SOURCE: The St. Petersburg Times
DATE: Issue #1557 (18), Friday, March 19, 2010
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TITLE: Cops Bust Alleged Gang Of Fake Priests
AUTHOR: By Galina Stolyarova
PUBLISHER: The St. Petersburg Times
TEXT: City police this week opened a criminal case against an alleged confidence scam involving fraudulent priests performing bogus burial services and other rituals.
The alleged scam involved false religious ceremonies at St. Elizabeth’s Church, located near Yelizavetinskaya Hospital at 14 Ulitsa Vavilovikh in the north of St. Petersburg. The phony priests also charged locals for access to fake sacred relics of Orthodox saints, including those of St. Nicholas and St. Panteleimon, police say.
“A group of swindlers disguised as Orthodox priests charged relatives of patients who died at the Yelizavetinskaya Hospital for the performance of religious rites at the hospital’s morgue,” the city police press office said Thursday. “A special notice on the wall said that the priests were operating with the blessing of the Metropolitan of St. Petersburg and Ladoga.”
Police said leaflets advertising the services were distributed across the city and that large numbers of worshippers had flocked to the church to light a candle by the fake relics at a cost of 50 rubles ($1.70) each.
“The victims of this scam were literally praying to God knows what,” said Vladimir Vigilyansky, head of the press service of the Moscow Patriarchy. “The scammers appear to have no fear of God whatsoever. The sacred relics that they mentioned are located in some of the world’s most important churches and are hardly ever moved. For example, the sacred relics of St. Nicholas are kept in a sanctuary at the St. Nicholas Cathedral in the Italian town of Bari. Needless to say, it is a world-renowned place of religious pilgrimage, and the relics are never moved.”
The alleged fraudsters were brought to the attention of the police after a series of complaints from local Orthodox believers. They questioned the authenticity of what were being presented as precious sacred relics and had noticed that the priests had even managed to get the name of the Metropolitan of St. Petersburg and Ladoga wrong — the Metropolitan is in fact called Vladimir, and not Ioann as stated on the leaflets.
Police say the confidence trick had been going on for more than five years. 
Vigilyansky said that the men disguising themselves as priests were schismatics who had no relation to the Russian Orthodox Church. He said that the Moscow patriarchy had in recent years released numerous statements aimed at exposing the fraudulent practices. 
For example, in 2006, there was widespread advertising in St. Petersburg of a temporary display of the holy relics of St. Serafim Sarovsky at St. Elizabeth’s, though the Moscow patriarchy and the St. Petersburg patriarchy both officially declared that the relics were fakes.
Investigators believe the group was founded and masterminded by Grigory Lourie, who was excommunicated from the Orthodox Church for sacrilege in 2003. Earlier, Lourie had been accused of forming a club for people intending to commit suicide and encouraging several of its members to go through with attempts on their lives, though the police found insufficient evidence and eventually dropped the case. 
Doctors from Yelizavetinskaya Hospital told reporters on Thursday that the hospital had no connection with the church or any fraudulent practices carried out there.

TITLE: Disabled Athletes Show Up Olympic Team
AUTHOR: By Alexander Bratersky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — As Russia recovers from its worst-ever Winter Olympics, it’s getting a welcome boost from unlikely quarters.
Five days into the Winter Paralympic Games in Vancouver, Russia’s team had already left its rivals — and the Russian Olympic team — in the dust with six gold medals, six silvers and three bronzes.
This is in sharp contrast with the grim results of the Vancouver games in February when Russia snagged only three golds among a total of 15, placing a lowly 11th on the medals table. The poor showing cost Russia’s top Olympics official his job and sparked a government furor over the use of record funds earmarked for Olympics training.
The irony in the disabled athletes’ success is that they receive little money for training and are among the most marginalized members of a society where public facilities for the disabled are a rarity.
“You must understand that we are not comparing ourselves with the regular Olympic team, but that won’t stop me from taking a jab at them because we won as many gold medals in just one day of the Paralympics as they won in two weeks,” said a triumphant Vladimir Lukin, president of the Russian Paralympic Committee, the Ves Sport news agency reported.
The Olympic team had planned to win seven golds, while the Paralympic team went into the competition without any medal plans, Paralympic Committee chairman Pavel Rozhkov said.
While the rules are generally more relaxed at the Paralympics, which end Sunday, Russian athletes face tougher challenges than those from countries where the disabled enjoy nearly all the same benefits as regular people, said Alexander Porshnev, coach of 20-year-old athlete Maria Iovleva, who won a silver in sitting biathlon on Saturday.
“This competition for her is like a window to the world,” Porshnev told The St. Petersburg Times by telephone from the Komi republic, where he and Iovleva live. “There she can communicate with people and prove her abilities instead of sitting in a room on her own.”
Iovleva is deaf, barely able to speak and is paralyzed from the waist down. After winning the silver Saturday, she had some bad luck at cross-country sit-skiing the next day. Her hands thrown up, smiling and confident about winning the race, she mistakenly headed for the finish line without making one last lap, unaware of the calls from coaches or the roar from the stands. Even though she had to go back and finish the distance, she still placed eighth out of 11 athletes.
For Iovleva, the silver medal and a cash reward that she will receive for it back in Russia might make her daily life easier. She lives in a single room with 12 other young women in a home for the disabled in Syktyvkar, capital of the Komi republic, and dreams of owning an apartment, Porshnev said.
The government awards 100,000 euros ($137,000) to gold medalists, 60,000 euros for silver and 40,000 euros for bronze, the same amount as Olympic medalists receive. The prize money was increased fivefold after the Winter Paralympic Games in Turin in 2006 when the Russian team won 13 golds, 13 silvers and seven bronzes, its best-ever result in the Winter Games since it began participating in 1988.
The money has proved to be a strong motivation for disabled athletes to train hard, said Oleg Smolin, vice president of the Russian Paralympic Committee.
“People with disabilities are not used to state attention, so they are very responsive when they get it,” Smolin, who is also a State Duma deputy, said by telephone from Vancouver.
Smolin said Russia’s athletes excelled in the biathlon and cross-country skiing but trailed their European rivals in mountain skiing and sledge hockey. The problem, he said, is a lack of proper training facilities and coaches. To train athletes for those events, the Paralympic Committee has been taking them to Finland, he said.
“After the victory in Turin in 2006, the authorities turned their attention to disabled people, but it was only temporary,” he said. “We can’t expect any radical changes soon.”
Coach Porshnev said regional authorities would not help Iovleva train for the next Paralympic Games in Sochi in 2014, despite her silver medal and desire to compete. “Our bureaucrats are not really impressed by anything,” he said.
It took a money-raising campaign in a local newspaper to help Iovleva acquire her current wheelchair in 2007. Porshnev said he had assembled her previous wheelchair by himself and had also covered most of the cost of her $4,000 German-made rifle used for the biathlon.
Disabled athletes are able to attract some sponsors, usually private individuals whose contributions account for about up half of the budgets of sports organizations for the disabled, said Lyudmila Bogdanova, head of the Federation of Disabled People Sports in the Moscow region.
Many people with disabilities face a daily struggle trying to access public places and to use public transportation. One of the main problems — even at the site of the next Paralympic Games in Sochi — is a lack of wheelchair-assessable ramps, said Pavel Zhestovsky, head of the Sochi branch of the All-Russia Disabled People Society, a public group.
“Many of the existing wheelchair ramps are made just for the sake of appearance — they are too steep,” he said. “Construction workers should have tried to use them by sitting in wheelchairs themselves.”

TITLE: Russia Today Uses Controversy to Seek Viewers
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia Today kicked off a billboard campaign in December featuring the faces of U.S. President Barack Obama and Iranian President Mahmoud Ahmadinejad superimposed over each other.
“Who poses the greater nuclear threat?” read the billboard, which included the television channel’s logo and the slogan, “RT News: Question More.”
U.S. airports rejected the ad. But a British advertising association honored it with an “ad of the month” award.
For some, Russia Today is a mouthpiece that spreads Kremlin propaganda around the world. For others, the state-bankrolled channel is a vital voice that offers different political viewpoints in an ocean of media monotony.
Russia Today says attention-grabbing stunts like the billboard campaign are transforming its image from that of a Kremlin mouthpiece to an increasingly popular brand able to claw viewers away from much larger rivals like CNN and BBC World News.
“When we were a quiet, little-noticed channel telling stories from Russia, our audience was negligible. When we started being really provocative … our audience started to grow,” said Margarita Simonyan, the channel’s editor.
The channel — created five years ago and widely seen as a Kremlin project to improve Russia’s image around the world — regularly reports on conspiracy theorists’ claims that the terrorist attacks in Washington and New York on Sept. 11, 2001, were committed by someone inside the United States — not by Islamic militants. As of Tuesday, one of the top-rated videos on the channel’s web site, RT.com, was a report about a conference in Pennsylvania for “truthers,” those who believe that the U.S. government had a role in the attacks.
Last month, an episode of the show “CrossTalk” descended into chaos when its host, Peter Lavelle, was berated by the show’s guests for proclaiming that the people who perpetrated the Sept. 11 attacks were not fundamentalists.
One of the guests, British journalist Douglas Murray, expressed outright disgust afterward. “I’ve never encountered a more incompetent presenter,” he wrote on his blog.
Asked by The St. Petersburg Times about the show, Lavelle said it was a “fiasco” because he had not been able to get a balanced pair of experts. “Everybody was snowed in,” he said.
Critics like Murray maintain that far from improving Russia’s image abroad, the channel has instead morphed into a platform for conspiracy theorists and other like-minded figures on the margins of debate — especially for those who espouse anti-American views.
But Simonyan explained that controversy was vital and that polishing Moscow’s reputation was not among Russia Today’s tasks.
In a rare interview in her unassuming Moscow office, the sharp-voiced 29-year-old emphasized that Russia Today was not a Kremlin propaganda tool and said the growing channel — which now boasts a staff of 2,000 and broadcasts in English, Arabic and Spanish — strives to offer an alternative to mainstream Western media.
“Our job is to tell the world about Russia and to report world news from a Russian viewpoint,” Simonyan said.
Yet strangely, Russia Today last year abruptly started calling itself just RT. Sources inside the station even say they are not supposed to refer to their employer as Russia Today at all, and the name no longer appears on employees’ business cards.
Simonyan flatly denied that a name change had taken place and explained that the station had only altered its corporate logo to attract more viewers.
“We removed ‘Russia Today’ from the logo after many colleagues, also from foreign media, told us that it was diminishing our potential audience,” she said.
The logic, she explained, was that the country’s appeal is too narrow. “Who is interested in watching news from Russia all day long?” she said.
The rebranding, she said, only affects the English- and Spanish-language divisions, while the Arabic channel is still called Russia Today (Rusiya Al-Yaum). “For the Arab world, Russia has added interest as a result of old Soviet links,” she said.
Igor Reichlin, a partner with CNC Communications, a public relations agency in Moscow, suggested that such a rebranding was counterproductive.
“’RT’ is just meaningless. They are shying away from the difficult but feasible task of ridding the brand ‘Russia’ of its negative connotations,” he told The St. Petersburg Times.
Simonyan denied that Russia Today was disguising its roots. “All of our anchors begin their shows with ‘Hello from Moscow,’” she said.
Others have questioned the channel’s independence because of its links to the state-owned RIA-Novosti news agency, whose guiding principle is to improve Russia’s image in the world. 
“The double remit of reporting and representation is a handicap for that organization. It would probably be better for RIA-Novosti to be given an explicitly independent remit, like the BBC or AFP,” said John Laughland, director of studies at the Paris office of the Institute for Democracy and Cooperation, an pro-Kremlin think tank that focuses on relations between Europe and Russia.
RIA-Novosti said in a statement issued last month that it is “neither a sponsor nor a backer of Russia Today” and merely participated in establishing the channel as an Autonomous Non-Profit Organization, which provided for its complete legal, editorial and operational independence .
Simonyan, whose office is in the same building as RIA-Novosti’s, stressed that the station does not position itself as part of RIA-Novosti and that RIA-Novosti does not interfere in its editorial policy.
She also said Russia Today never hid that it was funded by the government. “Probably many viewers of BBC World News also do not know that their program is directly funded by the British Foreign Office,” she added.

<strong>Shedding Light on the Margins</strong>
Laughland, who is a frequent commentator on Russia Today, said the channel “fulfills an important role in the world media by airing views that otherwise might be ignored.” He also pointed out that by offering shows like “CrossTalk,” “whose very purpose is to encourage strong debate,” the station was making a leap from its image as a propaganda tool.
While Russia Today’s reports are clearly a far cry from the fawning news coverage on the country’s national television channels, critics maintain that its editorial policy is overtly toeing the Kremlin line by giving generous airtime to obscure critics of the United States. Last week, the station aired an interview with U.S. author Hank Albarelli, who claims that the CIA is testing drugs on people.
Simonyan argued that the channel’s policy was merely to provide a platform for marginalized points of view that otherwise got little coverage, like the Sept. 11 conspiracy theorists. “I personally do not believe them. But I believe that if there are people out there who think so but do not get into mainstream media, they deserve an audience — and we should give them a forum,” she said.
She added that giving airtime to “truthers” was morally comparable to Western media coverage of the 1999 apartment bombings in Moscow and two other cities that killed 293 people. “What about Western media reports saying that Vladimir Putin was behind the bombings?” she said.
Some employees at Russia Today feel that this is a dead-end strategy. “I think it makes us look stupid. By giving airtime to all these crazy conspiracy theorists, we are really limiting our audience,” said one employee, speaking on condition of anonymity for fear of reprisal.
But Simonyan said viewer resonance and audience numbers confirmed that the strategy is right.

<strong>Cultivating a Global Audience</strong>
Russia Today said that in a three-month period last year, the number of viewers in six European countries — France, Germany, Italy, Poland, Serbia and Britain — exceeded 7 million.
In Washington, where Russia Today recently opened a glitzy broadcast center with five editing rooms and an 80-seat newsroom, the channel had a daily audience 6.5 times greater than that of Al-Jazeera English and a monthly audience five times greater than Deutsche Welle last year, Simonyan said.
The editor takes pride in the fact that the channel has conquered new heights on the Internet, which she described as “the future of television.” By Tuesday, Russia Today’s videos had garnered more than 83 million views on YouTube, and on many days its clips get more views than other major news organizations, she said.
YouTube currently ranks Russia Today ninth in its “News & Politics” section (YouTube.com/Channels) and 35th overall in this month’s channel ranking.
Yet critics have called the channel a huge waste of money, arguing that its 2008 budget of reportedly 3.6 billion rubles (then worth $147 million) was disproportional to its viewership.
Simonyan said “such criticism can only come from people who have no idea of audiences and financing” but refused to say what the channel’s current budget is, explaining that it was “unclear” if it was legal for her to disclose it.
She added that the budget is significantly less than Deutsche Welle’s but significantly higher than the initial $30 million in 2005 “because in 2009 there were three Russia Today channels, not one.”
German broadcaster Deutsche Welle has an annual tax-financed budget of 275 million euros ($374 million), but that includes radio, television and Internet services in 30 languages. Its television division’s budget for 2010 is 84 million euros ($116 million), Berthold Stevens, a spokesman for Deutsche Welle said in an e-mailed statement.
“Our budget is really small. There are Chinese projects that will get $7 billion this year but whose audience is significantly smaller,” Simonyan said.
Simonyan said it was good that countries like Russia are spending money to make their voices heard “after so many years in which the international media scene was reduced to the points of view of Anglo-Saxon countries.”
Pointing to a string of monitors on the wall opposite her desk, she said, “For five years, I have been watching BBC and CNN news every day — they have almost exactly the same topics, the same wording, the same order. And for so many years they were the only international TV news sources. … It’s great that there is a channel with a different view, different experts and a different order.”
Russia Today also offers more traditional news fare, including interviews with leading newsmakers like Foreign Minister Sergei Lavrov and State Duma Deputy Andrei Lugovoi, who was wanted by Britain in connection with the 2006 poisoning death of former security officer Alexander Litvinenko.
Mikhail Fedotov, chairman of the Union of Journalists, said Russia Today’s main problems, apart from a lack of trust because of its perceived closeness to the state, were created by the very state that founded it.
“To improve Russia’s image, we need change within Russia,” he said.
As an example, he pointed to the harassment last fall of journalist Alexander Podrabinek by the pro-Kremlin youth group Nashi. Podrabinek was forced into hiding after Nashi held daily demonstrations outside his apartment following his publication of an article critical of Soviet military veterans.
“Such incidents do more harm to the country’s image than Russia Today can do good. Rather than building a television channel, it would be cheaper if the government just told Nashi to stop,” Fedotov said.
A search for the word “Podrabinek” on Russia Today’s web site yielded no results Tuesday.

<strong>Russian Media Through an Editor’s Eyes</strong>
THE ST. PETERSBURG TIMES
MOSCOW — When Margarita Simonyan was appointed Russia Today’s editor in the summer of 2005, she was just 25. An ethnic Armenian, she had already worked for four years as a correspondent for state-owned Rossia television from her native Krasnodar and the adjoining North Caucasus.
Simonyan won a medal of honor from the Defense Ministry for a September 2004 report on the Beslan hostage crisis and another from the South Ossetian government for Russia Today’s coverage of Russia’s war with Georgia in August 2008.
She spent a year as a student in Bristol, New Hampshire, in the late 1990s.
Simonyan readily criticizes the Soviet media for offering only one opinion. She agrees that public debate is underdeveloped in Russia. But she gets quite emotional when asked whether national television is an example of a rollback of media freedom.
“Yes, but only if we exclude the Internet, newspapers, magazines, radio, regional and private television,” she says. “How can national television eclipse thousands of other media outlets?”
The fact that state-controlled television has by far the biggest audience for her is proof that Russian television watchers have little appetite for sharp political debate. “If people thought they were being deceived … they would switch to other media. But they don’t. Surely they are not watching because [Prime Minister Vladimir] Putin forces them to watch only the first and second channel,” Simonyan quipped, referring to state-owned Channel One and Rossia.
Apart from overseeing a staff of 2,000, Simonyan is also a member of the Public Chamber, where she works on interethnic issues. Last month she published “To Moscow,” a novel about a young female journalist working in the regions.

TITLE: Editor, Kremlin Critic Decry YouTube Video
AUTHOR: By Alexander Bratersky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russian Newsweek editor Mikhail Fishman and opposition politician Ilya Yashin cried foul Thursday after a video surfaced on YouTube that seemingly shows them giving bribes to traffic police officers.
The traffic police suggested that the officers depicted in the video were actually actors, and Yashin linked the recording to Nashi, the youth group known for hounding people critical of Prime Minister Vladimir Putin’s policies.
The three-minute video, posted by an anonymous user and titled “Words and Actions,” shows Fishman, Yashin and liberal political analyst Dmitry Oreshkin being asked by someone off camera to share their opinions about the widespread practice of bribing the traffic police.
Fishman and Oreshkin say they have bribed officers in the past to avoid fines, while Yashin says he prefers “to convince police officers with words.”
The video then shows Yashin being stopped by the traffic police and apologizing for speeding. The camera then cuts to a police officer’s hand holding 3,000 rubles ($100). An officer is then shown telling Yashin not to give money directly to the police but to pay the fine as required by law.
Similar scenarios are repeated with Fishman and Oreshkin.
Yashin denounced the video as “an ordinary provocation by the security forces.”
“I don’t even see any reason to complain to the police because the policeman himself acted as a political provocateur,” he told The St. Petersburg Times.
He said the incident in the video occurred in September when he was stopped by a traffic police car near his house. He said the officers tried to extort a bribe but he convinced them to back off.
Yashin noted that the video does not show him handing over money and suggested that it had been doctored.

TITLE: President Warns Officials They Must Obey Orders
AUTHOR: By Scott Rose
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — President Dmitry Medvedev warned federal and regional officials on Tuesday that they could find themselves out on the street for not fulfilling his orders in a timely manner, including a sweeping reorganization of the state corporations created under his predecessor.
The remarks — made at a Kremlin meeting that included a number of ministers and regional bosses who listened in by video link — were Medvedev’s latest initiative to raise his profile as the country’s top politician.
Prime Minister Vladimir Putin, whose Cabinet receives the majority of presidential orders, was not in attendance, although three of his deputies were: Sergei Sobyanin, Alexander Khloponin and Alexander Zhukov.
“Orders from the head of state … just have to be fulfilled. Whoever doesn’t fulfill them can take a hike,” Medvedev said.
The number of official directives from Medvedev rose to 1,753 in 2009, a 30 percent increase compared with the previous year, but many of them remain unfulfilled, Konstantin Chuichenko, head of the Kremlin’s control department, told the meeting.
“The theme for the orders hasn’t changed. Like before, the focus is on the social and economic situation. The number of completed … orders was 1,084 in 2009. That’s an increase in completion of about 15 percent from 2008,” Chuichenko said, Interfax reported.
“Despite some positive results, the quality of how orders are fulfilled remains at an unsatisfactory level,” he said.
The biggest offenders in completing presidential orders were the Energy, Defense and Regional Development ministries, Chuichenko said.
Medvedev’s most efficient subordinates were from the Prosecutor General’s Office as well as the Justice, Transportation and Foreign ministries.
“Despite the fact that I fairly often hear reports from the government, from the regions, from other organizations, these reports don’t always look substantive,” Medvedev said, according to comments posted on the Kremlin web site. “They’re often just runarounds trying to push back this or that deadline. Our respected colleagues report that they’ve done this and that, but in reality, when you start to look into it, basically nothing has happened.”
Medvedev said some long-term projects, such as Olympics preparations and other big construction projects, require distant deadlines. “But when [officials] write letters suggesting a half-year extension, then that can only mean one thing: not fulfilling the president’s orders,” Medvedev said.
He ordered Chuichenko to suggest appropriate consequences, “regardless of rank or position,” for officials requesting delays, Interfax reported.
In the second part of the meeting, Medvedev listened to reports on how his previous orders were being carried out, as well as issuing a series of new directives. Most notable was the broadside against state corporations, which have been a regular target for Medvedev.
In August 2009, he ordered Chuichenko and Prosecutor General Yury Chaika — also present at Tuesday’s meeting — to investigate them, setting Nov. 10 as a deadline to determine whether the state corporation model should “continue to be used as a legal and management structure.” In his state-of-the-nation in November, Medvedev said three of the corporations — Russian Technologies, Rusnano and Vneshekonombank — would likely lose the status in 2010.
Several of the state corporations, such as Olimpstroi, were established with fixed end dates. But the heads of others have been quietly lobbying to push back the reforms, which would strip them of some privileges.
“The combination of commercial and regulatory functions is the best path to corruption. Therefore, the sooner this situation is overcome, the better — for these state corporations, for their directors and for the budget,” Medvedev said.
Economic Development Minister Elvira Nabiullina told the president that two bills providing greater oversight of the corporations were being discussed in the government and would be submitted to lawmakers by April 1. The bills would place more independent directors on the corporations’ supervisory boards and monitor how they purchase goods and services.
Medvedev scolded her, however, saying he had ordered the bills to be submitted by March 1. “If that hasn’t been done, then the order hasn’t been fulfilled,” he said.
He also reprimanded her for proposing that state corporations should not be forced to operate under federal law No. 94, which requires that state orders of goods and services be conducted through transparent tenders.
“If you have other thoughts on the matter, then it’s essential to justify that position,” Medvedev said.

TITLE: Local Yabloko Members Oppose Party Leadership
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: An interparty struggle between the St. Petersburg branch of Yabloko and the democratic party’s leadership in Moscow went public this week.
Local members quit the Solidarity democratic movement in order to comply with a party congress resolution obliging them to leave all political movements, coalitions and groups other than Yabloko, but issued an unusual statement criticizing the party’s leadership on Tuesday.
Resolution No. 248 “On Double Membership,” passed by a Yabloko congress held in Moscow in December, requires members to announce their departure from other groups “publicly, on the party’s web site” within three months or face expulsion from Yabloko. The resolution was criticized as being approved on orders from the Kremlin to weaken the opposition.
In Tuesday’s statement, 35 Yabloko members, mostly from the St. Petersburg branch — including chairman Maxim Reznik and deputy chairman Alexander Shurshev — complied with the resolution, but criticized it as “harmful and damaging not only to our party, but to the whole democratic movement in Russia.”
Claiming that the party’s conservative leadership was “deliberately forcing us out of Yabloko,” the protesters said that the interparty reformative opposition would continue to struggle against the party’s current leadership and its political line and cooperate with the other democrats.
The statement laid responsibility for the resolution with Grigory Yavlinsky, Yabloko’s former chairman, whom the statement described as “effectively the party’s leader,” along with its official chairman Sergei Mitrokhin and deputy chairman Sergei Ivanenko. The authors of the statement criticized the Yabloko leaders’ unwillingness to take part in Dissenters’ Marches, their “aggressive refusal” to back Solidarity leader Boris Nemtsov at the Sochi mayoral elections last year and their support of Moscow Mayor Yury Luzhkov, the leader of the ruling United Russia party in Moscow.
“Having chosen to conserve the party under [the country’s current] authoritarian rule (in the hope of living to see better days,) these colleagues of ours, while imitating and misappropriating the status of the ‘only united democrats,’ in reality, time after time torpedo any attempts at genuine consolidation by democrats, activists and voters in this country,” the statement read.
Speaking by phone on Thursday, Yabloko chairman Mitrokhin welcomed the fact that the party members had submitted to the resolution and dismissed speculation that the resolution had been instigated by the Kremlin as “the idle talk of home-grown political analysts.”
“You can’t sit on the fence all the time, or be the bridegroom at every wedding,” he said, adding that Yabloko does not refuse to cooperate with the other democratic organizations.
“I understand their emotions, I understand that they are voicing their resentment. I react to it with understanding and welcome their criticism. Ours is a democratic party. 
“But it’s unacceptable if you are a member of our political organization and of some other organization at the same time, with goals that are perhaps similar but still different. I think it’s harmful for those who choose to sit on the fence. The fence could fall down and they could hurt themselves.”
Olga Kurnosova, a member of the Solidarity leadership, said that local members of Yabloko belonged to Solidarity as individuals, rather than as part of a political party. She described the resolution as “destructive” and Kremlin-initiated.
“I am almost positive that after Solidarity took part in elections, when Solidarity started to come in second regularly after United Russia, it simply sent them [the Kremlin] into a panic,” Kurnosova said by phone Thursday.
“It doesn’t fit in with [the Kremlin’s chief ideologist Vladislav] Surkov’s scenario at all. That’s why the demarche aimed at weakening Solidarity was staged, but it won’t work. We’ll keep on working together, and no Mitrokhin will be able to forbid us from cooperating in St. Petersburg.”

TITLE: Kalinin, Architect of Prison System, Fired
AUTHOR: By Alexandra Odynova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — President Dmitry Medvedev has fired Deputy Justice Minister Yury Kalinin, an architect of the country’s notoriously corrupt prison system, the Kremlin said in an official statement Tuesday.
The statement, published on the Kremlin’s web site, did not give a reason for Kalinin’s dismissal.
The country’s prison system has been widely criticized by human rights groups and the media. Most recently, Hermitage Capital lawyer Sergei Magnitsky died in pretrial detention in November, prompting Medvedev to dismiss about two dozen senior prison officials.
Human rights groups welcomed Kalinin’s dismissal, saying he had introduced a system of violence that was used to control and subjugate the more than 900,000 inmates in the country’s penitentiaries.
“At last it has happened. The struggle against his activities has gone on for many years,” said Yevgeny Ikhlov, an activist with the Foundation in Defense of the Rights of Prisoners.
In 2008, leading human rights activist Lev Ponomaryov was charged with slander for calling Kalinin “the author of a sadistic system of torture” who was responsible for a network of 40 prisons that were effectively “torture zones.” A court ordered Ponomaryov to retract the statement.
Ponomaryov also claimed last year that hardened criminals were being used to torture other inmates in efforts to extract confessions.
In another example of prison abuses, seven St. Petersburg prison officials were charged this month with abuse of office in connection with sexual violence against two prisoners who attempted to escape in September.
In 2006, when Kalinin reached retirement age, several media outlets incorrectly reported that he had resigned because of his age or because of an investigation into the abuse of inmates at a Perm region prison camp.
Kalinin, 63, served as chief of the Federal Prison Service from December 2004 until last August, when he was appointed deputy justice minister and charged with overseeing the penitentiary system.
Kalinin is one of the federal government’s longest-serving officials. He assumed command of what was then the Interior Ministry’s Main Corrections Directorate in 1992 and held on to his post when the prison system was later folded into the Justice Ministry.

TITLE: Clinton Urges Russia Over Iran
PUBLISHER: The Associated Press
TEXT: MOSCOW — U.S. Secretary of State Hillary Rodham Clinton has urged Russia to delay launching Iran’s nuclear plant until Tehran proves that it’s not pursuing atomic weapons.
Clinton made the statement Thursday when asked about Prime Minister Vladimir Putin’s statement that Iran’s first nuclear reactor is set to be launched this summer.
Clinton said Iran is entitled to civil atomic energy, but added that it would be premature to go forward with any nuclear project when Tehran has yet to prove the peaceful nature of its program.
The U.S. and other nations are concerned that Iran has been trying to secretly develop nuclear weapons.
Foreign Minister Sergey Lavrov responded that Russia still intends to launch the plant in the Iranian port city of Bushehr. Both spoke after their talks in Moscow.
Clinton said Thursday that Washington and Moscow are making “substantial progress” in negotiating a replacement pact to an expired treaty on limiting their strategic nuclear arsenals.
Clinton spoke in Moscow during a two-day visit for talks on a range of international issues, after a one-on-one meeting with her Russian counterpart, Sergey Lavrov.
The long-awaited replacement to the Strategic Arms Reduction Treaty — which expired Dec. 5 — is a pillar of the so-called reset in relations between the Cold War foes.
President Barack Obama and his Russian counterpart, Dmitry Medvedev, called for a quick signing at their Moscow summit in July, but negotiations stalled over such issues as counting methods, verification procedures and U.S. plans for a missile defense system in Europe.
Teams of negotiators from both countries have been hammering out a new pact over the last months in Switzerland.
“We are making substantial progress on the new START treaty. The word from our negotiators in Geneva and the results from the latest negotiating rounds lead us to believe we will be reaching a final agreement soon.”
Some observers say Russia and the U.S. want a deal reached before nonproliferation conferences in the United States in April and May.
Lavrov said there was every reason to believe “we have entered the final straight.”
Clinton was to take part in a meeting of the so-called Quartet of Mideast peacemakers set to hold formal talks on Friday, and is also to see Prime Minister Vladimir Putin in a previously unannounced schedule change.

TITLE: Boy at Center of Custody Dispute Goes Home
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: Robert Rantala, the seven-year-old child taken into care by Finnish social services, will stay with his Russian mother Inga Rantala and her Finnish husband Villi Pekka. 
Finnish social workers have said they will not take Robert back to the children’s home, and will not file a case against the boy’s mother.
The decision was the result of negotiations between Russia’s children’s ombudsman Pavel Astakhov and representatives of Finnish social services in Finland on Wednesday, RBC news agency reported. Astakhov, who traveled to Finland to resolve the situation, which had created an outcry in the Russian media, admitted the Rantala family had certain problems. 
“There is quite a large file of information gathered since 2006 about the case, and nothing is as simple as it seemed,” the ombudsman said, Kommersant daily reported.
Astakhov said the Finnish side “would not file a case if the boy’s parents fulfilled their obligation to meet certain conditions.”
During the meeting, Astakhov and the Finnish social workers developed a plan of “home social help for the family” with the aim of making conditions in the family and the boy’s home life “normal.”
The parents must stay in contact with social workers, and allow social workers access to their home. They must also attend family consultations.
Astakhov said that the Rantalas deserved a second chance.
“The family is ready to recover and take care of the child,” he said. “Robert himself wants to live with his parents.” Astakhov said he was prepared to be a guarantor that the family would not violate the boy’s rights.
The scandal surrounding the Rantala case broke out in early February when the boy was taken into care after he allegedly said at school that his mother smacked him and that he could move to Russia if he had problems in Finland.

TITLE: Forum Focuses on City Ecology
AUTHOR: By Jan Meyer
PUBLISHER: The St. Petersburg Times
TEXT: The quality of St. Petersburg’s tap water was one of the spotlight issues at the Ecology of a Big City international ecology forum held at the city’s Lenexpo exhibition from Wednesday to Friday this week.
The issue was selected as a central theme by the local water utility Vodokanal, in response to concern expressed by many inhabitants of St. Petersburg about the drinkability of the city’s tap water. Ayna Muktepavel, a representative of the company’s information policy department, addressed worries at the forum about water quality. According to Muktepavel, the water is tested by independent laboratories at more than 300 different locations, and the 2.5 billion liters of water processed every day are checked every 10 seconds in special stream tests. 
Less conventional methods are also employed to guarantee the quality of the water.  Vodokanal uses crayfish testing, in which crayfish and their reaction to the water are constantly monitored. The World of Water museum that opened at Vodokanal’s headquarters in 2003 aims to create awareness, particularly among young people, of water cleaning processes and the importance of high quality water.  
The company did concede an elevated iron content in 2 percent of the water samples tested, but the problem will be tackled in June this year by employing a new filter system, according to Tatyana Portnova, head of technical services at Vodokanal. Portnova said that in addition to making the water safer by decreasing its iron content, the company will also start improving tap water for locals’ health by adding extra calcium to it. 
Visitors to the forum, at which about 140 exhibitors from more than 10 different countries promoted their products, services and innovations, can also learn about the newest technologies in air protection and waste management, among other things.  Special emphasis was paid to developments that decrease toxic waste. The Moscow company Kiel presented a machine that disposes of dangerous clinical waste by compressing and grinding it, turning it into harmless powder comprising just 30 percent of its initial volume. Though the equipment is relatively expensive compared to conventional methods ($164,000 for one device capable of serving one hospital,) the project’s director, Eduard Musiyev, believes his company’s invention will prevail on the market due to its “clear ecological advantages.” 
The event, which was organized by the local authorities of St. Petersburg and the Leningrad Oblast, as well as the presidential administration for the Northwest federal district, attracted more than 3,500 specialists from around Russia and nearby countries. 
The Ecology of a Big City exhibition has been held in St. Petersburg annually for the past ten years. The issues focused on at the forum are nowhere more relevant than they are in Russia — according to the Blacksmith Institute, three out of the 10 most polluted cities in the world are in Russia: Norilsk, Dzerzhinsk and Dalnegorsk and its neighboring Rudnaya Pristan.
St. Petersburg was ranked a dismal 85th out of Russia’s 89 regions in a rating compiled last year by the Russian Independent Environmental Monitoring Agency.

TITLE: Ukraine Seeks Funding as IMF Poised to Return
AUTHOR: By Daryna Krasnolutska
PUBLISHER: Bloomberg
TEXT: KIEV — Ukraine is planning a return to capital markets outside its borders after the International Monetary Fund indicated it is close to resuming cooperation with the government.
The IMF will send a mission to Kiev next week, Deputy Prime Minister Serhiy Tigipko said at a Dragon Capital conference on Thursday, at which he pledged commitment to budget cuts needed to narrow the government’s 11.5 percent deficit of gross domestic product.
“Today, we have offers to issue bonds in the west, but rates are not good,” Tigipko said. “After we restore the IMF program and as we demonstrate to investors that we are committed to reforms, we will get good terms.”
Tigipko on Thursday unveiled a range of measures designed to persuade the IMF and investors that his government will reduce the deficit and unfreeze its $16.4 billion emergency loan. Ukraine wants to cut spending, to bring in 10 billion hryvnia ($1.24 billion) this year from asset sales and to negotiate a lower gas price with Russia, Tigipko said Thursday.
The Economy Ministry under the previous government said in January that it plans to sell as much as $1 billion in foreign-currency debt next quarter, its first international sale since June 2007.
“We have to repay 4.9 billion hryvnia on domestic bonds in April, we also have significant obligations in May and June,” Tigipko said. “We will target borrowing abroad as yields on domestic bonds are high.”
The government sold 2013 notes on March 16 at an average yield of 17.3 percent. That compares with an average yield of 22.92 percent on 2013 notes sold on March 2.
The government also wants to extend its program with the IMF beyond the autumn expiration date.
“We may not need more money from the IMF as investors will be interested in Ukraine and we will have investors demand,” Tigipko said. “But we need the IMF’s advice to boost our economy.”
The IMF’s representative in Kiev, Max Alier, said the fund hadn’t yet received an official request from Ukraine asking it to extend its program.
Alier said the Washington-based fund is taking a “fresh” look at its budget targets included in the loan’s terms. The IMF currently requires Ukraine to target a 4 percent shortfall of GDP. The fund’s Kiev office has sent a request to Washington for a mission visit, though no final dates have been announced, he said.
Ukraine’s credit outlook was raised to stable from negative at Fitch Ratings Wednesday, sending credit default swaps on the country’s debt to the lowest level since September 2008. Fitch affirmed Ukraine’s long-term foreign currency rating at B-. The Fitch move follows Standard & Poor’s, which upgraded Ukraine’s credit rating by one level, to B- on March 12.
Parliament this month pushed through legislative amendments to allow the formation of a coalition sympathetic to President Viktor Yanukovych. Prime Minister Mykola Azarov has said he will submit a budget proposal to lawmakers within a month.

TITLE: Online Shopping Mired In Shipping Problems
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Foreign-based Internet shopping sites are drawing increasing numbers of Russian consumers looking for deals, but as delays mount at the country’s notoriously inefficient postal service, many are finding that securing delivery of their items is no simple task.
Complaints have surfaced over the past several weeks that internationally shipped packages from popular online shopping sites such as eBay are taking an inordinate amount of time to reach their destination in Russia.
“It seems as though packages have stopped moving altogether since the New Year’s holidays,” said Alexander, an avid online shopper who keeps a popular blog on the subject at http://t-itanium.livejournal.com.
“I have convinced two people to sell to me, though they were against shipping to Russia, and now their worst fears have been realized — two months later I am still waiting,” he said by telephone, requesting that his last name not be used.
Internationally posted letters and parcels are supposed to be delivered via Russian Post within 13 and 20 days, respectively, according to the company’s web site. EMS Russian Post, its express subsidiary, says parcels must be delivered within two days from most European countries and three days from the United States, but parcels delivered by EMS post have also been missing for weeks, shoppers said. And the packages’ electronic tracking system indicates that the delays are happening on both sides of the customs posts, Alexander said.
But there is some evidence that part of the problem may be holdups in customs processing. Well-known international carriers such as UPS and DHL have seen the amount of time it takes to process packages at customs recently increase to 10 days from the standard four days, Kommersant reported Wednesday.
DHL said in a statement last week that parcels destined for Moscow “are currently incurring clearance delays as a result of recent changes in customs clearance procedures for all express carriers.” Federal Customs Service spokesman Dmitry Kotikov denied that any procedures had changed this year.
Russian Post jumped on the bandwagon, blaming the customs services for the increased delays experienced by its customers.
“The longer delivery times … are a result of delays in customs check zones for parcels coming from abroad,” Russian Post said in e-mailed comments.
“Mail that goes through [regular] customs processing is sent to its destination without delay,” it said.
Russian Post also pointed to an increase in the volume of international mail it processed. Depending on the type of mail, deliveries increased 50 percent to 90 percent year on year during the first two months of 2010, it said.
The Federal Customs Service confirmed that the volume of processed parcels grew over the period, but denied that it was responsible for any delays.
“Almost all mailings given to the service by the Russian Post are processed within one day,” the service said in a statement last week.
Much of the mail sitting at customs points is there because it hasn’t gone through Russian Post’s own internal processing procedures, and another part is waiting to be picked up by the postal service, the statement said.
Kotikov said the service was looking into increasing the number of customs processing points.
The mutual accusations and red tape highlight the difficulties faced by Russia, which still uses the same infrastructure and procedures as in Soviet times, as it tries to increase its participation in the global Internet marketplace.
And the huge delays faced by customers are forcing many sellers to write off Russia entirely. Since delays often cause buyers to file claims to PayPal — the Internet payment system used by eBay and many other Internet shopping sites — many eBay vendors have begun changing their policies.
“I switched to shipping items [internationally] only to Canada,” said eBay seller Dan, who sells collectible coins out of the United States. “I have had a few people from Russia saying they are not receiving items. When an item does not make it to them, I lose money because PayPal sides with the buyer,” he said by e-mail, asking that his last name not be used.
And even if sellers do eventually get their money, the lost time isn’t worth it to many.
“PayPal takes the money out of my account while they are waiting for a dispute to end, so in each case I wasn’t paid for the item or the shipping for two months,” eBay vendor Jon, who declined to give his last name, said when contacted through eBay. He stopped shipping to Russia two years ago after several deliveries were delayed and has not resumed despite the growth in Russian Internet shopping.
“The Russian e-commerce market grew more than 50 percent last year to $5 billion,” Alina Prawdzik, eBay’s head for expansion in Europe, said in an e-mailed statement.
California-based eBay said recently that it planned to launch a Russian version of its web site to satisfy increasing demand, but it has not said officially when the site will be launched.
For the time being, Russian customers are advised not to use Russian Post, Prawdzik said in the statement.
“Feedback from experienced eBay sellers recommends the use of alternative carriers [to Russian Post]. … In many instances the deals available to Russian buyers will still remain compelling,” she said. “We are obviously looking forward to the resumption of normal postal services in Russia as soon as possible.”
Russian Post is nevertheless the only option for many people because it is much cheaper and parcels shipped using the service fall under different customs rules: Customers can ship items valued at up 10,000 rubles ($340) without paying a duty through Russian post, while the figure is only 5,000 through DHL and UPS.
The postal service has struggled to reinvent itself as it tries to shed its reputation for long lines and poor service.
Alexander Kiselyov, former director of Svyazinvest, a state-owned telecommunications giant, took the reins of Russian Post last year and vowed major changes to modernize the company and make it less state-dependent. In November, it announced that 8 percent of its 415,000 jobs would gradually be eliminated as it pushes to increase its efficiency.
Nevertheless, the postal service is still viewed negatively by many Russians. A poll initiated last week by Alexander, the blogger, showed that he was not the only disgruntled customer waiting for delivery. Out of 494 respondents, 91 percent thought that Russian Post’s service was poor, very poor or awful.

TITLE: Tax Breaks Planned for Investors in Innovation
AUTHOR: By Dmitry Kazmin
PUBLISHER: Vedomosti
TEXT: MOSCOW — The government is planning to exempt investors from long-term capital gains taxes, but for now the proposed rules would only apply to shares of companies not traded on exchanges, in the hope of stimulating private equity and venture capital investment.
A special focus was put on boosting innovation during a meeting on tax policy for the coming three years chaired by Prime Minister Vladimir Putin.
Putin agreed with a proposal to exempt the sale of not publicly traded shares from the 20 percent tax on capital gains, a move intended to increase long-term investment in innovative companies and entice investors to conduct their deals in Russia’s legal jurisdiction, two officials with knowledge of the meeting told Vedomosti.
Putin’s press secretary, Dmitry Peskov, declined to comment on the matter.
Under an Economic Development Ministry proposal that was forwarded to the Finance Ministry before the meeting, the tax break would apply to stakes of at least 10 percent held for at least five years. A copy of the proposal was obtained by Vedomosti.
Shares traded on the MICEX Market for Innovations and Investments or not traded on any organized exchange would be covered under the plan. MICEX’s innovation market was opened in July 2009 and has five companies’ shares trading on it.
Final proposals should be finished by April, said an official at a state body participating in the discussion of the Tax Code amendments. Canceling the capital gains tax for legal entities has essentially already been approved, but extending the benefit to private investors is still being discussed, the source said.
There are currently no discounts on the capital gains tax, although until 2007, investors holding securities for at least three years were exempt from it, said Dmitry Kostalgin, a partner at Taxadvisor.
The practice is, however, nearly universal in European Union countries, said Rustam Vakhitov, a senior lawyer at Pepeliaev Group. He said 10 percent ownership was a widespread condition for the tax breaks, though typically there are either no limitations on the period of ownership or the period is less than five years.
Vakhitov said he could not think of any countries with a tax break applying only to securities not traded on exchanges.
The goal is to stimulate an inflow of investment beyond blue chips and into startups and venture capital projects, Deputy Economic Development Minister Stanislav Voskresensky told Vedomosti.
Kirill Dmitriyev, president of Icon Private Equity, said he thought it was the right approach, since a disproportionate amount of investment in Russia goes to blue chips. Tax breaks on capital gains would make Russia more attractive for private equity investment, investors contacted for this article told Vedomosti. But there was no consensus on how significant the measures would be for the market.
Investors will start to look more closely at a business’ fundamentals and not just its stock price, said Alexei Panferov, managing partner at New Russia Growth Capital Advisers. For venture capitalists and private equity investors, the changes are very positive, agreed Finam general director Arsen Aivazov, but portfolio investors — who tend to prefer liquid assets — are unlikely to change their priorities.
The investors surveyed for this story said they generally approved of the ownership requirements for the discount. For venture investors, five years is the upper limit for staying in an asset — three to four years is more common — but they could come to terms with the longer time for the tax break, Aivazov said.
Rusnano managing director Dionis Gordin said the proposals were a positive indication about changes in the system as a whole but the time limits and the size of the stake were a bit harsh for venture capitalists. They’re more used to frequent purchases and sales with a timeline of three to five years, he said.
The Economic Development Ministry’s proposals are also intended to encourage investors to conduct their business in Russia, Voskresensky told Vedomosti.
Capital gains taxes are a major argument in favor of selling shares somewhere else, for example, in Cyprus, said Giedrius Pukas, a partner at private equity fund Quadro Capital Partners.
But taxes aren’t the only reason, said Konstantin Demchenko, a managing director at Everest Asset Management. Foreign jurisdictions are favored also because of problems with Russian law enforcement and courts. Another reason for offshore transactions is reluctance to disclose end beneficiaries, said Finam’s Aivazov.
Additionally, from 2011, tax exemptions will be simplified for dividends being paid into Russia from abroad, said Alexander Zakharov, a partner at Center USB. The minimum investment of 500 million rubles ($17.1 million) will be lifted, and the discount will apply to owners of stakes of 50 percent for more than a year, excluding countries in the Finance Ministry’s list of tax havens, he said.

TITLE: Russian Technologies May Lose Air Assets to Aeroflot
AUTHOR: By Anastasia Dagayeva and Yelena Mazneva
PUBLISHER: Vedomosti
TEXT: MOSCOW — Russian Technologies could be left without its airlines or a stake in Aeroflot because the state corporation and state-run airline cannot agree on how to manage their aviation assets jointly.
The six airlines handed over to Russian Technologies by presidential order in 2008 and 2009 could now be handed over to Aeroflot for management — also by presidential order. As a result, Russian Technologies would be left without a stake in Russia’s largest carrier, Reuters reported, citing government sources and people close to Aeroflot and the state corporation.
A source close to Russian Technologies confirmed to Vedomosti that the option was being discussed but said it was not the only one. The main reason this option is even on the table is that the two sides cannot agree on joint management of their assets, the source said.
Cooperation between Aeroflot and Russian Technologies was discussed Monday at a meeting led by First Deputy Prime Minister Igor Shuvalov. A decision has been made, a spokesperson for Shuvalov said, declining to elaborate.
Aeroflot and Russian Technologies could not be reached for comment late Tuesday.
Russian Technologies is managing the companies Rossia, Kavminvodyavia, Orenburgskiye Avialinii, Vladivostokavia, Saratovskiye Avialinii and Sakhalinskiye Aviatrassy, which had a combined passenger volume of 6.65 million people last year.
Initially, Russian Technologies wanted to create its own airline as a competitor to Aeroflot, working in partnership with Moscow City Hall. The partnership fell through, however, and the Aeroflot plan soon emerged. On Feb. 2, Prime Minister Vladimir Putin decided that Russian Technologies would give the aviation assets to Aeroflot and receive in exchange a stake in the company.
A week later, the two sides were supposed to sign a memorandum of understanding, and Aeroflot even prepared some of its own shares ahead of time, reaching agreement with Alexander Lebedev’s National Reserve Corporation to purchase a 25.8 stake.
The memorandum remains unsigned, however. The state corporation wants an equal say in the management of the six carriers it now controls, but Aeroflot is opposed, a Transportation Ministry official and a source close to Aeroflot said in early March.
Apparently, the government is concerned that the sides will not reach an agreement because they are both too ambitious, a Transportation Ministry official said. After all, the airlines that would be handed over are not in the best financial shape, especially the largest of them, Rossia, the official said.
Yelena Sakhnova, an analyst at VTB Capital, said she thought that the officials’ discussions about whisking away Russian Technologies’ six airlines could be simple blackmail. The deal will certainly go through as approved by Putin, she said, but Russian Technologies will be more complaisant.
Putin’s press secretary, Dmitry Peskov, declined comment.

TITLE: Bringing the Money Back to Russia
AUTHOR: By Tim Nicolle
TEXT: The credit crisis, which will soon be three years old, may be over, depending on whom you listen to and on when you think it started. Whether it is over or not, the effects of a global crisis continue to be felt in all markets. International lending to Russia — other than to sovereign-grade borrowers — has slowed to a trickle, and domestic credit to the real economy is not in plentiful supply. It is still too early for mature reflection on what the crisis means for Russia, but we can now guess the likely pattern of the next few years.
In the period immediately before the crisis — from 2000 to 2007 — international banks developed a lot of extra credit which they provided freely around the world. This was because the amount of risk that they were running was underestimated and because a lot of risk was assumed to have been reliably transferred to the non-bank sector, namely hedge funds and insurers. Moreover, it was assumed that markets were getting more efficient at pricing risk, and much of the regulation of the banking system was delegated to the market. Fundamentally, the efficiency of the market in measuring the risks was overestimated.
The extra credit was created because banks were allowed to borrow more and to lend more without increasing their capital base. Russia received more than its fair share of these extra funds. At the start of the crisis, markets froze, but it became clear very quickly that the crisis was not a liquidity problem but a capital one. Banks had taken on too much risk for the amount of capital that they now held. This was made clear in the United States, Britain and the rest of Europe by the nationalization of some banks and insurers, the failure of others and the widespread use of government guarantees to support bank credit. Although many banks have since raised more capital, most have not raised nearly enough to get back to where they were, especially as new rules are being created that require even more capital than before. As a result, most banks continue to run extensive programs to reduce their loan books in order to get their capital ratios back into line. This means that the extra money will take some time to be restored to circulation. It also means that no amount of liquidity provided by central banks to the banking system will correct the position.
As far as Russia is concerned, we should not expect the imminent return of international money in high volumes to the real economy. Never mind restoring confidence in subsovereign Russian credit. With a few exceptions, international banks will continue to have problems lending to their own economies, let alone to Russia’s.
A domestic solution is Russia’s best hope. Fortunately, the country’s banking regulators did not endorse the correlation and market-based approaches of international supervision. Going into the crisis, Russian banks were well-capitalized — at least on paper.
But Russia experienced an explosion of credit. This was based upon inflated asset values, driven in part by funds from international sources that have now been withdrawn and by lenders who tended to focus on assets rather than cash flow. With some exceptions, Russian banks also now have a degree of capital weakness. The banking system certainly and rightly enjoys substantial state support, so this is not something that affects the safety of the country’s bank deposits. At the same time, we do know that the volume of nonperforming loans is troubling, and that there are issues with the availability of credit in the real economy. State-owned banks operating alone are not likely to be the best answer. The challenge for Russia is whether the domestic banking system will be able to respond quickly and efficiently.
Failing to deal with the twin issues of nonperforming loans and capital weakness in the banking system will slow growth in Russia’s real economy for years. Businesses with an overhang of debt do not invest, as management focuses on taking value out rather than putting value in. Postponing the problem will only make it worse. At the same time, accelerating the workout of nonperforming loans potentially undermines further the capital base of the domestic banking system. So there is a paradox: The medicine for curing nonperforming loans needs to be taken quickly, but not at such a speed that it kills the patient — the country’s banking system.
The right answer should involve steps similar to those already taken. This can include, for example, making more improvements to the protections for creditors so banks have the tools to address their positions on nonperforming loans; encouraging the banks to work out their poorly performing loans rather than shifting them off-balance sheet or extending them for another day; ensuring that domestic banks adopt better lending practices, typically with more focus on cash flow and less on assets; and even providing state support, perhaps similar to the policies adopted in the United States and Britain where troubled assets were transferred to a federally managed fund in order to be worked out.
Time is not on Russia’s side, but if it is able to solve its credit issues the money can come back.

Tim Nicolle is a corporate finance partner at PricewaterhouseCoopers in Moscow.

TITLE: Start of a New Thaw
AUTHOR: By Boris Kagarlitsky
TEXT: Ever since the 1960s, Russians have used weather conditions as metaphors for politics. Soviet leader Nikita Khrushchev’s rejection of the personality cult and mass repression under his predecessor, Josef Stalin, was referred to as “the thaw.”
Today, analysts use similar metaphors in predicting how the political reforms announced by President Dmitry Medvedev will play out, although those reforms have so far brought few results.
 The dismal performance of Russia’s Olympic athletes has shown that in athletics, as in other spheres, you cannot buy success with money alone. This Olympics fiasco would not have been so painful were it not for the additional bad news coming in from other areas. We hear almost daily reports of corruption and crime in the police force, with no sign yet that any of the reforms that the Kremlin announced are producing results. Unemployment continues to climb, and opposition groups are gaining momentum, successfully playing off the people’s discontent.
To make matters worse, United Russia lost ground in Sunday’s regional elections. One reason United Russia was still able to perform as well as it did is that voters couldn’t discern any differences between it and A Just Russia or the other Kremlin-friendly “opposition.” The latest elections revealed managed democracy’s secret weapon: You don’t always have to falsify elections results outright, like in the October elections. Sometimes, all it takes to get the similar results is to juggle the candidates and confuse the voters.
It was against this backdrop that a traffic accident on Moscow’s Leninsky Prospekt on Feb. 25 turned into a political scandal. An armored Mercedes sedan carrying LUKoil vice president Anatoly Barkov slammed head-on into a Citroen carrying Vera Sidelnikova, 72, and her daughter-in-law Olga Alexandrina, 35. Both women were killed, while Barkov sustained minor injuries.
The police immediately announced that they had no evidence to suggest that Barkov was at fault. What should have been a standard accident investigation quickly turned into a scandal. Some people are calling for a boycott of LUKoil gas stations, and Russian rapper Noise MC’s song about Barkov going to hell quickly became a hit on the Internet. This is one of the rare cases in Russia in which civil society and public protest scored a victory against government abuse of power. Even Medvedev got involved in the case and ordered the interior minister to investigate the accident. The effectiveness of the president’s intervention will only become clear once the guilty parties are named and punished.
There was a similar case with Moscow’s Rechnik neighborhood, where several homes were demolished on the orders of Moscow authorities. Only after the houses were leveled did the federal authorities step in and declare that the actions of Moscow officials were illegal. Journalists compared that incident to the posthumous rehabilitation of the victims of Stalin’s terror.
For now, the general population continues to live with uncertain hopes. We are probably seeing the start of a new “thaw,” and that is the best news we have had as spring begins to blossom.
But there is a worrisome flip side to this political “thaw.” If the country’s democratic movement continues to develop further, neither the authorities nor society are even remotely prepared for the consequences and responsibilities of living in a freer society.

Boris Kagarlitsky is director of the Institute of Globalization Studies.

TITLE: French flair
AUTHOR: By Elmira Alieva
PUBLISHER: The St. Petersburg Times
TEXT: With 2010 officially designated as the Year of France in Russia (and the Year of Russia in France,) St. Petersburg is actively playing host to French-themed events as well as representing Russia through cultural events in various French cities.
Russia and France have long traditions of bilateral cooperation. This year, more than 350 events in many Russian and French cities will aim to stimulate partnership between the two countries in the areas of culture, trade, economics, manufacturing, scientific research, education and sport. 
The key events of the year include a tour of the Com?die Francaise state theater around seven Russian cities, a unique exhibition titled “Holy Russia” at the Louvre in Paris, and a celebration of Russia’s Independence Day in Paris on June 12. 
While the countries’ capitals naturally play host to many of the key events — Moscow is set to host a concert of French music as well as an exhibition titled “The French Art of Living” in the Manezh exhibition hall, and the year’s program will be closed in December with a gala concert featuring Russian and French ballet stars at the Bolshoi Theater in Moscow — St. Petersburg has certainly got its fair share of events. 
The Year of France in Russia kicked off in St. Petersburg on Feb. 27, with a concert given by the eminent French organist Olivier Vernet at the Mariinsky Theater concert hall. 
More than 50 local renowned cultural establishments will host French projects during the year. The State Hermitage will host an exhibition from the Paris Picasso museum from June 19 to Sept. 15 that looks set to be very popular, as well as an exhibition of modern porcelain from the S?vres factory from June 2 to Sept. 5. From Oct. 5 to 10, the Hermitage will host a week devoted to the Centre Georges Pompidou.
“The Centre Pompidou project will focus on how objects of arts are displayed and discussed, which will continue the well-established cooperation between and mutual enrichment of Russian and French cultures,” said Mikhail Piotrovsky, director of the State Hermitage Museum. 
“Hosting the project in the main state rooms of the Winter Palace will open a multilevel dialogue between styles and epochs.”
The events are not only limited to the interiors of St. Petersburg’s theaters and palaces, however. The State Russian Museum will dedicate the 3rd annual Imperial Gardens of Russia festival to French gardens. 
“The festival and the competitive exhibition, held from June 9 to 20, will be devoted to the history and traditions of French landscape art,” said Vladimir Gusev, director of the State Russian Museum. 
“The participants of the competition will be asked to recall the history of French influence on landscape design in Russia and to demonstrate a variety of methods used in French gardens by modern landscape architects,” he said.
French finesse will also be a dominant theme among the city’s performing arts this year. The Mikhailovsky Theater unveiled its premiere of Jacques Francois Fromental Hal?vy’s cornerstone of the French opera repertoire “Iudeika” (“La Juive,”) staged by French director Arnaud Bernard, on Feb. 19.
La Com?die Francaise will visit the city to perform at the Alexandriisky Theater, while the Tovstonogov Bolshoi Drama Theater, Youth Theatre on the Fontanka and the Theater of the Young Spectator (TYuZ) will all stage joint performances with French theaters. Special French programs will also be presented at the Palaces of St. Petersburg and Stars of the White Nights musical festivals. 
The city’s celebrated Mariinsky Theater will naturally take part in the year of events — a ballet troupe from the Lyon Opera will perform “Giselle” on April 22 as part of the Mariinsky festival. 
Modern dance gets its moment in the spotlight with a French project at the Open Look modern dance festival from July 1 to 10, as well as the France Danse festival of modern French dance in December. 
The French cultural program in St. Petersburg also includes projects in the visual arts, photography, cinema and literature. France will be a guest of honor at the St. Petersburg international book salon, which will be visited by renowded French writers including Eric-Emmanuel Schmitt, R?gis Debray and Jean-Fran?ois Colosimo. A delegation of French comic book authors will also participate in the Boomfest comic festival in the city in September.
France will also be a guest of honor at the St. Petersburg International Economic Forum in June, while one of the most spectacular events in the city looks set to be the Vend?e — St. Petersburg sailing regatta from May to June. 
According to Alexander Prokhorenko, the chairman of the St. Petersburg Committee for External Relations, the local program reflects different aspects of life in St. Petersburg. “The city positions itself not only as a ‘cultural capital,’ but also as a dynamically developing scientific, educational and innovation center,” he said.
St. Petersburg is also the subject of a smaller-scale exchange with the city of Bordeaux, with which it is twinned. This program will include cultural, educational and business events. 
As well as hosting French events, the city will also represent Russian events in France. The Hermitage, the Russian Museum, St. Petersburg Museum of Theater and Music and other local museums are organizing exhibitions in Paris, Nice and Strasbourg, while the Mariinsky and Alexandriinsky theaters, St. Petersburg Cappella and Bolshoi Drama Theater will perform in France. 
“The theme of ballet traditionally unites Russia and France,” said Boris Eifman, the artistic director of the St. Petersburg state academic ballet theater. “So our troupe is delighted to go on tour in France in December 2010.
“French audiences have a deep understanding of ballet, and are always eager to see Russian and St. Petersburg dance groups. Wherever we have performed [in France], we have always been given a warm welcome. We hope these tours will be a success,” he added.
“St. Petersburg will make a major contribution to the overall program with its cultural, economic, sporting, scientific, educational and intellectual events,” said Prokhorenko. “These events will once again highlight the rich potential for cooperation between St. Petersburg and France,” he added. 
 
 A full program of French events in Russia and Russian events in France is available at www.russia-france2010.ru.

TITLE: Word’s
      worth
AUTHOR: By Michele A. Berdy
TEXT: Íóëåâûå ãîäû: the first decade of the 21st century; the “naughts/noughts”
So you’re sitting around the table with your friends, reminiscing about times gone by. Someone says: Â âîñüìèäåñÿòûå ãîäû ÿ áûë â Òáèëèñè (I was in Tbilisi in the 1980s). Â ñåìèäåñÿòûå è âîñüìèäåñÿòûå ãîäû âñå ïîñîëüñòâà â Ìîñêâå çàêóïàëè ôèíñêèå ïðîäóêòû (In the 1970s and 1980s, all the embassies in Moscow imported food from Finland). Everything is fine until you get into a discussion of the first and second decades of a century. Then both Russian and English fall apart.
According to Russian-language specialists, the way to describe the years from 10 to 20 of any century is: äåñÿòûå ãîäû. These years can be called “the teens” in English, although that might confuse the age of a person and the age of the century. For example: Êîãäà Ìàÿêîâñêèé â íà÷àëå äåñÿòûõ ãîäîâ ïðèåõàë â Ïåòåðáóðã, îí ïîäðóæèëñÿ ñ Ìàíäåëüøòàìîì (When Mayakovsky moved to St. Petersburg at the beginning of the teens, he befriended Mandelshtam).
If you ask your Russian friends, colleagues, spouse and in-laws about this, eight out of 10 of them will confess that they never say äåñÿòûå ãîäû in reference to the last century. History provided other convenient time markers, so people say: äîðåâîëþöèîííûå ãîäû (pre-Revolutionary years); äîâîåííûå ãîäû (prewar years); or ãîäû äî Ïåðâîé ìèðîâîé âîéíû (the years before World War I). They might also say: ïåðâûå äåñÿòèëåòèÿ äâàäöàòîãî âåêà (the first decades of the 20th century); or even simply: íà÷àëî äâàäöàòîãî âåêà (the early 20th century).
How about the first decade of a century? In English, you can find a few people who call them the “oughts” (although pedants insist they should be called the “noughts”): “Their 1970s schoolhouses, built in anticipation of traditional Catholic birth rates, were emptying through the nineties and oughts.” In Russian, smart specialists assert: Äåñÿòèëåòèå 1900-1910 ïðèíÿòî íàçûâàòü äåâÿòèñîòûìè ãîäàìè (It is commonly accepted to call the decade of 1900-1910 “the nine hundred years.”)
“Commonly accepted”? Well, I found a few — a very few — examples. Äåâÿòèñîòûå ãîäû — áëåñòÿùàÿ ýïîõà! (The oughts of the 20th century — what a magnificent epoch!) These same experts tell you that the first 10 years of the 19th century are called âîñüìèñîòûå (literally, “the eight hundred years”) and the first 10 years of the current century are äâóõòûñÿ÷íûå (literally, “the two thousand years”). Apparently it doesn’t bother the specialists that we went from the 900 years to the 2,000 years in a mere century.
Neither does it bother the specialists that virtually no one except them uses these terms. My friends hooted. They say: íà÷àëî âåêà (start of the century); ïåðâîå äåñÿòèëåòèå (first decade); ïåðâûå ãîäû âåêà (first years of the century); or íà ðóáåæå âåêà (at the turn of the century).

Michele A. Berdy is a Moscow-based translator and interpreter.

TITLE: A nose falls in love
PUBLISHER: Bloomberg
TEXT: NEW YORK — A nose goes rogue, running off to experience life at its absurd best.
The amused audience at the Metropolitan Opera premiere watched the nose fall in love, take a graceful turn as a ballerina and ride proudly at the head of a military parade.
Using drawings, collage, old Soviet film footage and enigmatic, handmade projections, South African artist William Kentridge created a phantasmagorical showcase for Dmitry Shostakovich’s first opera, “The Nose.”
The 80-year-old piece was taking its first bow at the Met along with Kentridge and Paulo Szot, the Brazilian showboat who recently radiated suave charm as Emile De Beque in “South Pacific” next door at the Vivian Beaumont Theatre.
Cast as the hapless and understandably befuddled Russian functionary Kovalyov, who wakes up to find his face as smooth as a blin, or Russian-style crepe, Szot revealed a great talent for comedy and an expressive baritone capable of filling the Met’s cavern. 
Based on Nikolai Gogol’s 1836 short story, the opera mocks snobby St. Petersburg society.
Like everyone else, collegiate assessor Kovalyov is highly sensitive to class distinctions, so when he spots his missing appendage at Kazan Cathedral, he is horrified that the nose now outranks him. When Kovalyov fearfully approaches, he is snubbed by his own nose looking down at him.
Shostakovich was 22 when he wrote “The Nose,” and it’s full of youthful, snarky exuberance. Brashly modern, the piece sends up the petty tyranny of Russian life, the idiocy of the press and the corruption of the police.
Stalin was not amused. “The Nose” was quickly denounced and not performed in the Soviet Union for more than four decades after its premiere at St. Petersburg’s Maly Theater.
Kentridge replaced the stage curtain with a giant collage, replete with photos, maps, text and charming animation. A dissonant tune played by brass and percussion signaled the start of the action, and a small window opened to reveal an old-fashioned barber shaving his client.
In the chair, Kovalyov sings the very first words: “Ivan Yakovlevich, your hands always stink!” And they are not all that stinks in town. It’s rather surprising that Stalin didn’t pack the composer off to a cold place.
Scaffolding and boxes cleverly moved on and off the stage represent the cathedral, a newspaper office and the police chief’s house.
Flitting through the scenes, the nose assumes a fabulous life of its own. It dances like Pavlova, paints huge portraits of Stalin and rescues a woman from a jeering pack of men. Even after it’s back on Kovalyov’s face, the nose retains its celebrity status, with rumors flying and crowds jostling for the chance of a brief sighting.
Yet blah-blah is not this nose’s strong suit as it struts through town, though tenor Gordon Gietz filled his two minutes with aplomb. Of the many Russians on stage, tenor Andrei Popov, from St. Petersburg’s Mariinsky Theater, was a standout in the brief role of the Police Inspector.
Valery Gergiev, artistic director of the Mariinsky, conducted a suitably rambunctious performance. This isn’t a melodic score, and he brought out its spike modernity with humor and energy.

TITLE: In vino veritas
AUTHOR: By Sasha de Vogel
PUBLISHER: The St. Petersburg Times
TEXT: Culinary adventurers, take note: the hottest trend in the restaurant world has arrived in St. Petersburg. Molecular gastronomy — the highly innovative cooking style that uses science to create previously unthinkable flavors and textures — has found a home in the kitchen of Wine Bar Grand Cru on the Fontanka, where the creative cuisine is sure to delight intrepid diners.  
At first glance, the brief menu may leave visitors feeling perplexed. Is shrimp carpaccio even possible — especially with orange salt crystals and curry butter (830 rubles, $28?) How would one even make a foie gras scallop (930 rubles, $31,) and why does it arrive under a glass dome filled with smoke? 
We took the plunge with the bouillabaisse-cappuccino with lemon powder (500 rubles, $17.) The frothy, pinkish soup had the airy texture of steamed milk and a potent fish flavor, which was a delight for the palate after the initial surprise of the unlikely combination wore off. 
The appetizers offer flashy preparations, but when it comes to the main courses, the focus is all on delicate and rich flavors. The slices of breaded turbot, layered with black olive tapenade over tomato pesto, is sauced tableside with a buttery concoction made from manchego cheese (700 rubles, $24.) The mullet with black rice, peas, lime and Merlot sauce (960 rubles, $32) proves that seafood and well-executed, delicate sauces are two of Grand Cru’s specialties. 
The “Zemlya” (“Earth”) dessert (380 rubles, $13) provides a playful conclusion to a meal. The powdered spiced nuts mounded over a layer of lime cream, with a sweet and sour scoop of cherry sorbet on top, really did resemble dirt. Thankfully, the dish tastes a lot better than its namesake, with flavors that referenced Middle Eastern cuisine.
Less daring diners need not fear: not every dish is a thrill ride. Try the green salad with tandoori chicken, avocado and coriander yoghurt dressing (500 rubles, $17) — it’s tangy without being spicy — and ponder the restaurant’s d?cor instead of the food. Are the red lights of the ceiling panel meant to resemble a leopard’s spots or a future blood clot? Are the naked girls in the black and white photos on the wall actually making wine, or just checking the quality of the grapes? Diners who struggle to resolve these questions can always take in the beautiful view of the Fontanka. 
Though for some the cuisine may steal the show, Grand Cru is really a wine-lover’s fantasy. Diners enter the restaurant through the Grand Cru wine shop, which features a selective library of vintages from all over the world, sure to please connoisseurs, and an expert staff to offer advice to those who know more about a Baltika than a Bordeaux. Visitors are encouraged to select a bottle or two from the shop to accompany their meal, as Grand Cru has no wine card. Those who want to enjoy wine by the glass can check out the bottles displayed in the long rectangular refrigerator that’s featured front and center in the dining room. The apparatus would look equally at home in a scientist’s lab as it does among the sleek wooden curves and leather booths of the small dining room. 
Lacking both wine expertise and a wine card, we consulted with our server, who recommended a young, fruity white (300 rubles, $10 per glass) that went nicely with our meal — much to our surprise, since we had no idea what to expect from what we had ordered. 
The Grand Cru Wine Bar is the latest in a successful line of boutique wine shops with two outposts in St. Petersburg and six in Moscow. Moscow is also home to the original Grand Cru Wine Bar, which features a similar menu developed by executive chef Adrian Quetglas. 
Moscow is ready for molecular cuisine, but is St. Petersburg? In addition to exploring unusual preparations and techniques, many of Quetglas’s dishes highlight unusual flavors that are less commonly found in St. Petersburg cuisine, such as citrus, tropical fruit and exotic spices. The portion sizes, too, may cause the hungry diner some dismay, particularly considering the prices. Our entrees appeared smaller than the appetizers, but it may have been an optical illusion, since the food was piled in the center of a gigantic, mostly empty plate. In any case, Petersburgers who think they can handle the adventure will be justly rewarded with a memorable and mouth-watering meal that will leave them scratching their heads.

TITLE: House Dems on Track for Health Bill Vote
AUTHOR: By Erica Werner
PUBLISHER: The Associated Press
TEXT: WASHINGTON —  Pushing toward a history-making vote, Democrats struggled to eliminate lingering complications standing in the way of House action this weekend on President Barack Obama’s landmark health care overhaul.
Their drive to change the way health care is administered and extend coverage to millions of uninsured Americans took on a growing sense of inevitability, picking up endorsements from a longtime liberal holdout and from a retired Roman Catholic bishop and nuns who broke with church leaders over the bill’s abortion provisions.
At the same time, last-minute snags related to costs delayed formal release of the legislation and an analysis from the Congressional Budget Office at least until Thursday. Democratic lawmakers had hoped to see those details last week.
Since Democrats are promising 72 hours for lawmakers and the public to review the legislation once it’s released, that would push a House vote on the bill back to Sunday at the earliest — the same day Obama plans to leave for an overseas trip. Obama has already delayed the trip once so he can be present for the vote and help with the 11th-hour arm-twisting that inevitably will precede it.
“You’ve got to realize how complicated this is and how focused we are on getting it right,” House Majority Leader Steny Hoyer, D-Md., said Wednesday near the end of a long day of meetings on the legislation. “We’re waiting to get a real confidence level.”
Obama expressed optimism in an interview with Fox News Channel. “I’m confident it will pass,” he said. “And the reason I’m confident that it’s going to pass is because it’s the right thing to do.”
Democrats are seeking to make sure the legislation would reduce federal deficits annually over the next decade and are revisiting details of a planned tax on high-cost insurance plans that’s been a sticking point for organized labor. Richard Trumka, head of the AFL-CIO, met with Obama at the White House on Wednesday, and officials said the labor leader raised concerns. Obama has proposed significantly softening the tax in keeping with an earlier deal with organized labor, and labor leaders want to preserve that accord, at a minimum.
Trumka was to brief members of the AFL-CIO’s executive council on Thursday, and the federation was expected to announce whether it would support the legislation.
The long-anticipated measure is actually the second of two bills that Obama hopes lawmakers will send him in coming days, more than a year after he urged Congress to remake the U.S. health care system. The first cleared the Senate late last year but went no further because House Democrats demanded significant changes — the very types of revisions now being packaged into the second bill.
Together, the measures are designed to extend coverage to more than 30 million who now lack it and prohibit insurance industry practices such as denying coverage on the basis of pre-existing medical conditions. Obama also has asked lawmakers to slow the growth of medical spending generally, a far more difficult goal to achieve. The total cost is around $1 trillion over 10 years.
After heavy lobbying from Obama, liberal Rep. Dennis Kucinich, D-Ohio, announced his support Wednesday, becoming the first Democrat to declare he would vote in favor of the legislation after opposing an earlier version. Shortly after Kucinich’s announcement, a letter was released from 60 leaders of religious orders urging lawmakers to vote for the legislation.
The endorsement reflected a division within the Catholic Church. The U.S. Conference of Catholic Bishops opposes the Senate-passed legislation, contending it would permit the use of federal funds for elective abortions.
Late Wednesday, however, retired Bishop John E. McCarthy of Austin, Texas, told The Associated Press he was urging approval of the legislation.
“The bill guards against the use of federal money for abortion,” McCarthy said in an interview. “This is an extraordinarily important bill, providing health care for 30 to 40 million people who don’t have it. It’s not perfect; we can come back later and improve it. But let’s not kill it at this crucial moment.” McCarthy, 80, served as bishop of the Austin diocese from 1986-2001.

TITLE: German Archbishop Demands Investigation
AUTHOR: By George Frey and Melissa Eddy
PUBLISHER: The Associated Press
TEXT: BAD STAFFELSTEIN, Germany —  A prominent archbishop called Thursday for justice for sexual abuse victims in Germany’s Roman Catholic Church, saying they need to feel they can finally speak openly about their suffering.
Reinhard Marx, the archbishop of Munich and Freising, said Catholic bishops in the southern German state of Bavaria — the homeland of Pope Benedict XVI — felt “deep consternation and shame” over the reports of abuse of children in church-run schools and institutions revealed in past weeks.
“The priority is the search for the truth and achieving an open atmosphere that will give the victims courage to speak about what happened to them,” Marx told reporters following a meeting with Bavarian bishops.
Marx said the bishops had agreed to investigate each claim and would contact authorities as appropriate.
The statements come as the German church continues to grapple with the magnitude of abuse claims; since the first victims came forward in January, at least 300 others have said they suffered sexual or physical abuse at the hands of priests.
Victims in neighboring Austria and the Netherlands have also come forward with claims of abuse, triggering a crisis in the church and charges the pontiff is avoiding comment on the issue.
“If the pope himself doesn’t take a stance, apologize for what Rome has committed over the past decades in terms of cover-up — then our believers will become even more disappointed than they already are,” Father Udo Fischer, who heads a parish in the Lower Austrian village of Paudorf told the ORF public broadcaster.
“Jesus would certainly not have kept quiet,” Fischer said.
Robert Zollitsch, the head of Germany’s Bishops Conference, met the pontiff last week and insisted in a letter Thursday to Die Welt newspaper that the pope has repeatedly made clear his position on sexual abuse.
“I know from my discussion with the pope how deeply appalled he is by the sexual abuse of children by priests, especially in Germany,” Zollitsch wrote.
Benedict spoke out repeatedly against sexual abuse during his 2008 trip to the United States. He called the crisis then a cause of “deep shame,” pledged to keep pedophiles out of the priesthood and decried the “enormous pain” that communities have suffered from priests’ “gravely immoral behavior.”
Zollitsch pointed out that despite his heritage, Benedict is the pontiff for all Catholics, not just those in Germany, and his previous statements on the issue remain valid.
“His words retain their weight, even if they are not constantly repeated,” Zollitsch wrote.

TITLE: China Without Google: Defeat For Both
PUBLISHER: The Associated Press
TEXT: BEIJING — China without Google - a prospect that looks increasingly likely - could mean no more maps on mobile phones. A free music service that has helped to fight piracy might be in jeopardy. China’s fledgling Web outfits would face less pressure to improve, eroding their ability to one day compete abroad.
Chinese news reports say Google Inc. is on the verge of making good on a threat to shutter its China site, Google.cn, because Beijing forces the Internet giant to censor search results. The reports indicated that Google had, in fact, already stopped censoring results, but searches Tuesday for sensitive topics like “Tiananmen massacre” appeared to still return only whitewashed results.
A Google spokesman, Scott Rubin, denied censorship had stopped and would not confirm whether Google.cn might close.
The extent of a possible pullout from China is unclear. But on top of a local search site that Google says it may close, services that might be affected range from advertising support for Chinese companies to online entertainment.
“If Google leaves, it’s a lose-lose scenario, instead of Google loses and others gain,” said Edward Yu, president of Analysys International, a Beijing research firm.
Google says it is in talks with Beijing following its Jan. 12 announcement that it no longer wants to comply with Beijing’s extensive Web controls. But China’s industry minister insisted Friday the company must obey Chinese law, which appears to leave few options other than closing Google.cn, which has about 35 percent of China’s search market.
Google CEO Eric Schmidt said last week something would happen soon, but Rubin, speaking by phone from Google’s headquarters in Mountain View, California, said no action had yet been taken.
Such a step could have repercussions for major Chinese companies as well as local Web surfers. It would deliver a windfall to local rival Baidu Inc., China’s major search engine, with 60 percent of the market. But other companies rely on Google for search, maps and other services and might be forced to find alternatives.
China Mobile Ltd., the world’s biggest phone company by subscribers, with 527 million accounts, uses Google for mobile search and maps. Baidu offers mobile search, but China Mobile passed up a partnership with it earlier after they failed to agree on terms, according to industry analysts. Millions of mobile customers might lose access to Google’s Chinese-language map service.
A key issue is whether Beijing, angry and embarrassed by Google’s public defiance, would allow the company to continue running other operations, including advertising and a fledgling mobile phone businesses in China if Google.cn closes.
China promotes Internet use for business and education but bars access to sites run by human rights and political activists and some news outlets. Officials who defend China’s controls by pointing to countries that bar content such as child pornography are stung that Google has drawn attention to how much more pervasive Chinese limits are.
Chinese Web surfers are blocked from seeing Facebook, YouTube, Twitter and major blog-hosting services abroad and a Google pullout would leave them increasingly isolated.
Google hopes to keep operating its Beijing research and development center, advertising sales offices and mobile phone business, according to a person familiar with the company’s thinking. But the person said the company won’t do that if it believes its decision to stop censoring search results will jeopardize employees in China. Industry analysts estimate Google has a work force of 700 in China.

TITLE: Sudan and Darfur Rebel Umbrella Organization Signs Cease-Fire
PUBLISHER: The Associated Press
TEXT: DOHA —  Qatar & Sudan’s government and a collection of Darfur rebel groups have signed a cease-fire, opening the way for political negotiations ahead of a full peace agreement.
Government representative Ghazi Salah Eddin Atabani and rebel leader Al-Tijani Al-Sissi signed the truce Thursday in Doha, Qatar.
Al-Sissi’s Liberation and Justice Movement is an umbrella organization that includes several small Darfur rebel groups that recently united to negotiate with the government.
Last month, Sudan’s government signed a similar truce in Doha with Darfur’s most powerful rebel group, the Justice and Equality Movement.
The government refused JEM’s demand that other rebel groups join the reconciliation process under its umbrella.