference.
The complex, named Platinum, will consist of 12 sections including about 600 apartments and two penthouses in total. Of a total area of 75,000 square meters, apartments will occupy 51,000 square meters, each one varying in size between 40 and 236 square meters.
Shops and offices on the first and second floors will occupy 10,000 square meters, while underground parking space is planned for 343 cars.
The high-tech building will be faced with natural stone, ceramic-granite plates, facing bricks and glass. It will be 13 stories high, with a central tower reaching a height of 17 stories.
Kvartira.Ru acquired the project when it was already underway in February 2007, from its initial developer Nevsky Sindikat. Kvartira.Ru will cover liabilities to 26 buyers who paid Nevsky Sindikat for apartments in the complex.
The total cost of the project will exceed $120 million, due to expensive engineering works and the need to buy out property in three buildings that are being demolished. The project is financed by Kvartira.Ru Platinum — a joint venture of Kvartira.Ru and Russkiy Mezhdunarodny Bank.
“Demand for elite housing accounts for about 13 percent of the total demand for housing in the city,” said Igor Luchkov, head of the assessment and analysis department at Becar Commercial Property Spb.
Luchkov compared Platinum to Stroimontazh corporation’s Montblanc residential complex on Vyborgskaya embankment. He also indicated several elite buildings on Oktyabrskaya embankment and RBI’s project on Novgorodskaya Ulitsa.
“The advantages of Platinum are its panoramic view of Smolny Cathedral and the historic center of the city, and its location in a developing part of the Krasnogvardeiskiy district,” Luchkov said.
Price for apartments in similar residential complexes vary from $3,500 to $6,000 per square meter, Luchkov said. He forecasted a 30 percent increase in prices by the end of 2008.
Luchkov considered the inclusion of commercial areas on the ground floor to be a rational solution for a large-scale project.
“A-class tenants would not be interested, but developing medium-size Russian companies looking for a modern building combining a prestigious location with moderate rent rates are most likely to be based in this building,” Luchkov said.
Nikolai Bylinin, marketing manager of Kvartira.Ru, said that last year real estate prices in the Krasnogvardeisky district increased by 23 percent up to $3000 per square meter.
Platinum will be located close to an elite building being built by RBI and the Polyustrovo business center, as well as the future Okhta-Center. A new tunnel is planned underneath the Neva River to ease traffic flows to and from the area. “The Orlovsky Tunnel will improve transport infrastructure in the district considerably, as the overland express should pass through the district,” Bylinin said.
Sales of property in the Platinum complex began in December 2007, and so far apartments have been sold for an average of $3000 per square meter. This year, Bylinin expects elite real estate prices to grow by 35-40 percent. Platinum is due for completion in 2011.
Kvartira.Ru unifies construction, contractor and realtor companies, and has investments in over 100 projects in Moscow and around Moscow. Since 2003 the company has been involved in projects in Russia’s regions, and since 2005 it has been active in Tajikistan and Belarus.
“We currently have over 900,000 square meters under projection and construction, and over half of this area is in St. Petersburg,” Kanalin said.
In St. Petersburg Kvartira.Ru has already built the Olimpiisky residential complex in the Nevsky district (14,850 square meters). The company’s Mezhdunarodny complex in Kupchino (42,000 square meters) is nearing completion, and Ladozhsky Park will be its largest project (330,000 square meters).
This year Kvartira.Ru plans to complete 86,000 square meters in St. Petersburg and 132,000 square meters in 2009.

TITLE: What To Expect From 2008: Expert Opinions
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: <i>Real estate experts optimistically forecast healthy growth in commercial areas of all market segments this year. The development of office areas is expected to increase, while a large number of warehouse facilities are under construction, with projects receiving backing from foreign investors and developers increasingly interested in the St. Petersburg market. Shopping areas are the most developed market segment and the closest to saturation, but even in this segment experts envisage opportunities for further development.</i>

Shopping areas
Yelena Snegireva, retail real estate consultant at Maris Properties in association with CB Richard Ellis

At the end of 2007, the volume of shopping areas in St. Petersburg stood at about 2.47 million square meters. This year we expect over 1.28 million square meters to be added. If all of the shopping centers scheduled for opening in 2008 start operating, by the end of this year the total volume will increase to about 3.756 million square meters.
At the end of last year St. Petersburg had 530 square meters of shopping areas per one thousand citizens. By the end of 2008, this figure should have increased to 820 square meters.
St. Petersburg now has more high-quality shopping areas than Moscow, since at the end of last year Moscow had 450 square meters of shopping areas per one thousand citizens. By the end of 2008, this figure is forecasted to increase to 620 square meters.
St. Petersburg also now outstrips several European cities — Prague has 460 square meters of shopping areas per one thousand citizens, Madrid has 400 square meters and Berlin has just 370 square meters.
The largest projects scheduled to be launched this year are the North Mall (73,000 square meters) and two projects by Makromir company — Felicita (100,000 square meters) and City Mall (115,000 square meters). These shopping centers rely heavily on their anchor tenants -Karusel, Real and Leroy Merlin — who should ensure stable operation.
One of the most interesting projects is Atlantic-City, which is positioned in a premium class segment. This shopping center focuses on unique and exclusive stores rather than mass-market brands.
Unfortunately, the launch of some large and rather interesting projects, for example the Leto shopping center, have been postponed until 2009.
By the end of 2009 several large shopping centers will be in operation, and the market will be largely saturated. However, most of the projects are concentrated in the Primorsky, Moskovsky and Vyborgsky districts, so there will still be opportunities for development.
The market saturation will in fact benefit retail operators, as they will be able to choose between more locations and negotiate better terms.

TITLE: Deciphering The Law: Land Buy-Out Pricing Laws
AUTHOR: By Yelena Ryzhkova, Senior Lawyer at Pepeliaev, Goltsblat & Partners
TEXT: Paragraph 36 of the Land Code stipulates that owners of premises located on state and municipal lands have the exclusive right to buy these land plots. The new regulations from October 2007, which will be in force until January 2010, define the buying-out price of the land according to the “privatization history” of premises located on it.
Two types of land are defined:
— Land containing premises that used to be state or municipal property but have since been privatized 
— Land containing premises which were never privatized (for example, private owners could have constructed the buildings from scratch).
Changes have been made to the pricing of land plots containing privatized premises. Through January 1, 2010, the buying-out price of these land plots will be:
— Within 20 percent of the cadastral price for land plots located in cities with a population of over three million people (Moscow and St. Petersburg);
— Within 2.5 percent of the cadastral price for land plots in other areas.
The same rules will be applied to individuals and non-profit organizations who had privatized premises located on state and municipal lands before October 2001 when the Land Code came in force.
These general rules are modified by two essential provisos:
1. Unless regional authorities price the land with respect to new regulations, the land should be sold at the highest price usual for that particular region.
2. In cities with a population of over three million people, the authorities may ban new construction, which would affect the pricing of the land plot. Authorities can charge up to 80 percent of the cadastral price of land to remove this ban.
Land plots containing premises that were never privatized are also mentioned in the new regulations. According to the new law, the old rules should be applied to the pricing of these land plots. For this purpose, the law defines three groups of cities:
— In cities with a population of over three million people, the buying-out price of land could vary between 5 and 30 land tax rates per area unit;
— In cities with a population of 500,000 people to three million people, the buying-out price of land could vary between 5 and 17 land tax rates;
— In cities with a population of less than 500,000 people / rural (outside the city area lands), the buying-out price of land could vary between 3 and 10 land tax rates.
Before new pricing is introduced, land plots containing premises that have never been privatized should be sold at a minimum price usual for that particular region.
From Jan. 1 2010, unified pricing will be introduced for state and municipal land regardless of what kinds of premises are located on it. The buying-out price will be either based on or equal to the cadastral price of the land.
We haven’t seen enough cases of the new rules being applied to land pricing yet. However, a number of questions arise.
Firstly, will the new pricing for land plots containing privatized premises be applied to any owner, or only to the initial owner who was responsible for privatizing these premises?
The draft of the law referred more clearly to the initial owner. It is likely that lawmakers broadened the range of owners to whom the new pricing system could be applied. However, only court decisions will prove whether that is really the case.
The second question concerns the pricing of land plots containing several premises — both privatized and non-privatized.  If the law is to be interpreted literally, we must assume that in this case the land plot should be divided into several parts, which would be privatized separately.
Another question concerns bringing regional legislation on land pricing into conformity with the Land Code. Will regional laws remain in force until the necessary amendments are introduced, or will the maximum/minimum pricing rules stipulated by the federal law be applied immediately?
In St. Petersburg, for example, the buying-out price of land equaled nine land tax rates. Land tax for non-agricultural lands equaled 1.5 percent of its cadastral price. As a result, the buying-out price in St. Petersburg was equal to 13.5 percent of the cadastral price.
This price is within the limits defined by the new law. However, it was defined before the new legislation was introduced. This pricing scheme was universal, while the new law describes two different pricing schemes.
Working on the basis that the old pricing scheme is invalid until the new procedures have been settled by the regional authorities, we think that land in St. Petersburg should be priced as follows:
— For land plots containing privatized premises, the maximum standard price would apply, which is 20 percent of the cadastral price;
— For land plots containing non-privatized premises, the price would equal five land tax rates, which is 7.5 percent of the cadastral price.

Many operators are switching from paying fixed rent rates to paying a share of their gross turnover, usually around ten percent of the turnover. Under this kind of agreement, it is the responsibility of the managing company and not that of the individual tenants to promote the shopping center.
The market saturation will have the largest impact on managing companies and consultancies, since managing companies will have to offer new incentives to customers and tenants and compromise financially, which will decrease their profitability. For consulting companies it will be increasingly difficult to find unoccupied market niches for new projects and recommend specific concepts to a developer.
For developers it will be a challenge to find an available land plot and construct a competitive shopping center that would not require re-conceptualization in at least five to seven years’ time.
In addition to a wide range of products, shopping centers will start offering a variety of services to consumers. Retail operators will face difficulties in marketing widely-available goods, while the service sector is less occupied and Russian consumers still unsophisticated.
Many owners have stopped managing their shopping centers themselves and now hire professional management companies.
The trends of recent years will continue this year, such as gigantism and the construction of multifunctional complexes, premium and luxury-class companies entering the market. The opening of the Louis Vuitton boutique was significant in this regard.
As a result of the saturation of the St. Petersburg market, high-quality shopping centers have started opening in surrounding suburbs like Gatchina and Peterhof.
Shopping centers are becoming more diverse. Inside, they are divided into separate zones — for sports goods, for children, “for men only” and so on.
More and more shopping centers aim to attract customers for the whole day or evening. They are increasing the share of entertainment facilities such as cinemas, skating rinks, bowling and billiard centers, karting tracks, aqua-parks and spa-centers.
One currently popular idea is the construction of shopping centers over existing or planned metro stations.

Office areas

Dmitry Zolin, managing director of LCMC

From 2006-2007, the volume of office areas in the city grew steadily by about 230,000 square meters a year. In 2008-2009 we forecast a sharp increase in construction, especially in class A and class B segments.
29 office centers with a total area of 334,000 square meters are scheduled for opening in 2008. If these projects are realized, by the end of 2008 the volume of office areas in the city will increase by 28.4 percent to over 1.5 million square meters.
Over the course of this year the share of A-class office areas will increase from 10.7 percent to 20.2 percent. In contrast, the share of C-class office areas will decrease from 26.5 percent to 20.7 percent.
Most of the projects are being realized in the Petrogradsky district (101,000 square meters), followed by the Primorsky district (63,000 square meters) and Central district (54,000 square meters).
11 office centers are due to start operating in 2009, adding 285,000 square meters to the existing office stock, most of them in the Primorsky district (165,700 square meters).
By the end of 2009 we forecast that the total volume of office areas will increase to 1.8 million square meters. By that time, A-class office areas will account for 19 percent, B-class for 63 percent and C-class for 18 percent of the total stock.
At the end of 2007, rent rates stood at $67-202 per square meter a month in A-class office centers, $40-52.5 in B-class centers, and at $24-40 per square meter a month in C-class centers (including communal fees and VAT).
The most expensive office centers are based in the Central, Petrogradsky and Vasileostrovsky districts.
The highest rent rates for A-class office areas are found in the Central district, while the most expensive B-class office centers are based in the Admiralteisky, Vyborgsky, Moskovsky and Petrogradsky districts. C-class office areas are most highly priced in the Admiralteisky and Petrogradsky districts.

Alexei Chizhov, director for consulting at Praktis CB

At the end of 2007 total stock of office areas stood at about 1.1 million square meters, including 627,600 square meters of high-quality office areas.
In other words, St. Petersburg had 250 square meters of office areas per one thousand citizens, which is half the level in Moscow and significantly less than in European cities. For comparison, Paris has 5,000 square meters of office areas per one thousand citizens and Warsaw has 950 square meters.
This is a clear indication of unsatisfied demand for office areas in St. Petersburg. Occupancy levels are close to 100 percent in virtually all A- and B-class office centers. We estimate the deficit of office areas in St. Petersburg to be 2.9 million square meters.
In 2008 we expect 500,000 square meters of A- and B-class office areas to be added to the total stock. 
A considerable proportion of these areas will be located in multifunctional business complexes, like Paradny Kvartal, Stockmann and Nevsky Plaza.
If all the office centers scheduled to open in 2008 do start operating, by the end of the year the amount of office areas in the city will increase to 317 square meters per one thousand citizens.
This year the share of C-class areas is due to decrease from 44 percent to 31 percent, while the share of A-class areas should increase from 12 percent to 20 percent.
However, previous experience has shown that only around 65 percent of announced projects are actually completed on time. 
Thus we can expect that by the end of 2008, only 324,000 square meters of office areas will have begun operating. As a result, the total volume of office areas in the city will increase to about 1.45 million square meters.
Most of the high-quality office centers (61 percent) are concentrated in the Central, Petrogradsky and Admiralteisky districts.
Traditionally, the most popular office areas are units of up to 50 square meters (accounting for 35 percent of demand). 
However, demand for office areas of over 1,000 square meters has started to grow while there is an evident lack of large areas on the market.
Most tenants are IT, telecom, financial, service and real estate companies from St. Petersburg and Moscow, along with foreign enterprises. Regional Russian companies represent an insignificant proportion of tenants.
This year we forecast a 14-16 percent increase in rent rates for A-class office centers, a 12-14 percent increase for B-class and 13-15 percent increase for C-class centers.

Warehouses

Kirill Malyshev, director of the warehouse and industrial real estate department at Colliers International

The St. Petersburg warehouse market continued to develop actively last year due to a growing interest from foreign investors (EPI, Fleming Family & Partners, Aberdeen, Baltic Property Trust), the development of the industrial and retail sectors, and an improved transport infrastructure.
At the beginning of 2007, the volume of A- and B-class warehouse facilities stood at over 300,000 square meters. 
During the year, over 220,000 square meters of new warehouses were put into operation, resulting in an annual increase of about 73 percent. Out of the total stock, approximately 270,000 square meters were A-class.
Currently an additional 1.3 million square meters are under construction and over 2.5 million square meters are in the project development phase. By the end of 2008, more than one million square meters of warehouse space are set to open, though their completion dates might be rescheduled.
The industrial area Shushary keeps on developing at a rapid pace. In 2007, the warehouse facilities PNK-2 (40,000 square meters) and Yuzhny (10,000 square meters) began operating. 
The largest project — the A-class Eurasia Logistic warehouse complex — with a total area of 790,700 square meters was launched, and the Raven Russia and Avalon Group project was announced with an area of 140,000 square meters.
The Utkina Zavod territory began to develop actively with the start of construction on the Utkina Zavod warehouse facility, whose first building has an area of more than 80,000 square meters (the total area of the warehouse facilities exceeds 200,000 square meters).
Construction of the EPI warehouse facilities, which have a total area of 175,000 square meters, is under way in the Gorelovo industrial district.
In the Predportovaya industrial district, Interterminal has begun operating 46,604 square meters of the Interterminal-Predportovy techno-logistics complex.
Currently, almost all warehouse facilities are 100 percent leased. 
In most cases, warehouse complexes are pre-leased at the construction stage, which stems from the limited supply along with growing tenant requirements.
The major tenants of high-quality warehouses are logistics, trading and industrial companies. 
Small units of up to 4,000 square meters are still the most attractive, with only four percent of all tenant companies, mainly logistics operators, willing to lease units of more than 10,000 square meters.
The highest demand is for warehouses located close to the Ring Road, the Moscow Highway, the Vyborgskoe Highway, and the Pulkovskoe Highway.
The triple net rental rates for A- and B-class warehouse facilities were estimated to be approximately $115-140 per square meter a year and $110-120 per square meter a year, respectively.
In A- and B-class warehouses, safe keeping fees range from 40 to 50 cents per pallet per day, and from 34 to 42 cents per pallet per day, respectively (excluding operating expenses and VAT).
Large logistic operators are entering the St. Petersburg warehouse market, such as Ahlers, FM Logistic, Relogix, National Logistics Company, and Russian Logistics Service. 
In 2008, the average size of warehouse buildings will keep increasing significantly, and many large-scale warehouse facilities will continue to enter the market.
The construction of the Ring Road has resulted in a substantial increase in interest from developers in territories on the border of St. Petersburg and the Leningrad Oblast which were previously considered unattractive.
Developers are most interested in areas located at the intersections of the Ring Road and the radial highways, with the first projects emerging in the south-west (Gorelovo) and in the east (Yanino).
The share of high-class warehouses is expected to grow this year. One of the main warehousing development trends will be the establishment by large trade chains of their own distribution centers.
As the share of projects that are completed on time makes up no more than 50-60 percent of the market, an overstock of leasehold spaces and significant increase in competition are not expected for the next few years. 
Rent is expected to increase by six percent to nine percent for leasehold units of less than 5,000 square meters.
The market is seeing the development of purpose-built warehouse facilities, such as zero-temperature warehouses. 
Developers are showing a growing interest in industrial park developments, where the demand for smaller units will increase. There is also an increased interest in purpose-built projects and sale-and-leaseback schemes.

TITLE: Glavstroi’s Prospects For Local Market Rosy
AUTHOR: By Nadezhda Zaitseva
PUBLISHER: Vedomosti
TEXT: ST. PETERSBURG — The large-scale selling of land plots last year by City Hall has resulted in the appearance on the local construction market of a major player — Oleg Deripaska’s Glavstroi company bought 732 hectares of the 767.5 hectares of land sold for development in 2007.  In January this year, Galvstroi was awarded the tender to develop the Apraksin Dvor complex at an investment cost of $1.15 billion.
According to data from the Property Fund, last year eight contracts were signed for the rental of land plots for the development of complexes, and the revenue from them was 7.3 times above the expected total, amounting to a total of10.5 billion rubles ($0.4 billion). Of that sum, 8 billion rubles ($0.3) came from Glavstroi.
In addition to the Apraksin Dvor complex, where Glavstroi plans to construct 70,000 square meters of housing, 80,000 square meters of shops, 70,000 square meters of offices and three hotels, the company has acquired territory at Konnaya Lakhta and Severnaya Dolna for the construction of 5 million square meters of residential accommodation.  At Yuntolovo, a plot of 437 hectares, Glavstroi plans to invest a minimum of three billion dollars, according the company’s general director, Artur Markaryan.  Glavstroi’s portfolio of projects in St. Petersburg also includes a five-hectare area on Ulitsa Shkapina, which the company acquired at an auction for 701 million rubles for the construction of around 200,000 square meters of hotels and offices.
“The completion of the projects at Konnaya Lakhta and Severnaya Dolina will give Oleg Deripaska’s company the opportunity to control around 10 percent of the St. Petersburg market,” says the general director of Peterburgskaya Nedvizhimost, Ilya Yeremenko.  If  Glavstroi’s projects go as planned, by 2015 the company will control no less than 15-20 percent of the housing market, according to the vice-president and project manager of Stroimontazh, Anatoly Pavlov.  Local players will of course have to move over and make room, but the greatest impact will be suffered by small construction companies, in his opinion. Pavlov expects the market to consolidate over the next 10-15 years.
Glavstroi has taken on long term projects, which in the future will lead to the reconfiguration of the way the market is divided up at present, agrees the general director of Normann investment and construction group, Vladimir Smirnov.  According to Yeremenko, the arrival of Glavstroi on the market does not present a serious threat to large construction companies.  Without help, Glavstroi will be unable to complete the projects anyway, so will probably act more as a developer and recruit local builders to construct the various plots, agrees Smirnov.
“In the past year, the city has not given market players any other way of acquiring plots for housing construction than by buying plots for the development of complexes,” he says. “Developers are left with only one alternative — buying out property owners and clearing land of factories, but this only an option for the big companies.”
By only offering such large plots for auction, the city has consciously limited the number of participants at auctions, since there are very few local companies that are able to acquire and develop such territories, according to Pavlov.  “The city is interested in large projects, and so by only offering such large plots for sale, has eased entrance onto the market for serious developers,” says Yeremenko.  “It’s more convenient for City Hall to work with 10 large companies, but often smaller companies complete the projects far more effectively,” adds Smirnov.
However, Glavstroi would have found a way to enter the market even without the auctions, according to Pavlov.  Yeremenko agrees. According to his estimates, there are 37 sites of at least 25 square meters on the outskirts of the city and in the Leningrad Oblast that are suitable for the development of complexes.  “About 42 million square meters of housing and corresponding facilities could be built there,” Yeremenko says. 
According to him, some of these plots belong to private owners and others to the state, and they will begin to be developed over the next three years.
This year the city plans to sell just three plots with a total area of 94 hectares for development into complexes.  The plots are due to be sold at auction in the second quarter of this year.

TITLE: Dubai Developer Will Build Moscow Suburb
PUBLISHER: Bloomberg
TEXT: MOSCOW — Limitless LLC, the Dubai developer building a desert waterway longer than the Panama Canal, agreed to build a Moscow suburb for 12,000 people to enter Russia with local partner Regional Development & Investment Group.
State-run Limitless signed an agreement with RDI to build 4,500 houses and apartments, plus schools and shops about 24 kilometers (15 miles) northwest of the Russian capital, the two companies said a joint statement last week. The project will start next year and take seven years to complete.
Limitless, a unit of Dubai World, is spending more than $100 billion in five countries to replicate large-scale Dubai developments overseas. The builder is overseeing a $12 billion development of 60,000 homes in Saudi Arabia and a project of equal value in India, and has ventures in Vietnam and Malaysia.
Moscow has the world’s fourth most-expensive real estate after Monaco, London and Tortola in the British Virgin Islands, the Global Property Guide said in a report last month. Elite apartments cost on average $17,011 per square meter in Moscow, versus $15,933 in New York and $11,870 in Tokyo, the study found.
Limitless will seek Islamic debt this year to finance new projects in Russia, Jordan and Poland, finance chief Paul Green said Jan. 15. Green and bankers from Emirates NBD PJSC and Emirates Islamic Bank PJSC traveled to Singapore, Kuala Lumpur and London last month to promote a $1.2 billion Islamic loan.
Green was not available for comment last week when Bloomberg called seeking comment about the Russian development. Limitless spokeswoman Rebecca Rees said the venture will be owned equally by the two partners, declining to comment on the project’s cost.

TITLE: TNK-BP Investment To Soar
PUBLISHER: The St. Petersburg Times
TEXT: The Russian-British oil company TNK-BP will buy land plots and invest over $150 million into filling stations in St. Petersburg and the Leningrad Oblast over the next five years, the company said Monday in a statement. The company will also invest in existing filling stations.
On Monday TNK-BP opened its first multifunctional filling station under the BP brand name in St. Petersburg, at Maly Prospekt on Vasilievsky Island. It is the 50th filling station opened by the company in Russia.
“The St. Petersburg retail fuel market is one of the most attractive in Russia, and a key priority for TNK-BP along with Moscow,” Anthony Considine, Executive Vice-President of TNK-BP, said in the statement.
Last year TNK-BP opened the first two gas stations under the TNK brand in St. Petersburg. By 2013, TNK-BP’s retail network in St. Petersburg and Leningrad Oblast is slated to include fifty filling stations, which will create over 1,500 new jobs.
The TNK-BP retail network, consisting of 1,600 filling stations, sells petroleum products in twenty major regions of Russia and in nearly all regions of Ukraine. Fuel is sold under two brand names — TNK and BP. In St. Petersburg the company will develop both brands.
BP began building its network of multifunctional filling stations in Moscow and the Moscow Oblast in 1996.

TITLE: In Brief
TEXT: <b>City Tipped For $4 Bln</b>
ST. PETERSBURG (Bloomberg) — Russian entrepreneur Andrei Rogachev, founder of the Pyaterochka and Carousel supermarket chains, plans to invest $4 billion in property developments in St. Petersburg and other cities, Kommersant reported last week.
Rogachev plans to invest $1 billion of his own money into a new holding, Terra On, and raise $3 billion from other investors, the newspaper reported, citing an unidentified person familiar with Rogachev’s plans.
Terra On will only invest in projects worth at least $50 million, Kommersant said.

<b>Pulkovo Open To Bids</b>
ST. PETERSBURG (Bloomberg) — City Hall will seek bids from investors starting in March for the expansion of Pulkovo airport, Kommersant reported last week, citing Nikolai Asaul, head of the city’s transport committee.
Municipal authorities estimate that 900 million euros ($1.3 billion) is needed for the airport’s renovation, the newspaper said. The city plans to select an investor by the end of this year, Asaul said, according to the newspaper.
The city government may also seek to have the airport declared a “special economic zone,” where tax breaks and other incentives will apply, Kommersant reported, citing Asaul.
Most companies operating out of Pulkovo are not looking for tax breaks and will benefit more from simplified customs procedures, the newspaper said, citing unidentified analysts.

<b>Ikea Complex In Talks</b>
MOSCOW (Bloomberg) — Ikea, the world’s largest home-furnishings retailer, is in talks to buy land for its fourth mall in Moscow, the Russian newspaper Kommersant reported Monday.
The outlet is planned for northeast Moscow, the only area of the city without an Ikea, the newspaper reported, citing company spokeswoman Oksana Belaychook.
The mall, which would open in 2010, might host other retailers, a business center, a hotel and residential buildings, Kommersant said, citing an unidentified Moscow developer.

<b>RZD To Develop Site</b>
ST. PETERSBURG (Bloomberg) — Russian Railways will develop a site near St. Petersburg’s Baltiysky train station and spend as much as $1 billion to build a hotel and office and retail space, Vedomosti reported last week.
The company plans to develop a 20-hectare site, adding 300,000 square meters of commercial property and a public museum in three years, the newspaper said, citing an unidentified official at Russian Railways’ unit Zheldoripoteka.
Competition among developers will only intensify in this part of St. Petersburg as municipal authorities relocate industrial facilities away from the city center, Vedomosti said, citing an interview with Oleg Barkov, head of the St. Petersburg office of Knight Frank LLC.

<b>Legal Counsel For Firm</b>
ST. PETERSBURG (SPT) — Simon Elliott, who provides legal counsel to a broad range of investors, developers and managers on real estate matters, has joined Baker Botts LLP’s Moscow office as special counsel to head up the firm’s Russian real estate practice, PR Newswire reported Monday.
In addition to advising clients on targeted real estate and joint venture matters, Elliott provides legal advice to developers and contractors on real estate and construction issues.  One of the clients he represents is Hines International, Inc. and associated Hines funds.  He is also experienced in handling dispute resolution matters in the international construction arena.

TITLE: A Lot of Doom About Nothing
AUTHOR: By Bret Stephens
TEXT: In 1788, Massachusetts playwright Mercy Otis Warren took one look at the unratified U.S. Constitution and declared, “We shall soon see this country rushing into the extremes of confusion and violence.” This, roughly, is the origin of American declinism — and it’s been downhill ever since.
A couple centuries later, Paul Kennedy, an international relations theorist at Yale University, sought to explain the decline of great powers in terms of a ratio between military commitments and economic resources. The military buildup under former President Ronald Reagan and the deficits that went with it, he warned, had brought the United States to the point of “imperial overstretch.” Not quite. Within a few years, the Soviet Union collapsed, Europe and Japan — with no military burdens to speak of — entered a long period of economic stagnation, and the United States consolidated its position as the world’s only true superpower.
Declinism is again in vogue. “America’s unipolar moment has inspired diplomatic and financial countermovements to block American bullying and construct an alternate world order,” writes Parag Khanna in a recent New York Times Magazine cover story cheerfully titled “Who Shrank the Superpower?” In Sunday’s Los Angeles Times, Fred Kaplan observes that “the United States can no longer take obeisance for granted.” Kaplan’s new book, “Daydream Believers: How a Few Grand Ideas Wrecked American Power,” sounds just a bit derivative of Nancy Soderberg’s “The Superpower Myth,” Roger Burbach’s “Imperial Overstretch” and Charles Kupchan’s “The End of the American Era.”
The United States’ “decline” is the foreign policy equivalent of homelessness: The media only take note of it when a Republican is in the White House. Broadly speaking, declinists are divided between those who merely accept the United States’ supposed diminishment as a fact of life and those who celebrate it as long overdue. As for the causes of decline, however, they tend to agree: the relative decline in economic muscle due in large part to the rise of China; an overextended military bogged down needlessly in Iraq and endlessly in Afghanistan; the declining value of America’s “brand” as a result of President George W. Bush’s policies on detention, pre-emption, terrorism, global warming — you name it.
Yet each of these assumptions collapses on a moment’s inspection. In his 2006 book “Uberpower,” German writer Josef Joffe makes the following back-of-the-envelope calculation: “Assume that the Chinese economy keeps growing indefinitely at a rate of 7 percent, the average of the past decade (for which history knows of no example) ... At that rate, China’s gross domestic product would double every decade, reaching parity with today’s United States ($12 trillion) in 30 years. But the U.S. economy is not frozen into immobility. By then, the United States, growing at its long-term rate of 2.5 percent, would stand at $25 trillion.”
Now take military expenditures. Last Monday, the Bush administration released its budget proposal for 2009, which includes $515.4 billion for the regular defense budget. In inflation-adjusted dollars, this would be the largest defense appropriation since World War II. Yet it amounts to about 4 percent of GDP, as compared to 14 percent during the Korean War, 9.5 percent during the Vietnam War and 6 percent in the Reagan administration. Throw in the Iraq and Afghanistan campaigns and total projected defense spending is still only 4.5 percent of GDP — an easily afforded sum even by Professor Kennedy’s terms.
Finally, there is the issue of the United States’ allegedly squandered prestige in the world. There is no doubt America’s “popularity,” as measured by various global opinion surveys, has fallen in recent years. What’s striking, however, is how little of this has mattered in terms of the domestic political choices of other countries or the consequences for the United States.
In the immediate aftermath of the Iraq War, nearly every government that joined Bush’s “coalition of the willing” — Australia, Britain, Denmark and Japan — was returned to power. Former French President Jacques Chirac and former German Chancellor Gerhard Schroeder, the war’s two most vocal opponents, were cashiered for two candidates who campaigned explicitly on a pro-U.S. agenda. The same happened in South Korea, where the unapologetically anti-U.S. President Roh Moo-hyun has been replaced by the unapologetically pro-U.S. Lee Myung-bak. Italy’s equally unapologetic pro-U.S. Silvio Berlusconi seems set to return to office after a brief vacation.
None of this is to say that perceptions about the United States play a decisive role in the politics of most other countries. It is to say that anti-Americanism, like illegal immigration, is fool’s gold politics. French President Nicolas Sarkozy and German Chancellor Angela Merkel were not installed in office principally to mend relations with Washington. But to the extent that both seek to liberalize their economies, strengthen NATO or take a responsible position vis-a-vis Iran, they are moving closer to Washington’s way of thinking.
Meanwhile, McDonald’s — the icon of everything anti-Americans detest about the U.S. — is doing a booming business overseas even as sales in the United States flatlined last year. Another U.S. icon, Boeing, is having no trouble booking orders (meeting them is another matter) for its new 787 Dreamliner from such customers as Spain’s Air Europa and Bahrain’s Gulf Air. The quintessentially American film “National Treasure” has earned nearly half its gross revenue — about $160 million — in foreign ticket sales since its release in late December. So much for the United States’ loss of “soft power.”
Happily for Kaplan, I look forward to receiving his forthcoming book. I’ll put it right up there on the shelf with another favorite of mine — “19-0: The Historic Championship Season of New England’s Unbeatable Patriots.” I’m guessing it will fetch a price on eBay.

Bret Stephens is a columnist for The Wall Street Journal, where this comment appeared.

TITLE: The News That Doesn’t Get Reported
AUTHOR: By Yulia Latynina
TEXT: There is something very strange about the way news is presented in Russia. On one hand, there is news that we are all aware of — news of Medvedev meeting with dairy farmers, for example, or Medvedev outlawing inflation and increasing pensions.
But there is another type of news that distinguishes Russia from most countries in the West. I’m speaking of the news that doesn’t exist.
For example, a few years ago former FSB General Anatoly Trofimov and his wife were gunned down in front of their home in an apparent contract murder. Trofimov had been working for investment company Gruppa Finvest for a few years prior to his shooting.
In the United States, if a gangster kills a law enforcement official — and not merely another gangster — he is a marked man. The police will go to all lengths to hunt him down and bring him to justice. But, in Russia, there is no news concerning Trofimov’s murder even though it should have been a simple case to solve.
Hired killers used similar methods to get rid of Nazim Kaziakhmetov, an investigator with the Prosecutor General’s Office who had been investigating the criminal fraud case against Finvest.
Even before former security agent Alexander Litvinenko was poisoned in London, President Vladimir Putin’s former head of security in St. Petersburg, Roman Tsepov, was also poisoned. Tsepov thought he had a free hand to meddle in important Kremlin business affairs, including the Magnitogorsk Iron and Steel Works and Yukos.
Although Tsepov had been fairly close to the president, he apparently overestimated Putin’s loyalty to him. It seems that Putin should have ordered an investigation to find out who killed his friend, but not a peep has been heard from the media about the case.
In addition, a former department head at the Federal Property Management Agency, Sergei Korolko, was stabbed to death in Novosibirsk on April 11, 2005. Korolko was a high-ranking government official in charge of selling off property confiscated in criminal investigations. It is not difficult to guess who might have had an ax to grind with Korolko, but you won’t hear any news about the investigation into that case.
About a month ago, the body of VTB managing director Oleg Zhukovsky was found at the bottom of the swimming pool at his luxury dacha in Odintsovo, just outside Moscow. Although Zhukovksy’s arms and legs had been tied up and a plastic bag was tied around his head, his death was classified as a suicide. Moreover, the police carried out a thorough investigation to try to understand how Zhukovsky could have possibly tied his own hands behind his back. But where is the media coverage of this crime?
Of course, I understand that Tsepov, Trofimov and Korolko might not have been the easiest people to get along with and that Zhukovsky was probably no angel either. Nonetheless, the basic principles of a civil society dictate that it is wrong to kill a former FSB general, a friend of the president, a top government official or a managing director of a bank; they also dictate that the details of the investigation — or the lack of investigation — into these crimes should be reported in the mainstream media.
Not long ago in St. Petersburg, the poisoned bodies of two Federal Drug Control Service agents were found near a bridge. Less than an hour before their deaths, the men were having dinner at a restaurant. Their colleagues paid for dinner using credit cards. It should have been an open and shut case, but no leads have been reported in the media.
Although there is virtually no media coverage on these high-profile killings, we are bombarded almost every day with information about an entirely different topic — the strengthening of Putin’s power vertical, the increase in law and order and the way Putin has returned stability to the country after a decade of lawlessness, corruption and chaos.

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

TITLE: Putin’s Jewish Anomaly Comes as a Surprise
AUTHOR: By Vladimir Shlapentokh
TEXT: Josef Stalin and President Vladimir Putin epitomize the type of leader who is ready to sacrifice the country’s interests to maintain his power. Of course, Stalin and Putin used ideologies extensively for propagandistic purposes and for the legitimization of their personal power. But given the fact that they were concerned only about personal power, these two leaders were extremely flexible and open to the idea of changing the country’s ideological course in any direction.
Though Putin respects Stalin as a great leader, he has condemned Stalinist repression. For example, many took note of Putin’s October visit to Butovo, in the south of Moscow, where more than 20,000 people were killed during the peak years of Stalin’s terror in 1937 and 1938.
Another area where Putin differs from Stalin is his policy toward Jews.
If Putin were a dogmatic leader, he would have included anti-Semitism in his public ideology. Anti-Semitism was introduced as official Soviet state ideology during Stalin’s reign in the late 1930s. Jews were barred from high positions in virtually all spheres. In the media, literature and films, they were almost never shown in a positive light.
The open propaganda against Jews ran counter to Lenin’s heritage and internationalism. For this reason, the Soviet authorities replaced the term “Jews” with “Zionists.” Since Zionism was a “legitimate” enemy of socialism, it was easy to carry out an anti-Semitic campaign under the guise of the fight against this movement. Soviet propaganda tended to describe Zionism as a greater evil than the United States, suggesting that U.S. imperialism was merely a tool used by the Jews to conquer the world. The anti-Zionist campaign continued until the last days of the Soviet Union.
Traditional anti-Semitism, honed by Stalin over many years, was seen by his successors as a fundamental element of the Russian psyche. In Nikita Khrushchev’s four-volume memoir, “Time, People, Power,” he wrote a lot about Stalin’s anti-Semitism. He did not, however, risk even indirectly mentioning Stalin’s anti-Semitic policy in his public reports to the Party congresses in 1956 and 1961, when he harshly denounced his former boss.
The same was true about Soviet leader Mikhail Gorbachev. From the beginning of glasnost to the end of his rule, he was almost never critical of his predecessors’ state policy toward Jews. Gorbachev continued to keep his distance from any involvement in the “Jewish question” and did not appoint Jews to any significant position in his administration, continuing the old Party tradition.
When Putin came to power and declared his affinity for certain elements of the Soviet empire and traditions, it was only natural to expect a gradual restoration of state anti-Semitism. During the Soviet period, there was a strong link between anti-Americanism and anti-Semitism, and Putin started his harsh anti-U.S. campaign in earnest in 2005. Furthermore, Putin’s professional background strengthened the pessimistic expectations about the revival of a state anti-Semitic policy; since the late 1930s, the KGB was indeed a bastion of anti-Semitism.
But, contrary to what many expected, Putin has been very supportive of Jewish issues and concerns. Hence, his so-called Jewish anomaly. Taking into account all of Putin’s publications, meetings and speeches since 2000, he has said more positive words about Jews than all the Russian leaders before him except Lenin. In his memoir, Putin did something that no other Russian or Soviet leader had done. With a high degree of warmth, he described a Jewish family that shared a communal apartment with his family in Leningrad. He talked about his Jewish wrestling coach, Anatoly Rakhlin, as a person who “probably played a crucial role in my life.” In a meeting with Russia’s chief rabbi in June 2007, he promised to donate a month’s salary for the construction of a Jewish museum of tolerance. Speaking in Krakow on Jan. 27, 2005, in connection with the 60th anniversary of the liberation of Auschwitz, Putin urged other nations to consider the lessons learned from the Holocaust and warned against anti-Semitism, racism and xenophobia worldwide.
What’s more, he also acknowledged the existence of anti-Semitism in Russia — a statement that none of the Soviet leaders after Lenin dared to make. No Russian leader after 1945, including Gorbachev and Boris Yeltsin, even indirectly mentioned the Holocaust. Such a reference was forbidden in Soviet media. Moreover, Putin was also the first Russian leader to visit Israel.
Anti-Semitism in Russia today is lower than it has been in the past seven decades. Jews in Russia are much less inclined to hide their ethnic origin or their interest in Jewish culture and religion. Although Jews in Russia continue to feel some hostility, the government has never treated Jews as well as they treat them today. In fact, state anti-Semitism — as opposed to popular anti-Semitism — has almost completely disappeared from the political scene. Jews or so-called half Jews hold a large number of prominent positions in the state apparatus, including the government and leading state corporations.
To be fair, however, Putin has not fully risen to the level of a Western leader on the Jewish question with regard to one issue: Unlike Western leaders, he did not openly take a position against the two most outspoken anti-Semites of our time when he met them — Malaysian Prime Minister Mahathir Mohamad and Iranian President Mahmoud Ahmadinejad.
In the end, Putin’s refusal to incorporate anti-Semitism into his domestic and foreign policy reveals his inordinate flexibility as a politician, despite his poor record on democracy and human rights and as supporter of several heinous regimes in the world.
At the same time, however, we can only speculate about Putin’s motivation on this Jewish issue. Putin’s foreign policy combines deep hostility toward the West with a willingness to maintain a bridge with the United States and the European Union. His positive attitude toward Jews represents another part of his dualism. By maintaining the image of a civilized ruler, Putin enhances his connection with the West and keeps many opportunities open for his future career.
If, however, the danger to Putin’s elites from Russian nationalists increases, Putin could very well play the Jewish card. In this case, the Kremlin, without any compunction, could deprive its opponents of their powerful weapon, anti-Semitism, and resort to moving the regime even closer to that of Stalin. In any case, the West is dealing with a very flexible and pragmatic Russian leader.

Vladimir Shlapentokh is professor of sociology at Michigan State University.

TITLE: The Pharaohs Retain Nations Cup Crown
AUTHOR: By Jerome Pugmire
PUBLISHER: The Associated Press
TEXT: ACCRA, Ghana — Egypt won its sixth African Cup of Nations title, and second in a row, by beating Cameroon 1-0 behind Mohamed Aboutreika’s goal in the final Sunday. 
Aboutreika scored in the 77th minute, converting Mohamed Zidan’s cross for his fourth goal of the tournament. 
“It is a great feeling to score for the country,” said Aboutreika, who also netted the winning penalty in the 2006 win against Ivory Coast. “It’s not about me scoring goals, but it’s about all the players and the 80 million people supporting us back home.” 
Egyptians poured into the streets in Cairo and elsewhere in the country waving flags and beating drums late Sunday to celebrate the victory. The scene was especially dramatic in Cairo’s twin city of Giza, where crowds wielding flaming aerosol cans flooded the eight-lane Arab League street and brought traffic to a halt. 
Cameroon coach Otto Pfister had been trying to become only the second German to win the African title. It was his second attempt after leading Ghana to the 1992 final against Ivory Coast. 
Winfried Schafer won the 2002 title with Cameroon. 
Using Samuel Eto’o as a lone striker, Cameroon created few chances in the match. 
“We showed a lot of heart,” Cameroon defender Bill Tchato said. “Congratulations to Egypt. We came up against a team that deserved to win. It is no surprise that they were champions of Africa two years ago.” 
FIFA president Sepp Blatter, Ghanian President John Kufuor and former Chelsea manager Jose Mourinho attended the match. 
It was a crucial error from Rigobert Song that led to Aboutreika’s goal. 
The Cameroon captain had two chances to clear the ball but got tangled in a needless duel with Zidan and lost the ball. Zidan squared it perfectly and Aboutreika finished powerfully in the bottom right corner. 
Realizing his error, Song pulled his shirt into his mouth and pointed to the skies, as if seeking forgiveness. Goalkeeper Carlos Kameni ran over and comforted Song. 
Cameroon struggled to get shots on goal and there was no player on hand to turn home Stephane M’Bia’s cross in the 83rd. Song had a chance in injury time but headed Geremi’s cross over. 
Egypt dominated the second half, negating the threat from Eto’o, who received hardly any passes and failed to score for the third straight match. 
Hosni Abd Rabou hit the post with a header from Amr Zaky’s cross in the 62nd as the Indomitable Lions tired. 
Kameni burst into tears at the final whistle and had to be comforted by Eto’o. Defender Augustin Binya dropped to his knees and gazed into the distance as Egypt’s players rolled on the field and hugged in celebration.

TITLE: Winehouse Wins Grammys From Afar
PUBLISHER: The Associated Press
TEXT: LOS ANGELES — Trapped half a world away by the place she promised to never “go, go, go,” a vibrant, exuberant Amy Winehouse dominated the Grammys on Sunday night, winning five awards and delivering a defiant performance of her autobiographical hit “Rehab” via satellite from London.
Winehouse, nominated for six awards, lost the final prize in a shocker when Herbie Hancock took album of the year for “River: The Joni Letters.”
“You know it’s been 43 years since the first and only time that a jazz artist got the album of the year award,” Hancock said, then proceeded to honor “the giants upon whose shoulders I stand, some of whom like Miles Davis, John Coltrane ... unquestionably deserved the award in the past. But this is a new day, that proves that the impossible can be made possible.”
For a while it seemed impossible that Winehouse would perform at all. She recently entered a drug rehabilitation center after months of erratic behavior and canceled performances, not to mention the anthemic “no, no, no” resistance of her hit song.
As the ceremony approached, suspense built over whether her drug troubles would cost her a work visa. When her visa application was rejected Thursday, Grammy producers arranged for her to perform remotely. On Friday, the U.S. government reversed itself and approved the visa, but it was too late for her to make the cross-continental trek.
So she took the stage at almost 4 a.m. London time before a small cabaret audience, wearing a sly smile as she performed a sultry, soulful rendition of the hit that has defined her recent fall from grace. She looked just as coy as she sang the song “You Know I’m No Good” — almost reveling in the irony of her words.
Shortly afterward, Winehouse seemed dumbfounded when she was announced as the record of the year winner. She was immediately enveloped by her band, then her mother and father, who have publicly worried whether the 24-year-old artist would survive her demons.
“I am so proud of this album,” Winehouse told The Associated Press in a statement. “I put my heart and soul into it and it’s wicked to be recognized in this way. I feel truly honored to be mentioned in the same breath as many of the artists present tonight and to win is even more amazing!”
Her five awards were the most of the night, and included wins for best new artist, song of the year, pop vocal album and female pop vocal performance.
Winehouse’s performance was not the only dramatic moment of the night. Kanye West, who had a leading eight nominations and won four trophies, delivered an electric, glow-in-the-dark rendition of “Stronger,” then segued into a stirring tribute to his mother, Donda West, who died unexpectedly last year at age 58 after undergoing plastic surgery.
“Last night I saw you in my dreams, and now I can’t wait to go to sleep,” sang West, dressed in black and with MAMA etched into his haircut, as he launched into “Hey Mama,” a celebratory tune from his second album that has now turned into a somber ode.
West won awards for best rap album for “Graduation,” best solo performance for “Stronger,” best rap song for “Good Life” and best rap performance by a duo or group for his collaboration with Common on “Southside.”
While West was accepting the best rap album trophy, the orchestra tried to play him off the stage as he began speaking about his mother.
“It would be in good taste to stop the music,” West said — and the music stopped. “I know you’re really proud of me right now and I know you want me to be the No. 1 artist in the world.”

TITLE: ‘Jaws’ Star Scheider Dies at 75
PUBLISHER: The Associated Press
TEXT: LITTLE ROCK, Arkansas — Roy Scheider, a one-time boxer whose broken nose and pugnacious acting style made him a star in “The French Connection” and who later uttered one of cinematic history’s most memorable roles in “Jaws,” has died.
Scheider died Sunday at the University of Arkansas for Medical Sciences hospital in Little Rock, hospital spokesman David Robinson said. He was 75.
The hospital did not release a cause of death, but Scheider had been treated for multiple myeloma at the hospital’s Myeloma Institute for Research and Therapy for the past two years.
Scheider earned two Academy Award nominations — a best-supporting nod for 1971’s “The French Connection” in which he played the police partner of Oscar winner Gene Hackman, and a best-actor nomination for 1979’s “All That Jazz,” the semi-autobiographical Bob Fosse film.
But he was perhaps best known for his role as a small-town police chief in Steven Spielberg’s 1975 film “Jaws,” about a killer shark terrorizing beachgoers — as well as millions of moviegoers.
In 2005, one of Scheider’s most famous lines in the movie — “You’re gonna need a bigger boat” — was voted No. 35 on the American Film Institute’s list of best quotes from U.S. movies.
Widely hailed as the film that launched the era of the Hollywood blockbuster, “Jaws” was the first movie to earn $100 million at the box office.
“I’ve been fortunate to do what I consider three landmark films,” he told The Associated Press in 1986. “‘The French Connection’ spawned a whole era of the relationship between two policemen, based on an enormous amount of truth about working on the job.”
‘“Jaws’ was the first big, blockbuster outdoor-adventure film. And certainly ‘All That Jazz’ is not like any old MGM musical. Each one of these films is unique, and I consider myself fortunate to be associated with them.”
Born into a working class family in New Jersey, he was stricken with rheumatic fever at 6. He spent long periods in bed, becoming a voracious reader. Except for a slight heart murmur, he was pronounced cured at 17. He acquired the distinctive shape of his nose in an amateur boxing match.
After three years in the Air Force, Scheider sought a New York theater career in 1960. His debut came a year later as Mercutio in the New York Shakespeare Festival’s production of “Romeo and Juliet.” He also played minor roles in such films as “Paper Lion” and “Stiletto.” Then he made a breakthrough in 1971 as Jane Fonda’s pimp in “Klute.”
“He was a wonderful guy. He was what I call ‘a knockaround actor,’” Richard Dreyfuss, who co-starred with Scheider and Robert Shaw in “Jaws,” told The Associated Press on Sunday.
“A ‘knockaround actor’ to me is a compliment that means a professional that lives the life of a professional actor and doesn’t’ yell and scream at the fates and does his job and does it as well as he can,” Dreyfuss said.
He also appeared in the films “Marathon Man,” as Dustin Hoffman’s brother, “Klute,” with Jane Fonda, and “Naked Lunch,” David Cronenberg’s adaptation of William S. Burroughs’s novel. He starred in “Jaws 2,” which turned out not to be as successful as the original.
TV roles included “SeaQuest DSV” and “Third Watch.”

TITLE: England Hangs On To Beat Italy
AUTHOR: By Rex Gowar
PUBLISHER: Reuters
TEXT: LONDON — Jonny Wilkinson returned to something like his normal, composed self and lock Steve Borthwick led by example to help save England from a second successive Six Nations collapse at the weekend. 
England must, however, improve dramatically if they are to have a chance of upsetting joint leaders and title holders France in Paris on Feb. 23. 
The World Cup runners-up, who had thrown away their opener 26-19 to Wales in an inept second-half display at Twickenham a week earlier, held on for a 23-19 win over Italy on Sunday after a late Italian try had the team wobbling. 
Centre Jamie Noon and flanker James Haskell also stood out as England, beset by injuries, ran in early tries that ended up as insurance against an Italian fightback. 
In both matches, England had substantial first-half leads, but were on the back foot for most of the second half. 
“We failed to sustain (the pressure) and we are all aware that, unless we put in a markedly better display in the second period against France in Paris next week, we are highly unlikely to win,” Haskell said in a column in The Guardian. 
“A lot was said last week about England lacking leadership against Wales but...(lock) Steve Borthwick was vocal throughout against Italy.” 
Borthwick was named stand-in captain after prop Phil Vickery pulled out of the match on Saturday due to a stomach bug, one of a string of injury and illness woes to beset coach Brian Ashton. 
To make matters worse, Wilkinson’s replacement Danny Cipriani, who came on for the final 10 minutes with the score 23-12, soon had a kick charged down which led to Italy’s try. 
Wilkinson was quick to point out that the 20-year-old flyhalf, of whom he said “he’s the future”, quickly made amends. 
“You could tell he quickly got it sorted in his head,” Wilkinson told reporters. 
“The very next ball he took it blind and kicked it long into the same space. It closed out the game and we were crying out for someone to close out the game last week (against Wales).” 
Were it not for the fact that Ireland exposed flaws in the new French side, going down only 26-21 at the Stade de France on Saturday, England on current form would be given very long odds for another upset in Paris.

TITLE: Hockey Player’s Throat Cut by Teammate’s Skate
AUTHOR: By John Wawrow
PUBLISHER: The Associated Press
TEXT: BUFFALO, New York — Florida Panthers goalie Thomas Vokoun saw fear in Richard Zednik’s ashen face when his teammate reached the bench with blood gushing from his throat. 
“He was very scared,” Vokoun said, describing the frightening scene after the right side of Zednik’s throat was accidentally sliced by teammate Olli Jokinen’s skate during a game at Buffalo on Sunday night. “He was conscious, I guess. His eyes were closed, but he was moving and moaning.” 
As the Panthers traveled home to south Florida following a 5-3 loss, the team announced Zednik was stable and resting comfortably at Buffalo General Hospital after having surgery to close the gash that led the forward to leave a long trail of blood on the ice. 
A 12-year NHL veteran, Zednik was hurt with 9:56 left in the third period in the right corner of the Sabres zone. 
Zednik was circling the net behind the play and skating into the corner just when Jokinen was upended by Sabres forward Clarke MacArthur. Jokinen fell headfirst to the ice, and his right leg flew up and struck Zednik directly on the side of the neck. 
Clutching his neck, Zednik somehow had the capacity to race the three-quarters length of the ice to the Panthers bench, where he nearly fell into the arms of trainer Dave Zenobi, who immediately placed a towel on the player’s throat. With the help of defenseman Jassen Cullimore, Zednik was escorted up the tunnel behind the Panthers bench and loaded into an ambulance. 
Jokinen was sickened when he watched the replay and learned it was his skate that caused the cut, leaving the Panthers’ captain in no mood to continue playing. 
“It was terrifying,” Jokinen said. “If it was my call, I would have gone to the hospital with him.” 
Play resumed after a 15-minute delay, during which time crews scraped the blood off the ice and the surface was cleaned by Zambonis. NHL officials briefly considered stopping the game, but determined to continue playing after knowing that Zednik was stable and the two teams were willing to go on. 
Panthers spokesman Justin Copertino said the team was making arrangements to have Zednik’s wife, Jessica, fly from South Florida to Buffalo by a charter flight Sunday night. Zenobi and assistant general manager Randy Sexton also stayed behind to be with Zednik, Copertino said. 
Hospital spokesman Mike Hughes said he expected the Panthers to provide an update on the player’s condition on Monday. 
A hush fell over the crowd at HSBC Arena after Zednik was hurt. It wasn’t until the public address announcer said Zednik was in stable condition that fans gave a lengthy standing ovation. 
Players on both benches, though, were still shaken. 
“It was pretty solemn,” Sabres coach Lindy Ruff, said describing the mood on his bench. “There wasn’t a lot being said (on the bench). There was just more concern for Richard than anything else. 
“I can fully understand if they wanted to cancel the whole game,” Ruff added. “When you see something like that, it isn’t about playing anymore. But I said, ‘We’re going to finish the game and it’s going to be what it’s going to be.”’
The NHL released a statement, saying: “The thoughts and prayers of the NHL family are with Richard Zednik, his loved ones, his teammates and the Florida Panthers organization.” 
Sabres general manager Darcy Regier credited both Zednik for having the awareness to head to the bench and also the NHL for mandating physicians be on hand and near the bench during games. Regier said doctors were already waiting in the tunnel behind the Panthers’ bench when Zednik was escorted off. 
Zednik’s injury was eerily reminiscent of an injury sustained by Sabres goaltender Clint Malarchuk about 19 years ago at Buffalo’s Memorial Auditorium. On March 22, 1989, Malarchuk severed his jugular vein when St. Louis Blues forward Steve Tuttle was upended while skating toward the crease, slicing Malarchuk with a skate. 
Malarchuk required over 300 stitches but spent only one night in the hospital, returning to practice after four days. On April 2, he played the final five minutes in the season finale, less than two weeks after his injury. 
It was the second serious injury caused by a skate this weekend. 
On Saturday, NHL linesman Pat Dapuzzo needed dozens of stitches to close a cut on his face after he was hit by the skate of Philadelphia Flyers forward Steve Downie in a game against the New York Rangers. 
Dapuzzo, scheduled to retire at the end of the season, didn’t return after the second-period injury. 
Zednik has 15 goals and 11 assists this season, and had a four-game point streak (three goals, six assists) end on Sunday.

TITLE: Stars Make Obama Hit
PUBLISHER: Agence France Presse
TEXT: WASHINGTON — Black Eyed Peas frontman Will.i.am was so inspired by a speech given by White House hopeful Barack Obama that he turned it into a music video filled with celebrities singing the Democrat’s words.
Will.i.am says on his website that he made the song, entitled “Yes We Can,” after hearing the silver-tongued candidate’s speech at the primary in New Hampshire, where he lost to Hillary Clinton, in which he repeatedly intoned those three words.
The video opens with a black-and-white shot of Will before cutting to a shot of actress Scarlett Johansson, as an acoustic guitar is strummed in the background.
In the fourth bar, Will sings and Obama speaks the words of the speech the Democratic candidate gave in New Hampshire, which lends itself with ease to a musical cadence:
“It was a creed, written in the founding documents, that declared the destiny of the nation: yes, we can.”
As the song and speech continue, images of Obama are juxtaposed or swap the screen with shots of celebrities including basketball legend Kareem Abdul-Jabbar, jazz great Herbie Hancock, model-turned-actress Amber Valletta and Johansson.
The video ends with the word “hope” morphing into “vote.”
“I was never really big on politics ... and actually I’m still not big on politics,” Will.i.am wrote on his blog.

TITLE: Piaf Role Wins BAFTA For Cotillard
PUBLISHER: Bloomberg
TEXT: LONDON — French actress Marion Cotillard and U.S. filmmaking duo Joel and Ethan Coen were surprise winners of this year’s British Academy Film Awards, or Baftas, defeating a slew of U.K. competitors.
Cotillard, 32, who portrayed the celebrated singer Edith Piaf in “La Vie en Rose,” won the best-actress award. She beat U.K. actress Julie Christie, 66, a Golden Globe winner and an Academy Award nominee for her poignant role as an Alzheimer’s patient in “Away From Her.”
“You don’t expect for a French movie to have success even in France,” Cotillard, wearing a sparkling silver mini-dress, told a cluster of reporters backstage. “I was so happy the movie had this beautiful success here.” Her film garnered four awards, the most this year, including those for music, make-up and hair, and costume design.
Daniel Day-Lewis won the best-actor Bafta for his role as the cruel American oil baron in Paul Thomas Anderson’s “There Will Be Blood.” The same part won Day-Lewis a Golden Globe and an Oscar nomination. U.K. movie “Atonement” was voted best film. It won only one other of the 14 prizes for which it had been shortlisted.
The mask-like trophies were handed out in a red-carpet gala ceremony at London’s Royal Opera House last night.
In terms of number of prizes, the second-biggest winner was the Coen Brothers’ “No Country for Old Men,” about a hunter in west Texas who is chased by a loopy killer after discovering drugs and cash. The brothers carried home the best-director trophy. Passed up were Joe Wright — the young Briton who made “Atonement” — and Paul Greengrass, another British national, who was a runner-up with “The Bourne Ultimatum.”
“We have made movies for many years, many of which have actually gotten a very warm reception, sometimes a warmer reception in Europe and the U.K. than they have even in America,” Joel Coen told reporters. “For that reason, and for other reasons, this is very special to us. We also work with lots and lots of British crew.”
Another “No Country” winner was Spanish actor Javier Bardem, who took home the best-supporting actor trophy for his part as the mad murderer. 
“Working with the Coen brothers is always easy,” said Bardem, trading the helmet-like bob he had in the film for a stylish haircut. “They make people feel just fine, and don’t take themselves very seriously.”

TITLE: Man City Beats Man Utd As Teams Honor Munich Dead
AUTHOR: By Mike Collett
PUBLISHER: Reuters
TEXT: MANCHESTER, England — Manchester City honored the memory of Manchester United’s tragic 1958 Busby Babes before showing no regard for their arch-rivals’ current title ambitions with an unexpected 2-1 win at an emotional Old Trafford on Sunday.
After the fans of both clubs had observed a minute’s silence to mark the 50th anniversary of the Munich air crash that killed 23 people including eight United players, City stunned United with an excellent performance to win at Old Trafford for the first time since 1974. 
First-half goals from Darius Vassell and debutant Benjani Mwaruwari also gave them their first league double over United since 1969 and sent United crashing to their first home league defeat of the season. 
Substitute Michael Carrick’s well-taken stoppage-time goal was no more than a consolation for the home side, who played in a 1958-style kit without logos or markings apart from the numbers on their backs as a mark of respect to the Munich victims. 
Although the kit evoked memories of the great United side that was virtually wiped out at Munich, their performance on the day did not. 
City, with skipper Richard Dunne outstanding in defense and Stephen Ireland and Martin Petrov battling for everything in midfield, well deserved the win that has seriously hit United’s hopes of retaining their title. 
The result put City in seventh place with 44 points from 26 games, on the same points as fifth-placed Liverpool who drew 0-0 with Chelsea at Stamford Bridge. 
Arsenal, who play Blackburn Rovers on Monday, have 60 points from 25 matches and victory will move them five points clear of United, who have 58 from 26. Chelsea have 55 from 26. 
City withstood almost constant but not particularly effective United pressure in the second half with Carlos Tevez, Ryan Giggs and the out-of-sorts Cristiano Ronaldo failing to take any of the chances that came their way. 
United took control in the early stages but City had begun to assert themselves by the time they took the lead through Vassell after 24 minutes. He scored with a second chance after goalkeeper Edwin van der Sar blocked his first effort. 
United, who narrowly avoided defeat at Tottenham Hotspur last week with a stoppage-time equalizer from Tevez nearly pulled level through Tevez again three minutes later. 
The Argentine did well to slam in a volley from the edge of the box, only for Joe Hart to make a fine save. 
Instead it was City who scored the next goal. Petrov, collecting the ball after United failed to clear a corner, swept it back towards the United goal and debutant Mwaruwari, making his first appearance following his protracted transfer from Portsmouth, glanced the ball inside the far post to make it 2-0. 
Although United carried the game forward, their passing was poor, they made too many mistakes and they missed the threat of the suspended Wayne Rooney up front. 
On a day of rare emotion at Old Trafford and in front of Prime Minister Gordon Brown, survivors of the crash and the families of the victims, it was the blue half of the city who made the most of the occasion.

TITLE: Russia Beats Ailing Serbia in Davis Cup
AUTHOR: By Chris Lehourites
PUBLISHER: The Associated Press
TEXT: LONDON — Russia took advantage of an ailing Novak Djokovic to reach the quarterfinals of the Davis Cup on Sunday, when Germany and Sweden also advanced. 
The United States, Argentina, the Czech Republic, Spain and France all reached the quarterfinals on Saturday. 
The Russians, who lost to the U.S. in last year’s final, earned their decisive point in the 3-2 win over Serbia when Djokovic withdrew from the first reverse singles match despite leading Nikolay Davydenko 6-4, 6-3, 4-6. 
“I decided to stop because I don’t want to risk my health,” the Australian Open champion said. “I wanted to fight. I tried to play, but in the end I was aware of the fact that I am very dizzy and I have a lack of energy. I just didn’t want to continue because of the risk I had.” 
Sweden rallied to beat Israel 3-2, winning both reverse singles matches Sunday, and Philipp Kohlschreiber gave Germany the winning point in a 3-2 win over South Korea in the best-of-five series by beating Lee Hyung-taik 6-0, 4-6, 6-1, 7-6 (1). 
Djokovic, who was playing his first singles match since winning the Australian Open, withdrew from the opening singles Friday because of the flu. But he played doubles Saturday, partnering with Nenad Zimonjic to give Serbia its first point. 
Russia will play the Czech Republic in the quarterfinals in April. The Czechs lost both reverse singles matches Sunday but still beat Belgium 3-2. 
The United States, which won its record 32nd Davis Cup title last year, took a 4-1 victory on clay at Austria. The U.S. will face France in the next round. 
Stefan Koubek earned Austria’s lone point when Mike Bryan retired while trailing 7-5, 1-0. Bryan’s brother Bob, the other half of the winning doubles team, defeated Werner Eschauer 6-0, 3-6, 7-6 (3) in the final match. 
The French team swept Romania 5-0 with Michael Llodra and Arnaud Clement winning Sunday. 
Thomas Johansson and Jonas Bjorkman kept Sweden in the competition at Israel. Johansson defeated Dudi Sela 7-6, 6-1, 7-5 to even the score at 2-2 and Bjorkman recovered from a horrible first set to beat Harel Levy 0-6, 6-4, 6-3, 7-6 (6). 
The Swedes, who reached the semifinals last year, will play Argentina in the quarterfinals. 
The Argentines beat Britain 4-1, with Jose Acasuso defeating Alex Bogdanovic 7-5, 7-5 in the first reverse singles match and Jamie Baker giving the visitors a point by beating Agustin Calleri 7-6 (7), 6-4 in the second. 
Kohlschreiber got his third win of the series to help Germany advance past South Korea, serving two aces in the fourth set tiebreaker. 
“The whole week has been great for me,” Kohlschreiber said. “I dominated from the start.” 
The Germans played without Tommy Haas, who has a shoulder injury. 
Germany next gets Spain, which won 5-0 at Peru as Tommy Robredo and Nicolas Almagro won reverse singles matches on Sunday.

TITLE: Losing Coventry Fires Coach
PUBLISHER: Bloomberg
TEXT: LONDON — Coventry City today fired manager Iain Dowie following a run of five defeats in six league games, which leaves it four points above the relegation zone in the second-tier Championship. 
Dowie, his brother Bob and coach Tim Flowers “have been relieved of their duties with immediate effect,” Coventry said in a statement on its Web site. Frankie Bunn and John Harbin will take charge for tomorrow’s home match against Cardiff City. 
Former Oldham, Crystal Palace and Charlton manager Dowie won 20 of his 49 games in charge of Coventry since joining a year ago, with 21 defeats. 
The team beat Manchester United 2-0 at Old Trafford in the Carling Cup in September and won 4-1 at Blackburn in the F.A. Cup last month. The Sky Blues play West Bromwich Albion in the F.A. Cup fifth round on Feb. 16.