SOURCE: The St. Petersburg Times
DATE: Issue #1632 (93), Tuesday, December 7, 2010
**************************************************************************


TITLE: Governor: Gazprom Tower May Be Moved
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: St. Petersburg Governor Valentina Matviyenko unexpectedly announced last week that the city authorities might offer state oil and gas giant Gazprom alternative locations for the company’s controversial Okhta Center skyscraper.
“I believe it is possible that we will offer Gazprom some other sites for the construction of such a large investment project,” Matviyenko said was quoted by Interfax as saying last week.
Matviyenko said no official decision had yet been made about the construction of the 396-meter tall skyscraper, set to house the headquarters of Gazprom Neft, and that the main opposition to the project was its planned location across the Neva from Smolny Cathedral.
“I think we’ll find some compromise that will suit everybody,” she said.
“We have actively discussed the possibility of moving the construction site both with investors and city preservationists, and we already have a number of options for a possible location,” the governor said.
Matviyenko said the site at the confluence of the Okhta and Neva rivers that has been under development by investors remains attractive to them, and in the event that it is decided to relocate construction, investors, including Gazprom itself, may build some other project on the site.
The governor said that the city definitely needs projects such as the Okhta Center.
“However, such projects should take into account the opinion of all St. Petersburg residents. The decision should unite citizens,” she said. 
President Dmitry Medvedev said earlier that the decision on the construction of the Okhta Center should be made upon completion of all the legal proceedings regarding the matter and after consultation with UNESCO, which had said that the historic center’s World Heritage status would be jeopardized by the building of a skyscraper in such close proximity.
The controversial planned Okhta Tower has encountered fierce opposition from protesters who say it will violate the city’s historic skyline. Opponents have staged meetings protesting the project and attempted to convince City Hall to reconsider the building’s location or its height.
Okhta Center’s press service said that the project was developed for the plot of land on the Okhta River, and that the investor is in constant contact with City Hall.
“At the stage of the project’s development, we considered various options for the location of the center, and the investor and the city administration maintain a constant dialogue about the matter,” Interfax reported the center’s press service as saying.
Maxim Reznik, leader of the city’s branch of the Yabloko political party that has opposed the location since the project’s beginning, welcomed Matviyenko’s comments about the possibility of finding another site for the construction of the so-called Gazprom tower.
Reznik said that the position of the governor was a result of long-term efforts on the part of the city’s preservationists and the dialogue that Matviyenko recently entered with the city’s town planning council, Yabloko said via its press service.
“Back in 2006, Yabloko proposed constructing the business center to the south of Dunaisky Prospekt, next to the ring road, which would make it easily accessible from any district of the city and from the airport. I’m sure our colleagues in the negotiation process will offer other options as well, especially where there is no need to disfigure something created by previous generations for the purpose of making something new,” Reznik said.
Architect Boris Nikolashchenko advised Gazprom back in 2005 to consider a site near Utkina Zavod on the southeastern outskirts of the city, according to the press club Zelyonaya Lampa, which is part of the RosBalt news agency.
The 60-billion-ruble Okhta Center is due to be completed in 2016.

TITLE: $10 Billion Earmarked By State For World Cup
AUTHOR: By Olga Razumovskaya
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The federal budget will supply 300 billion rubles ($9.6 billion) of funding for the 2018 FIFA World Cup, excluding airports and roads, Finance Minister Alexei Kudrin said Friday. Experts say some of that funding will help accelerate regional development.
Prime Minister Vladimir Putin has made it clear that he expects big business to contribute to what some say will be a $20 billion to $50 billion overall tab, with Roman Abramovich and Gazprom as two sources likely to be tapped.
The government clearly understood the scale of the project and will now have to follow through on the financial and organizational commitments made as part of the winning bid.
“Herein lies the challenge, and herein lies the advantage of our bid,” Putin said Thursday, “which was about the development of world football and the development of the sport, road and transport infrastructure in our country, the infrastructure that will be used not only by football players and fans, but by all Russian citizens.”
The Russian proposal included a pledge to build 13 new stadiums in cities across the country, renovate three existing ones, and pump $11 billion of public and private funds into tourism infrastructure, including hotels, railways and airports, to host several hundred thousand expected visitors.
Putin also said during a press conference Thursday night in Zurich, where he arrived to thank FIFA for its decision, that he wants to see Russia as the winning team in 2018. Sports minister Vitaly Mutko echoed that sentiment during a joint visit on Friday with the prime minister to the South Sport athletic camp, where they shook hands and chatted with teenage football players.
“The goal is to make a team of 11 players that will win in 2018,” Mutko said to the boys, who will be in their early twenties when Russia’s turn to host the World Cup comes. The minister said Russia has 1,400 football schools with 480,000 kids participating.

Public-Private Partnership
The prime minister made it clear that he expects Roman Abramovich, whose personal net worth is estimated at $11.2 billion by Forbes, to help his motherland prepare for the World Cup.
“We know … that he takes the development of Russian football very much to heart and, on the whole, can assist in World Cup preparations,” Putin said in Zurich.
“Obviously, we will consider opportunities to participate in preparations for the 2018 World Cup in Russia, in partnership with the government,” John Mann, Abramovich’s spokesman, told The St. Petersburg Times in an e-mailed statement.
The prime minister highlighted examples of successful public-private partnerships in sports.
“Construction of Spartak’s Luzhniki Stadium in Moscow will be funded by LUKoil, and Dynamo in Moscow by VTB. We are building sporting venues in Kazan and Sochi in preparation for the Student Games and the Olympics. Gazprom is building a stadium in St. Petersburg,” Putin said.
“We want to attract businesses to other areas, too, so as to reduce government expenditures to the minimum,” Putin said.
LUKoil is not actually funding construction of the new Spartak stadium but does sponsor the team, spending “several dozens of millions of dollars per year” to support it, a LUKoil spokesman said.
The new stadium is being built by company Stadion Spartak, owned by Leonid Fedun, LUKoil vice president and majority owner of the Spartak football club, the spokesman said.
“The project costs approximately 250 million euros [$330 million], out of which we have already spent 30 million,” Andrei Fedun, head of Spartak’s medical department, general director of Stadion Spartak and Leonid Fedun’s brother, told The St. Petersburg Times.
The stadium, which will be able to house 42,000 people, will be fully operational by 2015, Fedun said.
This capacity satisfies FIFA’s general requirements. But for a finals match, a stadium seating between 60,000 and 80,000 is necessary. As of now, Luzhniki is the only one with that capacity.

Regions and Markets
“The main benefit of this is not the development of football,” Fedun said. “It is the development of infrastructure in the regions. Think about it: Those cities that will get to host the games — their people will clearly get a lot.”
Fedun pointed out that building a road to the stadium may cost as much as building the actual stadium; winning the World Cup bid may finally bring the desperately needed roads to over a dozen cities, which otherwise would probably have had to wait for funding beyond 2018.
Red tape will also be an issue. In the case of Spartak stadium, the decree to provide a plot of land to build on was signed in 2006, but construction did not begin until several years later.
“With regional development somewhat frozen due to the economic crisis, this news will provide a much needed boost for those areas selected as host cities. Infrastructural developments such as airports, roads and stadiums will bring much needed project business to the regions and after the World Cup will be seen as legacy developments — created for an event and able to impact regional and city growth for long after,” said David Jenkins, head of hospitality for Russia and the CIS at Cushman & Wakefield.
“These are not just ‘proposed’ facilities — they are now real projects with government support that will have to be completed by 2018. … We are likely to see increased competitiveness between contractors given the profitability of the commercial contracts that will be entered into,” said Stephen Cozens, a partner at law firm CMS.
The total price tag of the 2018 World Cup for Russia could exceed $50 billion, which includes almost $4 billion on the construction of stadiums, $35 billion on new roads and railways, more than $1 billon on airport upgrades and more than $10 billion on the development of tourism infrastructure, Cozens estimated.
Markets welcomed the news of the win on Friday, with construction companies and steelmakers making gains. (Related story, Page 8.)
Some firms met the announcement with caution.
“It is still unclear where exactly the stadiums will be built and to whom the contracts will go,” said a spokesman for steel maker Evraz group, which is part-owned by Abramovich.
While the South Africa World Cup created about 500,000 jobs and gave the country’s GDP a 1 percent boost, one needs to avoid placing too much hope on the championship as a means of dramatically improving the hosting country’s economy, said Kingsmill Bond, Troika Dialog’s head strategist.

Safety and Politics
Another concern that came up during the decision-making process is the safety of the incoming tourists, which was highlighted by the terrorist attacks in the Moscow metro in March.
This did not stop Chechen President Ramzan Kadyrov from making a proposal on Friday that his republic’s capital city of Grozny be used as a sight for some of the games of the championship.
Putin reassured the world that Russia is ready. “We are eager to do our best to secure the comfort and safety of our guests,” he told journalists in Zurich.
President Dmitry Medvedev called FIFA chief Sepp Blatter on Sunday to thank him and his executive board. “Russia will stage the World Cup at the highest possible level,” Medvedev was quoted by the official Kremlin web site as telling the FIFA president.
FIFA’s decision to award the 2018 and 2022 World Cups to Russia and Qatar respectively has received a mixed reaction around the world, with some making accusations of corruption within football’s governing body. Putin rejected the allegations, saying Russia “won a tough and fair fight.”

TITLE: City Seeks to Boost Birth Rate With Land for Babies
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: City Hall hopes to stimulate St. Petersburg’s birth rate with a plan to give families with three or more children plots of land in the Leningrad Oblast. Experts and mothers are critical of the measure, however, and say it will not lead to a baby boom.
“We’ll devise our own regional program to encourage people to have three and more children,” City Governor Valentina Matviyenko said Wednesday in response to President Dmitry Medvedev’s annual address to the Federation Council.
In his address, Medvedev tasked the federal government and regional authorities with providing free land plots for building a house or dacha to families with three or more children.
Matviyenko said that St. Petersburg would find it difficult to allocate land plots.
“In St. Petersburg, we don’t have land for individual housing construction. This problem cannot physically be solved in Moscow, St. Petersburg and other large cities,” Matviyenko said, Interfax reported.
“[Instead,] we’ll negotiate with the authorities of the Leningrad Oblast, and probably agree on allocating the land,” she said.
Vadim Tyulpanov, speaker of the city’s Legislative Assembly, suggested that families with many children should be given apartments rather than land plots, saying that the proposal to allocate land would be difficult to implement in St. Petersburg.
“We’ll try to encourage families with three or more children, not with land plots, but with apartments,” Tyulpanov was quoted by Interfax as saying.
The city’s children’s ombudsman Svetlana Agapitova said giving land plots in the Leningrad Oblast to St. Petersburg families with many children would not solve their housing problem.
Agapitova said that the city already has an agreement with the LenOblast for allocating land to families with handicapped children and families with five or more children, but that the program doesn’t really work. 
“They are offered land, but very far away from the city — so far that the families don’t agree to take the land,” Agapitova was cited by Interfax as saying. “Very few families are ready to leave the city and begin a new life, set up a farm or build a house. Most of them want to live in the city.”
Agapitova said that families with many children have priority access to improved housing conditions, but they can still wait for decades.
Lack of space is a problem faced by the majority of families in cities all over the country. 
“The worst forecast shows that by 2025, we’ll have 200,000 fewer children in St. Petersburg. The housing issue must be solved as quickly as possible,” said Agapitova.
Mothers reacted critically to the proposal of land plots in Leningrad Oblast.
Larisa Galushko, 39, a manager with three children, said the program has already been in place in the city for some time. 
Two years ago, she was offered a plot of land, she said. The land was located in the Boksitogorsk district of the Leningrad Oblast, about 300 kilometers from St. Petersburg, and had no infrastructure such as electricity or roads. Installing infrastructure on the plot would have cost about $1,000. There were two commuter trains per week to and from the district. The family was offered the use of the land, but not ownership of it. In addition, the terms of the offer required the family to build a house on the plot within one year, or the land would be taken away from them, Galushko said.
“We didn’t want to take the land because of all those reasons, especially because it was located so far away and was unsuitable for weekend visits, and we didn’t have plans to move out of St. Petersburg,” Galushko said.
“And even if we had moved there with the family, there would have been no jobs for us, no kindergarten or school nearby,” she said.
Galushko said her family would have considered accepting the land if it had been located no more than an hour and a half’s drive from St. Petersburg, and if they had at least been able to acquire property rights to it in order to pass it on to their children later.
Alexandra Cherchik, 39, a conference manager with two children, said a plot of land in a remote area of the Leningrad Oblast “would never tempt her to have a third child.”
“I think the only [state material support] that could inspire me to have a third child would be an apartment given to us in the city,” Cherchik said.
Anastasiya Pospelova, 35, a mother of three, said the main precondition for people to have many children is financial and social stability.
“The better people live, the more children they can afford to have. But in our country we can’t be sure of tomorrow’s financial situation,” Pospelova said.
Pospelova, whose family lives outside the city, said another problem faced by people who live outside the city is a lack of kindergartens or overcrowded ones  that are in poor condition.
“This problem makes it difficult for women to be able to work,” she said.
Galushko said the state child benefit for families with many children is currently $18 a month. Accordingly, she receives $54 a month for her three children.
“What can you do with that money, if our family’s utility bills alone total $283, which is a significant part of the family budget,” said Galushko.
“People will have more children only when they feel real help and protection from the state, when benefits and other social support will be substantial,” she said.

TITLE: City Artists Nominated For Grammy Awards
AUTHOR: By Galina Stolyarova
PUBLISHER: The St. Petersburg Times
TEXT: Local musicians have seized four nominations at this year’s prestigious Grammy awards, presented every year by the American Academy of Recording Arts and Sciences.  
The Mariinsky label’s recording of Rodion Shchedrin’s opera “The Enchanted Wanderer” performed by the Mariinsky Theater Symphony Orchestra and Chorus under Valery Gergiev is a finalist in two categories: “Best Opera” and “Best Work by a Contemporary Classical Composer.” 
St. Petersburg conductor Mariss Jansons, who began his career at the St. Petersburg Philharmonic and now spends most of his time abroad, has also been nominated in the “Best Classical Album” and “Best Orchestral Performance” categories for a recording of Bruckner’s Third and Fourth Symphonies with the world-renowned Royal Concertgebouw Orchestra, where he is principal conductor.
James Mallinson, producer of “The Enchanted Wanderer” and of a recording of the opera “Parsifal” by Mariinsky Theater soloists and the Symphony Orchestra and Chorus under Valery Gergiev, received a Grammy nomination for “Producer of the Year in Classical Music.” 
“Among this year’s nominees we see musicians of exceptional talent and outstanding professionalism,” said Neil Portnow, president of the American Academy of Recording Arts. “I am proud that this year the academy has once again succeeded in compiling an impressive list of candidates for the award, covering an incredibly broad range of music.” 
The Grammies are presented every year in categories including pop, electronic, rock and classical music, as well as jazz, blues, gospel, rap, reggae, country and children’s music.
“The Enchanted Wanderer” was released in March this year, making it the label’s fifth disc. The new recording immediately attracted attention from critics, with BBC Music Magazine naming “The Enchanted Wanderer” the best opera recording of the month. 
Rodion Shchedrin wrote “The Enchanted Wanderer” in 2002 based on themes from Nikolai Leskov’s eponymous novel following a commission from Lorin Maazel for the New York Philharmonic, which gave the premiere. The work’s Russian premiere was held in St. Petersburg in July 2007 as part of the Stars of the White Nights international music festival. 
In the “Best Opera” category, the Mariinsky Theater Symphony Orchestra and Gergiev are competing against the Royal Opera House Symphony Orchestra (London) under Antonio Pappano with a recording of Alban Berg’s “Lulu,” Ars Lyrica Houston under Matthew Dirst with Johann Adolf Hasse’s opera “Marc Antonio e Cleopatra,” Germany’s Sinfonieorchester Berlin under Kent Nagano with Kaija Saariaho’s opera “L’amour de loin” and the BBC National Orchestra of Wales under David Lloyd-Jones with Arthur Sullivan’s opera “Ivanhoe.” 
In “Best Classical Album” Jansons is up against Riccardo Muti (Verdi’s Requiem), Giovanni Antonini (Sacrificuim album), Giancarlo Guerrero (Deus Ex Machina by Michael Daugherty and Gil Rose (Dreamhouse by Steven Mackey).
“Bruckner is a signature composer for the Concergebouw orchestra, which firmly holds the third position in the world’s rating of symphony orchestras,” said Gyulara Sadykh-zade, a musical reviewer with Infox.ru news resource and Vedomosti newspaper. “For that reason the nomination is all the more important for Jansons, who feels the heart and soul of this famous orchestra perfectly.”
“Mariinsky is a very young recording label — it had its first release in 2009 — and it has been noticed by the Grammies since its very first release, which is most encouraging,” Sadykh-zade said. “Usually, new or small recording labels go completely unnoticed by such giants as the Grammy awards.”
The prize-giving ceremony will take place in Los Angeles on Feb. 13, 2011.

TITLE: Pilot Error Considered in Crash
AUTHOR: By Alexandra Odynova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Investigators were considering Monday whether the pilots who crash-landed a Tu-154 at Moscow’s Domodedovo Airport over the weekend were heros for saving 165 of the 167 people on board or responsible for the emergency that required the landing.
The pilots reported that all three of the engines on the jet operated by South East Airlines, formerly known as Dagestan Airlines, failed about 15 minutes after a 2 p.m. Saturday takeoff from Moscow’s Vnukovo Airport en route to Makhachkala, the Dagestani capital, investigators said.
The crew decided to make a quick emergency landing at Domodedovo despite poor visibility and the fact that the plane still had tanks full of fuel, which meant a risk of explosion on impact.
Clouds were hanging at a low altitude of 180 meters in the area, meaning that the pilots could not see the runway until the last minute, Alexander Neradko, a spokesman for the Interstate Aviation Committee, told reporters.
Upon landing, the brakes failed and the plane hurled off the runway at about 200 kilometers per hour, the Investigative Committee said in a statement.
The jet slammed into a small hill, narrowly avoiding a potentially dangerous collision with a concrete barrier around the runway, Gazeta.ru reported, citing Domodedovo employees.
An S7 Airbus jet crashed into a concrete barrier and burst into flames after skidding off a rain-soaked runway in Irkutsk on July 9, 2006, killing at least 124 people.
The South East Airlines jet broke into three parts, and passengers had to leap from the plane, with some breaking their legs, after the emergency chutes failed to deploy, Gazeta.ru said. Cell phone photos made by the passengers show the shattered plane lodged among thin trees, its nose and a wing torn off.
The two passengers killed in the crash were Gadzhimurad Magomedov, 49, a businessman and brother of Dagestani leader Magomedsalam Magomedov, and Roza Gadzhiyeva, 80, mother of Constitutional Court judge Gadis Gadzhiyev, investigators said.
Some pilots called the crash landing a “miracle,” news reports said, and the plane’s passengers concurred.
“The crew did a good job. They did everything in their power,” an unidentified passenger told Interfax. “If we had slammed into the nearby barrier, we would have exploded.”
Passengers said they did not panic because they had not been informed that the engines had failed.
Possible causes for the crash being batted about in the media are pilot error, poor-quality fuel and a technical malfunction.
Interfax, citing an unidentified law enforcement official, reported that the pilots probably forgot to turn off the jet’s fuel booster pumps after takeoff, causing the engines to shut down.
Vnukovo Airport said in a statement that “soon after takeoff the crew reported the consecutive failure of all three jet engines.”
The Interstate Aviation Committee said one of the engines soon resumed working and “kept on working up until the landing at 2:36 p.m.”
The Investigative Committee said it was examining the pilots’ actions but had no solid theory for what had caused the engine problems.
“The investigation is considering all possible versions, but none of them has been granted priority,” the Investigative Committee said in a statement Sunday.
Preliminary data from the plane’s flight recorders were expected to be released late Monday.
South East Airlines chief Murza Omariyev defended the pilots as experienced.
“The captain … has some 17,000 hours of flight experience, with 10,000 of them on Tu-154s,” Omariyev said in televised remarks on Rossia-24.
He also dismissed speculation that the aircraft, built in 1992, might have experienced a mechanical failure, saying it underwent a complete overhaul last year at Vnukovo.
The jet was used in mid-November to fly Belgium’s national football team to Voronezh — a flight that confirmed it met European safety requirements, Omariyev said.
South East Airlines, which still calls itself Dagestan Airlines on its official web site, Dagair.ru, announced its rebranding in January, and the plane that crashed Saturday had been repainted in new red and blue livery colors.
The crashed Tu-154 was among the airline’s fleet of 10 planes and one helicopter, according to the company web site. The airline offers regular flights between Makhachkala and four destinations: Moscow, St. Petersburg, Istanbul and Sharjah, United Arab Emirates.
Vnukovo Airport said the Tu-154 received the same fuel on Saturday as dozens of other planes, none of which reported any problems.
The Tu-154 jet arrived at Vnukovo from Machachkala shortly after noon and departed for the return flight with 160 passengers and a crew of nine.
Eighty-two people were injured in the crash, and 36 remained hospitalized late Sunday, including three in serious condition, the Health and Social Development Ministry said on its web site. Dagestani Justice Minister Azadi Ragimov was among the injured.
Forty-one passengers from the ill-fated flight flew to Makhachkala on Sunday, Interfax reported.

TITLE: Malls Launch Charity Scheme
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The city’s Mega malls launched a charity project on Dec. 1 that will enable visitors to help make the New Year wishes of children in need come true.
Shoppers will be able to make wishes come true for about 200 children who attend the Day Rehabilitation Center for Neglected Children, the social shelter Nadezhda and the Social Community organization, said the press service of IKEA, the malls’ anchor tenant.
The more unusual wishes include “I want a dolphin because they are kind and help people” and “I need a microscope to make tests because I want to be an ecologist.”
Other children dream of electric fretsaws, drills, a globe, art equipment, soccer balls, skies, a bicycle or skates. Younger children aged from two to five years old dream of sweets and toys, while one child is desperate for a music box with a figure of a ballerina inside. 
Mega customers willing to act as Father Christmas can choose a wish from the Christmas Wishes Trees at the malls and bring the gift to the central information desks before Dec. 20. Customers will then in turn receive a surprise.
“Thousands of people around all Russia have taken up the call of IKEA and UNICEF and decided to combine a New Year’s gift for their loved ones with support for those in need,” IKEA said.

TITLE: Jehovah’s Witnesses ‘Persecuted’
PUBLISHER: The Associated Press
TEXT: MOSCOW — The religious group Jehovah’s Witness says their local leader is being persecuted in Russia under a vague anti-extremism law.
The group said Monday that Alexander Kalistratov is going on trial in the Siberian town of Gorno-Altaisk for alleged “incitement of religious enmity and hatred.”
The group’s spokesman Robert Warren said the trial is part of a “larger problem” that Jehovah’s Witnesses have been facing in Russia and called the trial a “misapplication” of Russia’ 2002 anti-extremism law.
Human rights advocates claim that law is used to crack down on dissidents and religious groups that Russia’s dominant Orthodox Church disapproves of.

TITLE: Italy’s Prime Minister Denies He’s Putin’s Man
AUTHOR: By Jim Heintz and Alessandra Rizzo
PUBLISHER: The Associated Press
TEXT: Italian Prime Minister Silvio Berlusconi rejected claims in a U.S. diplomatic cable that he profits from close relations with Moscow, declaring as he stood next to President Dmitry Medvedev on Friday that the two leaders act only in the interests of their people.
Memos from the U.S. Embassy in Rome, released earlier in the week by WikiLeaks, alleged an uncomfortably close relationship between Berlusconi and Prime Minister Vladimir Putin. One cable suggests that the friendship between the two is so strong and Italy’s dependence on Russian energy so significant that Berlusconi has a “distorted” view of Moscow.
Another memo claims that meetings between Berlusconi and Putin include the exchange of lavish gifts and that Berlusconi and his allies are believed to be personally profiting from Italy’s extensive energy contracts with Russia.
After Berlusconi’s talks with Medvedev, Putin joined them in the mountain resort of Krasnaya Polyana. They dined together and later inspected a Russian-built SuperJet at the Sochi airport before Berlusconi flew home.
“There has never been a single personal interest. We have always worked in the interest of our respective countries,” Berlusconi told a news conference Friday.
Medvedev in turn did not comment on the specific claims about Berlusconi, but said the tranche of cables released by WikiLeaks — many of which have contained acid criticism of Russia — “show the full measure of cynicism in the assessments and conclusions that prevail in the foreign policy of various states, and I mean the U.S.”
Then he appeared to try to leaven that sharp criticism by joking that Russian diplomatic cables also contain unflattering characterizations of U.S. policies, diplomats and leaders.
“If, God forbid, mass media learned certain assessments made by Russia’s Foreign Ministry or special services, including [the assessments] of our U.S. partners, they’d have a whole lot of fun too,” he said.
At the meeting, Russia and Italy agreed on holding joint military exercises next year and signed a partnership memorandum between Italy’s Enel utility and Russian power trader Inter.
Putin and Berlusconi have long enjoyed a close friendship, with frequent visits to each other. Berlusconi has often defended Putin from critics who say the Russian prime minister is not fully committed to democracy.
The cables show that such strong ties have come under U.S. scrutiny.
One of the most critical cables from the U.S. Embassy in Rome says Berlusconi “appears increasingly to be the mouthpiece of Putin.”
“His overwhelming desire is to remain in Putin’s good graces and he has frequently voiced opinions and declarations passed to him directly by Putin,” the communique says.
In part, the cable says, that reflects Italy’s reliance on Russian gas. The energy-hungry country imports about nine times more gas than it produces, and Russia supplies about 40 percent of that.
“The quest for stable energy supplies from Russia frequently forces Italy to compromise on security and political issues,” it says. Such apparent compromises include support for “Medvedev’s plans to redefine European security architecture to undermine the OSCE and NATO” and Italian opposition to NATO efforts to improve ties with Georgia and Ukraine, the cable says.
But the report also suggests Berlusconi is emotionally and financially enriched by close relations with Russia. Berlusconi is believed to “admire Putin’s macho, decisive and authoritarian governing style, which the Italian PM believes matches his own,” the cable said.
In addition, the cable says contacts from within Berlusconi’s party and from an opposition party “hinted at a more nefarious connection. They believe that Berlusconi and his cronies are profiting personally and handsomely from many of the energy deals between Italy and Russia.”
Another cable from the U.S. Embassy dated October 2009 said Berlusconi chose “private fun over statecraft” when he decided to skip an event with the visiting Jordanian king ahead of his trip to Russia to celebrate Putin’s birthday.
Berlusconi gave the impression that “he was husbanding his flagging energies for a blow-out party at Putin’s private dacha,” said the cable by U.S. Ambassador to Italy David Thorne.
Berlusconi has been dismissive of the cables. He said Friday that diplomats often based their memos on local news reports in an effort to appear well-informed in the eyes of their superiors, and therefore “we shouldn’t attach to much importance” to them.
Still, he acknowledged for the first time, assessments in the cables were “certainly annoying.”
The 74-year-old Italian has also been the subject of many other U.S. diplomatic cables, some touching on the scandals that have engulfed the premier’s private life, including reports of parties with young girls and allegations of encounters with a prostitute. He has denied taking part in any “wild parties.”

TITLE: Latvian Gets 3 Years For Hijacking of Arctic Sea
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A Moscow court sentenced a Latvian national to three years in a maximum-security prison Friday after convicting him of hijacking the Arctic Sea freighter in July 2009.
Sergeis Demchenko, 37, was convicted in a closed-door trial of piracy, the Moscow City Court said in a statement.
But Demchenko did not personally participate in the attack, instead training the attackers and planning the attack, Dmitry Savins, another Latvian, who was sentenced to seven years in prison in June in connection with the incident, told the court earlier, Interfax reported.
Demchenko has pleaded guilty and cooperated with investigators, Interfax reported.
The freighter carrying a cargo of timber from Kaliningrad to West Africa mysteriously disappeared off the coast of Sweden in July 2009 and was rediscovered and boarded by the Russian Navy off Cape Verde a month later.
Another suspected hijacker, Andrei Lunyov, was sentenced to five years in prison in May.
Six other suspects — Alexei Andryushin, Dmitry Bartenev, Igor Borisov, Alexei Buleyev, Vitaly Lepins and Yevgeny Mironov — are awaiting trial at the Arkhangelsk regional court and face up to 15 years in prison if convicted. The freighter’s crew hailed from Arkhangelsk.

TITLE: Leaks Cast Light on U.S. Embassy
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A new batch of classified embassy cables published by the WikiLeaks web site shows that U.S. diplomats in Moscow possess impressive writing skills but have trouble tapping government sources for information.
In fact, many of the 37 reports published at cablegate.wikileaks.org since late Wednesday cite the same political experts that are widely quoted by national and international media, including The St. Petersburg Times.
They also feature interviews with journalists like Ekho Moskvy editor Alexei Venediktov and at least one reference to a St. Petersburg Times report on illegal logging in the Ivanovo region.
The cables, which date from May 2006 to February 2010, reveal that the diplomats seem to have little more access to the inner circles of power than foreign correspondents.
“They complained to me regularly that they have trouble accessing government sources,” said political analyst Alexei Mukhin, who appears in a November 2008 cable about the relationship between President Dmitry Medvedev and Prime Minister Vladimir Putin.
Mukhin, who heads the Center for Political Information, a think tank, is quoted in the report as saying that Medvedev’s first state-of-the-nation address showed that his political clout was on the rise.
Andrei Soldatov, a security expert and head of the Agentura.ru think tank, said U.S. representatives were not alone in their difficulties getting access to government officials.
“Diplomats of all countries have had that problem for a long time,” he told The St. Petersburg Times.
Soldatov argued that the situation worsened since Medvedev’s presidency began in 2008, because a number of liberal analysts hitherto regarded as independent had become associated with the Kremlin.
As an example he named Olga Kryshtanovskaya, a prominent sociologist, who joined United Russia in April 2009. She said at the time that she decided to join the party because of her frustration with the “destructive” forces that prevail among opposition politicians.
Kryshtanovskaya is quoted in a February 2010 cable as saying Putin was likely to return to the Kremlin in 2012 because he was “hostage to the system he had built.”
“Those formerly regarded as independent are now being used by the Kremlin,” he said.
Soldatov also said that while Putin was probably offended by some of the reports, he could ultimately profit from them depicting him as less acceptable to the United States.
“This only confirms his image in the country,” he said.
Mukhin said in an interview that he believed the leak was the work of U.S. intelligence agencies. “This is a whole supermarket of compromising material and nobody profits more from the goods offered than those services,” he said.
Putin told CNN’s Larry King in an interview broadcast Thursday that “experts believe that someone deceived WikiLeaks — to undermine the site’s reputation and to use it later for their own political purposes.” Putin did not elaborate.
A February 2010 cable titled “The Luzhkov Dilemma,” which was approved by Ambassador John Beyrle, argues that under former mayor Yury Luzhkov, City Hall had direct links to organized crime.
The 2,100-word report offers no concrete evidence but quotes a number of informants — whose names were withheld by WikiLeaks — as saying the Luzhkov’s administration “operates more as a kleptocracy than a government.”
Allegations of criminal links within City Hall have been made infrequently in the past — and while investigators have opened corruption probes against some of Luzhkov’s senior officials, no criminal charges have been brought against the mayor since Medvedev fired him for a loss of confidence Sept. 28.
The embassy cable’s authors were right in their prediction that “ultimately, the tandem will put Luzhkov out to pasture, like it has done with fellow long-term regional leaders.”
A cable dated May 2006 lists Mayor Sergei Sobyanin, who was head of the Kremlin administration at the time, as a potential successor to Putin as president. 
While Sobyanin was mentioned less often later, his profile as “lacking ambition” fits descriptions forwarded this fall when he was picked as Luzhkov’s successor.
Another cable dated March 2009 cites proliferating “rumors” that Putin is resisting his workload as prime minister, preferring to work from home while leaving much of the day-to-day operations to First Deputy Prime Minister Igor Shuvalov.
The report’s sources were also removed, but doubts about Putin’s work ethic have been put forward by political analysts in the past, most notably Mukhin.
Putin’s spokesman, Dmitry Peskov, said Thursday that the latest publications were “rubbish” and could not hurt relations with Washington.
“This is so comical … that I don’t think it can have any influence” on ties with Washington, he said, Interfax reported.
Ambassador Beyrle wrote on his Russian-language blog that diplomats’ work had remained “nearly unchanged” for centuries and that the leaks would not disrupt that.
“Our main task is to help build trust between governments, without which it is impossible to solve common problems or reach agreement,” he wrote. 
“A diplomat from any country is something like a correspondent, who talks to people from varying professions and with varying views and writes home what he found out, and sometimes adding his own conclusions.”
Beyrle, who did not specifically address the contents of the leaks, said diplomatic ties had stood up against this “minor trial,” though he said he regretted the damage caused by the release of “confidential diplomatic correspondence.”

TITLE: President Visits Warsaw For New Round of Talks
PUBLISHER: The Associated Press
TEXT: WARSAW, Poland — Russia’s ambassador said Thursday that President Dmitry Medvedev’s visit to Poland will open a new chapter in relations with Poland.
Medvedev arrived in Warsaw on Monday for talks with Poland’s President Bronislaw Komorowski and Prime Minister Donald Tusk which will continue on Tuesday. The nations are to sign a number of economic agreements.
Ambassador Alexey Alexeyev told a briefing that the visit would be a “very big event” and would open a “new chapter in Russian-Polish relations.”
Russia is seeking to modernize its economy and a key agreement will focus on cooperation with Poland. Other agreements aim to strengthen cooperation in sea transport, and in fighting pollution of the Baltic Sea.
Alexeyev said that modernization changes are needed in all walks of life in Russia, including in the daily life of society or in the role of non-governmental organizations. He expressed hope that Poland could use its strong knowledge of Russia to help in all of these efforts.
Alexeyev noted a rapid growth in trade between the two countries of $15 billion so far this year -- a jump of more than 40 percent on last. He said with most of the volume coming from Poland’s imports of Russian gas and oil, an intensification in sales of Polish goods to Russia should help redress the imbalance.
In the talks, Polish leaders are sure to raise a number of grudges rooted in the World War II, expected to include an analysis of all documents concerning the 1940 massacre of more than 20,000 Polish army officers by the Soviet NKVD in the forest of Katyn and other locations in the former Soviet Union.
Moscow has made some of the documents available and said it is working on having the others declassified for the needs of Poland’s historians.
Historically, ties became icy after Poland shed communism and Moscow’s dominance in 1989 and joined NATO and the European Union. However, sympathy expressed in Russia after Polish president Lech Kaczynski died there in a plane crash this year has accelerated a thaw.
Russian and Polish investigators are seeking the cause of the crash in separate probes and their efforts are also expected to be a theme of talks.

TITLE: YouTube Whistleblower Gets 18 Months
PUBLISHER: The St. Petersburg Times
TEXT: A former Komi prosecutor who made a YouTube appeal to President Dmitry Medvedev over “fabricated” charges that resulted in two people getting life prison terms was sentenced to 18 months in jail Friday after being convicted of deliberately giving false evidence.
The Syktyvkar City Court convicted Grigory Chekalin, a former deputy prosecutor for the Komi republic, of falsely accusing an unidentified local police investigator of fabricating charges against two young men who were convicted of burning down a local shopping center, the Investigative Committee said in a statement.
Chekalin was convicted of giving false testimony in December 2007 and March 2009 when he was questioned as a witness in the arson case.
He reiterated his claims against the investigator in a November 2009 appeal to Medvedev on YouTube, asking him to investigate the charges.
In late October, Nikolai Piyukov, a former head of the Federal Security Service’s branch for the Komi republic who examined Chekalin’s claims, told the closed-door trial that they were in part true, news portal Bnkomi.ru reported, citing Chekalin.
Piyukov’s subordinates were not able to examine all of Chekalin’s claims because they were forced to stop their inquiry under pressure from regional prosecutors, Piyukov told the trial.
In late September, State Duma Deputy Alexander Kulikov, a Communist, asked Prosecutor General Yury Chaika to check Chekalin’s claims. Chaika’s office has not publicly commented on Kulikov’s request.
Chekalin made his YouTube appeal to support a YouTube video posted in November 2009 by former Komi police officer Mikhail Yevseyev, who also called the arson charges false.
Yevseyev was arrested in Moscow in late August and sent to the Komi republic to face charges of assault and abuse of office connected to his service in Chechnya in 2004.
Yevseyev is also accused of disclosing classified information, but details of that charge have not been made public.
Two men were handed life sentences in July 2009 over the 2005 fire that killed 25 people and injured 11.

TITLE: Muscovite Denies Spam in U.S.
PUBLISHER: The Associated Press
TEXT: MILWAUKEE, Wisconsin — A 23-year-old Moscow resident accused of masterminding a vast worldwide spamming network pleaded not guilty Friday in a U.S. court to violating a U.S. anti-spam law.
A federal judge in Wisconsin ordered Oleg Nikolaenko held without bond, saying he was a flight risk because of his access to cash and his lack of ties to the state and United States.
Nikolaenko was brought into court wearing bright orange prison pants and matching sweatshirt and shackled at the ankles. His attorney entered the plea as a Russian interpreter translated for his client.
Prosecutors say Nikolaenko ran a network that involved placing malicious code on unsuspecting users’ computers and then hijacking the infected machines to blast out billions of e-mails.
Internet security experts say the network was so massive that on some days it accounted for one of every three unwanted e-mails in the world.
Nikolaenko is charged with violating the CAN-SPAM act by intentionally falsifying header information in commercial e-mail messages and sending at least 2,500 spam e-mails per day, the minimum threshold for the charge. Prosecutors say his network was capable of sending up to 10 billion messages per day.
The charge carries a maximum penalty of three years in prison and a $250,000 fine.
Nikolaenko, unshaven with disheveled hair, sat silent and expressionless during the 20-minute proceedings.
His attorney, Christopher Van Wagner, said he intended to mount a vigorous defense and would examine whether broad pretrial publicity might jeopardize his client’s ability to receive a fair trial.
“Some people still harbor Cold War images of people from Russia,” he told reporters on the courthouse steps. “You take one look at Oleg, he looks like a kid you find in a basement munching nachos and playing Wii” video games.
Assistant U.S. Attorney Erica O’Neil said the prosecution’s case would hinge on “voluminous” records including e-mails Nikolaenko purportedly sent and information gleaned from computer hard drives. She said a computer-crimes expert from the U.S. Justice Department is assisting because of the complexity of the case.
Van Wagner hinted that he may try to cast doubt on the validity of the e-mail records.
“When you respond to an e-mail you don’t know who’s typing it,” he said.
Nikolaenko was arrested last month at the Bellagio Hotel while he was in Las Vegas for a car show. He is being tried in Milwaukee because that’s where an undercover FBI investigator ordered Viagra through an e-mail distributed by Nikolaenko’s alleged operation and received bogus herbal pills instead, an FBI spokesman said.
O’Neil said Nikolaenko is being held at a U.S. Marshal detention facility in Milwaukee.
In arguing that Nikolaenko should be granted release on bail, Van Wagner noted that his client’s wife and young daughter were in the process of requesting travel visas in Russia so they could be with Nikolaenko in Milwaukee for the trial. They would not be doing that if Nikolaenko were planning to flee, he said.
But U.S. Magistrate Judge Patricia Gorence wasn’t convinced, saying Nikolaenko had two passports and a sizeable amount of cash when he was arrested. She said Van Wagner could request a new bond hearing once the defense arranged for a place for Nikolaenko to live, a request Van Wagner said he would “absolutely” make.

TITLE: Putin Opens Up for Interview With Larry King
AUTHOR: By Nabi Abdullaev
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia is ready to begin a new arms race if NATO fails to come to terms with Moscow over a joint missile shield in Europe, Prime Minister Vladimir Putin said on CNN’s “Larry King Live” last week.
“Russia will simply be obliged to protect its own safety by different means,” including new offensive weapons and nuclear missile systems, Putin said, echoing President Dmitry Medvedev’s warning to the United States in his state-of-the-nation address last Tuesday.
Putin also downplayed tensions with Washington, habitually dodged the question of whether he would run for the presidency in 2012 and spoke about gay rights, tigers and his daughters. The hourlong interview was recorded Tuesday and broadcasted at 5 a.m. Moscow time Thursday.
“We [with Medvedev] have long ago decided between ourselves that we will make a coordinated decision about the 2012 election in the interests of the Russian people,” said Putin, who was making his second appearance on Larry King’s show. He spoke to the U.S. television journalist in 2000, in his first year as president.
The prime minister dismissed claims about a lack of democracy and of Russia being ruled by the security services, comments attributed to U.S. Defense Secretary Robert Gates in a recent WikiLeaks report.
Mocking Gates’ past job as director of the Central Intelligence Agency, Putin said: “If this is the best expert on democracy in the United States, then my congratulations.”
Putin praised U.S. President Barack Obama for softening rhetoric about Russia and effectively postponing White House plans to build a missile shield in Europe.
“We won certain time to try implementing the plan proposed by President Medvedev in Lisbon,” Putin said, referring to a proposal to create a joint missile shield with NATO. Medvedev made the proposal at the alliance’s summit last month.
Putin also defended 10 Russian sleeper agents who were busted in the United States in June and later swapped for four Russians imprisoned on spy charges, saying the agents “deserve unconditional respect.”
He maintained that “their activities had not done harm to U.S. interests” and that they were only to become operational “in crisis periods, say, in case of a breakup in diplomatic relations.”
“Thank God neither these people nor our other intelligence and special services officials were detected organizing secret prisons, abductions and using torture,” Putin, a former Soviet spy, said in a dig aimed at recent U.S. intelligence scandals.
King did not bring up numerous allegations that Russian special services resort to those very tactics in the North Caucasus. Dozens of residents in the restive region have successfully sued Russia in the European Court of Human Rights in Strasbourg for abduction and torture carried out by officials.
King also ignored the plight of former Yukos owner Mikhail Khodorkovsky, who awaits a new verdict this month in a politically charged case, as well as matters corruption or violation of civil liberties.

TITLE: In Brief
TEXT: <strong>Mom ‘Harassed’</strong>
MOSCOW (SPT) — A solicitor representing lawyer Sergei Magnitsky, who died in pretrial detention last year, said Magnitsky’s mother has been harassed by undercover reporters preparing a critical documentary about her son.
Magnitsky — who worked for Hermitage Capital, formerly the largest foreign investment fund in Russia — died at age 37 when the pancreatitis he developed in jail was left untreated. He had been arrested on fraud charges, but supporters allege that he was silenced as punishment for uncovering an $230 million tax fraud scheme by the police officers who detained him.
Magnitsky’s former associate Jamison Firestone said Friday that Magnitsky’s mother was being followed by journalists from a Kremlin-friendly television network. He said the reporters even entered Natalia Magnitskaya’s home claiming to be real estate agents. Firestone alleged that NTV was preparing a show critical of Magnitsky. An NTV spokeswoman was unavailable for comment.

<strong>Two Deny Road Rage</strong>
MOSCOW (SPT) — Two high-profile public figures implicated in separate road rage accidents involving flashing blue lights have denied wrongdoing, news reports said Friday.
A spokesman for tycoon Telman Ismailov’s AST group said neither the company nor cars used by Ismailov’s family were equipped with flashing blue lights, which may only be used by state officials, Interfax said.
Earlier reports said people in a car with a flashing blue light allegedly carrying Ismailov’s son attacked a motorist Nov. 24 for not giving way.
A car used by Makhmud Sakalov, Ingushetia’s legislature speaker, was implicated in a similar incident Nov. 28, but Sakalov said his driver was using the vehicle without authorization, Gazeta.ru reported.

<strong>Nine Dead in Crash</strong>
MOSCOW (SPT) — At least nine people died in Tatarstan on Friday after a bus carrying oil company workers returning home from a month-long shift swerved into the wrong lane and rammed into a KamAZ truck carrying sunflower seeds, Interfax said.
The bus driver, Anas Garipov, 47, was killed along with eight workers of the Kalmneft company. At least 25 people were hospitalized in Saratov and Kazan, seven in serious condition, an Emergency Situations Ministry spokesman said.

<strong>Japanese Flyover</strong>
TOKYO (AP) — Japan’s foreign minister on Saturday flew within sight of islands held by Russia but claimed by Japan, a month after a visit there by the Russian president set off a political fracas between the countries.
Foreign Minister Seiji Maehara’s observation trip off the northern tip of Japan comes amid dissatisfaction over the government’s handling of territorial disputes. Tokyo has also been in a row with China in recent months over islands to the south.
“We want to stabilize political relations and resolutely negotiate with Russia,” he told reporters who accompanied him on the plane, the Kyodo News agency reported.

<strong>OSCE Powers</strong>
ASTANA, Kazakhstan (SPT)  — Unresolved conflicts across the former Soviet Union thwarted attempts by Europe’s main security watchdog to adopt new powers Friday, sending world leaders home empty-handed from the first OSCE summit in more than a decade, Reuters reported.
The 56-member state Organization for Security and Cooperation in Europe could not agree on a new “action plan” to tackle conflicts after two days of talks that dragged into the early hours of Friday in Kazakhstan’s windswept capital.

<strong>Arrest in Austria</strong>
VIENNA (SPT) — Austrian police have detained a Chechen refugee wanted in Belgium on suspicion of planning an Islamist militant attack on NATO targets, Austrian authorities said Saturday.
The suspect, who lives with his family in Austria, slipped through the dragnet when police in Belgium, Germany and the Netherlands swooped in on suspected plotters last month, Interior Ministry spokesman Rudolf Gollia said.
The man, whom Gollia declined to identify, was taken into custody Dec. 1 when he arrived at Vienna airport from abroad. He remained under arrest pending an expected request from Belgium for his extradition.
“Belgian authorities suspect a group of Chechen extremists, who were seeking to set up a religious state in northern Chechnya, planned to attack NATO facilities in Belgium,” Gollia said.

<strong>TV for Prisoners</strong>
MOSCOW (SPT) — Inmates in Russia’s prisons, who face problems including overcrowding, disease and violence, also watch too much trashy television, Russian Orthodox Church Patriarch Kirill said, Reuters reported.
Inmates watch too many shows that romanticize crime and would benefit from a cable channel with morally uplifting and patriotic programming, Kirill said Friday, RIA-Novosti reported.
“Why not think about creating a cable television system for detention facilities and fill the system with remarkable works of film and television?” he added.
Young Russian inmates should be exposed to “the romance of honest labor and valiant service to the homeland,” Kirill said.
Russia has one of the world’s largest per capita prison populations, at 628 prisoners per 100,000 residents, with most held in often crowded, unsanitary or poorly managed facilities.

<strong>Bull Paralyzes Airport</strong>
MOSCOW (SPT) — Operations at Sheremetyevo Airport, Moscow’s main international hub, were halted for 20 minutes after a young bull blocked the runway, RIA-Novosti reported.
The bull, which escaped from a plane owned by the Air Bridj Cargo company late Thursday, was eventually caught, but not before five planes had to switch airports, landing in Moscow’s Domodedovo, the report said, citing a Sheremetyevo spokeswoman.
It was unclear how the animal managed to escape.

TITLE: New Visa Process To Flourish
In 2011
AUTHOR: By Howard Amos
PUBLISHER: The St. Petersburg Times
TEXT: Government officials said Friday that while the number of highly skilled foreign specialists working in Russia under a new, simplified visa regime is “not big,” a significant increase in take-up is expected next year.
Mikhail An, deputy director of the Economic Development Ministry’s department of investment policy and public-private partnership, said companies were looking at how the law was working before participating more fully. He made the statement at the Association of European Businesses’ fourth annual migration conference.
Federal Law No. 86 introduced July 1 permits highly skilled foreign specialists — classified as those with an annual salary of at least two million rubles ($63,500) — to be employed in Russia under a preferential visa and work permit system.
Federal Migration Service Director Konstantin Romodanovsky told reporters Wednesday that his ministry had approved 2,610 applications for this type of migrant.
Oleg Artamonov, head of the Federal Migration Service’s external relations department, qualified this figure, stating at the conference that fewer than 2,000 specialists had actually entered the country since July.
He added that 80 percent of these foreign specialists were from the European Union, while most of the rest came from the United States, Japan and other East Asian countries.
On the basis of spiraling demand, a predicted 3,000 applications would be received by the end of 2010 and that serious growth would begin next year as companies got used to the new system.
Though all problems had now been resolved, there had been some initial complaints by certain “big firms” about the new legislation, said Alexei Utkin, advisor to the Foreign Ministry’s Consular Department.
Admitting that foreigners sometimes have to go through “circles of hell” to work in Russia, An said further changes to the migration rules would be targeted in the science, education and innovation sectors.
Russia currently attracts fewer than half the 46,000 foreign specialists it has calculated are needed for its modernization drive, Romodanovsky said.
There is, however, one aspect of the July legislation that has not been a success: Foreign specialists have the option of registering with their embassies, which then post the details on the Federal Migration Service’s web site from where it can be accessed by potential employers.Though widely advertised, the scheme has been little used, Utkin said.

TITLE: PepsiCo Purchases WBD for $3.8 Billion
AUTHOR: By Roland Oliphant
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — PepsiCo will acquire a controlling stake in juice and dairy giant Wimm-Bill-Dann to become the biggest food and beverage company in Russia, the companies announced Thursday.
As a result of the deal Pepsi will have 49 manufacturing facilities and employ some 31,000 people in Russia, Ukraine and Central Asia, making it “the crown jewel of PepsiCo Europe,” Zein Abdulla, chief executive of PepsiCo Europe, told reporters.
PepsiCo will pay $3.8 billion for 66 percent of the No. 1 beverage company, and will get an option to buy the rest of the company later.
The deal, which is subject to approval by the Russian government, will make PepsiCo the biggest food and beverage company in the country, and will make Russia Pepsi’s biggest market outside the United States.
The price paid by PepsiCo implies a total company value of some $5.4 billion. At $33 per ADR share ($132 per ordinary Russian share), Pepsi paid a 32 percent premium on the current value of Wimm-Bill-Dann shares.
Wimm-Bill-Dann stock surged on the news, causing the MICEX exchange to raise its upper limit on price gains for Wimm-Bill-Dann shares. By the close of trading in Moscow, the stock was up 58 percent to 3,634.32 rubles, with a volume more than 10 times the previous day.
The company had previously been valued at $2.6 billion when the French dairy giant Danone divested itself of an 18.4 percent share for $470 million in October.
Wimm-Bill-Dann, whose juice brands include J7 and Lyubimy Sad, was the last major independent player on the market after Pepsi’s acquisition of Lebedyansky in 2008, and Coca-Cola’s acquisitions of Nidan Soki earlier this year and Aquavision in 2007. The Russian juice market is now effectively divided between the two American rivals, said Alexander Yudin, vice president at the Grandis Capital brokerage.
Analysts estimate the company’s juice business at 28 percent of its overall turnover. Yudin said the move would not make sense if it was just for the sake of consolidating the juice market. It looks more like a strategic move to get into to the dairy market.
Wimm-Bill-Dann owns four out of the five most popular dairy brands in Russia, including Domik v Derevne, Vesyoly Molochnik, Chudo and M.
PepsiCo says the move is part of fulfilling its declared goal of growing its nutrition businesses to $30 billion by 2020, from about $10 billion today. Acquisition of Wimm-Bill-Dann takes that figure to $13 billion.
“Health and wellness trends are accelerating around the globe, and that’s one thing that’s driving the growth of dairy,” said Abdulla, whose company has already moved into the dairy market in the Middle East via a joint venture with Saudi-based Almarai.
“Consumption of dairy products is only 25 kilograms per capita per year in Russia — that’s much less than some European countries,” Yudin said. PepsiCo says it expects the Russian dairy market to grow “at a low double-digit rate” for at least the next three years.
But Pepsi is not alone in its interest in Russia’s dairy market. Danone sold its stake in Wimm-Bill-Dann in order to comply with antitrust laws so it could acquire Unimilk, another Russian dairy company.
“Competition is heating up in the dairy market, and competition to achieve a health focused positioning, both in emerging and developed markets, is becoming increasingly intense,” said Ildiko Szalai, packaged foods analyst at Euromonitor International.

TITLE: Cables Give Insights On Business
AUTHOR: By Howard Amos
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Cables from the U.S. Embassy in Moscow published late Wednesday by WikiLeaks have shed light on Washington’s attitude toward President Dmitry Medvedev’s modernization agenda.
A cable from Christmas Eve last year states that “Medvedev’s modernization drive provides American officials another potential hook for cooperation.”
“Medvedev is finally challenging the low expectations and assessments of many experts after 19 months in office as [Prime Minister Vladimir] Putin’s junior partner,” the cable concludes.
In the same cable, U.S. officials analyzed Medvedev’s chances of success in his plans to change the country. It quotes some sources as being optimistic and others as pessimistic, believing that Medvedev does not “have the inclination, power or buy-in of the bureaucracy.”
It added that “some siloviki,” including Sergei Chemezov, chief executive of state-owned Russian Technologies, have reportedly boycotted meetings of Medvedev’s modernization commission.
The cables, averaging between 1,000 and 2,000 words of analysis and comment, signed off by U.S. Ambassador John Beyrle, make clear Washington’s desire to see Russia drawn further into global financial structures “to force reforms deeper into the system.”

TITLE: In Brief
TEXT: <strong>Ferry to Stockholm</strong>
ST. PETERSBURG (Vedomosti) — St. Peter Line will launch a passenger cruise ship, the Princess Anastasia, on a Petersburg to Stockholm route in April next year. 
The ship, which has a passenger capacity of 2,215, will make the trip twice a week, with a stop in Tallinn also planned.
St. Peter Line already operates a ferry to Helsinki. The Princess Maria was launched in April this year.

<strong>Tunnel Talks</strong>
ST. PETERSBURG (Vedomosti) — The German company Herrenknecht may supply a tunneling machine for the construction of the Orlovsky Tunnel underneath the Neva River.  
Talks were held last week between City Governor Valentina Matviyenko, the leaders of Herrenknecht, and Nevsky Concession Company (a consortioum of Vinci and First Quantum that in spring won a 47.7 million-ruble tender to build the tunnel).

<strong>Buckwheat Saga</strong>
ST. PETERSBURG (Vedomosti) — St. Petersburg’s branch of the Federal Anti-Monopoly Service (FAS) has found indications that city retailers Agrotorga, Perekryostok, Real-Hypermarket, Lenta, Dixy-Petersburg, and O’kay may be in violation of a law “on the protection of competition” after hiking buckwheat prices at their stores this summer.  
The FAS claims that in some stores, the price of buckwheat almost doubled, and that such actions cannot be justified by adverse climatic conditions that led to a poor harvest.
X5 Retail Group and Lenta have declined to comment until an official decision is made. If the retail chains appeal a writ from the FAS, the agency will take administrative action against them, while the companies could face fines of up to 15 percent of their turnover, said Ivan Smirnov, a partner at Baker & McKenzie law firm. A court decision in favor of the FAS is unlikely, as there is little evidence against the companies, Smirnov added.
According the Federal State Statistics Service, the price of buckwheat grew by 158.8 percent in July and August due to a significant reduction of the crop after the summer’s heatwave and subsequent drought.  

<strong>Ginza Takes to Sky</strong>
ST. PETERSBURG (Vedomosti) — Local restaurant group Ginza Project is expanding into aviation with a spin-off holding company, Ginza Sky. 
The company will rent a helicopter and Gulfstream III jet with a capacity of 12 people, on which the company will offer its clients international flights.
The demand for business aviation in St. Petersburg is growing rapidly, but clients have to pay extra for flying in aircraft from another city, said Vlas Pavlenko, a manager at Ginza Sky. For example, a round-trip flight from Petersburg to Geneva costs 30,000 euros. Thanks to Ginza Sky’s location in St. Petersburg, prices will be reduced by about 30 percent, he said.

TITLE: Investors Like Regions That Give a Warm Welcome
AUTHOR: By Roland Oliphant
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Foreign investors are more interested in the legal environment, tax incentives and attitude of the authorities in a region than location, natural resources or infrastructure, according to research released Friday.
The findings, drawn from interviews by KPMG in cooperation with the Russian Union of Industrialists and Entrepreneurs, suggest that regional governments that are not blessed with oil fields or rich mineral deposits can still compete for foreign direct investment.
Economic Development Minister Elvira Nabiullina welcomed the findings at a ceremony to release the report, saying the future of Russia’s economic development lies in the regions, and that “investment climate in the regions will be an integral part of economic policy.”
“Working with the regions to improve the investment climate there is one of our priorities for 2011,” she said. Nabiullina said the government had discussed the question of regional investment on Wednesday and that “not everything is all right there, unfortunately.”
As part of the strategy, billionaire Viktor Vekselberg promised to extend the benefits available in the new innovation city of Skolkovo outside Moscow to “any company doing R&D regardless of location.”
Russia has managed to slow, but not reverse, a systematic fall in foreign investment sparked by the 2008-09 financial crisis. FDI was down 11 percent to $5.4 billion in the first half of 2010, the State Statistics Service reported in August. Overall foreign investment fell 5.5 percent to $30.4 billion.
Vekselberg, who heads the Skolkovo Development Foundation, pointed to World Bank figures that showed Russia is ranked 120 out of 138 countries for investment climate.
But investments are still skewed disproportionately toward Moscow and St. Petersburg and to energy-producing regions like Arkhangelsk and Sakhalin.
Five of Russia’s 82 regions account for more than 70 percent of FDI, KPMG wrote in the report. Forty percent of FDI currently goes into mining. And 37 regions have attracted less than $100 million in FDI in the last four years, Andrew Cranston, a senior partner at KPMG, said in a presentation to investors and officials.
The consulting firm canvassed more than 70 investors in 12 regions and deliberately excluded Moscow and St. Petersburg, as well as regions blessed with mineral wealth, to get a picture of investment climates in “ordinary” regions.
Regional investment was hindered by a mismatch of expectations between foreign investors and regional authorities; high-level regional officials’ friendliness not extending into the middle ranks of bureaucracy; and a proliferation of stake holders that makes coordination extremely difficult.
The good news, the report said, is that improving a region’s investment climate depends more on the regional authorities’ will than it does on more challenging factors, such as geography, a skilled work force or impressive infrastructure.
KPMG’s researchers were surprised to find that investors were more interested in “soft” factors, like the legal environment, and financial and tax incentives.
“This is important because it shows us that for regions that are strong in hard factors, it is not enough; and it means that regions weak in hard factors can compensate by overperforming in soft factors,” said Cranston, who helped compile the report.
A case in point is the Kaluga region. It has only some raw materials for production of construction goods, suffers from an imbalanced energy infrastructure, a small work force and unattractive business-to-business and business-to-consumer markets, the report said.
But through a combination of liberal legislation and tax breaks, Kaluga managed to win the title “Europe’s Detroit” after Volkswagen opened a factory there in 2007. It has seen 168 percent FDI compound annual growth rate in 2005 to 2009, currently second only to oil-rich Sakhalin in terms of FDI per capita.
Kaluga Governor Anatoly Artamonov had no doubts about how best the federal government could help other regions.
“The federal authorities can do two things: Either they can help the regions do this with their own laws and legislation; or at least make sure regional laws and legislation are not disturbed,” he said.

TITLE: Troika Executive Arrested 
In New York in Fraud Case
AUTHOR: By Derek Andersen
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Troika Dialog global markets division head Peter Ghavami has been arrested in the United States on a fraud charge.
Ghavami, a Belgian national, was arrested upon arrival at John F. Kennedy International Airport in New York on Dec. 1. The charge against him is related to activities that took place in 2001 and 2002.
A U.S. Justice Department statement cites a criminal complaint filed on Sept. 16 alleging that Ghavami rigged a competition to determine the recipient of an investment, in exchange for a $100,000 kickback for his employer.
Ghavami is alleged to have been involved in depriving “a municipal bond issuer of money by causing it to award an investment agreement at an artificially determined or suppressed rate” after the bond issuer hired Ghavami’s employer to carry out competitive bidding “to select a provider in which to invest proceeds from a municipal bond offering.”
According to news reports, Ghavami was managing director and co-head of the municipal bond reinvestment and derivatives desk at the New York subsidiary of Swiss bank UBS at that time. The Justice Department statement does not identify UBS by name.
Ghavami faces one charge of wire fraud, which is punishable by 20 years imprisonment and a maximum fine of $250,000. The fine can be increased to twice the gain derived by the crime or twice the loss caused by it.
Wire fraud is a charge made in the United States when electronic communications are used in the course of committing a crime. Like the charge of mail fraud, wire fraud is often used to increase the severity of a crime by making it a federal offense when state law is more lenient.
The Wall Street Journal reported that eight people have already pleaded guilty in an ongoing investigation of the municipal bond industry being conducted by the Justice Department’s Antitrust Division, the FBI and the IRS. Seven more people are still facing charges. UBS stated in its most recent quarterly report that it is cooperating with the Justice Department’s investigation.
Troika Dialog’s press service did not answer its telephone on Sunday.
Ghavami began working at Troika Dialog in September 2009, according to the Troika Dialog web site, coming from Standard Bank. He worked for UBS for a total of nine years and had also held positions at Lehman Brothers and JPMorgan Chase.
The purpose of Ghavami’s trip to the United States is unknown.

TITLE: World Cup Gives Russia an Anti-Graft Goal
AUTHOR: By Brook Horowitz
TEXT: Awarding Russia the right to host the World Cup in 2018 was, in fact, the best outcome. FIFA’s decision, reached amid claims and counter-claims of corruption, puts Russia on the spot once and for all to clean up its reputation.
However the decision was arrived at, the reality is that Russia’s reputation as a “difficult” market has reached an all-time low. Official figures suggest that corruption in government tenders costs the government 1 trillion rubles ($32 billion), or 20 percent of the money spent, every year. Many major corruption cases are ignored or remain unresolved, and variations of fraud, bribery and extortion are common in everyday life, suggesting that corruption remains prevalent throughout the economy. Russia recently slipped a few notches to 154th place, near the very bottom of Transparency International’s Corruption Perceptions Index.
But there are forces at play that will shine sunlight onto the murky waters of the Russian business environment and government in the eight years leading to the World Cup.
Internationally, the willingness of governments to tolerate corruption is diminishing. Over the last few years, the United States has used the Foreign Corrupt Practices Act to prosecute several multinational companies operating in Russia. Getting it wrong has entailed huge fines for the companies, inestimable losses in reputation, business and legal expenses, and even the risk of prison sentences for the senior executives involved.
The international legislative environment for companies in Russia is likely to get tougher. The Dodd-Frank Wall Street Act, passed earlier this year in the United States, provides for increasing incentives for whistle-blowers — as much as 30 percent of the amounts recovered. And in April 2011, the new British bribery act comes into force, making companies liable for “failure to prevent bribery.” Precisely how the new law will be implemented will be decided following a consultation by the Serious Fraud Office with the business community. International companies operating in Russia, their Russian agents and distributors, and Russian companies operating abroad — all the most likely contractors for World Cup projects — will be the most exposed.
Domestically, Russian law is changing too. President Dmitry Medvedev has spearheaded an anti-corruption drive, introducing a strategy and several new laws. Russia next year is likely to sign the Organization for Economic Cooperation and Development’s Anti-Bribery Convention and join the OECD, in advance of its accession to the World Trade Organization. This commitment to global standards will in the longer-term entail the Russian government introducing more effective anti-corruption laws in the Russian legal code and reforming the law enforcement agencies to ensure effective implementation.
Apart from the impact of changes likely to be engendered by legal developments, a change of culture will likely occur that will begin to squeeze corruption. Obligated to adhering to the best international standards, the multinational companies bidding for contracts in the Russian World Cup will have an important role to play in setting the best example of resisting the temptations of corruption. Their willingness to step away from a deal if the conditions are not right will be an important part of the equation, as will their experience of devising effective compliance procedures such as internal codes of conduct and employee training, and discovery procedures such as internal audit and whistle-blowing. Indeed, business has the ability to create “islands of integrity” within their own companies and among their agents and representatives in Russia.
After the suspicions of foul play in the selection process, the World Cup in Russia is an invitation to the world’s media (especially the British, who are inconsolable at losing the bid) to investigate every hint of corruption during preparations for the championship. The awarding of media rights and sponsorship packages, the fairness of construction and infrastructure bids, the impact of social dislocation and environmental damage will all come under public scrutiny — if not in Russia, then abroad. With $10 billion of government funds allocated for reconstruction projects in 13 cities from Kaliningrad on the border of the European Union to Yekaterinburg in the Urals, international contractors and suppliers will need to be involved on a scale never before known in Russia. It is hard to imagine how the traditional machinations of public contracts can be concealed from the onslaught of the world’s investigative journalists. The World Cup will either make or break Russia’s reputation as a business and investment destination for the next 20 years.
The World Cup provides a multitude of opportunities for Russia to accelerate its integration into the world economy. The financial and economic benefits for the country are clear. But the benefits go beyond that. The opportunity for Russian business to operate on the basis of the best international standards, and for the state to relax its stranglehold on small business and diversify the economy, will all contribute to reducing corruption — the main obstacle to Russia’s modernization. As the world’s football fans enter Russia in June 2018 without having had to apply for a visa, and descend on the sparkling new facilities of provincial cities like Podolsk, Saransk, Samara and Rostov, it is tempting to hope that Russia will by then have made its way to the top half of Transparency’s corruption index. That would benefit not only Russia but the whole world. Now that’s a goal worth aiming for.

Brook Horowitz is head of governance and anti-corruption programs and executive director for Russia at the International Business Leaders Forum, an independent business association working with companies to promote responsible business practices worldwide.

TITLE: Ivan the Terrible vs. Peter the Great
AUTHOR: By Richard Lourie
TEXT: Billionaire Mikhail Prokhorov recently gave an interview in Snob, the magazine he owns. He notes that when lecturing he always asks the audience to name the most effective manager of all Russian leaders in the last 500 years. Invariably, the answer is Ivan the Terrible or Peter the Great. But Peter and Ivan are more than effective managers; they represent enduring currents in Russian history.
If Prokhorov can give an interview in his own magazine, I suppose I can quote myself in my own column. In my novel “Zero Gravity,” a 1986 Cold War comedy, an eccentric Kremlinologist reduces “all Russian history to two basic rhythms, which he called the Ivan-the-Terrible contraction and the Peter-the-Great expansion. Russia was either closing in on itself, shunning the world, hating foreigners, purging the bad blood … or else it was expanding, reaching out for the fruits of the West, the fruits of science, which, as bad luck would have it, grew best on the tree of liberty.”
Though that was written tongue in cheek, I find it helps me now in trying to understand the stream of highly disparate events occurring in Russia. Both tendencies are at work and at war with one another, a sharp contradiction as the Marxists were fond of saying. Though that contradiction is part of Russia’s internal dynamic, external forces are also deeply involved. The rise of China is pushing Russia to the West, as is the need to modernize the economy. The power elite created under Vladimir Putin is in no hurry, however, to embrace the West. That means change and risk. They were the beneficiaries of the last upheaval. There’s no guarantee they would fare so well in the next round.
But in Russia there are contradictions within contradictions, and so overly simple generalizations must also be avoided. The anti-immigration nationalists that include “White Power” racists, fascists and skinheads chanted anti-Kremlin slogans at a recent demonstration. The liberal opposition can be as anti-Chinese as many of the rabid nationalists in and out of government.
The Ivan-the-Terrible wing of today’s Russia may have its own contradictions, but there is no question that it opposes the opening to the West, a notion associated with President Dmitry Medvedev. That opening includes closer ties with NATO, membership in the WTO, new treaties with the United States on reducing nuclear weapons and the use of nuclear fuel for civilian purposes. Other positive trends include foreign investment in Skolkovo, Russian’s Silicon Valley: Microsoft has pledged tens of millions, and Cisco Systems a billion over a decade. Demonstrations were finally allowed on Triumfalnaya Ploshchad on Oct. 31. Prime Minister Putin approved of an abridged version of Alexander Solzhenitsyn’s “Gulag Archipelago” to be used in the schools. Medvedev banned the sale of the S-300 surface to air missiles to Iran.
And all this is happening at the same time as journalists are being savagely beaten and the law enforcement officials connected to the jail death of Hermitage lawyer Sergei Magnitsky are being awarded medals while Magnitsky himself is being posthumously charged for crimes those officials may themselves have committed.
If unfortunate developments in U.S. domestic politics do not take some of the luster off the West, the contradictions will only become sharper. They will probably culminate in the choice of candidate for the 2012 Russian presidential election.
In any event, too much can be made of the contrast between Ivan the Terrible and Peter the Great. They both killed their own sons.

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

TITLE: Changing Furniture in the Name of Art
AUTHOR: By Claudia Arozqueta
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Flying tables, a sofa that lights up and other furniture turned into unusual and enchanting objects are on display at “The New Decor” exhibition at the Garage Center for Contemporary Culture in Moscow.
The show’s aim is to question our daily surroundings as artists explore interior design as a means of engaging with changes in contemporary culture.
“The New Decor challenges visitors’ perceptions of their own environment and explores a new chapter in the history of exhibitions looking at art and design,” said Ralph Rugoff, director of the Hayward Gallery in London and the exhibition’s curator.
Thirty-six renowned artists, including Jimmie Durham, Mona Hatoum, Martin Boyce, Yuichi Higashionna, Loris Cecchini, Jin Shi, Pascale Marthine Tayou and the Raqs Media Collective, look at the possibilities and interpretations of daily objects in the show.
The works in this exhibition attempt to “explore an arena between practicality and imagination, theater and everyday life by drawing out the social, historical and personal stories which are embedded in the furnishings that surround us,” Rugoff said.
The exhibit was previously displayed at the Hayward Gallery in London during the summer. The only difference for the show in Moscow is that Garage has specially commissioned new artists to create works involving local materials, such as “Soft Protection: Russian Version,” by Polish artist Jaroslaw Kozlowski, who connects two tables of different periods and styles.
Many of the artists explore the interior and exterior, private and public spaces in their work. One of the most attractive artworks that plays with this idea is “Cama” (2007), by Cuban art collective Los Carpinteros, which changes a bed’s form so that it resembles a motorway junction. Among many interpretations, this absurd and surreal object reminds us that despite being immobile and finite, the act of dreaming could be the greatest trip in our daily lives.
In the series of works entitled “Powerless Structures,” Michael Elmgreen and Ingar Dragset explore our prejudiced conception of objects by throwing in an element of surprise. In “Fig. 22” (2000), two ordinary white doors merge with the exhibition space. Both seem like simple objects, but they are actually linked to each another by a security steel chain, making them dysfunctional objects that cannot achieve their principle function as apertures that control access between the inside and outside.
Young Russian artist Anna Zholud presents an interesting artwork titled “An Outline of Space,” a spatial composition of a room with objects made from wire rods. Zholud’s installations are like 3-D drawings: solid and illusory. Metal in her artworks is used as a method of drawing in space.
“The New Decor” runs until Feb. 6 at the Garage Center for Contemporary Culture, 19A Ulitsa Obraztsova, Moscow. Metro Novoslobodskaya. 
Tel. (495) 645-0520, www.garageccc.com.

TITLE: Tsarist Letters 
Go To Auction
PUBLISHER: The Associated Press
TEXT: GENEVA — Some 2,000 letters, postcards and photographs sent by the last Russian tsar’s siblings to their private tutor will go under the hammer in Geneva this month.
The correspondence from Tsar Nicholas II’s younger brothers George and Mikhail and their sisters Ksenia and Olga to their Swiss tutor Ferdinand Thormeyer has never before been published, Swiss auction company Hotel des Ventes said.
Chief auctioneer Bernard Piguet said the letters were “really intimate documents” covering the period from 1881 to 1959. The correspondence reveals details about life within the Romanov Imperial family and gives an insight into the siblings’ childhood, journeys and life in exile.
“All the family were a little bit disconnected from reality,” Piguet said. “They loved Russia, but they didn’t realize that changes were going to happen.”
George died in an accident in 1899. His brother Mikhail was killed after the 1917 Revolution that saw older brother Nicholas II deposed and then executed in 1918. Their sisters Ksenia and Olga died in exile in 1960.
The collection — which also includes a gold, silver and sapphire cigarette case bearing a signed personal message from Nicholas and George — is divided into 45 lots with a total estimated value of $70,000 to $100,000.
“We hope all the lots will be purchased by a single person who will keep them together,” Piguet said.
Hotel des Ventes said the papers were discovered recently in a dust-covered storage trunk by Thormeyer’s descendants.
Little has been written about Thormeyer, who traveled to Russia at age 18 in 1876 and began teaching French and literature to the Romanov children 10 years later. He taught the future tsar, Nicholas II.

TITLE: Old Russian Country Life on Display in Mandrogi
AUTHOR: By Peter Spinella
PUBLISHER: The St. Petersburg Times
TEXT: VERKHNIYE MANDROGI, Leningrad Oblast — Visitors to this small settlement on the outskirts of the Leningrad Oblast can catch a glimpse of a time long-forgotten by immersing themselves in 19th-century rural Russian life.
Located 260 kilometers northwest of St. Petersburg, Verkhniye Mandrogi is a rustic, wood-crafted village that has thoroughly recreated the simple life of pre-revolutionary Russia. Surrounded by forests and flanked by waterways on both sides, this timeless settlement along the Svir River offers something for almost anyone who wants to unwind from big-city life.
There are several relaxing banyas dotted around the village, two restaurants with excellent homestyle food, a vodka museum, crafts and cooking master classes, horseback riding and, for those seeking something a little more rustic, cozy cabins offering complete immersion in 19th-century Russia.
“It’s a harmonious blend of a historical and modern way of life,” guide Olga Reshetova said. “Here it is possible to completely unwind from the noisy big city and learn something new about Russia’s past.”
Visitors can stay in wooden cabins — a number of which are authentic, 19th-century cottages, dismantled in the Arkhangelsk region and taken to Mandrogi — without modern conveniences, such as a television, gas stove or indoor plumbing.
“We strip you down, take your cell phone and put you in traditional village clothing,” Reshetova said as she led visitors on a press tour this fall. She showed journalists a wooden cabin with two cozy bedrooms, a large living room with a loom and a stone oven, a small stable on the ground floor with a cow and a horse, and outside, a banya beside a fresh-water lake.
“In Moscow, life is like a constant battle. Every day, you feel like you are simply aging. Here one can live normally,” said Reshetova, who escaped Moscow to live in the village a little over a year ago.
The village dates back to the 19th century but burned down during World War II. It was rebuilt in 1997 and has been attracting tourists ever since.
Tourists learn how to work the loom and fire up the wood stove and banya, cooking the food themselves and even doing chores like feeding hay to horses and cows.
Vladimir Totkalo and Neonila Shklyar are in charge of the village’s immersion aspect. They teach tourists about living in the old days, about tending cows and horses, milling flour, weaving textiles on a loom and firing up a stove and “black,” or smoke-filled, banya.
When asked about the difficulties of living in a 19th-century village, Vladimir said: “For most folks, the hardest thing is waking up in the morning,” to get out of bed to start a fire and tend to the horses and cows as their ancestors did.
The less hardy can wimp out and opt for a cabin with running water and a television.

Verkhniye Mandrogi. Podporozhsky district, Leningrad region. 
Tel. (812) 347-9404. www.mandrogi.ru

<strong>Where to Eat</strong>
Pavel Yankovsky, a chef from St. Petersburg, heads the main restaurant in the village center. Homestyle dishes using quail, duck and bear meat are specialities. Try the local kvas or khrenovukha (vodka with horse radish).
<strong>How to Get There</strong>
Almost a four-hour drive from St. Petersburg: Take the E105 northwest. At the 213 kilometer mark, at the sign for “Lodeinoye Pole,” drive to the right down the main street in the direction of Murmansk (through Lodeinoye Pole). After 23 kilometers, just beyond the bridge over the train tracks, at the sign, “Podporozhye — 45 kilometers,” take a right toward the town of Podporozhye. After 21 kilometers, you’ll see the sign to the village “Mandrogi.” The road to the village is on the left.
<strong>Where to Stay</strong>
A cabin with two or three bedrooms costs from 9,000 rubles a night. The village also has a small hotel charging from 2,200 rubles per night.

TITLE: In the Spotlight: WikiLeaks
AUTHOR: By Anna Malpas
TEXT: The latest WikiLeaks revelations are causing blushes and choking fits around the world, and one Dagestani oil magnate will definitely not be inviting those friendly American diplomats back for another party.
Forced to dish out hearty handshakes and fixed grins in public, diplomats understandably enjoy composing acidic bon mots when they’re writing home. And the diplomats in Russia and other CIS countries honed some good stories for their memoirs while rubbing shoulders with the local elite, or whatever passed for one.
Some of the complaints are petty. In Kazakhstan, a U.S. ambassador sneered that one businessman insisted on ordering wine for dinner — and then washed his meal down with three cans of Coca-Cola. Even worse, he forced the ambassador to order his lamb chop well-done instead of rare, telling him “this isn’t London.”
A Kazakh metals and mining magnate spent his billions on anything but good food, another diplomat quipped in an entertaining report called “Lifestyles of the Kazakhstani Leadership.” Every time he went round to his house, the menu was the same, he complained: boiled meat, noodles and pilaf. And the charmless waiters seemed to have gone to a “Soviet cafeteria training academy,” he added.
Then there was the defense minister, who enjoyed “drinking himself into a stupor,” the diplomat wrote, saying the minister received a senior U.S. diplomat while slumped in his chair and slurring his words, and explained that he had been toasting cadets at a graduation ceremony.
In Kyrgyzstan, the ambassador reserved her choicest remarks for Britain’s trade envoy Prince Andrew, who brought his unique insight to a meeting with expat businessmen. Told that corruption was rife and every deal had to be agreed with the president’s son, the prince “laughed uproariously, saying that ‘All of this sounds exactly like France,’” she wrote.
One woman who may not raise an eyebrow but may manage an expression of frozen horror is Mehriban Aliyeva, the wife of Azerbaijani president Ilham Aliyev. She was cruelly described in a cable quoted in Der Spiegel as so transformed by cosmetic surgery that she could pass for one of her daughters — but could barely move her face.
The best story comes from a Moscow diplomat who gives a lovingly detailed account of attending the wedding of the 19-year-old son of Dagestani oil chief Gadzhi Makhachev.
Makhachev, who is also Dagestan’s representative to President Dmitry Medvedev, seems to be quite a character. He is pictured in a loud pinstriped suit on his official web site, which describes him as a “phenomenon.”
The diplomat wrote that Makhachev once gave him a ride in his Rolls-Royce Silver Phantom in Moscow, but the leg-room was a bit lacking because he’d packed a Kalashnikov.
Makhachev later denied to the Kavkazsky Uzel web site that he had ever had a Rolls, though the Kalashnikov was not mentioned.
The wedding party was a drunken affair lasting eight hours, with a break for a spot of jetskiing, the diplomat writes. Makhachev had a special vodka bottle filled with water to enable him to drink a toast with every guest, and presumably the diplomat also kept a clear head.
The diplomat has a great turn of phrase, describing “dramatically paunchy men” dancing the lezginka and a “cock-eyed” Chechen leader Ramzan Kadyrov joining the fun.
Kadyrov dances “clumsily” with a gold-plated automatic stuck in the back of his jeans, the diplomat says, and quotes Makhachev as saying that he gave the newlyweds a five kilogram lump of gold as a gift.
Makhachev denied to Kavkazsky Uzel that Kadyrov attended the celebrations, which he described as “nothing special, just an ordinary Dagestani wedding.”

TITLE: ‘The Victims Return’ Looks at Life After the Gulag
AUTHOR: By Joy Neumeyer
PUBLISHER: The St. Petersburg Times
TEXT: In the 1950s, millions of people reappeared in Soviet society, like ghosts returned from the dead. They had been revolutionaries, scientists, petty criminals and bureaucrats; some were their children. Some had been gone for months; others, for decades. But they all shared a common fate of having endured what Alexander Solzhenitsyn called the “Gulag Archipelago” — the immense forced labor and exile system that existed across Russia for almost a quarter century under Josef Stalin.
As historian Stephen Cohen shows with sharp analysis and deep pathos in his new book, “The Victims Return: Survivors of the Gulag After Stalin,” the question of what to do with the gulag’s victims, and the legacy of the man who put them there, did not end with their liberation. It has continued to haunt Russia for decades, along with ever-changing interpretations of how the country should address its own past.
Memoirs by Solzhenitsyn and other gulag survivors, as well as recent best-selling studies such as Orlando Figes’ “The Whisperers,” have familiarized Western audiences with accounts of the gulag. But Cohen, a professor at Princeton University, is one of the first to focus on the survivors’ experiences after their release. “The Victims Return” draws on literary journals, memoirs and interviews with former inmates Cohen befriended in the ’70s to survey individual experiences of post-gulag life. At the same time, it analyzes the political decisions at the top that shaped them.
After a chilling overview of the terror and life inside Stalin’s gulag system, Cohen turns to the book’s central focus: how those who survived, and the society they re-entered, coped with their return. Liberation was a slow, halting process, beginning with the release of a million prisoners (mostly criminals) in 1953 and unfolding over the next several years. Upon their release, survivors and their families faced a lengthy bureaucratic struggle to obtain the document of rehabilitation that would grant them “clean” passports.
The fates captured in the book defy generalization. Some survivors returned home to waiting spouses, some built new lives in isolated territories, still more found themselves irrevocably severed from the people and places they once knew. Many joined the Communist Party and carefully concealed their pasts from colleagues, friends and even spouses, desperate to secure normal lives within the system. Others, such as Solzhenitsyn and Anton Antonov-Ovseyenko, the son of a Bolshevik revolutionary, proudly claimed new identities as professional “zeks” (gulag inmates), readily pulling out their old camp garb and reciting stories.
Inmates viewed their experience in very different ways. One former zek, poet Lev Gumilyov, proclaimed that “the years in the camp don’t count; it’s as though I didn’t live them.” But clashing opinions about the meaning of “moving on” could lead to bitter feuds. Poet and memoirist Yevgenia Ginzburg, who endured almost 20 years in Kolyma, severed ties with a fellow inmate when he rejoined the Communist Party, angrily accusing him of having “neatly repaired the broken thread of his life. He had knotted the two ends securely, joined up 1937 and 1954, and threw away everything in between.” Photographs of inmates before and after their time in the gulag form a powerful visual account of the varying ways zeks emerged from their experience: Some smile brightly, while others frown with lines carved deep by age and hardship.
Reactions to inmates’ return ranged from idolization to hostility. As Cohen points out, beyond those informed on by neighbors and colleagues, millions of people indirectly benefited from the zeks’ confinement by gaining their apartments, belongings and sometimes even their wives. Soviet officials’ attitudes toward gulag survivors were more predictable: Most disdained the zeks and resented their return (as one official remarked, “the mark was removed, but the stain remained.”)
Cohen’s clean prose moves deftly between high and low, showing how individual fates and official decision-making intertwined. The book sometimes sacrifices depth for brevity as it moves briskly through the second half of the Soviet era, when zeks fell out of public favor under Brezhnev, only to experience a “second great return” during perestroika. In one section, Cohen boldly asserts that anti-Stalinism was the key factor in Khrushchev’s removal, then quickly moves on.
The book’s central interest in a relatively small group of post-gulag intellectuals and decisions made by top political leaders sometimes overlooks the population at large. For example, a quick gloss on ’70s dissidents concludes that they preserved a spirit of anti-Stalinist reform but that top-down political initiatives were ultimately more significant. In doing so, Cohen fails to acknowledge the slow changes in the relationship between the millions of people who were neither dissidents nor top officials and the Soviet system, a process that historians such as Alexei Yurchak have recently examined.
Perhaps the book’s greatest strength, the author’s intimacy with his subjects, is also its greatest weakness. Cohen is a careful historian, openly introspective about his investment in the people and events he describes. Nevertheless, his presence is sometimes overbearing, especially in the section on the Gorbachev era; he has already described his own role in perestroika in another book, “Stephen Cohen, the Soviet Union and Russia,” and does not need to make so many references to it here. The large number of personal photos of Cohen and his family with survivors and at events, 21 in all, is also a distraction.
But thanks to the power of the stories Cohen tells, and the simple grace and sharp analysis with which he delivers them, “The Victims Return” surmounts its author’s occasional domination of the text. In a thought-provoking epilogue on Russia’s current “Stalinist renaissance,” Cohen examines the continuing debates on Stalin’s legacy in Russia. For some, the gulag era serves as a barbaric reminder of the need for further democratic reform; for others, it is a golden past that justifies a strong, centralized state. For his part, Cohen sees recent statements by President Dmitry Medvedev in support of gulag memorials as hopeful evidence that his generation of political leadership will revive Gorbachev’s legacy of reform.

TITLE: Iran, 6 World Powers Resume Nuclear Talks
AUTHOR: By George Jahn
PUBLISHER: The Associated Press
TEXT: GENEVA — Iran and six world powers came to the table Monday for the first time in a year.  They exchanged pleasantries, but remained far apart on how deeply their talks should tackle the West’s greatest concern — Iranian nuclear activities that could lead to the manufacture of atomic weapons.
Tehran says it does not want atomic arms, but as it builds up its capacity to make such weapons, neither Israel nor the U.S. have ruled out military action if Tehran fails to heed UN Security Council demands to freeze key nuclear programs.
The long-term aim for the six nations is nudging Iran toward agreeing to stop uranium enrichment, which can make both fuel for reactors and the fissile core of nuclear arms.
Delegates from Iran, the European Union, the U.S., Russia, Britain, France and Germany hurried inside a conference center in Geneva to escape the pouring rain, and EU foreign policy chief Catherine Ashton met Saeed Jalili, Iran’s chief negotiator, in the foyer.
As the doors closed to reporters Monday morning, the two had joined the other delegations sitting around a light brown oval table, with flags of their nations behind them.
“The two sides exchanged pleasantries — the atmosphere was pleasant but businesslike,” an official from one of the delegations said. The official, who asked for anonymity because his information was confidential, told The Associated Press the first hour was taken up by the six powers making a case for why they thought Iran’s nuclear program needed to be discussed.
Iran’s semi-official Fars news agency said Jalili began the meeting with a reference to the slaying last week of a senior Iranian nuclear scientist “and a strong condemnation of the terror act against him.”
The attack, which left another scientist wounded, has burdened the atmosphere, with Iranian officials linking the West and the International Atomic Energy Agency to the assault.
Before the talks began, the chief negotiator from one of the six powers warned: “Don’t expect much of anything,” in a comment reflecting the deep divide separating the two sides. He also asked not to be named because he was not authorized to talk to the media.
Iran’s defiance was highlighted Sunday when it announced it had delivered its first domestically mined raw uranium to a processing facility, claiming it was now self-sufficient over the whole enrichment process.
Salehi, head of the Atomic Energy Organization of Iran and the country’s vice president, said Iran had for the first time delivered domestically mined raw uranium to a processing facility — allowing it to bypass UN sanctions prohibiting import of the material.
Salehi said the delivery proved that the mysterious bombings which targeted the Iranian scientists would not slow the country’s progress.
Iran acquired a considerable stock of yellowcake from South Africa in the 1970s under the former U.S.-backed shah’s original nuclear program, as well as unspecified quantities of yellowcake obtained from China long before the UN sanctions were in place.
Western nations said last year that Iran was running out of raw uranium as that imported stockpile diminished and asserted that Tehran did not have sufficient domestic ore to run the large-scale civilian program it said it was assembling.
“Given that Iran’s own supply of uranium is not enough for a peaceful nuclear energy program, this calls into further question Iran’s intentions and raises additional concerns at a time when Iran needs to address the concerns of the international community,” said Mike Hammer, spokesman of the U.S. National Security Council.
But Salehi denied that local stocks were lacking and said Iran was now self-sufficient over the entire nuclear fuel cycle — from extracting uranium ore to enriching it and producing nuclear fuel.
Since Iran’s clandestine enrichment program was discovered eight years ago, Iran has resisted both rewards — offers of technical and economic cooperation — and four sets of increasingly harsh UN sanctions meant to force it to freeze its enrichment program.
Nations have a right to enrich domestically and Iran insists it is doing so only to make fuel for an envisaged network of reactors and not to make fissile warhead material. But international concerns are strong because Tehran developed its enrichment program clandestinely and because it refuses to cooperate with an IAEA probe.

TITLE: Court Rules On Concorde Crash
AUTHOR: By Angela Doland
PUBLISHER: The Associated Press
TEXT: PONTOISE, France – Continental Airlines Inc. and one of its mechanics were convicted in a French court of manslaughter Monday because debris from one of its planes caused the crash of an Air France Concorde jet that killed 113 people a decade ago.
The Houston-based airline was ordered to pay Air France 1.08 million euros ($1.43 million) for damaging its reputation, in addition to a fine of around 200,000 euros ($265,000). The victims of the crash were mostly German tourists.
The presiding judge confirmed investigators’ long-held belief that titanium debris dropped by a Continental DC-10 onto the runway at Charles de Gaulle airport before the supersonic jet took off on July 25, 2000, was to blame. Investigators said the debris gashed the Concorde’s tire, propelling bits of rubber into the fuel tanks and sparking a fire.
The plane then slammed into a nearby hotel, killing all 109 people aboard and four others on the ground.
Ronald Schmid, a lawyer who has represented several families of the German victims, said he was “skeptical” about the ruling.
“It bothers me that none of those responsible for Air France were sitting in the docks,” he told The Associated Press by phone from Frankfurt.
The airline and mechanic, John Taylor, were also ordered to jointly pay more than 274,000 euros ($360,000) in damages to different civil parties.
Taylor was also handed a 15-month suspended prison sentence, and a 2,000 euro ($2,650) fine. All other defendants — including three former French officials and Taylor’s now-retired supervisor Stanley Ford — were acquitted.
The court said Taylor should not have used titanium, a harder metal than usual, to build a piece for the DC-10 that is known as a wear strip. He was also accused of improperly installing the piece that fell onto the runway.
Continental’s defense lawyer, Olivier Metzner, confirmed the carrier would appeal. He denounced a ruling that he called “patriotic” for sparing the French defendants and convicting only the Americans.
“This is a ruling that protects only the interests of France. This has strayed far from the truth of law and justice,” he said. “This has privileged purely national interests.”
Continental spokesman Nick Britton, in a statement, echoed that sentiment, and said the airline disagreed with the “absurd finding” against it and Taylor.

TITLE: Bombing in Pakistan Kills 50
AUTHOR: By Riaz Khan
PUBLISHER: The Associated Press
TEXT: PESHAWAR, Pakistan — A pair of suicide bombers disguised as policemen killed 50 people Monday in an attack targeting a tribal meeting called to discuss the formation of an anti-Taliban militia in northwest Pakistan, officials said.
The attack occurred on the grounds of the main government compound in Mohmand, part of Pakistan’s militant-infested tribal region. It was the latest strike against local tribesmen who have been encouraged by the government to take up arms against the Taliban.
The explosions also wounded more than 100 people, many of them critically, said Mian Iftikhar Hussain, information minister of neighboring Khyber Pakhtunkhwa province.
One of the reasons the attacks were so deadly was because the bombers had filled their suicide jackets with bullets, said Amjad Ali Khan, the top political official in Mohmand, who was at the compound in the town of Ghalanai when it was attacked.
“These bullets killed everyone who was hit,” said Khan.
Both of the bombers were disguised in tribal police uniforms, said Khan. One of them was caught at the gate of the compound, but he was able to detonate his explosives, he said.
One of the wounded in the attack was 45-year-old Qalandar Khan, who came to the compound to visit an imprisoned cousin and was hit by the second explosion.
“There was a deafening sound and it caused a cloud of dust and smoke and a subsequent hue and cry,” said Khan, lying in a hospital bed in his blood-soaked clothes. “There were dozens on the ground like me, bleeding and crying. I saw body parts scattered in the compound.”
The dead and wounded included tribal elders, police, political officials and other civilians. Two of the dead were local TV journalists who were at the compound reporting on stories, said Shakirullah Jan, president of the Mohmand press club.
The Pakistani army has carried out operations in Mohmand to battle Taliban and al-Qaeda fighters in the area, but it has been unable to defeat the militants.
The military has encouraged local tribesmen to form militias to oppose the militants. These groups have had varying degrees of success and have often been targeted in deadly attacks.
In early November, a suicide bomber attacked a mosque in northwestern Pakistan that was frequented by elders opposed to the Pakistani Taliban, killing 67 people. The attack occurred in the town of Darra Adam Khel, a militant stronghold on the edge of the tribal region.

TITLE: Italian Boat Finds Remains of U.S. Balloonists After Two-Month Search
AUTHOR: By Nicole Winfield
PUBLISHER: The Associated Press
TEXT: ROME — An Italian fishing boat on Monday pulled the remains of two American balloonists from the Adriatic Sea, ending a two-month hunt for the pair’s bodies in one of ballooning’s darkest chapters.
The boat hauled in the balloon gondola with the bodies of the Americans still inside while fishing 11 miles (17 kilometers) north of Vieste before dawn, said Commander Guido Limongelli of the Vieste port. Viete is on Italy’s eastern Adriatic coast in the southern Puglia region, which makes up the “heel” of boot-shaped Italy.
He said documents found in the gondola confirmed the identities of Richard Abruzzo, 47, of Albuquerque, and Carol Rymer Davis, 65, of Denver.
The two had been participating in the 54th Gordon Bennett Gas Balloon Race when contact was lost Sept. 29 as they flew over the Adriatic. They had taken off with some 20 other balloons from the English city of Bristol on Sept. 25.
Search crews looked for the veteran balloonists in vain for a week before determining that their craft had plunged toward the water at 50 mph (80 kph) and they likely didn’t survive.
As soon as the fishing boat discovered what was in its nets it alerted port officials in Vieste, who sent out a patrol boat to escort the vessel back to port, Limongelli said. A coroner was performing an autopsy and officials were investigating to determine what might have caused the balloon to crash.
The disappearance of the champion balloonists had cast a pall over the ballooning community, which had been gathering for the America’s Challenge Gas Balloon Race in the United States — one of the nation’s top balloon races — when the search was called off.
“I’m glad at least they found them. Now it will give the family some final closure,” said David Melton of Espanola, New Mexico, an active balloonist who flew with Abruzzo in the 1995 America’s Challenge. “It’s been quite hard on all of them.”
The Abruzzo name in particular is synonymous with ballooning. Abruzzo was the son of famed balloonist Ben Abruzzo, who was in 1981 part of the first team to cross the Pacific Ocean by balloon, and who was killed in a small airplane crash in 1985.
The younger Abruzzo and Davis won the 2004 edition of the Gordon Bennett race and the 2003 America’s Challenge — one of Abruzzo’s five victories in that race.