SOURCE: The St. Petersburg Times
DATE: Issue #1375 (39), Friday, May 23, 2008
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TITLE: Medvedev On China Mission
AUTHOR: By Lyubov Pronina and Dune Lawrence
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russian President Dmitry Medvedev was due to arrive in China on Friday for a two-day mission to persuade the world’s fastest-growing major economy to buy more than just energy from his country.
“Natural resources dominate our exports to China,” said Sergei Sanakoyev, director of the Russia-China Center for Trade and Economic Cooperation, a member of the delegation whose institute monitors the bilateral trade. 
“This doesn’t satisfy Russia. Discussions will focus on specific measures to increase high-tech and innovative exports to China,” Sanakoyev said. 
The visit is part of Medvedev’s first international trip since becoming president on May 7. En route, he stopped off in neighboring Kazakhstan on Thursday to meet his counterpart, Nursultan Nazarbayev.
“The fact that Kazakhstan was chosen is an acknowledgment of the role it plays in the former Soviet Union and its increasing influence in the region,” said Fyodor Lukyanov, an analyst at the Council on Foreign and Defense Policy in Moscow.
Kazakhstan is the second largest of five states bordering the energy-rich Caspian Sea and holds about 3 percent of world’s oil. Nazarbayev will propose forming an economic union with Russia, Russian newspaper Kommersant reported Thursday.
The visit to Kazakhstan demonstrates the “cooperation of particularly trusting and fraternal relations that have been established between Russia and Kazakhstan,” Medvedev said during his meeting with Nazarbayev in the capital, Astana. “Such a beginning is a good continuation of what has been achieved in the past year by you and President Putin.”
Several Russian businessmen are accompanying Medvedev on his trip, Sanakoyev said. They include: Vladimir Yevtushenkov, the billionaire chairman of AFK Sistema, which has interests in telecommunications, technology, real estate and retailing; Mikhail Pogosyan, chief executive officer of Sukhoi Aviation Holding Co.; Valery Okulov, CEO of Aeroflot, Russia’s largest airline; and Andrei Kostin, CEO of VTB Group, the country’s second-largest bank.
China’s economy expanded by 11.4 percent last year. Its trade with Russia grew almost fivefold to $48 billion during the eight-year tenure of Medvedev’s predecessor, Vladimir Putin, and may rise to $80 billion in 2010, Sanakoyev said. Russia is the world’s biggest energy exporter.
Russia may seek investment in more than 30 projects worth about $3 billion, presidential aide Sergei Prikhodko told the Interfax news service. 
He said Russia wants China to participate in plans to build Olympic facilities in Sochi, a Black Sea resort and site of the 2014 Winter games, and develop projects in Vladivostok, which will host the Asia-Pacific Economic Cooperation summit in 2012.
China has indicated that it will be a receptive host.
“Russian exports of machinery and electronics have slowed down in recent years,” Chinese Assistant Foreign Minister Li Hui told reporters in Beijing. “China’s ready to work with Russia to find a solution to this issue.”
A unit of Yevtushenkov’s Sistema has been in talks with China’s ZTE Corp. to produce telecommunications equipment in China. Sistema CEO Alexander Goncharuk said last week that negotiations were “three-fourths of the way” to completion.
China is also likely to buy more nuclear-power plants from Russia. “There is a high probability” that China will order more Russian nuclear reactors, Russia’s ambassador to China, Sergei Razov, told reporters in Beijing May 20. Agreement may be reached on the purchase of two additional reactors for China’s Tianwan nuclear power plant, said Irina Yesipova, a spokeswoman at Atomstroiexport, Russia’s nuclear-reactor builder. 
The company completed construction of two units last year at the plant, on the coast north of Shanghai, under a 1997 contract.
Russia and China are core members of the Shanghai Cooperation Organization, a regional-security group established in 2001. 
They held military exercises in 2005 and 2007, asserting power in energy-rich central Asia. Putin, who became prime minister upon Medvedev’s ascension, last year told Chinese President Hu Jintao that Russia won’t change its policy toward China “in the next few years.”
Medvedev’s visit to China “is a strong statement that he’ll oversee the continued internationalization of Russia rather than simply lead it into the West,” said Chris Weafer, chief strategist at Moscow-based UralSib Financial Corp.
In Beijing, Medvedev, 42, is scheduled to meet Hu, 65, and Premier Wen Jiabao, 65 and deliver a speech at Beijing University.

TITLE: Path Is Cleared for Renewed Partnership Talks With EU
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — In a double dose of good news, the European Union agreed Wednesday to start long-delayed partnership talks with Russia, and the next EU president, France, said it was keen to improve relations. 
President Dmitry Medvedev and visiting French Foreign Minister Bernard Kouchner discussed ways to improve EU-Russia ties during France’s six-month EU presidency, which begins July 1. 
Prime Minister Vladimir Putin will fly to Paris on May 29 and 30 for a working trip that might include a meeting with French President Nicolas Sarkozy, a Russian government official said. 
In Brussels, EU member states approved a mandate for starting new partnership talks with Russia after including Lithuania’s concerns over its relations with Moscow. 
“A common agreement has been reached in Brussels, and we are pleased that all the issues have been included into the mandate,” Lithuanian Foreign Ministry spokeswoman Violeta Gaizauskaite said by telephone from Vilnius. 
“Lithuania has never been against the start of the EU-Russia talks,” she said. 
Lithuania had blocked agreement on the mandate, saying it wanted it to include resumption of oil supplies from Russia, Moscow’s cooperation on judicial issues, and the solution of “frozen conflicts” in Moldova and Georgia, among other conditions. 
The mandate for the talks is expected to be rubber-stamped at an EU foreign ministers’ meeting Monday. EU spokeswoman Christine Hohmann said the meeting’s agenda stipulated that the mandate would be adopted without further discussion. She added, however, that she could not guarantee anything. “We certainly hope for the adoption on Monday,” she said. 
The mandate would mean that talks on a new framework agreement that covers trade, energy and foreign policy could start at the EU-Russia summit in the Siberian oil town of Khanty-Mansiisk in late June. Russian and EU officials failed to reach any agreements at a similar summit near Samara last May, when Germany held the bloc’s rotating presidency. German Chancellor Angela Merkel, European Commission President Jose Manuel Barroso and then-President Putin spoke of a need to cooperate but disagreed on almost every issue. 
Adopted in 1997, the 10-year agreement was automatically extended after Poland blocked talks on a new agreement over a Russian ban on Polish food imports. Warsaw lifted its veto earlier this year. 
The start of negotiations does not signal the end of wrangling within the EU’s old and new members but rather the start of long and difficult partnership talks over energy and other issues, said Alexander Rahr, an analyst with the Korber Center for Russia and the CIS in Hamburg. 
The talks on the new framework document could be more difficult than agreeing on the mandate, he said. “There are too many problems on the agenda, especially energy,” he said. 
EU officials acknowledged the complicated nature of the looming talks. 
“The important thing is that we have the agreement of all members to adopt the mandate, while problematic questions will still be a matter of the talks,” Slovenian Foreign Minister Dimitrij Rupel, whose country currently holds the EU presidency, told reporters in Ljubljana. 
Kouchner, the French foreign minister, predicted that the new partnership agreement would go into force by early next year. 
He acknowledged in televised remarks that the EU remained divided in its approach to Russia, adding, “Therefore, we need to work together to reach a unified position.” 
Kouchner, speaking to reporters, said he believed that the EU would propose to Russia a timetable on the cooperation pact in May or June. 
An EU official said the talks would almost certainly drag out. “Given the importance of the EU-Russia energy partnership and given a list of issues on the agenda to be discussed, the discussion is going to a be long one,” said the official, speaking on customary condition of anonymity. 
Foreign Minister Sergei Lavrov welcomed the opportunity to start the talks. 
“Russia has been ready for these negotiations for a long time. We have been waiting patiently for the European Union to reach the same level of readiness,” he told reporters. 
Speaking to Medvedev in the Kremlin, Kouchner said his visit was part of France’s preparations to assume the EU presidency. 
“We’d like to improve our ties further,” he said of the EU-Russia ties, “and the ties between our France and the great Russia.”

TITLE: Fears Of Radiation Leak Grip Region
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Panic gripped many in the city Wednesday after rumors spread that a serious accident had happened at the Leningrad Nuclear Power Station (LAES) in Sosnovy Bor, a town 70 kilometers west of St. Petersburg. 
The power station operates four Chernobyl-type reactors and has a history of minor accidents.
Hundreds of people stormed local pharmacies, emptying stocks of iodine, while teachers in kindergartens and nurses in some hospitals shut windows in fear.
Internet forums overflowed with “eye witness” accounts of the first victims of radiation poisoning arriving at hospitals, and a radioactive cloud moving toward the city at speed.
But in a rare case of agreement between environmental groups and officials, LAES’s managers and independent ecologists said the rumors were false.
The Emergency Situations Ministry distributed an official statement Wednesday saying that LAES is operating as usual and there were no abnormalities in the radiological environment.
Dmitry Pulyayevsky, head of the Sosnovy Bor city administration, branded the propagation of rumors of the accident as “information terrorism.”
“The rumors were distributed with astounding skill: the plotters apparently called kindergartens and medical institutions with warnings, perhaps introducing themselves as representatives of security services,” he told reporters. 
Pulyayevsky said residents of Sosnovy Bor reacted skeptically to the rumors. 
“Most of them are in some way connected to the station, and knowing it well, they are capable of adequate judgement,” he added.
Galina Pavlova, a local PR manager whose parents — both physicists — live in the town of Sosnovy Bor where the station is located, called them in panic on Wednesday afternoon, after hearing rumors about an accident.
“Friends were calling all the time to tell me about the rumors and asking if it was true,” Pavlova recalls. “Everyone was really agitated, and I did not know what to think.” 
Pavlova’s parents, who do not work at the nuclear power station but have numerous friends there, reassured her.
“They said that the rumors were groundless and untrue, and no one was leaving Sosnovy Bor or taking iodine, including themselves,” Pavlova said. 
Other St. Petersburgers had no such reliable source of information and hundreds called local media outlets and environmental groups to find out more about the incident.
It is unknown whether the incident was a deliberate provocation or the result of a misunderstanding.
“Some people could have seen, for example, a regional exercise carried out by the Emergency Situations Ministry and got it wrong,” said Vladimir Asmolov, deputy head of Rosenergoatom, the national nuclear power stations operator. “The sight of paramedics dressed in full gear can potentially serve as an impulse for rumors like this.”
The Sosnovy Bor prosecutor’s office is investigating the case and is looking to establish who, if anyone, orchestrated the hoax.
“We started checking the facts immediately after receiving the first phone calls and have not established anything yet,” said Rashid Alimov of the environmental pressure group Bellona. 
Environmentalists at Green World, an ecological organization that focuses on monitoring LAES and is located in Sosnovy Bor, said radiation levels remained normal and no evidence of an accident was seen.
Activists from the local branch of the international environmental organization Greenpeace said their members have checked radiation levels both in Sosnovy Bor and in various parts of the city, and found no deviations.
But the ecologists found it suspicious that the original source of information has been impossible to establish. 
“The people who rang us sounded very scared but they weren’t able to tell us where exactly the information came from,” Alimov said. “We were told very vague things, like ‘someone called a kindergarten’, ‘someone at the Pavlov Medical Institute said it’.”
In the meantime, Bellona said they are determined to get to the bottom of the case.
“We must establish if there was any fact that could have been misinterpreted or distorted to spark the rumors,” Alimov said. 
The ecologist said that in 2005 a similar panic was caused by an explosion at Ecomet-C, a private enterprise situated in the power station which processes radioactive waste. Three people died in that accident.
“Minor incidents are relatively common at the station: on May 15, the plant’s safety system automatically closed down one of the reactor blocks, which shortly resumed its work,” Alimov said. 
In order to establish the truth, Alimov called for an independent investigation.

TITLE: Moscow Court Denies Storchak Bail
AUTHOR: By Catrina Stewart
PUBLISHER: Staff Writer
TEXT: MOSCOW — A Moscow court denied bail Wednesday to Sergei Storchak, the deputy finance minister who has been held in pretrial detention on corruption charges since November. 
The appeal, which took place in a small courtroom in the Moscow City Court in the northwest of the city, was packed with friends and relatives of the defendant. Storchak himself appeared by video link from a holding cell in Lefortovo Prison. 
The judge ordered Storchak to remain in detention until July 9, upholding a decision in April to extend his pretrial detention while the preliminary investigation is completed. Prosecutors hope to compile their evidence by July. 
Storchak, who was Russia’s foreign debt negotiator and overseer of the $160 billion oil stabilization fund before his arrest, has been accused of attempting to embezzle $43 million from state budget funds. His arrest has been widely interpreted by analysts as an effort by sparring Kremlin cliques to put pressure on liberal Finance Minister and Deputy Prime Minister Alexei Kudrin. 
The prosecution argued Wednesday that Storchak’s release from custody could jeopardize the case. “If released, Storchak could flee the investigation and the court and influence the outcome of the criminal case,” the lead prosecutor said in court. 
The defense dismissed concerns that Storchak would flee the country or put pressure on witnesses if granted bail as “fantasy.” 
They also complained that Storchak had been denied the right to attend the hearing in person, violating his constitutional rights to a proper defense. 
Storchak’s lawyers have criticized the prosecution’s handling of the case, claiming that there has been no proper investigation of the charges while their client has languished in jail. The prosecution has rejected the claim, arguing that the case’s sensitivity has complicated the investigation. 
“The investigators are blindly pursuing their own line, without worrying about fabrications,” Storchak said via video link. 
The investigation appeared to stall recently when Dmitry Dovgy, the officer in charge of the case, was moved from his post after an inquiry found him to have broken rules on the disclosure of confidential information. 
Storchak’s lawyers criticized the decision after the hearing, saying investigators had yet to produce any evidence to implicate Storchak. 
“Your job is to ask, ours [as lawyers] is to show,” said Igor Pastukhov, one of Storchak’s lawyers. 
Kudrin and several State Duma deputies have called for Storchak’s release from pretrial detention, saying he would not go into hiding and would cooperate fully with the investigation. Kudrin has said he would personally vouch for Storchak.

TITLE: Trial in Estonia Angers Moscow
AUTHOR: By Nikolaus von Twickel
PUBLISHER: Staff Writer
TEXT: MOSCOW — The trial of a World War II Red Army veteran on charges of genocide in Estonia has drawn angry charges from the Foreign Ministry and promises from State Duma deputies on Wednesday that they will issue a formal condemnation of the case.
The trial of Arnold Meri, 88, for his part in the deportation of 251 Estonians to Siberia after the war has rekindled the tensions surrounding the movement of “The Bronze Soldier,” a Soviet-era memorial, from central Tallinn to a cemetery last year.
“The epic of the Bronze Soldier is not over,” Nikolai Kovalyov, chairman of the Duma’s Veterans’ Affairs Committee, told the parliament Wednesday. He added that a formal declaration was in preparation, RIA-Novosti reported.

TITLE: Abramovich Buys $120M
In Paintings
PUBLISHER: Agence France Presse
TEXT: LONDON — The Russian billionaire Roman Abramovich is the mystery buyer of two paintings by Francis Bacon and Lucian Freud that sold for record prices at auction this week, The Art Newspaper said on its website.
It said Abramovich, 41, who owns English Premier League football side Chelsea, bought Bacon’s “Triptych”, which sold for $86.2 million at Sotheby’s in New York on Thursday.
Two days before, he purchased Freud’s 1995 painting “Benefits Supervisor Sleeping” for $34 million at Christie’s, also in New York.
Bacon’s three-panel work from 1976 set a new record for a painting by an Irish artist while Freud’s work is now the most expensive ever by a living artist.
The Art Newspaper said neither auction house discloses information on buyers but said “sources close to the market confirm that Mr. Abramovich... purchased both lots, apparently for display in his London home.”
“He has not previously been known to purchase works of art at this level. These purchases demonstrate how the balance of power in the art world is shifting away from the U.S.,” it added.
Abramovich is estimated to have a $23 billion fortune from the oil and gas sector according to this year’s Sunday Times Rich List.
The Art Newspaper, which is based in London, reported earlier this week that Abramovich’s girlfriend, Daria Zhukova, is to open a new art gallery in Moscow in September and has long-term plans for a permanent collection.

TITLE: Georgia Polls Show Ruling Party Ahead
AUTHOR: By Misha Dzhindzhikhashvili
PUBLISHER: THE ASSOCIATED PRESS
TEXT: TBILISI, Georgia — Partial returns Thursday and an exit poll showed President Mikhail Saakashvili’s ruling party heading for a strong majority in Georgia’s parliamentary election, drawing a challenge from his opponents.
A dispute over results could set the stage for another round of political squabbling that has spilled into Tbilisi’s streets repeatedly over the past year, but a late-night opposition rally fizzled.
The election was seen as a test of the pro-Western leader’s commitment to democracy, crucial to his aim of bringing the former Soviet republic into NATO.
Returns from 554 of some 3,500 polling precincts gave Saakashvili’s United National Movement more than 62 percent of the vote by party list, the Central Election Commission said on its Web site hours before dawn Thursday.
The main United Opposition bloc was a distant second with more than 14 percent, it said.
The preliminary numbers were roughly in line with exit poll results released after polls closed Wednesday. Saakashvili’s opponents rejected those findings, accused the authorities of widespread violations and vowed to contest the official results.
Opposition leaders, who were unable to keep up the momentum of protests claiming fraud following Saakashvili’s re-election in January, had been hoping for a much larger crowd.
United Opposition co-leader David Gamkrelidze alleged widespread cheating and pressure on opponents by authorities in areas outside Tbilisi.
“There was total falsification, especially in the regions,” he said by telephone. “According to our data, the picture is totally different.”
Opposition leaders released their own partial results, which they said were based on data from polling precincts. They showed the numbers on a big screen at the rally, where activists handed out white masks bearing the slogan “You can’t falsify any more” in curly Georgian lettering. They claimed that in Tbilisi, the United Opposition was ahead with more than 40 percent of the vote, to 32 percent for the United National Movement. But Saakashvili’s party was confident of its win.
“It is certainly only preliminary information, but the gap is so great that it is unlikely that the situation is going to change fundamentally,” said David Bakradze, a former foreign minister for Saakashvili who is expected to be his party’s candidate for Parliament speaker.
The United States and European Union have hoped the election would restore the U.S.-allied leader’s reputation for democracy after a violent crackdown on opposition protesters last fall. Saakashvili also was under pressure to improve on January’s presidential election. Although international observers said the overall balloting was in line with democratic standards, they pointed to an array of violations and urged Georgia to do better in the parliamentary election.
The vote was colored by tension over Russia’s growing support for breakaway Abkhazia province, where gunfire broke out Wednesday along the border with Georgian-controlled territory.
Abkhazian forces fired on two buses carrying Georgian residents from Abkhazia’s Gali district who had crossed into Georgian-controlled territory to vote, and several people were wounded, Georgian Interior Ministry official Shota Utiashvili said.
In Moscow, Col. Igor Konashenkov, a spokesman for some of the Russian infantry forces serving as peacekeepers in Abkhazia, said automatic weapons fire and grenade explosions had been reported.
Hostility between Georgia and Abkhazia has escalated in recent weeks, with each side accusing the other of preparing for military action. Russia, which has long supported Abkhazia, has bolstered its peacekeeping forces in the region.
The opposition parties share Saakashvili’s wariness of Russia and his pro-Western views, so the heightened tension over Abkhazia has been more a platform for scoring points than for major policy debate.
His opponents accuse him of sacrificing democracy and human rights for the sake of holding on to power.
Saakashvili was elected by a landslide after leading the Rose Revolution in 2003, a mass protest over allegations of widespread fraud in an election for Parliament, but his popularity has faded amid persistent poverty and accusations of authoritarianism.

TITLE: New University Head Appointed
PUBLISHER: The St. Petersburg Times
TEXT: A former teacher of President Dmitry Medvedev and head of the Law Department at St. Petersburg State University or SPbGU, was elected Wednesday to head the university, one of Russia’s leading higher educational institutions.
Nikolai Kropachyov was welcomed to the post by the former head of SPbGU, Lyudmila Verbitskaya.
“He is a talented person, and an excellent specialist, organizer and leader,” Verbitskaya said, Interfax reported.
Verbitskaya said she was sure that Kropachyov will give the development of the university new energy.
Kropachyov was elected rector for a term of five years, winning 83 percent of the vote or 274 out of 334 votes cast by an election conference of academics and administrators. His only competitor, the head of the International Relations Department Konstantin Khudolei, withdrew his candidature. The speaker of the Federation Council, Sergei Mironov, said SPbGU had good prospects under the new rector.
“I’m glad that it was Kropachyov whose candidature was proposed. He is a really good leader and organizer,” Mironov said, Interfax reported.
Verbitskaya, 72, retired as rector in February and was then elected the university’s first president, a largely honorary role.
Kropachyov graduated from Leningrad State University (now SPbGU) in 1981 and pursued post-graduate studies there until 1984. In 1998 he became the head of the university’s Law Department, and in 2006 he was appointed the first pro-rector.
Kropachyov is a doctor of Legal Science and taught Medvedev when the president studied in his faculty in the 1980s and 1990s.

TITLE: Gazprom Sells Izvestia Stake
PUBLISHER: Reuters
TEXT: MOSCOW — Gazprom has sold its majority stake in the Izvestia newspaper to a firm linked to a businessman believed to be a close ally of Prime Minister Vladimir Putin.
Gazprom-Media said in a statement Wednesday that it had ceded control over a 50.19 percent share in Izvestia to the SOGAZ insurance company.
SOGAZ is part of a group controlled by Bank Rossiya, whose chairman is Yury Kovalchuk. Kovalchuk is thought to have close ties to Putin, and the two were part of a select group that owned a cluster of villas near St. Petersburg in the 1990s.
Izvestia had an average readership of 371,000 from May to October last year, according to market research firm TNS Gallup Media, making it one of the country’s most widely read broadsheet newspapers.

TITLE: Foreign Investment Plummets
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russian foreign direct investment fell 43 percent in the first quarter as investors avoided emerging markets in the global credit crunch.
Direct investment totaled $5.59 billion, while total foreign investment, including credits and flows into the securities markets, was $17.3 billion, 30 percent less than a year earlier, the Moscow-based Federal Statistics Service said in an e-mailed statement on Wednesday. Foreign investment in stocks and bonds fell 44 percent to $107 million, it said.
Foreign direct investment doubled last year to $27.8 billion as economic growth fueled a boom in consumption. Gross domestic product in the world’s biggest energy exporter rose 8.1 percent last year, the highest since 2000. Investment growth will probably pick up again, economists said.
“Foreign investment will rebound this year, fueled by a consumer and spending boom in Russia,” Yaroslav Lissovolik, chief economist at Deutsche Bank in Moscow, said in a phone interview Wednesday.
The infrastructure sector and the retail industry will probably draw the most foreign funding in 2008, he said. 
Cyprus is the largest foreign investor in Russia followed by the Netherlands, Luxemburg and the U.K., according to the Statistics Service.

TITLE: Vanity Boutique Building Up for Auction
AUTHOR: By Gleb Krampets 
and Natalya Chumarova
PUBLISHER: Vedomosti
TEXT: The developer Vasily Sopromadze plans to sell the Vanity boutique complex located at 3 Kazanskaya Ulitsa for $80 million at a Property Fund auction.
Sopromadze expects to sign a contract with the St. Petersburg Property Fund next week for the sale of the building.  Negotiations with the developer are close to completion and the auction could take place in the fourth quarter of this year, confirmed the fund’s head of private property deals, Nikolai Yablokov, via the fund’s press service.
The building was constructed in 2005 and has a total area of 6,000 square meters, including 4,377 square meters of commercial space.  There are currently two tenants at 3 Kazanskaya Ulitsa - the Vanity Opera boutique gallery and Terrassa restaurant. According to Sopromadze, the contracts are binding through 2020 and the annual revenue from the lease of the complex is between 5 million dollars and 5 million euros.  This figure could increase in 2010, as the rental rates are to be reviewed every five years according to the terms of the contract, Sopromadze said.
The manager of Vanity Opera, Regina Savostina, declined to comment.
Sopromadze wants to put the building up for auction at a starting price of $80 million, or $13,000 per square meter. Yablokov also said the starting price for the lot was about $80 million.  He is confident that there will be intense competition to buy the building.  “It’s the only shopping center next to Nevsky Prospekt that was built recently and can meet all current requirements,” he said.
“There are no other buildings like that next to Nevsky Prospekt, but the price is excessive,” said Igor Vodopianov, manager of Teorema management company.  “It will be difficult to find a buyer when the payback period of the deal is more than 15 years.  I’ll be surprised if Vasily [Sopromadze] can sell it,” Vodopianov said.
Fifteen years is the usual payback period for sales of completed buildings, according to Vladislav Golikov, general director of Biznes Soyuz (Business Union) development company, which in April bought 12 Mayakovskaya Ulitsa at a Property Fund auction.  His company, however, is not likely to take part in the tender.  The building will most likely be of interest not to developers, who make a profit from the increased value of buildings once they are completed, but to investment funds, for whom a stable revenue is more important, according to Golikov. 
Dmitry Kryukov, manager at Kazimir Partners investment fund, said that the value of the building on Kazanskaya Ulitsa had been greatly overestimated. “The ratio of the building’s revenue to its cost is about eight percent, and we only deal with revenues of a minimum of 13 percent,” he said.
“For $80 million or more, the building will only be acquired by investors interested in projects like this one.  For speculators focusing on market conditions, a more realistic price would be $60 million,” said Nikolai Kazansky, director of investment consulting at the St. Petersburg office of Colliers International.  The facilities could also be converted into a business center, he added.

TITLE: IN BRIEF
TEXT: Prisma Plans 2nd Store
n ST. PETERSBURG (SPT) — Finland’s SOK Corporation is to open a second Prisma hypermarket in St. Petersburg in the autumn. The hypermarket will cover about 8,500 square meters and will be located in a new shopping center in the Leningrad Oblast. The center, located on the road leading from St. Petersburg to Toksovo, will have an area of 18,200 square meters and will include over 30 stores, a fitness center and restaurants.
“This and next year, we are set to open three to five Prisma hypermarkets and supermarkets in St Petersburg, and in the long term we expect to open 15 to 20 units,” SOK Retail’s managing director Vesa Punnonen said on Thursday. 
The first Prisma store will open its doors in the summer, in the Hotel Moskva’s shopping and business center. SOK already has three hotel projects in St. Petersburg, the first of which, Holiday Club St. Petersburg, opened in January. The next will open in June and a third hotel will open at the end of this year

TITLE: Tetlis Calls for BP To Repay $400 Million
PUBLISHER: Bloomberg
TEXT: MOSCOW — BP may have to repay its Russian venture, TNK-BP, more than $400 million after a minority shareholder sued in Siberia to annul an employment contract between the two oil producers.
Under an agreement allowing TNK-BP to hire BP specialists, TNK-BP paid an average $685,000 a worker, including salary, housing, travel and schooling costs, per year, BP spokesman Vladimir Buyanov said Thursday by telephone. The venture hired about 150 specialists over the past two years, fewer than when it was formed in 2003, he said, without elaborating.
Shareholder Tetlis has demanded that the accord be scrapped and that BP return all payments received from TNK-BP, according to court documents viewed by Bloomberg. The payments reduced TNK-BP’s profit available as dividends, while the parent company benefited from both, according to the documents. Buyanov declined to comment on Tetlis’s claims.
“We consider the recent legal claim to stop BP specialists working in TNK-BP to be damaging to all our shareholders,” TNK-BP Chief Executive Officer Robert Dudley said Thursday in an e-mailed statement.
“The service we receive for BP specialists contains no element of profit for BP — it is on a cost recovery basis only,” Dudley said. TNK-BP employees who are contracted to work internationally with BP receive similar compensation packages, paid for by BP, he said, without elaborating.
Tetlis bought about 0.13 percent of TNK-BP Holding shares in April. TNK-BP Holding had profit of more than $5 billion last year on sales of more than $38 billion, Dudley said last month.
Tetlis’s founder and CEO Alexander Tagayev declined to comment on the claims on Thursday. His lawyer Eduard Karyukhin also declined to comment, citing confidentiality, when called in Tyumen.

TITLE: Flextronics Plant Bid Rejected by FAS
AUTHOR: By Anatoly Tyomkin 
and Natalya Chumarova
PUBLISHER: Vedomosti
TEXT: The antimonopoly service has refused to approve a plan by Singapore-based electronics producer Flextronics to build a plant worth $50 million due to a lack of information about the investor.
In a Federal Antimonopoly Service (FAS) ruling dated May 5 and published on Wednesday, the FAS refused an application by Flextronics’ Austrian subsidiary, Flextronics International, to buy 100 percent of Elcoteq, on the basis that Flextronics failed to present data about its beneficiaries. The FAS was unable to ascertain the facts, although it sent questions to the company twice and received replies, according to the ruling. At the end of last year, the Finnish company Elcoteq decided to sell its St. Petersburg factory, which used to produce hands-free telephone devices, ADSL modems and electronic parts.  A buyer was found quickly — at the end of February, the Singaporean firm Flextronics announced it would buy the plant and produce liquid crystal display (LCD) televisions for the Russian market there.  Initial investment into starting production was planned at $50 million, the managing director of Flextronics, Mike McNamara said in February.  The value of the Elcoteq plant was estimated by experts at $25-$35 million.
Flextronics Vice-President Misha Rosenberg and Elcoteq representative Elina Nieminen said on Wednesday that their companies were aware of the FAS ruling, but declined to comment.
The ruling was of a “technical, not political nature,” said Sergei Fiveisky, first deputy-chairman of City Hall’s committee for economic development.  He promised that the city’s authorities would help Flextronics to receive all the letters of approval necessary.
The FAS often turns down requests due to formalities, according to Maxim Kalinin, a partner at Baker & McKenzie.  The investor could be paying for the mistakes of their lawyer, he said.  If the documents are drawn up properly, repeating the application procedure will take about a month.
It is often difficult for foreign companies to get to grips with all the nuances of drawing up documents for approval in Russia, said Dmitry Ivanov, a lawyer at Duvernoix Legal.

TITLE: Gap to Open Russian Stores
AUTHOR: By Tai Adelaja
PUBLISHER: Staff Writer
TEXT: At long last, Russian women won’t have to make an extra trip to France, Germany or Japan to dress American. 
Gap Inc. said Tuesday that it had struck a franchise deal with Turkish bank Fiba Holding to bring its popular Gap and Banana Republic brands to Russia. 
Under the agreement, Fiba will open Gap and Banana Republic outlets over the next five years, Gap Inc., which is based in San Francisco, said in a statement. Financial details of the deal were not disclosed. 
Fiba will open the first Gap stores this year, in time for the holiday season, the statement said. 
Gap markets itself as offering “iconic American style.” Banana Republic, which sells dressier and higher-end clothing and shoes, should open its first Russian store by late 2009. 
Fiba Holding, Turkey’s ninth-largest bank, already operates Gap and Banana Republic franchises there. 
The company has the franchising rights for British retailer Marks & Spencer, according to Fiba’s web site, with a total of 13 stores in the country by the end of 2007. 
The current deal makes Russia the 17th country with Gap and Banana Republic franchises, the statement said. 
“With 80 franchise stores around the world, we’ve learned a great deal about how well our Gap and Banana Republic brands resonate,” Ron Young, senior vice president of international strategic alliances for Gap Inc., said in the statement. 
“We’re very selective in choosing our franchising partners. It made perfect sense to expand our work with a strong existing partner to take our brands to the vibrant shopping areas in Russia.” 
When it debuts in the country’s saturated fashion market, Gap Inc. will need to compete with more-established brands, such as Benetton, Zara, and Lee & Wrangler. Benetton, for instance, already has 300 retail outlets in the country.
Marco Riflettivo, Benetton’s commercial director, said that despite the presence of many players and growing travel opportunities, the domestic fashion market “is growing exponentially.”
Analysts, however, say Gap’s brands may have trouble securing a foothold as a late arriver to the market.

TITLE: Mysterious Shifts in Chechnya
AUTHOR: By Thomas de Waa
TEXT: Like one of those dark mysterious beech forests of the Caucasus, Chechnya still contains many secrets and most of what is going on there is hidden from outside view. 
From a distance, it looks as though war is over and the republic’s leader, Ramzan Kadyrov, is firmly in control. Kadyrov is now busy eliminating the threat posed by the last substantial visible armed group operating in Chechnya, the Vostok battalion run by the Yamadayev brothers. 
Somewhere in the shadows, a much less visible armed resistance numbering perhaps a few hundred men still flickers on in the southeastern mountains, but they are the hardest of a hard core: There can be little motivation to sustain a partisan war in current-day Chechnya. 
Some important shifts are occurring, and I got a glimpse of this last week from an address given in London by exiled Chechen pro-independence leader Akhmed Zakayev. 
To my astonishment, Zakayev, who is supposed to be leading a separatist struggle, gave a very upbeat assessment of the current state of affairs in his homeland. 
“The decolonization of Chechnya is now a fact,” said Zakayev, adding for good measure, “The Chechen people have won this war.” 
I was sitting next to well-known political analyst Andrei Piontkovsky, and we both practically fell off our chairs. We pressed Zakayev to say more. He said the conclusion should be self-evident. At great and tragic cost, he said, Chechnya had now become separate from Russia. Colonial rule was dead, and Presidents Boris Yeltsin and Vladimir Putin had achieved exactly the opposite of what they wanted. Twenty years ago, Zakayev said, a Chechen child on a bus in Grozny would have been clipped behind the ear for speaking in the Chechen language. Now the ethnic Russian population had virtually all left — something Zakayev said he regretted — and Chechen culture is predominant. Kadyrov, Zakayev said, had played his part and “done very important work for the liberation of Chechnya.” 
Could it be that an exiled pro-independence leader, whom the Russian government wants to extradite, is praising the work of a loyalist, whom that government installed in office? Madness surely — but actually quite logical within the internal dynamics of Chechnya. 
Kadyrov and Zakayev are in fact cut from the same cloth, both springing from the same nationalist movement of the early 1990s. Kadyrov’s father, Akhmad, was once a rebel fighter and associate of Zakayev’s — before he dramatically switched sides in 1999 to serve the Russians. In fact, the purported crimes over which the Prosecutor General’s Office tried and failed to extradite Zakayev from London in 2003 all date back to the years 1994 to 1996 and could just as easily have been laid against Akhmad Kadyrov. 
Two significant changes have occurred in the last year. The first is that Kadyrov junior has won undisputed power. He is now getting rid of his last rivals and winning ever greater control of Chechnya’s revenue flows. He has won popularity by confining the federal army to barracks and promoting Chechen traditional Islam in opposition to the extremists. 
The second change is a split inside what remains of the “Chechen resistance.” Chechen field commander Doku Umarov has proclaimed himself “Emir of the Caucasus” and now heads an unashamedly Islamist movement that sponsors violence across the entire North Caucasus. Umarov still has the support of veteran ideologue Movladi Udugov and the hate-filled web site Kavkaz Center. His main emissary abroad is Shamsuddin Batukayev, who won notoriety as the “Shariah judge” who staged a public execution in Grozny in 1997. 
Zakayev, a London resident, is now called “prime minister of the Chechen Republic of Ichkeria” and leads a disparate group of nationalist pro-Western Chechens in Europe. When I met him recently for a follow-up interview, I found him unusually cheerful, evidently relieved by his split from the Islamists and by recent developments. “Time is on our side,” he said. 
He clearly enjoyed giving rather equivocal praise for Ramzan Kadyrov, aware that it could only embarrass the leader in Grozny. “Kadyrov is resolving the social problems of the population, and we welcome that,” the rebel leader said. Zakayev called Kadyrov, 31, a “representative of the crippled generation,” his world-view entirely shaped by war. Although he undoubtedly had blood on his hands, he had helped rid Chechnya of the worst excesses of the federal military. 
Zakayev was seeing developments from the viewpoint of a Chechen nationalist. He insisted that his supporters would not target other Chechens, only the federal military. Besides, he said, up to three-quarters of Kadyrov’s police force are former fighters. “I can’t call 90 percent of the population of Chechnya traitors,” he said. 
Why this convergence of interests? Mainly I think because the Chechens are a small ethnic group, and that makes civil war an anathema. Fighters and leaders can change sides — as the famous Chechen warrior Hadji Murat, later made famous by Leo Tolstoy, did when he defected to the Russians in 1851. But as long as they stay loyal to their friends and family and preserve their social bonds, all can be forgiven. Chechens are often characterized as hot-headed and romantic, but it should not be forgotten that they also have a hard-headed pragmatic streak without which they would not have survived deep traumas such as Stalin’s mass deportations of 1944. 
Also, Chechnya remains traumatized after two wars and needs time to recuperate. For all his mafia-style excesses, much of the population of Chechnya seems to believe that Ramzan Kadyrov provides a good medium-term solution simply because he is giving them a chance to rebuild their lives. 
He gets this qualified support from a mass of Chechens, who feel alienated from Russia but are tired of war and confrontation. They are probably content with rule from Moscow, as long as it provides money and so long as federal soldiers are kept out of their backyards. In the long term, these people have very little in common with the rest of Russia and are set on an entirely different trajectory. 
For good or ill, this process is under way in Chechnya, and it is bigger than Ramzan Kadyrov or Akhmed Zakayev, or indeed President Dmitry Medvedev. The irony is that Chechnya did not start down this separate path on the day in 1991 that Chechen leader Dzhokhar Dudayev proclaimed what was a mainly fictional independence for his republic. It began on the day three years later that Yeltsin made the tragic decision to send in federal forces and, as he thought, crush Chechen separatism once and for all. 

Thomas de Waal is Caucasus editor at the Institute for War and Peace Reporting in London.

TITLE: When Rebels Need Cash, a Relative Vanishes
AUTHOR: By Yulia Latynina
TEXT: Terrorist leaders in the North Caucuses have received a new infusion of money, Deputy Interior Minister Arkady Yedelev announced last week in Nalchik. It was a kind of international tranche and “money from kidnappings,” Yedelev said.
Honestly, it would have been better if Yedelev had kept his mouth shut.
When al-Qaida’s emissary to Russian insurgents, Abu Khavs, was killed in Dagestan in November 2006, records of the insurgents’ accounts were found with his body. The Federal Security Service said Khavs received $340,000 in foreign contributions and $5 million “for a high-ranking hostage who was released in May.”
The only “high-ranking hostage” released in May 2006 was Magomed Chakhkiyev, father-in-law of Ingush President Murat Zyazikov.
The terrorists had a heyday with that $5 million. They blew up Ingushetia’s deputy interior minister, Dzhabrail Kostoyev. They shot the acting head of Ingushetia’s riot police, Musa Nalgiyev, with his young children. They bought two KamAZ trucks carrying guided-missile systems. And here Russia got lucky: The missiles blew up during handling, killing insurgent leader Shamil Basayev and a few of his top commanders. The blast occurred in Ekazhevo, two kilometers from Nazran, and burned until morning. Insurgents attempted without success to retrieve Basayev’s corpse, finally leaving in the morning. 
Don’t misunderstand me: Unlike Yedelev, I am not suggesting that the insurgents are fighting for the sake of money. The best thugs in Russia now earn more than the terrorists do. But money is the lifeblood of war. You don’t need money to become a suicide bomber, but nobody is handing out free landmines to blow up state officials. 
The accounts found with Khavs’ body indicate that the money for the 2006 terror campaign came from Ingushetia. And Yedelev again informed us that the insurgents received funds “from kidnappings.” 
Excuse me, but who was kidnapped that year? Again, it was a person from Ingushetia — Uruskhan Zyazikov, the uncle of President Zyazikov and the father of the president’s personal guard. He was abducted in March and freed in October 2007. 
How much did Zyazikov’s abductors receive for freeing him? In Ingushetia, they say the figure was $7.5 million. After the kidnappers received the money, terrorist acts became more frequent in Ingushetia, and from there the flare-up spread to Chechnya. And insurgents stepped up their activity this spring, in comparison to the same period last year. On March 19, insurgents under the leadership of Tarkhan Gaziyev entered the foothills of Alkhazurov, encountered stiff resistance and then retreated. The insurgents killed six men and lost eight. In April, bands of 15 to 20 insurgents appeared in Roshni-Chu, Yandin-Kotar, Shalazhi and Komsomolsk. 
As a rule, they chose small villages in the foothills — although a “small” Chechen village has about 5,000 inhabitants. With only one exception, the insurgents “warned” the local police without killing them. 
I repeat: I don’t think that insurgents who fight in the Caucasus Mountains are fighting for the money. But the leaflets in which insurgent leader Doka Umarov calls on police to leave their posts and the police uniforms purchased to erect false roadblocks cannot be obtained without funds.
Russia reestablished control over Chechnya thanks to the extremely cruel but effective methods of the republic’s Kremlin-installed president, Ramzan Kadyrov. Amazingly though, it is losing control over the Caucasus because of the ineffectiveness of regional leaders — primarily Zyazikov, who cannot even stop the insurgents from kidnapping his relatives. 

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

TITLE: Leningrad memories
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: A memoir by jazz journalist and promoter Alexander Kan, published by the local publisher Amphora, is called “Poka Ne Nachalsya Jazz,” which means, literally, “Until Jazz Starts,” but the author himself prefers to translate it as “Waiting for Jazz.” 
A reference to Samuel Beckett’s “Waiting for Godot,” Kan’s translation underpins the absurdity of underground cultural activities and life in general under the Soviets during the Cold War, of what was officially called “brotherly help to the people of Afghanistan” during the bloody Afghan War (1979-1989) and of ailing Soviet leaders who died in quick succession until Mikhail Gorbachev came to power in 1985.
Covering mainly the period between 1978 and 1986 until Gorbachev’s glasnost, the book, whose author relocated to London in April 1996 and works as a producer for the BBC Russian Service, opens with an account of the last day of the Contemporary Music Club, the appreciation society for avant-garde and contemporary improvised music that Kan co-founded and later chaired in the Lensoviet Palace of Culture, when Communist Party officials arrived to check what kind of music was performed at annual events called “Spring Concerts of New Jazz” in 1982. 
“The Petrogradsky District Party Committee were worried and concerned about what was happening at the Lensoviet Palace of Culture, because it was their prerogative to see what was happening there. They sent people to check, because there were rumors that it was an antisovetsky shabash [‘a coven of anti-Sovietists’],” said Kan, speaking at a cafe during a recent visit to St. Petersburg.
That visit by party officials led to the society’s imminent closure. The functionaries did not like it when Boris Grebenshchikov, the founder of the seminal Russian band Akvarium, made an apparently innocent gesture at the end of a concert organized by the late musician Sergei Kuryokhin. 
Grebenshchikov burst a balloon tied to his guitar with a pin, and, since the show was being held on April 12 — Cosmonaut Day — the party spies assumed the gesture was a deliberate insult to the Soviet space program. It was an absurdity that neither Kan nor Grebenshchikov would ever have thought of.
The St. Petersburg art and music explosion that followed, invisible under the dull Soviet facade but ready to burst, was comparable, according to Kan, to the 1960s rock revolution in the West. 
“In the early 1980s, Russia and, primarily St. Petersburg, was so rich in arts and ideas and, first and foremost, in rock and new jazz, whatever it was called at that time,” he said, adding that that he first started to hear the comparison from Western visitors, who invoked what they had experienced in 1960s London or San Francisco.
“‘Wow! You guys! It’s like being back in the ‘60s,’ that’s what they would say,” he said.
To launch the Contemporary Music Club in 1978, Kan and the other avant-garde jazz fans had to use mimicry, a word he often uses in his book.
“When we started our club, we had to pretend that we functioned within the official system, which we actually did,” he said.
“We assumed the guise of completely innocent music-society people.”
Kan said that he had to write reports on lectures, concerts and discussions that the Contemporary Music Club held, and submit them to the Palace of Culture’s administration.
“When I was writing, I had to stick to the official line, and of course we were so well trained in this hypocrisy,” he said.
“I was teaching and had to write the same kind of bullshit at my official job where I was employed, where I got my salary. I was teaching at the Serov Art School, and I had to write the same reports, so we were used to this hypocritical stuff.
“And the things that I would come up with, for instance, ‘The Music of the Soviet Baltic Republics,’ sounded fairly innocuous, fairly innocent. Actually what we had in mind was music of Arvo Part who was by then a sort of semi-banned Estonian composer who emigrated a couple of years later and lived in Germany. Or we had a lecture, ‘The Music of the Brotherly Socialist States’ which sounded again very much in line with party policy, but we had in mind the very avant-garde music of Krzyzstof Penderecki, a Polish composer.”
Kan’s book is valuable as a first-hand account of the art and music explosion that was beginning to boil in Leningrad, as St. Petersburg was known then, in the late 1970s and early 1980s. It also covers the adjustments people were making to still largely unknown matters such as contacts between underground artists and musicians and foreigners and Western consulates — activities that were seen as improper under the Soviets — and led, inevitably, to interest from the KGB. 
Unlike some other accounts, Kan, who was active in the Soviet underground music scene at the point where experimental jazz and innovative rock music merged, does not stress his own importance and the book is refreshingly devoid of any big, mad theories.
Whereas the book takes its Russian title from Akvarium’s 1984 song, the cover shows Grebenshchikov posing with a saw, next to Kuryokhin who holds a saxophone, in a photo taken during a session for visiting West German musician and photographer Hans Kumpf in Leningrad at Club 81, the society of unofficial poets and writers, in August 1983. 
Although it might seem that the book capitalizes on the Russian rock legend, Grebenshchikov was actually open to musical innovations and experimentation and took part in the Contemporary Music Club’s events during his band’s most interesting period in the early 1980s.
“The song relates to the period when he was kind of flirting with jazz, playing along with Sergei Kuryokhin and [saxophonist] Vladimir Chekasin,” Kan said.
“It was a short period in his life and he somehow...didn’t really play jazz, but he was trying his hand at playing jazz and therefore he used the term ‘jazz.’ And I thought it was very appropriate.”
As one of the early foreign visitors who came to St. Petersburg to discover the local music scene, Kumpf, who took the picture, was a frequent visitor to the city and released a record, “Jam Session in Leningrad”  of him playing with the Anatoly Vapirov Trio featuring Kuryokhin.
For a number of reasons, such as his command of English and international correspondence, Kan, who wrote about the Russian New Music acts and events for Jazz Forum, a Warsaw-based magazine published by the International Jazz Federation with his address and phone number printed on the back cover, became a mediator between local musicians and Western fans and musicians.
In 1979, Leo Records, a New Music label was founded by London-based Russian emigre Leo Feigin, also known as Alexei Leonidov, the host of the BBC Russian Service’s jazz programs. Kan was in charge of its activities in Leningrad and got involved in a tape-smuggling scheme for the label.
The book throws light on many unknown aspects of cultural life in Leningrad at the time.
According to the book, the U.S. Congress launched a well-funded cultural program in the mid-1980s which allowed jazz musicians such as Chick Corea to come to Leningrad and perform on diplomatic premises, with the guests chosen by none other than Kan. An invitation to Corea’s concert issued to the then Akvarium cello player Seva Gakkel is used as an illustration in the book.
Another ill-documented episode touched on in the book was the diplomatic involvement in the distribution of books banned by the Soviets. Kan wrote that during his visits to the consulate’s premises he noticed a bookcase filled with dissident books in Russian. As rumor had it that the books could be borrowed, neither he nor his friends would hesitate to take out some illegal books, but whether the books were intended to be “stolen” or not remains a mystery.
With his lifestyle and circle of friends, Kan inevitably came to the attention of the KGB, but it came from an unexpected direction. When he was invited to meet some KGB men, in the course of a conversation that followed, it became evident that the organization had got their hands on a letter Kan had written to a friend that mentioned persona-non-grata Alexander Solzhenitsyn.
“It was very much under close scrutiny,” he said.
“We were staging our concerts, and then I started to have very intense contacts with various consulates, mostly with the U.S., West German, Swedish and Dutch, and, of course, I attracted the attention of the KGB.
“They intercepted my letter to a friend in which I shared my experiences of Solzhenitsyn’s novels that I had read and the Continent magazine, which was a very anti-Soviet emigre literary and political magazine published in Paris by Vladimir Maksimov. All of that was certainly strictly banned literature. So they found out that I had access to that kind of literature and they tried to, first, recruit me, then, when I refused, blackmail me by saying that I might actually be put in jail for not disclosing the source of that forbidden literature.”
Kan said that musicians, including Kuryokhin and Grebenshchikov, also experienced pressure from the KGB, although he admitted that the kind of pressure which was applied to various people was different. 
“The KGB people were much, much smarter than the party officials, much more shrewd, much more efficient, much more intelligent — sometimes it was quite difficult to withstand the pressure,” he said.
“I was teaching, which was unusual for my community. Most people were night watchmen and street cleaners, and I almost felt embarrassed, like I was kind of a black sheep in the crowd: I am teaching and I hold this kind of almost privileged job in an official state system. So when they told me they would report me to the headmaster of the school where I was teaching, I said, ‘Go ahead.’ I would quit immediately and go and do what the rest of my friends did.”
But the irony, according to Kan, was that the offenses that the KGB had tried to accuse him of also worked as his protection.
“Connection with the Western media and consulates was a protection,” he said.
“Of course, if we were pursuing real dissident activities, then they would not have hesitated. They’d have arrested us and put us in jail. But, after all, everything we did was related to arts and culture, music. 
“They also knew that we had some exposure in the West, if minimal. But they also knew, at the time, that Radio Liberty or the Voice of America would use every opportunity to publicise every single arrest of every single dissident in the Soviet Union and they had to weigh up the pros and cons of arresting someone like Alexander Kan for a minor offense, knowing that Alexander Kan was at least a little known in the West. He’s not very well known, but if he’s arrested, he would immediately become known far far better, and the Western radio or whatever media would not hesitate to blow it up.
“They probably decided that the cons would outweigh the pros of arresting such a moderate dissident as myself."<br><i>Alexander Kan’s “Poka Ne Nachalsya Jazz” (Waiting for Jazz), is published in Russian by Amphora.</i>

TITLE: Chernov’s choice
PUBLISHER: Staff Writer
TEXT: KISS will finally arrive in Russia for the first time and perform at the Ice Palace on Monday. 
The U.S. 1970s rock veterans did not make it when they were scheduled to perform two concerts in Moscow and one in St. Petersburg in April 1999, but canceled amid Kremlin-orchestrated protests against the NATO bombing of Yugoslavia that culminated in several rounds from an automatic rifle being fired at the U.S. Embassy in Moscow and a failed attempt to discharge two grenade launchers at the same target.
The concert promoter in Moscow explained at that time that the U.S. Embassy in Moscow issued a warning to Americans in Russia not to attend any mass events, while the besieged embassy was not answering phone calls. Indeed, if KISS had performed then, they would have found themselves right in the middle of a mass event.
This time, the Russian shows look more likely to go ahead, but KISS did cancel a show in Serbia that had been scheduled for May 15.
According to reports, the band said the political situation, especially forthcoming elections in Serbia, lay behind the cancellation. The band’s agent was also reported to have mentioned KISS’s bad experience in Belgrade during a previous visit.
“The members of the band regret to inform you that the concert has to be canceled, but the situation in Serbia does not leave them much choice. However, they hope they will perform in Serbia on some other occasion,” the Serbian concert’s promoter said in a statement.
But, of course, serious rock fans in Russia have always seen KISS as a bad joke — so seeing Kim Gordon wearing a KISS button, when Sonic Youth first came to the city in 1989, was kind of a shock. 
“They’re a great New York band,” Gordon explained. Was she joking or was she serious?
Ironically, the Russian band that KISS has influenced most is <b>Alisa</b>, which has borrowed from the U.S. band musically and even organizes fans into an “Alisa Army,” just like KISS did with its “KISS Army.” 
But unlike KISS, Alisa is obsessed with Serbian nationalism, even putting the slogan “Kosovo is Serbia” on its MySpace page.
It also describes its music as “Orthodox Christian rock,” makes the occasional anti-Semitic remark in its songs and uses swastikas on its CD covers.
If anybody is interested, Alisa will perform, with some other Russian veteran rockers, at a stadium show called “Nashi v Gorode” at SKK on Friday.
Good things this week include garage rockers <b>Chufella Marzufella</b> (A2, Friday), all-women folk punk band <b>Iva Nova</b> (Manhattan, Friday) and alt-rockers <b>Tequilajazzz</b> (Griboyedov, Saturday). Seattle troubadour <b>Jason Webley</b> (A2, Saturday) and Dallas experimental rock band <b>The Paper Chase</b> (Mod, Saturday) will perform some American music, should one choose to skip KISS.
<i>- by Sergey Chernov</i>

TITLE: Wandering minstrel
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Jason Webley’s most recent concert in St. Petersburg early last year — organized by a local promoter at the highly inappropriate bar called XXXXII — was a disaster, but it the wasn’t fault of the Seattle-based singer-songwriter and accordion player who returns to the city with a vengeance this week.
During the past 12 months, Webley released a new CD, “The Cost of Living,” his first solo album in more than three years, which he describes as “darker and more solid than anything I’ve ever done,” and collaborated with Amanda Palmer, the frontwoman of Boston’s Brechtian punk cabaret band The Dresden Dolls, on a music project by conjoined twin sisters, both named Evelyn, while a Mexican ballet troupe has staged a ballet to his music.
Now on a seven-date, five-city Russian tour that started in Norilsk, the northernmost city in Siberia, above the Arctic Circle, and one of the ten most polluted cities in the world, Webley replied to questions from Moscow this week.
Q: Will your upcoming concert in St. Petersburg be a solo gig again or is it with your band? Please can you say a little about it — it’s been a while since you played here.
A: Yes... I think maybe it’s been almost a year and a half. I will be with a band this time. A new group of Russian musicians. I just met them yesterday and I’m really impressed. I think it’s going to be a good group.  It is the same line-up as my touring group at home right now — double bass, drums and violin.
Last year’s show in Piter was really strange. [It was] really the wrong venue. So I am really happy to be returning.
Q: What was wrong with the place? Was it a bar full of gangsters? Or some kind of managers? I heard the audience wasn’t terribly, but what happened exactly?
A: Well, I don’t want to complain too much. The folks that I met who were involved with the company promoting the night were very kind and helpful. But it was maybe the worst gig of last year for me.  Tickets were something like 1,500 or 2,000 rubles [$63-$84]. It was in some bar that truly seemed to be run by the mafia. A lot of people were there. But it was unfortunate. The people who came to see me, many of whom had paid all of this money, were made to stand in the back. 
The friends of the club, and a bunch of girls who worked there and were having a birthday party, were sitting right in front of the stage. They were very loud and not there to see the show. But the worst thing was this guy in his underpants. I don’t know if he was the owner of the club or some sort of DJ or a hired clown, but while I was playing he kept getting on the stage and talking in the microphone.
It was terrible. It was like the people who ran the place just wanted me to go away.  Right when I finished, before the crowd could even ask for an encore, they turned on the house music incredibly loud. Strippers came onto the stage. It was terrible.
Q: The tour includes some other Russian cities — is this your biggest Russian tour so far?
A: Yes, I just came back from Norilsk. It was such an amazing and strange place to visit. I feel very special to have been invited and to be lucky enough in my work to get to visit such places. I am also going to be visiting Kostroma and flying to Rostov on this trip. Later I am playing in the capital of Moldova as well. I am always happy to get to play in new places.
Q: What was interesting about Norilsk for you? I imagine it must be a gloomy industrial city with terrible pollution — is it? 
A: Norilsk is a gloomy city with terrible pollution, for sure! But it is partly because of this that it is such an amazing thing to visit it. The people there have had such hard and painful histories. So different from anything I have ever known. And to be able to travel and play for them, and for them to respond and love what I do, it was really deeply touching.
It was also very interesting to walk around and see this place. In many ways it looks like any other Soviet city...  big block apartments, wide streets. A lot of the buildings were actually modeled after St. Petersburg.  But somehow it was built in this arctic zone and with all of these massive industrial complexes surrounding it... it is really something strange to see.
Q: You described “The Cost of Living” as “more of a rock album.” Why? 
A: It is more of a rock album in my opinion just because it has a constant rhythm section on almost all of the songs. And somehow it draws a bit more on rock forms than on folk songs this time. But I still think it sounds mostly organic. I have not heard from any of my fans that they have been disappointed about the change. Maybe some are, but they are being quiet.
Q: I understand you’ll be performing many songs from the album in Russia. Will you?
A: Yes, we’ve arranged the band with the right format to be able to do that. We are rehearsing right now, so I am still not sure how many of these songs we’ll be able to do. But we’ve already got three of them down.
Q: How did you meet The Dresden Dolls? Please can you talk about your collaborations with them (I’ve just watched their “Shores of California” video featuring you on YouTube)?
A: I actually met Amanda [Palmer] in 2000, a year or two before the Dresden Dolls began. We were both street performers in Australia. After her band became successful, she looked me up and since then we’ve become quite good friends. I’ve toured with her band a bit, but we also have our own little side project together called “Evelyn Evelyn.” 
Q: What’s the story about a ballet in Mexico set to your music? 
A: They did a long piece that used six of my songs in 2007. Then this year added another song “Ways to Love” to make a piece that she called “Contra la Noche.” This was performed by the Taller Coreografico, a ballet company in Mexico City headed by a great choreographer, Gloria Contreras. She is 76 years old and won the presidential art award a couple years back. I believe her dance company may be coming to St. Petersburg next year if I understand correctly.

<i>Jason Webley at A2 on Saturday. www.jasonwebley.com</i>

TITLE: Curtain up
AUTHOR: By Olga Sharapova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Looking at the posters of the Mikhailovsky Theater’s Tuesday premiere of “L’Elisir d’Amore” (1832) by Domenico Donizetti, featuring the theater’s Vladimir Kekhman in costume as a conductor, the audience might think that he actually appears in the production. In fact, the true meaning of the image is that that Kekhman, since he took the reins and reopened the theater at the beginning of this season after a multimillion dollar renovation and revitalisation of the organisation and repertoire of the theater, is a very active manager and in the words of Daniele Rustioni, the acutual conductor of the production, is deeply involved in all the events at the Mikhailovsky.
There are differing points of view about the new management of the Mikhailovsky Theater, but it is clear that the artistic life of the former Mussorgsky Opera and Ballet Theater has increasingly become open, dynamic and diverse. 
This year the Mikhailovsky has participated for the first time in the Eighth Cherrytree Wood International Art Festival. Pietro Mascagni’s “Cavalleria Rusticana,” directed by Liliana Cavani in January, was the first production of the Mikhailovsky Theater included in the “Chereshnevy Les” program. Tuesday’s premiere of “L’Elisir d’Amore” is also part of the festival. Both operas are conducted by the young and energetic Italian maestro Rustioni, 25, who turned down the chance to work at London’s Covent Garden to fulfil his ambition to conduct in St. Petersburg. 
“L’Elisir d’Amore” is one of the most beloved and frequently performed of Donizetti’s operas and Rustioni says that almost every Italian knows how to sing and perform it from early childhood. His task as the conductor and music director of the performance at the Mikhailovsky Theater is to teach very enthusiastic Russian singers to perform Italian arias in the classic manner.
This pastoral story about love in the open air, comic mistakes and amusing circumstances based on a libretto by Eugene Scribe and an update by modern author Felice Romani, looks set to be a success with Russian audiences.
“I think this opera bouffe [operetta] by Donizetti suits the Mikhailovsky Theater very much,” the Italian conductor said. “The building itself, with its comfortable interiors and superior hall, looks like a toy theater. The light, playful and fresh music from the early Romantic period of Donizetti is very close to the atmosphere of the theater and with the very dynamic direction of Fabio Sparvali, the audience will be able to see a funny, traditional and sparkling comic opera.” 
The Italian stars Pietro Spagnoli, Bruno Pratico, Francesco Meli and the Norwegian Jan Erik Fillan perform in the production, along with a company of young Russian singers. 
“L’Elisir d’Amore” is not the only international project at the Mikhailovsky Theater this summer season. 
On June 3 and 4 the theater welcomes a touring production of George Gershwin’s “Porgy and Bess. This production from Peter Klein & Living Arts Inc., in conjuction with the Galina Vishnevskaya Opera Company has already visited 17 countries.

TITLE: Going for a song
PUBLISHER: Agence France Presse
TEXT: BELGRADE — The controversial Irish entry for this year’s Eurovision song contest, a purple-beaked glove puppet called Dustin the Turkey, has already been plucked from the competition by unimpressed voters.
Dustin’s gravelly-voiced rendition of “Irelande Douze Pointe,” a high-tempo electronic song, never really took off and he was summarily dumped at the contest’s first semi-final stage on Tuesday evening in the Serbian capital.
Speaking to reporters after the performance was booed by some in the massive Belgrade Arena, Dustin said he was “disappointed” and urged his fans to remain calm.
“We gave it a great performance. I am disgusted we didn’t get through because I really thought we were good enough,” said the unflappable puppet.
“I urge my fans across Europe to be dignified in defeat. I do not want street riots as I’m a peace-loving bird,” said Dustin.
Choosing Dustin as the Emerald Isle’s representative had ruffled a few Irish feathers when it was made, with some arguing that it was an insult to the Irish music industry.
“Irelande Douze Pointe” (“Ireland 12 points”) is a parody on the continent-wide contest, which is often accused of selecting a winner for political reasons rather than artistic quality.
Sample lyrics include: “Shake your feathers and bop your beak, shake em to the west and to the east, wave Euro hands and Euro feet, wave em in the air to the funky beat, Irelande douze pointe!”
A former Irish Eurovision winner, Dana Rosemary Scallon — who came top in 1970 with “All Kinds of Everything” — thought Ireland’s turkey was misunderstood.
“I wasn’t surprised. I was sorry for the turkey. The poor turkey was stuffed but I did say they are not going to understand our humor, they are not going to understand our Dustin and they didn’t,” she said.
Adding to the image of the contest as low-brow pop kitsch were Belgian entrants Ishtar, who were also culled in the semi-final thanks to their song “O Julissi” composed of entirely meaningless words.
Other nations that were eliminated were Andorra, Armenia, Estonia, Moldova, Montenegro, The Netherlands, Poland, San Marino and Slovenia, to the disappointment of fans who had traveled from the former Yugoslav republic.
The countries going through to Saturday’s final included favorites like Bosnia, Greece, Romania and Russia. The others were Armenia, Azerbaijan, Finland, Israel, Norway and Poland.
Bookmakers are tipping Russian pop singer Dima Bilan, who performs alongside Olympic figure skating champion Yevgeny Plyushenko, to win Eurovision 2008 with his song “Believe.”
The 53-year-old contest has a large following in former eastern bloc countries like Serbia — hosts thanks to the victory last year of Marija Serifovic with her ballad “Molitva.”
The event has turned into a sing-song battle between East and West in which many western European nations have in recent years been left languishing due to “bloc voting” among Balkan, Baltic and Scandinavian states.
Dustin the Turkey first appeared on television in 1990 on a children’s program broadcast by Irish national broadcaster RTE.
But his irreverent style, marked by periodic belching and flatulence, boosted his popularity among adults.
His six albums have flown off the shelves and he has appeared alongside several national stars, including Bob Geldof.
Another controversial contestant set to take the stage in Saturday’s final is French electro-pop star Sebastien Tellier, who triggered a wave of outrage in France after he announced plans to sing in English.

The Eurovision Song Contest 2008 is broadcast live on Telekanal Rossia from 11 p.m. on Saturday, with full post-contest analysis with a panel of musicians, politicians and other celebrities. www.rutv.ru

TITLE: Death of a journalist
AUTHOR: By Roland Elliott Brown
PUBLISHER: Special to The St. Petersburg Times
TEXT: Swiss director Eric Bergkraut doesn’t expect his latest film, “Letter to Anna,” to go down well in Russia, or even to make it into theaters. But in an interview after the premiere of the feature-length version at the Hot Docs International Film Festival in Toronto, he said he didn’t want his film to be perceived as “anti-Russian.”
“One can be very critical of Mr. Putin’s politics without being anti-Russian at all,” Bergkraut emphasized. “I am not sure if that is understood in Moscow today.”
“Letter to Anna” is a documentary describing the life and death of the independent-minded Russian journalist Anna Politkovskaya, who was often treated with suspicion by the Russian authorities, and indeed by no small number of ordinary Russians.
Politkovskaya was best known for her critical writing on the wars in Chechnya, which appeared in the Russian newspaper Novaya Gazeta, and in her books, “A Dirty War,” and “A Small Corner of Hell.”
She was shot to death in the elevator of her Moscow apartment building on October 7, 2006.
Bergkraut first met Politkovskaya in 2003, while he was working on his documentary, “Coca: The Dove From Chechnya,” a film about a Chechen woman who had filmed human rights abuses in the republic.
Bergkraut asked Politkovskaya to appear in the film, and she agreed.
“My first impression of Anna was that she was very busy, very focused on her work, and that she was afraid of wasting her time. But once we started talking, we had very long talks, much longer than we had intended,” Bergkraut said.
“What I liked was that she was always on the side of the weak person. I never had the feeling that it was about good Chechens and bad Russians. She was not naive at all. She just found the way the Russian government was dealing with the conflict not very intelligent.”
Bergkraut assembled “Letter to Anna” from footage of Politkovskaya left over from “Coca,” as well as footage which he shot in Russia after her death.
The film includes interviews with Politkovskaya’s son Ilya, her daughter Vera, her ex-husband, Alexander Politkovsky, and makes clear that Politkovskaya’s family feared for her life.
“Her family wanted to stop her. The only person who did not want to stop her was her daughter, Vera, who had a deep understanding for what her mother did. All the others — and it’s very understandable — tried to stop her, but it was not possible.”
The idea of living in exile was impossible for her, he said. “She did not want to leave the country. That would have been in total contradiction to who she was and how she lived.”
Expatriate Russian billionaire and Kremlin critic Boris Berezovsky is among the Kremlin opponents Bergkraut interviews in the film, which is one reason he expects to have difficulties getting it screened in Russia.
“The film could do without Berezovsky, but why should it? Why is it impossible for Russians to see Berezovsky?” Bergkraut asked.
“He is a kind of Mephisto in the film. He is not the good guy. He has to be in the film because, [Russian Prosecutor General] Yury Chaika said at a press conference that [Politkovskaya’s] murder could only have come from abroad, from oligarchs. It is quite clear that he was pointing at Berezovsky,” he said.
Another possible obstacle to the film’s presentation in Russia might be Politkovskaya’s characterization of the war in Chechnya as “genocidal.”
“She gives a very good argument,” says Bergkraut. “Do you know how many people have been killed in Chechnya? We do not know the figures. Maybe only 80,000. Maybe 150,000. Maybe 300,000. It’s really a tragedy. Chechens are a very small community,” he said.
“But every single Russian soldier and his family is a tragedy too, for me. It’s not necessarily that I share [her] judgment, but I wanted to show it,” he added.
“Letter to Anna” also includes appearances by Garry Kasparov, Novaya Gazeta editor Dmitry Muratov, and other colleagues and acquaintances of Politkovskaya. Bergkraut regrets that he was not able to represent “official Russia” more thoroughly in his film.
“I tried very hard to get an interview with Yury Chaika, but it was not possible. I am trying hard to understand [his position]. I would have loved to have more official Russian voices,” he said.
Bergkraut also laments that no one from “official Russia” has attended any of his international screenings.
“At all the screenings of my film, I was expecting that some day someone from the Russian embassy would come, and we would have a discussion. Nobody ever came. It’s a pity. My last film has been shown in about 30 countries, but not in Russia. Isn’t that strange?”
After winning the International Human Rights Film Award for “Coca” in Berlin last year, Bergkraut was approached by several film stars who expressed interest in collaborating with him. As a result, Susan Sarandon, Catherine Deneuve, and Iris Berben provided the narrations for “Letter to Anna” in its English, French, and German versions, respectively.
Bergkraut’s film was also honored by Vaclav Havel when it screened at the One World International Human Rights Documentary Film Festival in Prague earlier this year.
“Festivals and television stations are now approaching me because they want to show “Letter to Anna,” but no one has come to me from Russia,” Bergkraut said.
“A discussion [about Politkovskaya] — which may be controversial — would be interesting and somehow natural. The best thing would be if a Russian television channel bought ‘Letter to Anna.’ Maybe one day. Things can change.”

TITLE: Wallenberg’s Mission and Disappearance
PUBLISHER: The Associated Press
TEXT: Aug. 4, 1912: Wallenberg is born in Kappsta, Sweden.

March 19, 1944: Germany occupies Hungary, deportations of Jews begin two months later.

June 23, 1944: Wallenberg recruited in Stockholm by U.S. War Refugee Board to save Hungarian Jews.

July 9, 1944: Wallenberg arrives in Budapest, Hungary.

Aug. 12, 1944: Wallenberg persuades sympathetic Hungarian leader to honor Swedish protection documents.

Oct. 15, 1944: Fascist militia Arrow Cross stages coup in Hungary.

Dec. 24, 1944: Soviet Red Army surrounds Budapest.

Jan. 17, 1945: Wallenberg seen for last time in Budapest, taken into Soviet custody.

Feb. 6, 1945: Wallenberg sent to Lubyanka, Soviet secret police headquarters in Moscow.

March 8, 1945: Soviet-controlled Hungarian radio reports Wallenberg killed, apparently in car accident.

March 11, 1947: Wallenberg’s last recorded interrogation.

July 17, 1947: Date Russia later says Wallenberg died.

March 5, 1953: Soviet dictator Josef Stalin dies, leading to release of many political prisoners.

Feb. 6, 1957: Soviet Foreign Minister Andrei Gromyko memo states Wallenberg died in 1947 of heart attack.

Jan. 27, 1961: Swedish physician Nanna Svartz told by Russian colleague that Wallenberg alive in mental facility.

Oct. 16, 1989: Soviets give Wallenberg’s half-siblings his personal effects.

1991-2000: Joint Swedish-Russian working group investigates Wallenberg’s fate.

Nov. 27, 2000: Alexander Yakovlev, aide to Russian leader Mikhail Gorbachev, says Wallenberg was shot July 17, 1947, in Lubyanka.

Dec. 22, 2000: Russia officially acknowledges Wallenberg was victim of political oppression.

Jan. 12, 2001: Swedish-Russian working group publishes final report.

2001: Personal papers of John Grombach, head of secret U.S. intelligence unit called the Pond, discovered in Virginia, given to CIA.

2007: CIA completes declassification of Wallenberg files deposited at National Archives in College Park, Maryland. Most were released in 1993.

— The Associated Press

TITLE: The Wallenberg file
AUTHOR: By Arthur Max 
and Randy Herschaft
PUBLISHER: The Associated Press
TEXT: STOCKHOLM, Sweden — Budapest, November 1944: Another German train has loaded its cargo of Jews bound for Auschwitz. A young Swedish diplomat pushes past the SS guard and scrambles onto the roof of a cattle car.
Ignoring shots fired over his head, he reaches through the open door to outstretched hands, passing out dozens of bogus “passports” that extended Sweden’s protection to the bearers. He orders everyone with a document off the train and into his caravan of vehicles. The guards look on, dumbfounded.
Raoul Wallenberg was a minor official of a neutral country, with an unimposing appearance and gentle manner. Recruited and financed by the U.S., he was sent into Hungary to save Jews. He bullied, bluffed and bribed powerful Nazis to prevent the deportation of 20,000 Hungarian Jews to concentration camps, and averted the massacre of 70,000 more people in Budapest’s ghetto by threatening to have the Nazi commander hanged as a war criminal.
Then, on Jan. 17, 1945, days after the Soviets moved into Budapest, the 32-year-old Wallenberg and his Hungarian driver, Vilmos Langfelder, drove off under a Russian security escort, and vanished forever.
And because he was a rare flicker of humanity in the man-made hell of the Holocaust, the world has celebrated him ever since. Streets have been named after him and his face has been on postage stamps. And researchers have wrestled with two enduring mysteries: Why was Wallenberg arrested, and did he really die in Soviet custody in 1947?
Researchers have sifted through hundreds of purported sightings of Wallenberg into the 1980s, right down to plotting his movements from cell to cell while in custody. And fresh documents are to become public which might cast light on another puzzle: Whether Wallenberg was connected, directly or indirectly, to a super-secret wartime U.S. intelligence agency known as “the Pond,” operating as World War II was drawing to a close and the Soviets were growing increasingly suspicious of Western intentions in eastern Europe.
Speculation that Wallenberg was engaged in espionage has been rife since the Central Intelligence Agency acknowledged in the 1990s that he had been recruited for his rescue mission by an agent of the Office of Strategic Services, the OSS, which later became the CIA.
About the Pond, little is known. But later this year the CIA is to release a stash of Pond-related papers accidentally discovered in a Virginia barn in 2001. These are the papers of John Grombach, who headed the Pond from its creation in 1942. CIA officials say they should be turned over to the National Archives in College Park, Maryland.
In February, the Swedish government posted an online database of 1,000 documents and testimonies related to Wallenberg’s disappearance. In a few months, independent investigators plan to launch a Web site with their nearly 20-year research into Russian archives and prison records. Russia is building a Museum of Tolerance that will feature once-classified documents on Wallenberg. And the CIA last year relaxed its guidelines to reveal details of its sources and intelligence-gathering methods in the case.
Despite dozens of books and hundreds of documents on Wallenberg, much remains hidden. The Kremlin has failed to find or deliver dozens of files, Sweden has declined to open all its books, and The Associated Press has learned as many as 100,000 pages of declassified OSS documents await processing at the National Archives.
The Russians say Wallenberg died in prison in 1947, but never produced a proper death certificate or his remains.
But independent research suggests he may have lived many years — perhaps until the late 1980s. If true, he likely was held in isolation, stripped of his identity, known only by a number or a false name and moving like a phantom among Soviet prisons, labor camps and psychiatric institutions.
In 1991, the Russian government assigned Vyacheslav Nikonov, deputy head of the KGB intelligence service, to spend months searching classified archives about Wallenberg.
“I think I found all the existing documents,” Nikonov said in a e-mail last month. The Soviets believed Wallenberg had been a spy, he said, but unlike many political detainees he never had a trial.
Nikonov’s conclusion: “Shot in 1947.”
Later in 1991, Russia and Sweden launched a joint investigation that lasted 10 years but failed to reach a joint conclusion.
The 2001 Swedish report said: “There is no fully reliable proof of what happened to Raoul Wallenberg,” and listed 17 unanswered questions.
The Russian report bluntly said, “Wallenberg died, or most likely was killed, on July 17, 1947.” It named Viktor Abakumov, the head of the “Smersh” counterintelligence agency, as responsible for the execution and cover-up. It said the Russians consider the Wallenberg case “resolved.”
Unsatisfied, independent consultants and academics have kept digging, analyzing, reassessing old information and pressing for the Kremlin to release missing files.
Wallenberg arrived in Budapest in July 1944. With the knowledge of his government, his task as first secretary to the Swedish diplomatic legation was a cover for his true mission as secret emissary of the U.S. War Refugee Board, created by President Franklin D. Roosevelt in a belated attempt to stem the annihilation of Europe’s Jews.
In the previous two months, 440,000 Hungarian Jews had been shipped to Auschwitz for extermination. They were among the last of six million Jews slaughtered in the Holocaust.
Of the 230,000 who remained in the Hungarian capital in mid-1944, 100,000 survived the war.
After the Red Army arrived in January, Wallenberg went to see the Russian military commander to discuss postwar reconstruction and restitution of Jewish property. Two days later he returned under Russian escort to collect some personal effects, then was never seen in public again.
And what did his country — or his influential cousins — do about it?
Looking back a half century later, the Swedish government acknowledged that its own passive response to the detention of one of its diplomats was astounding, and that it had missed several chances to win his freedom.
“The worst mistakes were done in the first two years,” said Hans Magnusson, the Swedish co-chairman of the 10-year investigation with the Russians. Sweden felt intimidated by the mighty Soviets and unwilling to challenge them, he said.
In the mid-1950s, the Swedes pursued the case more aggressively, prompting a memorandum from Soviet Foreign Minister Andrei Gromyko in 1957 that Wallenberg had died of heart failure in detention 10 years earlier — at age 34.
As more testimony came in that Wallenberg was still alive, Stockholm periodically raised the issue with Moscow — but without results, said Magnusson, interviewed in the Netherlands where he is now ambassador.
Sweden could have pushed harder, he said, “but I doubt it would have achieved more.”
“It is inconceivable,” says Wallenberg’s half-sister, Nina Lagergren. “Here is a man sent out by the Swedish government to risk his life. He saved thousands of people — and he was left to rot.”
Some time around 1994, Susan Mesinai, who had by then been researching the Wallenberg case for five years, visited Lucette Colvin Kelsey, Wallenberg’s cousin, at her home in Connecticut. After lunch, Kelsey caught up with Mesinai as she got into the car and told her: “Raoul was working for the highest levels of government.”
“So I said to her, ‘How high? Do you mean the president?’ And she nodded her head,” Mesinai said, disclosing to the Associated Press a conversation she had kept confidential for 14 years.
Kelsey’s father, Colonel William Colvin, had been the U.S. military attache in the Swedish capital around the time of World War I. Wallenberg spent vacations in the 1930s with the Colvin family while he earned a degree in architecture at the University of Michigan. Kelsey, who was a year younger than her cousin, died in 1996.
Rather than clarify anything, Kelsey’s cryptic remark only deepened the fog.
Wallenberg’s rescue mission inevitably placed him in a vortex of intrigue and espionage involving the Hungarian resistance, the Jewish underground, communists working for the Soviets, and British, U.S. and Swedish intelligence operations. He also had regular contact with Adolf Eichmann and other Nazis running the deportation of Jews.
Whether or not he himself was passing on intelligence, Russia had plenty of reason to suspect him of spying, either for the Allies or Germany — or both.
“Wallenberg had ties to all the major actors in Hungary,” says Susanne Berger, a German researcher who collaborated with the Swedish-Russian research project.
The Stockholm chief of the War Refugee Board, Iver C. Olsen, was also a key member of the 35-man OSS station in the Swedish capital, and it was he who recruited Wallenberg, who in turn kept the U.S. connection secret by sending his communications through Swedish diplomatic channels.
Olsen’s OSS personnel file — unpublished until The Associated Press viewed it at the National Archives — revealed that the American was cited for using his position at the War Refugee Board “in gathering important information for the OSS and for the State Department.”
In 1955 Olsen denied to the CIA that Wallenberg ever spied for the OSS, and Mesinai and Berger offer a different likelihood: that the Swede was a source for the Pond, which was a rival to the OSS known only to Roosevelt and a few insiders in the War and State Departments.
A small clandestine intelligence-gathering operation, the Pond relied on contacts in private corporations and hand-picked embassy personnel. It worked closely with the Dutch electronics company N.V. Philips, “which had access to ‘enemy’ territory as well as a far-flung corporation intelligence apparatus in its own right,” said former CIA analyst Mark Stout who wrote a brief unofficial history of the Pond.
So far, no evidence has emerged that Wallenberg worked for the Pond, and Stout said in an interview he had not seen Wallenberg mentioned in any papers he has reviewed.
But their circles of contacts intersected at several points, including members of the Hungarian resistance and possibly the Philips connection.
“The Pond was centered around President Roosevelt’s office and rumors of a special mission, intelligence or otherwise, for Raoul Wallenberg have persisted through the years,” said Berger, who suspects the Soviets knew about the agency.
It may have been just one more reason for Stalin to order his arrest, she said. Regardless of whether Wallenberg was involved, “the Pond’s activities clearly would have served to enhance Soviet paranoia about Allied activities and aims in Hungary.” Hungarian historian Laszlo Ritter, of the Institute of History of the Hungarian Academy of Sciences, said the Philips company also was providing cover for Britain’s MI6 intelligence service. One of its crucial agents in the Balkans was Lolle Smit, who was knighted after the war by both Britain and his native Holland.
One month before Wallenberg arrived, Smit fled Budapest for Romania, from where he continued to control his network, Ritter said, but he left his family behind.
Smit’s daughter, Berber Smit, worked with Wallenberg in his rescue efforts — and “had a romance with him,” according to her son, Alan Hogg.
Ritter said Hungarian war files show no direct tie between Wallenberg and Smit, or between the diplomat and British intelligence. At the same time, MI6 used the Swedish legation at least twice to smuggle out information, and helped give false papers to Jews and the anti-fascist resistance, he said.
When the OSS wanted to dispatch a radio to the Hungarian underground leader Geza Soos, it sent the transmitter with a Swedish intelligence officer and told him Wallenberg would know how to contact Soos.
Wallenberg’s very name may have been enough to arouse Russian distrust. Throughout the war, his cousins Marcus and Jacob Wallenberg, the tsars of a banking and industrial empire, had done business in Germany, producing the ball bearings that kept its army on the move.
The Wallenbergs also were involved in discreet, unsuccessful peace efforts between the Allies and Germany, which Stalin feared would leave him excluded — a foretaste of global realignment that would lead to the Cold War.
In December 1993, investigator Marvin Makinen of the University of Chicago interviewed Varvara Larina, a retired orderly at Moscow’s Vladimir Prison since 1946. She remembered a foreigner who was kept in solitary confinement on the third floor of Korpus 2, a building used both as a hospital and isolation ward.
Though it was decades earlier, the prisoner stood out in Larina’s memory. He spoke Russian with an accent and “complained about everything,” she said. He repeatedly griped that the soup was cold by the time Larina delivered it. Prison authorities ordered her to serve him first.
“This is very unusual,” Makinen said in an interview. Normally, such complaints would condemn an inmate to a punishment cell. “The fact that he wasn’t means he was a very special prisoner.”
When shown a gallery of photographs, Larina immediately picked out Wallenberg’s — one never published before, Makinen said.
She recalled he was in the opposite cell when another prisoner, Kirill Osmak, died in May 1960.
That was enough for Makinen and Chicago colleague Ari Kaplan to roughly pinpoint the cell of Larina’s foreigner. Creating a database of cell occupancy from the prison’s registration cards, they found two units opposite Osmak’s that were reported empty for 243 and 717 days respectively.
Normally, cells were left vacant for a week at most, Makinen said. The researchers concluded that those two cells likely held special prisoners, namelessly concealed in the gulag.
Mesinai and others reviewed hundreds of accounts over the decades of people who claimed to have seen or heard of someone who could have been Wallenberg. They established a pattern of sightings, even though many individual reports were considered unreliable, uncorroborated, deliberate hoaxes or cases of mistaken identity with other Swedish prisoners.
Some stories, like Larina’s, ring particularly true.
One compelling account came in 1961. Swedish physician Nanna Svartz asked an eminent Russian scientist about Wallenberg during a medical congress in Moscow. Lowering his voice, the Russian told her that Wallenberg was at a psychiatric hospital and “not in very good shape.”
The Russian, Alexander Myasnikov, later claimed he had been misunderstood, but Svartz stood firm. His remark, she later reported, “came spontaneously. He went pale as soon as he said it, and appeared to understand that he had said too much.”
A few years later the Soviets sent out feelers for a possible spy swap. Envoys indicated Moscow was ready to “compensate” Sweden if it freed Stig Wennerstromm, a Swedish air force officer who had spied for the Kremlin for 15 years.
Though Wallenberg’s name was never mentioned, he was considered the only prize worth exchanging for such a high-value spy. The intermediary was Wolfgang Vogel, an East German lawyer who engineered many Cold War prisoner exchanges. But years of halfhearted negotiation ended in no deal.
Nina Lagergren keeps a small wooden box in the cellar of her comfortable Stockholm home. The Russians gave it to her in 1989 when she visited Moscow. It contains her half-brother’s diplomatic passport, a stack of currency, a Swedish license for the pistol he bought but never used, and two telephone diaries. Among the entries are Eichmann and Berber Smit, the daughter of the Dutch spy.
They also gave the family a copy of Wallenberg’s “death certificate,” handwritten and unstamped.
“They anticipated that I would get very moved and understand there was no more hope,” Lagergren said.
Instead it reinforced her belief that Wallenberg had lived beyond 1947 and perhaps was even then alive. “This proved we could go on,” she said. Today he would be 95, and she concedes he must be dead.
If indeed Wallenberg’s death in 1947 was a lie, the question remains: Why was he never freed?
The 2001 Swedish report speculated that the longer he was held, the harder it was for the Soviets to release him. Still, “it would have been exceptional to order the execution of a diplomat from a neutral country. It might have appeared simpler to keep him in isolation,” the report said.
The search continues.
Whatever it reveals, a 1979 State Department memo puts these questions into perspective: “Whether or not Wallenberg was involved in espionage during World War II is a moot point at this stage in history. His obvious humanitarian acts certainly outweigh any conceivable ‘spy’ mission he may have been on.”

TITLE: Man U Crowned European Champions
PUBLISHER: Reuters
TEXT: MOSCOW — Manchester United were crowned kings of Europe for the third time on Wednesday when they beat Chelsea 6-5 on penalties after a breathless all-English Champions League final had finished 1-1 after extra time.
United’s 37-year-old goalkeeper Edwin van der Sar, appearing in his third final 13 years after his first with Ajax Amsterdam, saved the decisive spot kick from substitute Nicolas Anelka.
The victory completed a famous double for the Old Trafford team who pipped Chelsea to the Premier League title 10 days ago.
It was an emotional triumph for United, coming 50 years after the Munich air disaster, and there was a huge cheer for one of the survivors, Bobby Charlton, when he joined the team at the presentation of the trophy he lifted in 1968 before Alex Ferguson led the team to a second success in 1999.
“We’ve had fate on our side all season and I felt that fate played its hand with John Terry slipping,” Ferguson said of the Chelsea captain’s penalty miss.
It was a heartbreaking night for Terry, who had the chance to take the trophy to Stamford Bridge for the first time but sent what would have been the winning penalty against the outside of the post.
“John Terry’s a man’s man, not many center halves will stand up and say I will take the last penalty because everybody knows that’s the thing it can hang on,” said Frank Lampard, whose equalizer had canceled out Cristiano Ronaldo’s opener.
United’s Portugal winger had been inexplicably left unmarked to head home a curled right-wing cross from fullback Wes Brown for the 42nd goal of his all-conquering season.
The goal brought the game to life as Van der Sar prevented a Rio Ferdinand own goal with a terrific instinctive save while Chelsea’s Petr Cech kept out Carlos Tevez’s stooping header and then tipped over Michael Carrick’s follow-up drive.
Chelsea had shown little but levelled when Essien’s long-range shot was deflected into the path of Lampard, who duly dispatched it from six meters.
The Londoners looked much more energised in the second half as Michael Essien and Michael Ballack fired shots just over.
The patient, European-style approach of the opening quarter had been replaced by football with a Premier League trademark — high-paced and physical, with a sprinkling of errors and battered bodies littering the temporary turf.
Didier Drogba was among them 12 minutes from time, but as he has so often before, made a miraculous recovery to curl a 20 metre shot against a post.
Ryan Giggs, the only survivor from United’s treble-winning 1999 final team, came off the bench in the 87th minute for his 759th appearance, breaking Charlton’s club record.
But he could not fashion a repeat of the storied last-gasp victory of that year and the game went into extra time.
Chelsea maintained their momentum and Lampard scooped a shot against the bar within four minutes of the restart but they needed Terry to deny Giggs a fairytale goal by heading the winger’s shot over the bar with Cech beaten.
As the clock ticked down — towards 2 a.m. local time — tempers boiled over and Drogba was sent off for slapping Nemanja Vidic.
The shootout first went Chelsea’s way as Ronaldo, who had missed a penalty early in the semi-final against Barcelona, saw his effort saved.
Ballack, Juliano Belletti, Lampard and Ashley Cole all scored for Chelsea but when Terry failed the momentum shifted.
Anderson and Giggs netted for United and, although Salomon Kalou was on target for Chelsea, Van der Sar blocked Anelka’s effort to secure the giant silver trophy once again.

TITLE: Police Keep Peace For Euro Final
PUBLISHER: Agence France Presse
TEXT: MOSCOW — Thousands of police patroled the streets of Moscow on Wednesday amid fears of violence as some 50,000 English football fans descended on the Russian capital for the Champions League final.
Interior ministry troops and riot police wearing black helmets and bulletproof vests were deployed near Red Square and in the area around the Luzhniki stadium where Manchester United beat Chelsea in a nail-biting game.
After the match officers blocked off access to Red Square next to the Kremlin, where city authorities had set up a small football pitch and stalls for visiting fans. Hundreds of soldiers were on standby near the square.
Despondent Chelsea fans and jubilant Manchester United supporters meanwhile filed out of the stadium towards waiting buses. Dozens of charter flights from Moscow airports prepared to carry fans back to Britain during the night.
Apart from a few brawls, the scenes in the streets were mostly peaceful as fans, some wearing traditional Russian fur hats and waving banners, thronged Red Square and bars in the center of oil-rich Moscow before the game.
“We didn’t get our drink on to Red Square. The police banned it, but apart from that it’s great,” said Manchester United fan Parmy Singh, who flew in on Wednesday and planned to stay up all night to avoid sky-high hotel prices.
Fans said the high prices of travelling to Moscow had put many supporters off attending the showdown. Others complained about the strict alcohol bans in place as part of elaborate measures to prevent any crowd violence.
Thousands of ticketless Russian and English fans also crowded into Moscow bars to watch the game, with tickets being sold by touts outside the stadium going for around 400 dollars just before the start of the match.
Among the Chelsea supporters at the game was ex-KGB officer Andrei Lugovoi, one of Britain’s most wanted men.
Lugovoi is suspected by British police of the 2006 radiation murder in London of Kremlin critic Alexander Litvinenko but Russian authorities have refused his extradition or prosecution in Moscow.
The Litvinenko case plunged relations between London and Moscow to their lowest point since the end of the Cold War although there have been signs that Russia’s new President Dmitry Medvedev wants to improve ties.

TITLE: Ronaldo’s Future at Manchester United Remains Unsure
PUBLISHER: Agence France Presse
TEXT: MOSCOW — The one cloud on Manchester United’s horizon after their Champions League triumph here is the continuing uncertainty over the future of their most valuable asset, Cristiano Ronaldo.
As he has done consistently for the last year, the 23-year-old winger issued mixed messages about his future plans in the aftermath of what was a rollercoaster night for him in the Luzhniki Stadium.
Within minutes of having declared, “I am going to stay — there is no way I’m leaving after this,” Ronaldo was qualifying that commitment with a reminder that, “the future ... no one knows.”
Ronaldo has been a consistent target for Real Madrid and leaks to the Spanish media over the last week have resulted in headlines claiming that they are close to winning their battle to persuade the Portuguese star to quit United.
United manager Sir Alex Ferguson dismissed those claims as “stupid” earlier this week and declared himself willing to wager very large amounts of money on Ronaldo doing his stepovers at Old Trafford next season.
As he is only one year into a five-year contract, it would take a combination of a world record transfer fee and a clear demand from Ronaldo himself to persuade United to give up the player.
Real reportedly would not baulk at a fee of up to $200 million, despite his protestations of being happy in the north of England, Ronaldo did not exactly rule out a change of heart.
“I don’t promise nothing, I don’t promise nothing to my mum, I don’t promise nothing to the supporters,” he said. “I want to stay, but the future... no-one knows. I want to stay. We are going to see in the next two weeks, I don’t say I make a decision.”
United are reported to be preparing a new contract for Ronaldo that will ensure his brilliant form this season is recognised by him becoming the club’s best-paid player.
His first-half header on Wednesday was his 42nd strike of a season which has seen him take George Best’s mantle as the most prolific winger/midfield player in the club’s history.
Given that record of achievement over ten months, it would have been cruel if Ronaldo had ended up being dubbed the man who cost United the chance of a second Champions League trophy.
“Sometimes life is unfair and that would have have been so unfair on the boy, given his contribution the whole season for us,” reflected United boss Sir Alex Ferguson.
Ronaldo also missed a penalty in the first leg of United’s semi-final win over Barcelona, but Ferguson was quick to remind any potential critics that the winger had also held his nerve on plenty of occasions this season.