SOURCE: The St. Petersburg Times
DATE: Issue #604 (0), Tuesday, September 19, 2000
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TITLE: EU Tries Plugging Porous Borders
AUTHOR: By Janet McEvoy
PUBLISHER: Reuters
TEXT: FRANKFURT ON ODER/SLUBICE BORDER, Poland - The burly Estonian truck driver looks on calmly as German customs officers hack chunks of his consignment of butter into plastic bags for forensic tests.


The officers at Frankfurt on Oder, the European Union's biggest border post with Poland and a major hub for international organized crime, can smell fraud and, on this occasion, they turn out to be right.

The recent discovery of falsely labeled butter at the EU's current eastern border highlights just one example of what the bloc is up against as it fights highly organized crime rings, who deal in everything from drugs to weapons, counterfeit compact discs and designer clothes.

It also highlights the enormous challenge faced by 10 former communist bloc countries seeking EU membership in plugging their own porous border controls before joining.

Destined for the 15-nation EU market, the butter is falsely marked as originating in Estonia, a Baltic candidate for EU membership, which enjoys lower import duties under a preferential trade deal with the EU.

Forensic tests show that the butter was not produced in Estonia at all, but in the EU itself. That suggests that it was exported to the Baltic state with the help of generous EU export subsidies.

Repacked in Estonia, the butter is then sent back to the EU, raising suspicions that the same butter has made the same journey again and again, before being intercepted.

As customs officials fork the butter into sealed bags, they joke that they would not be surprised to find underneath some of the millions of cigarettes smuggled into the EU via the border point from Lithuania and Russia every year.

With its 24-hour controls, highly trained personnel and state-of-the-art equipment, the Frankfurt on Oder border point boasts success in fighting the lucrative cigarette smuggling, saving millions of deutsch marks in tax damage, customs office spokesman Wilfried Goetz told Reuters.

Customs officials seized 124 million cigarettes last year and 85 million in the first half of this year, hidden under everything from cranberries to wooden furniture, steel and frozen vegetables.

But for everything they manage to catch, much more gets away, the officials admit, draining millions of dollars in lost tax revenues.

"The problem is that we have the biggest border control at the German-Polish border, with 1,800 trucks a day. That means we can only search at random," Goetz said.

"We need two hours for one truck. In the meantime 50 trucks can go by."

Self-confident truck drivers play cat and mouse with the customs authorities, keeping a step ahead by changing tack every time officers spot a pattern that can help them narrow down their random search.

Goetz said that lax controls at Poland's borders with Ukraine, Belarus and the Baltic States were fueling Germany's problem, raising questions about its readiness for EU entry.

Poland is negotiating entry terms along with the Czech Republic, Hungary, Slovenia, Slovakia, the three Bal tic states of Estonia, Latvia and Lithuania and Romania and Bulgaria.

Ironically Poland, the biggest candidate for membership, will eventually, as the EU's outer border, take over many of the tasks currently carried out by Germany, and that worries the EU.

"We see that this new eastern border is not being controlled so well. They must control their border better," Goetz said.

The state of the eastern candidates' border controls is one of the EU's biggest concerns in its entry talks, not least because it knows public fears over increased organized crime could undermine the expansion process.

The EU says the former communist countries - some of which did not even exist in their own right 10 years ago - need to clamp down on forged documents and invest heavily in trained staff and top technology.

It is also concerned that the EU's fight against crime and illegal immigration will be undermined by poorly paid eastern border guards, who are open to bribes.

Poland, anxious to be one of the first eastern countries to join, says it is trying to meet the EU's concerns.

"We are taking measures to tighten border controls. Last year we underwent several structural changes," Jacek Kapica, the head of Poland's central customs office, told Reuters.

He said Poland had taken steps to prevent border guards taking bribes, dividing checks between several individuals. While one guard performed the passport check, another would check other documents and another the goods.

A Polish customs officer never knew what he would be doing on a particular day, he said, to prevent firms setting up corrupt arrangements with them in advance. Warsaw had also set up a database of firms involved in smuggling, he said.

TITLE: Price of Fuel in City Set To Leap
AUTHOR: By Andrey Musatov
PUBLISHER: Special to The St. Petersburg Times
TEXT: Gasoline retailers and energy-sector analysts in St. Petersburg - while avoiding the word "crisis" - are predicting an "aggressive" increase in the price of gasoline in the city, owing to a shrinking supply triggered by high world oil prices. 


Gasoline prices have risen by about 50 kopeks (about 2 cents) a liter over the last three months - an increase much less than those experienced during the fuel crises in May and June of 1999 and the summer of 1997, when prices rocketed to double their initial level.

Since June the price of the most popular, 92-octane gasoline has risen from 6.80 rubles (about 25 cents) to 7.30 rubles (26.5 cents) per liter.

But the rise in gasoline prices could accelerate quickly, according to the commercial information center Kupol, with the price for the same 92-octane grade ballooning to 9.50 rubles (about 34 cents) per liter - an increase of over 30 percent. 

"The gradual rise in prices has many causes and is part of a usual process," Svetlana Snegir, the general director of Kupol said. "However, since Aug. 20 we have been noticing a tendency for the price increase to grow more steeply."

"The fuel business is something like a small-traders market," said Alexander Hilchenko, the head of St. Petersburg Faeton fuel stations.

"We are dependent on the mood created by other traders and the press. Since we lack stable sources of information about the market as a whole, we change our prices according to neighboring fuel stations."

But according to Snegir, the reasons for the hike in prices are more rational - the most significant being the rise in world oil prices, which has led Russian refineries to market more of their production abroad. The result has been a reduced supply available to local retailers.

"Today, the gasoline retailers are dependent on their suppliers, who set their prices a month ahead of time," Hil chen ko said.

"A rise in the suppliers' prices means a rise in prices at the pumps."

But Snegir also identified another cause of the spike in prices - the autumn season, when car owners use their vehicles to bring vegetables from their summer gardens or dachas.

Leonid Fedun, vice president of Russian oil company LUKoil, said that he didn't believe there would be significant price rises in the near future. 

"The increases have happened as a result of seasonal factors - both because of the harvest season and preparation for the winter," he was quoted as saying on the company's Web site. "The prices could even drop a bit at the beginning of the next year, but likely won't because of the new excise tax the government is planning to pass. If there is a change in the price it won't be because of supply-demand factors, but because of the new tax."

Fedun added that the price of 30 to 35 cents a liter in Russia is economically grounded, covering all costs associated with extraction and taxes - the latter accounting for about 50 percent of current fuel prices. 

But Sergei Borisov, president of the Russian Fuel Union and of the Moscow Fuel Association, says that the excise taxes are needed to keep domestic prices down.

"If the current taxes on exports are not enough to ensure stability on the internal market, the state should raise them," Borisov said in an interview with Vedomosti business daily. "The state should at least understand that our country is not prepared for an open market in the fuel and energy sector." 

In a telephone interview on Monday, Borisov placed more emphasis on the importance of export quotas in the market.

"We have been ringing all of the bells about the problems on the fuel market, which are the same every year, but the authorities refuse to take the need for seasonal adjustment into consideration when they issue export quotas," Borisov said.

But Snegir says that the government is too far-removed from the retailers and lacks the proper information to control prices 

"Today the conditions for exporters and internal traders are quite unequal," she said. "Exporters are in a much better position. The creation of a futures market for fuel goods might be a solution, so that prices will be set by the market."

According to Snegir, prices will rise over the next two weeks anywhere from 2 to 7 percent, depending on the grade of fuel.

She said that the increases are bound to hit the middle-income segment of society first, whether they own cars or not.

"The owners of expensive vehicles who use the more expensive 95- and 98-octane gasolines are unlikely to drive any less," Snegir said. "But those less well-off will have either to buy less or lower-quality gas, along with paying more for food and other products reaching the market by road transport."

TITLE: Archive Yields Clues to Missing POWs
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: In an effort to trace hundreds of French nationals who disappeared into the Soviet Union, the St. Petersburg Medical and Military Archive has this month agreed to release fresh information to an organization dedicated to the task.


The Association Edouard Kalifat has already found 50 Western European nationals since it was established in 1994. But according to the association's founder, Denis Sellem, the new agreement will help shed light on the fates of a further 1,000 French nationals who were stranded on Soviet territory during and after World War II.

Speaking at the French Consulate in St. Petersburg last week, Sellem said that his association had paid 45,000 French francs ($5,850) to the Medical and Military Archive, for access to medical records from World War II on French nationals.

Part of the Defense Ministry, the archive contains medical documents relating to all military conflicts in the former Soviet Union filed since 1938, and running up to the conflicts in Afghani stan and Chechnya.

According to Anatoly Budko, the head of the Medical-Military Museum which oversees the archive, it will take about three months to prepare copies of the documents requested by Sellem. 

In total, the archive houses approximately 60 million files, and they are kept in alphabetical order, rather than by any order of nationality, according to Vla dimir Yurko, who heads the largest section of the archives.

"[After the war, French] families would receive an official letter saying when and how a relative of theirs had died," Sellem said, "when in fact they were living in a prisoner-of-war camp. Even now, it is difficult to find out what really happened to some of these prisoners."

"When the Nazis overran France, they forced French soldiers to fight in the German Army," said Veniamin Iofe of the human-rights organization Memo rial, in a telephone interview on Thursday. "Many of them deserted to the Russians [on the Eastern Front], however, because they were French citizens and considered Russia an ally."

"But most of them ended up in prisoner camps."

Iofe said that Memorial and other human-rights organizations passed on any information they had concerning foreigners who were interred in the Soviet Union to Association Edouard Kalifat.

The real Edouard Kalifat was Sellem's uncle, who was freed by the Red Army from Auschwitz concentration camp in 1945. In 1992, Sellem was looking at a photograph of liberated Auschwitz prisoners, and thought that he recognized an uncle in the crowd.

When French forensic experts matched the face in the photo with another family shot of Kalifat, Sellem resolved to track his uncle down. The trail went cold in Odessa, Ukraine, but the discovery that other Frenchmen had settled there inspired Sellem to further investigation.

Of the 50-or-so people Sellem has found, only two were still alive: 75-year-old Jean Munch, who lives in Ulya nov ka, a small Ukrainian village; and Gaston Thivet, who also settled in Ukraine but who was interviewed by The St. Petersburg Times last year at his son's home in the Leningrad Oblast, where he now lives.

Although he visited France a few years ago, Munch chose to continue living in Ukraine with his family. Thivet - who now prefers to keep his life as private as possible - met his Ukrainian wife in a German labor camp in World War II. In a letter he wrote to the French Consulate two years ago, Thivet said the couple returned to the Soviet Union when his wife grew homesick, but he had his passport confiscated and was given Soviet citizenship.

He has yet to return to France, owing partly to his frailty and partly to difficulty getting enough money to do so, said a consulate spokeswoman last week.

In his work pouring through archives and museum documents in France and abroad, Sellem has also come across information on French soldiers wounded in the Napoleonic Wars.

"Tens of thousands of French soldiers never returned home after 1812," Sellem said, "and the Foreign Minister of the time, a Monsieur Ferronay, was besieged with letters from families trying to find their relatives."

But the St. Petersburg Medical-Military Museum's collection goes back much further, documenting the whole history of military medicine, and also contains artifacts such as weapons that date from the Kievan Rus period - from the 10th to the 12th centuries.

According to archivist Yurko, medical documents indicating a patient's name, nationality, age, condition, and (if necessary) where they were buried are gathered from military hospitals.

Records exist on approximately 300,000 people from 43 countries, including Italians, Chinese, Japanese and even Filipinos, Yurko said.

Unsurprisingly, the majority of the archive material on non-Russians comprises information on German soldiers and prisoners of war. Yurko said he estimates there are between 70,000 and 100,000 such documents, and that the archives receive regular requests from German organizations and private individuals to be allowed access to them.

"There were 5,500 military hospitals in the Soviet Union during World War II, with between 300 and 500 also treating foreign prisoners of war," Yurko said. 

"We are to help anyone if we have the necessary documents," said Yurko. "It is important that people could at least go and see where their ancestors are buried."

"Sadly, Russians have shown less respect to war cemeteries than Europeans have. If somebody goes to a village where a relative is supposed to have been buried, they may well find that a farm has been built on the site - or they may just find an empty field."

Despite the agreement, Memorial's Iofe said that gaining access to military archives was getting tougher, and that progress made in that direction since the perestroika era had slowed since President Vladimir Putin had come to power.

"However, foreigners can offer money in order to search [archives], and have a better chance [of gaining access] than we do," he said.

According to Sellem, there is also information on French citizens in the archives of the police and the security services, but almost all of this is restricted.

"Most of [these files] can only be looked at by the security forces themselves," Sellem said."

"But the goodwill of the Medical-Military Archive is very encouraging, and I believe that our agreement is just a first step towards [greater cooperation]."

TITLE: Kadyrov Slams Army's Tough Tactics
PUBLISHER: Combined Reports
TEXT: MOSCOW - Kremlin-installed Chechen leader Akhmad Kadyrov accused federal troops of unprovoked attacks even on Chechen villages with administrations loyal to Moscow, and warned authorities that people's patience was wearing thin.


Kadyrov said popular anger at troops' behavior could spill over into widespread protest.

"If it happens, the people will not be to blame, and I will have to stay with my people," Interfax quoted him as saying at his administration's headquarters in Gudermes on Saturday. 

"I spoke openly against illegal Chechen armed groups because they terrorized the people," Kadyrov said. "But this same people is suffering today from those on whose protection it counted."

Kadyrov blasted troops for their tactic of "tough" house-to-house searches, saying it amounted to an arbitrary rounding up of innocent civilians. He said many of those detained later disappeared.

Kadyrov's comments came a day before a delegation from the Council of Europe arrived in Moscow on Sunday en route to Chechnya to monitor Russia's adherence to human-rights commitments there.

The head of the delegation, Britain's Lord Judd, made no comment to reporters ahead of the group's departure for a site in northern Chechnya.

It is to meet the human-rights representative in charge of Chechnya, Vladimir Kalamanov, and Council of Europe officials working there, and tour a refugee camp before returning to Moscow for talks with top ministers and parliamentarians.

Also Sunday, military officials appeared forcibly to stop a live broadcast on NTV television from the federal headquarters in Chechnya.

The crew was interviewing a man identified as an officer who claimed he had seen servicemen throw an NTV cameraman to the ground and pin him down. In the middle of the live spot on the Itogi weekly news program, a hand covered the camera lens and the link was soon cut off.

It was unclear who blocked the filming and why. 

NTV's news director, Vladimir Kulistikov, said Monday that the conflict had been settled and the company was looking into allegations by the military that NTV's correspondent had violated regulations for working in the war zone. 


(Reuters, AP, Interfax)

TITLE: Hungarian Prisoner Is Home At Last
AUTHOR: By George Jahn
PUBLISHER: The Associated Press
TEXT: BUDAPEST, Hungary - The world's longest-serving prisoner of war smiles and his lips slowly form a name. "Hitler," he says. "He had a bird on his cap."


How about Josef Stalin, the Soviet dictator? The frail old man in striped pajamas smiles again as he grapples with memory. This time, his mumbled response is unintelligible - nothing as clear as the association between the Nazi fuhrer and the eagle emblem on his headgear.

At first glance, home at the Budapest clinic is not too different from what Andras Tamas left behind when he boarded the flight from Moscow to his native Hungary on Aug. 11 and ended 53 years of existence as a forgotten prisoner of war.

Both here and in Kotelnich in the depths of rural Russia, home was a spartan room in a medical ward. Here, as in Kotelnich, Tamas' crutches are propped up behind the head of his iron cot. In Kotelnich he would wile the days away sitting in a weed-infested courtyard. Now he sits by himself in the garden of a Budapest clinic, seemingly oblivious to those around him.

But as he enters his 80s, he is a changed man.

Gone is the look of frightened incomprehension that met the journalists who mobbed him at Budapest Airport and the doctors at the psychiatric clinic where he now lives.

Russian medical papers described him as almost autistic in his need for solitude. Now, visitors are met with a smile. Proffered hands are taken and shaken. Jokes are exchanged - even if some punch lines remain a mystery to all but the man who tells them.

Even the crutches - acquired after a leg was amputated a few years ago because of circulatory problems - will soon be gone. An artificial leg made of titanium will permit him to walk with a cane.

"He has opened up completely since arrival," says Dr. Andras Veer, head of the National Psychological and Neurological Institute. "He is talkative, he laughs loudly. We are sure that he'll be able to live a relatively normal life in an old folks' home, once he remembers his first 20 years - who he was, where he comes from."

Whatever comes back to Tamas, Veer's worry is that "one day soon, he will realize that much of his life was wasted. We are going to have to be careful so that he can deal with this without being devastated."

It is believed that Tamas was captured in 1944, when he was about 24, after Soviet forces destroyed the Hungarian army in the battle of the River Don. Files from that time say he was in "pitiful condition," wearing clothes too threadbare for the Russian winter.

He was taken from a Soviet prisoner-of-war camp to Kotelnich in the central Russian Kirov region in 1947. No information came with him on where and when he was born. One of the few pieces of documentation from that time diagnoses him as suffering from "psycho-neurosis."

The doctors at the clinic in Kotelnich, located about 500 kilometers northeast of Nizhny Novgorod, spoke no Hungarian and thought he was talking gibberish.

He was discovered by chance in 1997 by a Hungarian-speaking Russian who then got Hungarian officials interested and resulted in the campaign to bring him home.

Several dozen families have since contacted the Defense Ministry saying Tamas might be a relative.

The ministry officials trying to piece together his past check each claim, but none has yet been validated.

Tamas is getting a monthly pension of $67, which the Defense Ministry says will increase once his last rank is determined.

Much of his time in Russia remains a mystery - Tamas will talk of nothing but the cold and snow.

But getting details about his life before capture appear more successful.

Officials say they recently found a birth certificate made out to Tamas Andras in Bodrogkisfalud, a village near Nyiregyhaza in northeastern Hungary. It says he was born in 1920.

He talks often of blacksmith work, and to a recent visitor he spoke often about drinking at the village inn. When asked whether he had a sweetheart, he smiled and spoke a woman's name: Erzsi Szabo.

A television stands unused by his bed. Instead Tamas reads voraciously - newspapers, labels on soft-drink cans, whatever he can find. It is as if he was trying to make up for more than five decades of being deprived of the Hungarian language.

"Hungarian letters are beautiful," he says.

When his visitor recites the first line of the national anthem, "God bless the Hungarian," Tamas beams and supplies the next line: "With good humor and plenitude."

TITLE: Crime Investigator Survives Shooting
AUTHOR: By Galina Stolyarova and Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: As the head of the Interior Ministry was berating city law enforcement officials on Friday for not doing enough to beat crime, a local investigator was surviving an assassination attempt when a lone gunman shot him as he was about to drive to work.


Vasily Beglov, 43, a financial-crimes investigator for the St. Petersburg police's Main Investigation Department, was hit in the forearm and the hip as he got into his car just after 10 a.m. on Friday outside his apartment on Vereiskaya Ul. in the city center.

The attacker ran off, while Beglov managed to call the ambulance. He was taken to the St. Petersburg Military Medical Academy, where he underwent an operation. 

Beglov is still in the hospital under armed guard.

Among the crimes Beglov has been investigating recently is the so-called "Funeral Affair," involving the alleged corruption on the part of a City Hall official from the Consumer Markets Committee.

The committee's responsibilities included overseeing the city's food distribution, bathhouse, laundrette and cemetery and burial services. The former head of the committee, Nikolai Lugovskoi, was arrested in May 1999 and charged with taking bribes. 

Police investigating the case said at the time that Lugovskoi was accused of passing money from people connected to the cemetery business to high-ranking city officials.

Last year, Kommersant newspaper reported that Lugovskoi may have passed some of the money to Viktor Yatsuba, a former vice governor, who quit his post in October 1999 citing health reasons. City Hall said the report was groundless.

The case will go to court in December, according to the head of the Main Investigation Department, Maj. Gen. Sergei Dmitriyev, who was speaking at a press conference last week.

According to Gennady Ryabov, a spokesman for the St. Petersburg Prosecutor's Office, Beglov is working on several other cases as well, but would not disclose any details.

Ryabov added that he had no reason to link the attack on Beglov to the "Funeral Affair," and that all possible motives were being examined.

However, he refuted speculation in the local press that the attack was meant to embarrass the city's police during Rushailo's visit. 

"There are other ways of creating a disturbance without shedding blood," he said.

Ryabov did say that the attack on Beglov was intended as a warning, and that the hit had failed deliberately.

"The hitman was close enough to shoot him in head, rather than the arm and hip," he said. "If the real goal was to kill Beglov, the [gunman] would have done that."

In any case, the timing of the attack could not have impressed an already critical Rushailo, who said after his five-hour conference with local police and city officials that "murders and bombings have [long become a part of] the rhythm of the city."

No other region in the country, with the exception of the capital and the North Caucasus region, had attracted the attention of the Interior Ministry to the extent that St. Petersburg and the Leningrad Oblast had, said Rushailo.

TITLE: IN BRIEF
TEXT: Russia Signs Treaty


n UNITED NATIONS (AP) - Russia signed a treaty creating the world's first permanent war-crimes court Wednesday, leaving the United States and China as the only permanent UN Security Council members that haven't endorsed it. 

So far, 19 countries have ratified. At least 60 countries must ratify before the treaty can enter into force.

The United States was one of seven countries voting "no" when 120 countries meeting in Rome in June 1998 approved the tribunal.



Ex-Miss Russia Shot


n MOSCOW (AP) - An unidentified gunman shot and killed a former Miss Russia in the entrance to her apartment building in the Volga River city of Cheboksary, police said Sunday.

Alexandra Petrova, 20, won the Miss Russia pageant in 1996.

One of the people accompanying her was also killed in the attack late Saturday night, said a duty officer with the city police in Cheboksary, about 400 kilometers east of Moscow. The gunman escaped.



Bus Crash Kills 13


n MOSCOW (AP) - A passenger bus plunged off a ferry into a river in central Russia on Sunday, killing 13 people, emergency officials said.

The bus, traveling from the regional capital Kazan to the town of Bazarniye Mataki, had just driven onto the ferry when it rolled into the Kama River, said Sergei Klevakin, chief spokesman for the Emergency Situations Ministry branch in the province of Tatarstan. The cause of the accident was unclear.

Rescuers saved the bus driver and one passenger, but all the others aboard were killed, Klevakin said.



Spies Cool Ties


n MOSCOW (Reuters) - Japan said Friday that it would postpone a planned exchange of military delegations with the Russians following the arrest last week of a Japanese senior naval officer on suspicion that he had given secrets to Russia.

The Russian Foreign Ministry expressed disappointment with the decision. Alexander Losyukov, deputy head of the Foreign Ministry, was quoted by Interfax as saying that the spy scandal risked harming a thaw in once-frosty bilateral ties.

During talks earlier this month, President Vladimir Putin and Japan's Prime Minister Yoshiro Mori vowed to expand economic and political cooperation, but they failed to clinch agreement on a peace treaty formally ending World War II hostilities.


Sailors Return Home


n HALIFAX, Nova Scotia (AP) - Twenty-five stranded Russian sailors who had been marooned in Halifax since leaving their fishing trawler a month ago are returning home.

The fishermen abandoned the Bizon after it was forced into port by federal officials because of problems with its marine pollution equipment, which has been repaired.

The ship's owner, Sarmat Nord Ltd. of St. Petersburg, has paid for the crew's airfare home.



EU Attacks Belarus


n PARIS (Reuters) - The European Union on Monday criticized the Belarus government for failing to track down opposition politician Viktor Gonchar, who vanished a year ago.

"The EU presidency deplores the fact that no progress has been made in this case, one year after the disappearance," the EU said in a statement issued in Paris. France holds the rotating EU presidency.

Gonchar, an opponent of President Alexander Lukashenko, disappeared from a Minsk street along with businessman Anatoly Krasovsky on Sept. 16, 1999. Police investigations into the disappearance have so far revealed nothing.

TITLE: Swiss Fear Evidence Is Being Ignored
PUBLISHER: Reuters
TEXT: Swiss investigators gave prosecutors over the weekend several boxes of files on criminal cases involving some of Russia's high-profile figures, Interfax reported.


The handover Saturday occurred a day after Swiss prosecutors accused the Prosecutor General's Office of dragging its feet on the cases and demanded assurances that evidence gathered by the Swiss was actually being put to use.

Interfax quoted a Russian official saying the documents provided by the Swiss filled several boxes and complemented materials brought earlier from Bern by special prosecutor Nikolai Volkov.

Volkov, who headed work on one of two key cases, dubbed the Aero flot case, has since been removed from his post, prompting doubts about Russia's willingness to pursue the investigation.

The case centers on allegations that business mogul Boris Berezovsky was involved in the skimming off of up to $600 million from Aeroflot through two Lausanne-based companies.

Berezovsky has denied the allegations, calling them politically motivated.

The other key inquiry on which the Swiss sought Russian cooperation involved alleged paying of millions of dollars in kickbacks to Kremlin officials to secure lucrative contracts to refurbish Russian public buildings.

TITLE: Vilnius Gets Truly Presidential Vodka
AUTHOR: By Liudas Dapkus
PUBLISHER: The Associated Press
TEXT: VILNIUS, Lithuania - Putin Vod ka hit liquor stores Friday in what some are calling a clever marketing ploy that capitalizes on the name of Russian President Vladimir Putin.


The vodka, produced by the ex-Soviet republic's Alita distillery, features a label in white, blue and red - the colors of Russia's flag. "Putin" is emblazoned in large white letters.

A bottle of Putin costs $7 - a little less than most top-end vodkas in Lithuania.

Alita spokesman Vilmantas Peciura maintained the brand wasn't meant to refer to the Russian president. He said it derived from "putinas," a tree with red berries found in Lithuania, although the vodka reportedly is clear and not flavored.

Many people scoffed at the denial.

"What a brilliant idea," said Tautvydas Musteikis of Gray Advertising. "They've received tremendous publicity and are getting more attention with every denial of the Russian link."

Since Lithuania broke with the Soviet Union in 1991, relations with Russia have sometimes been strained. Many Lithuanians have expressed suspicion about Putin's past work for the Soviet secret police, saying he can't be trusted.

The new vodka now is sold only in Lithuania, though the distillery said it may decide to export it later, perhaps to Russia.

Russian Embassy spokesman Boris Kirilov said he knew about the vodka and said he didn't think Russians would be offended by it.

Putin, a judo champion in his youth, is said to drink little.

TITLE: President Attends Synagogue Opening
AUTHOR: By Peter Graff
PUBLISHER: Reuters
TEXT: MOSCOW - Hundreds of Moscow police shut down an area of several city blocks on Monday ahead of the opening in Moscow of a new Jewish community center where President Vladimir Putin was to give the keynote address.


A bandstand was decked out in festive bunting and balloons were strung up for a concert near the modest marble-faced building in the Marina Roshcha district near the city center.

Putin's decision to attend the opening of the $12 million synagogue and community center was a remarkable gesture of support in a country which saw state-sponsored anti-Semitism under both tsarist and communist rule.

"It's good for him and it's good for Russia," said Avraham Berkowitz, executive director of the Federation of Jewish Communities of the Commonwealth of Independent States, grouping Russia and 11 other ex-Soviet republics.

"The president's arrival heralds a new era for religious democracy in Russia."

The center is adjacent to the Marina Roshcha synagogue, one of only two allowed to function in Moscow during the Soviet era.

Anti-Semitism was rampant under tsarist rule when Jews were forced to live in a "pale of settlement" outside major Russian cities and in the Soviet era, when they were often denied access to top jobs and higher education.

It continued under communism but has not ended with its fall.

The synagogue was all but destroyed by fire in 1993 and by bombers in 1996 and 1998.

Putin's show of support for the center, run by the Lubavitch movement of ultra-religious Jews, was not without controversy.

The overwhelming majority of Russia's estimated 800,000 Jews are either non-practising or belong to other branches of the faith.

The Federation of Jewish Communities was set up by the Lubavitch movement and voted earlier this year to name an Italian-born rabbi from the movement as Russia's head rabbi.

The move apparently ousted Adolf Shayevich, who had held the post of Russia's chief rabbi for a decade.

Shayevich is supported by the Russian Jewish Congress headed by media magnate Vladimir Gusinsky, a frequent critic of the Kremlin.

The Kremlin did not invite Shaye vich to Putin's inauguration in May, asking Lubavitch representatives instead.

Shayevich said he had been invited to Monday's ceremony, but decided not to attend because many other rabbis who deserved invitations had not received them.

"We are very happy that Jews will have another place to gather," Shaye vich said by telephone. "With his presence, [Putin] underlines again that he is paying close attention to Judaism. If this will benefit Russian Jews, we support this of course, but so far we haven't seen this."

TITLE: Training Trip for Kursk Divers Is Held Up
PUBLISHER: Combined Reports
TEXT: MOSCOW - A group of deep-sea divers will travel abroad for final training before beginning work on retrieving the remains of 118 sailors from the sunken nuclear submarine Kursk, Deputy Prime Minister Ilya Klebanov said Monday.


Klebanov, who is heading an investigation into the Kursk disaster, also denied reports that the divers' training had been delayed because of a disagreement over financing, saying the retrieval project was on schedule.

However, contradicting earlier reports, he said it had still not been decided whether to try retrieving the sailors' remains first and then raising the submarine, or raising them together.

Divers had been scheduled to travel to a training base of Stolt Offshore, a Norwegian oil services company, over the weekend. But the trip was delayed because of a disagreement over financial details, Interfax said Sunday.

Klebanov said the divers would leave for Norway or Scotland on Tuesday for training. He said the total amount of money needed for the work was still under discussion.

On Friday, Klebanov told the State Duma that the tapping noises believed to be SOS signals were in fact caused by a "mechanical object," suggesting there was never any hope of rescuing the doomed crew. 

"Quite a few people wanted to believe that the crew were alive and interpreted the SOS signals from inside the submarine as being made by human hands. Today, I have other information," he said. 

At the time of the disaster, Russian officials claimed they heard tapping sounds coming from the hull of the 17,000-ton submarine, which sank in the Barents Sea on Aug. 12, taking the lives of all 118 aboard. The SOS signals led to a delayed and confused rescue mission, which was ultimately abandoned. 

He did not elaborate but said the commission "did not find any faults" with the rescue mission, which got underway only days after the sinking. 

The Russian navy originally indicated that it was in contact with the crew and there were survivors on board; since then, officials have acknowledged that the explosion and sinking probably killed all the crew members immediately or soon thereafter. 

Klebanov said the investigating commission has narrowed the possible causes to three: The sub hit a World War II floating mine; it collided with another vessel; or there was an explosion inside its torpedo compartment. 

Western specialists have favored the third explanation. Klebanov said that "attempts to simulate" a possible torpedo disaster at a testing ground "have so far failed," the Interfax news agency reported, without providing further details. 

Russian television reported that a research ship, the Keldysh, is headed to the scene to examine the Kursk with the same kind of deep-sea devices that were used to find the Titanic.

- AP, WP

TITLE: Judges Appointed to New Charter Court
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: The St. Petersburg Legislative Assembly last week approved the appointment of seven new judges whose job it will be to rule on local legislation and gubernatorial decrees and check that they correspond to the City Charter.


The choices have the backing of a majority of deputies, who say that the seven judges - nominated by various factions - represent an even balance of political opinion. "This is a team of professionals," said lawmaker Yury Gladkov, a member of the assembly's Union of Right Forces bloc, in a telephone interview on Monday.

"I know all the [judges], and I do not see a preponderance of any side on the list."

City Hall officials were unavailable for comment on Monday.

While the salary of the judges has been fixed at around 3,300 rubles ($120), no date has been set for the court to begin working.

The Charter, a sort of local constitution, has often been a bone of contention between Gov. Vladimir Yakov lev and the Legislative Assembly. Passed by deputies at the beginning of 1998, its initial form, which was meant to upgrade the assembly to a full-time body and limit the governor's right to rule by decree, angered Yakovlev, who accused the Charter's architects of harboring unspecified "political ambitions."

The Charter was watered down - the assembly still usually meets only once a week, for example - and its principal author, then-assembly speaker Yury Kravtsov, was ousted by Yakovlev supporters in April 1998.

Ever since, the Charter has frequently been cited by deputies who have felt that individual laws or decrees violate it. A recent and highly controversial example was the attempt in October last year to bring the gubernatorial elections forward to coincide with the December elections to the State Duma. Lawmakers opposed to Yakov lev protested that the move was a violation of the City Charter: It was ultimately blocked by the Sup reme Court.

"This was directly within the competence of a Charter court," said Anatoly Ka linin, a Yabloko faction lawmaker and head of Legislative Assembly's Legal Committee, by telephone on Monday.

"If it had existed at the time, the question would undoubtedly have been decided [against the governor]."

"The governor has often signed decrees contradicting the City Charter and we could do very little about it," said Leonid Romankov, a lawmaker with the Bloc of Yury Boldyrev. "Now, [with a City Charter Court] things will be different."

The judges who are now supposed to rule on conflicts include three who are reportedly supporters of the governor: Olga Gerasina, a lawyer for a local construction firm; Vera Ilyinskaya, a judge with the St. Petersburg Civil Court; and Igor Sobolevsky, former head of the City Justice Committee.

In the so-called opposition camp - i.e. those thought more sympathetic to anti-Yakovlev lawmakers - are Alexei Liverovsky, a professor at the St. Petersburg Humanitarian University, and Alexander Osotsky, vice president of the St. Petersburg Lawyers' Union.

The "neutrals" consist of Lyudmila Yeskina, a law professor at St. Petersburg State University, and Nikolai Kro pa chev, the dean of the same university's law faculty, known as a supporter of President Vla di mir Putin. Kropachev was one of the authors of the letter to the Kremlin written this spring criticizing the portrayal of the rubber Putin doll on Kukly, NTV television's satirical program.

Liverovsky said he was optimistic that the judges would be able to operate independently, but that he did not know when they would begin working.

"Once a judge has been elected, it becomes impossible for any [political side] to influence them," Liverovsky said in a telephone interview on Monday.

"We have a very strong team of professionals that will monitor local legislation. This has to correspond to the City Charter. It is very hard and often very [intricate] work."

But he added: "At the moment we are out on the street. We have nowhere to work and no finances as yet. We need to have a properly renovated building to work in."

Kalinin said that the new City Charter Court would not be short of cases.

"The City [Civil] Court examines about 40 cases a year which should be examined by a Charter court," he said.

One of the court's first cases, said Ka linin, could be resolving a contradiction in the Charter itself concerning the next elections to the Legislative Assembly.

One article in the Charter says that the elections should take place in December 2002, right after the current four-year term expires. Another states that assembly elections should be held on the first Sunday in April in the fourth year of the sitting body.

"There are also arguments between City Hall and local self administrations over certain taxes on trade in the city," said Kalinin. "City Hall thinks that taxes should go to the city, but the Charter states that local self administrations are entitled to a share." The self administrations comprise 111 small local authorities with hardly any money that are largely ignored by the St. Petersburg government.

TITLE: Russia's Markets Chilled By Global Bourse Freeze
TEXT: EQUITIES sank lower following the global stock market trends.


The RTS index was down 7.5 percent on the week to 210.54 even though oil prices held firm in London. The Brent futures edged up 3.66 percent on the week to close at $33.98 Friday - a margin below 10-year highs - despite the Organization of the Petroleum Exporting Countries' decision to raise production by 800,000 barrels to 26.2 million barrels per day as of Oct. 1.

But stock markets around the globe are chilly due to fears of inflation and low corporate earnings as a result of high oil prices.

The euro added to concerns about lower corporate earnings of multinational companies, hitting a fresh low of $0.8510 last week.

The Dow Jones dropped 2.61 percent on the week to 10,927, diving below 11,000 for the first time since Aug.10. The tech-stud NASDAQ - an indicator for emerging market risk - shed 3.6 percent and the FTSE 100 shrunk 2.78 percent to 6,417.3.

Bellwether Unified Energy Systems was down 9.99 percent to 14.5 cents a share, Surgutneftegaz shed 11.64 percent to 31.5 cents and LUKoiL slumped 7.0 percent to $14.35.

Rostelecom was a big loser, declining 11.65 percent to $1.82, taking guidance from the NASDAQ.

Two cellular operators joined the underperformers overseas after the Telecommunications Ministry said they would have to share their 900 Mhz channels with Sonic Duo, a joint venture between Sonera and Moscow Telegraph.

Even though the government pulled back by the end of the week, Vimpelcom slumped 19.9 percent to $20.88 per ADS and MTS dropped 5.1 percent to $25.5.

However, some brokers did not lose hope.

"RTS could keep growing until the middle of October because the fundamentals are solid," said Vla di mir Detinich, head of research with Olma brokerage. "But after that, we should adjust for global sentiments."

TITLE: Asteroid Strike Given Top Priority
AUTHOR: By Patricia Reaney
PUBLISHER: Reuters
TEXT: LONDON - It wiped out the dinosaurs 65 million years ago and only happens every 100,000 years, but British scientists said Monday it is now time to take steps to protect Earth from a major asteroid strike.


"These impacts are of low frequency but high consequences," said Professor David Williams, a former president of the Royal Astronomical Society.

"The risk is very real, very tiny and we need to do something about it," he told a news conference.

Williams and other members of the Task Force on Near-Earth Objects have urged Britain to spearhead an international effort to monitor comets and asteroids to reduce the risk of a devastating collision.

In a report released Monday, the task force appointed by Science Minister Lord Sainsbury in January listed a series of recommendations to reduce the odds of a collision that could kill millions of people.

"No known asteroid or comet is likely to hit Earth in the next 50 years, but there are many we do not know about," said Dr. Harry Atkinson, who led the task force.

The heart of the proposed early warning system is a new telescope to be built in the southern hemisphere to survey smaller objects than those usually observed by other telescopes.

The telescope would cost an estimated &15 million, or $21 million - and the entire project could run into the billions.

Near-Earth objects can range from pebble size to something resembling a mountain. The bigger the object, the smaller the risk there is of it colliding with Earth.

A collision with a large asteroid one kilometer in diameter could kill a quarter of the world's population.

The warning system would allow scientists to monitor asteroids, and if a collision is likely populations could be evacuated or the object could be deflected with a missile.

TITLE: Bayer Pays U.S. Over Drug-Price Allegations
PUBLISHER: The Associated Press
TEXT: NEW YORK - A U.S. unit of German pharmaceutical giant Bayer AG has tentatively agreed to pay the U.S. federal government $14 million to resolve allegations that it lied about the wholesale prices of certain drugs, including those to treat AIDS, The Wall Street Journal reported Monday.


The settlement requires the company to give regulators more accurate price information and to cooperate in the ongoing investigation, the Journal said.

Bayer said that it believed its actions were lawful but that it decided to resolve the charges to avoid further expense and disruption of its business. The settlement was reached Friday.

The case against Bayer focused primarily on drugs used to treat hemophilia and AIDS, such as Kogenate, Koate and Thrombate.

The investigation began in the mid-1990s after a lawsuit was filed by the Key West, Florida, pharmacy Ven-A-Care, which administers intravenous drugs to patients in their homes. The suit alleged the drug makers were reporting high wholesale prices to make their drugs more attractive to doctors receiving Medicaid reimbursements.

Investigators say that for certain drugs, the greater the disparity between actual and reported prices, the more profit per dose for doctors administering the medications.

TITLE: Fed Urges Bankers To Keep Up With Times
AUTHOR: By Jeannine Aversa
PUBLISHER: The Associated Press
TEXT: WASHINGTON - The banking industry is in a period of rapid technological change and regulators must keep pace, U.S. Federal Reserve Chairman Alan Greenspan said Monday.


Speaking at the annual convention of the American Bankers Association, Greenspan said bankers must be careful in such changing times because they are losing the advantage they have always had in information.

Competitors, with the aid of high-speed computers, have access to the same information about borrowers and financial market operations that the biggest banks have, Greenspan said.

"Financial institutions can endeavor to preserve the old way of doing business by keeping information, especially adverse information," from depositors, Greenspan said. "But that, I submit, would be unwise. Inevitably and increasingly it will become more difficult to do."

Greenspan said financial markets will be able to spot banks that are releasing "questionable" information and he cautioned that such banks would pay a high price in loss of confidence.

In addition to rapid advances in information brought on by computers, the regulatory framework has changed with the passage of last year's sweeping bank overhaul legislation, Greenspan said. The new law did away with Depression-era barriers that had separated banks, insurance companies and securities firms.

He said regulators were striving to adjust their supervision to the new law as well as a rapidly changing financial marketplace, which is creating a flood of new investment products.

"Today's products and rapidly changing structures of finance mean that supervisors are backing off from detail-oriented supervision, which no longer can be implemented effectively," Greenspan said. "We are moving toward a system in which we judge how well your internal-risk models are functioning and whether the risk thus measured is being appropriately managed and offset with capital."

He said in this new world of finance and supervision, public disclosure and market discipline would play larger roles in helping government regulators insure the safety of the nation's banking system.

"We have a long way to go, but this is where competitive pressures and the underlying economic forces are pushing both you and the supervisory system," Greenspan told the bankers.

Greenspan said nothing about the overall U.S. economy and what future actions the Fed may take on interest rates. 

Many economists believe the Fed is through raising rates for this year.

TITLE: Oil Price Could Spook Wall St.
AUTHOR: By Emma-Kate Symons
PUBLISHER: Reuters
TEXT: NEW YORK - Wall Street this week is bracing for more companies warning soaring oil prices and a strong U.S. dollar will cut into their bottom line.


"What's going to move the market is the weak Euro, higher energy prices and softening economic demand, how that will be impacting the guidance that companies are giving - that is the focus of Wall Street," said Richard Cripps, chief market strategist at Legg Mason in Baltimore.

Corporate guidance can take the form of an earnings warning: a company statement that profits will fall short of expectations. These warnings, especially those from industry leaders, can slam a company's stock or a whole sector.

"Rising energy costs globally are bad for earnings," said Richard Berner, Morgan Stanley's chief U.S. economist. "They act as tax on business and consumers [and] they slow growth and squeeze margins."

It's not just oil worrying Wall Street. Europe's common currency last week hit an all-time low, which will hurt U.S. exports or revenues from U.S. companies doing business there. Fast-food giant McDonald's Corp., for one, last week hit a 2-year low when it warned the strong U.S. dollar would hurt earnings.

New economic data to be released this week include U.S. housing starts for the month of August, a gauge of the U.S. economy's health. The data, however, are unlikely to move the market, because investors already have digested figures that show the economy is slowing and inflation remains in check.

A few companies will release earnings this week, including Wall Street's premier firms, Morgan Stanley Dean Witter & Co., Goldman Sachs Group Inc. and Lehman Brothers. The firms, which generally beat analysts' estimates, are expected to show solid profit growth after a strong summer for new stock offerings.

Other companies reporting include air package shipper FedEx Corp., and retailer Bed Bath & Beyond Inc. The financial results are unlikely to move the overall market, though, Cripps said.

Oil prices bolted to their highest level since the Gulf war, rising as high as $36 a barrel last Friday. That's great news for oil companies like Exxon Mobil Corp., which hit a record high on Friday, but bad news for non-energy blue chips.

"Obviously everybody's freaking out about oil," said Scott Bleier, chief investment strategist at Prime Charter Ltd. "Oil and utility stocks are the groups everybody seems to be focusing on at the expense of all others."

Shares of household-products maker Colgate-Palmolive, for example, tumbled last week because analysts feared rising petroleum prices would cut into earnings.

Energy finally is receiving the attention it deserves and the markets fear price hikes will become "embedded" in the economy, said Edgar Peters, chief investment strategist at Boston-based PanAgora Asset Management Inc. The stock market previously dismissed rising oil prices.

"This is a classic case of how the market under-reacts to emerging trends," Peters said. "And if they follow the usual course, once they realize something's going on they overreact."

The escalation of fuel protests in Europe, which have brought some business activities to a halt in England and across the continent have highlighted oil prices.

Spiraling energy costs may spark inflation, investors fear.

"The thing about oil prices that is scary is that they're one of the prime sources for inflation, but [the U.S. Federal Reserve] can't control them," Peters said.

Tech stocks, the market's prime drivers this year, will keep suffering at the expense of oil and utility stocks, analysts said. Technology stocks are expensive, leaving little room for error.

"All the attention has been on these [oil] stocks and tech stocks are locked in a morass, a very maddening and frustrating trading range," Bleier said.

TITLE: Biotechnology Could Solve World Hunger, Says Report
AUTHOR: By David Brough
PUBLISHER: Reuters
TEXT: PARIS - Biotechnology can make a big contribution to reducing world hunger and help reverse a trend toward disappointing crop yields, the UN said on Friday.


A new report by the UN Food and Agriculture Organization (FAO) said biotechnology offered the potential to boost crop yields in the developing world, as long as precautions were taken to protect people's health and the environment.

The report, entitled "The State of Food and Agriculture 2000," said the use of genetic engineering to increase crop yields could help reverse a trend of slowing yield growth.

Increased urbanization and industrialization as the world's population grew was cutting land and water resources for farming.

"There is now evidence that biotechnology can contribute substantially to overcoming these problems, provided that adequate precautions are taken against properly assessed negative outcomes," the FAO's report said.

"Prospects for a continuation of the productivity growth seen in the past are hindered in many countries by land degradation, strained water resources and reduced irrigation investment opportunities," it added.

The authors of the report said biotechnology created opportunities to help the international community achieve its goal to halve world hunger by 2015.

One of the authors, Michael Lipton, professor of development economics at the poverty research unit of Sussex University in Britain, called for more public investment in biotechnology in poor countries.

Robert Evensong, director of the economic growth center at Yale University in the United States and a professor of economics, said: "Tools made available to plant breeders have produced great unevenness in the availability of technology [between rich and poor countries]."

TITLE: First Phase of New Port Terminal Complete
AUTHOR: By Andrey Musatov
PUBLISHER: Special to The St. Petersburg Times
TEXT: A new oil terminal to be used for shipping diesel and fuel oil was officially opened at the St. Petersburg Sea Port, located in the city's southwest, on Friday.


According to Igor Teleshev, general manager of the Petersburg Oil Terminal (POT), Russia loses from $1.5 billion to $2 billion annually in storage and loading fees paid for the usage of port facilities in other countries. Teleshev said that the opening of the new terminal will shift much of this traffic, and the economic benefits it creates, to St. Petersburg and Russia from presently used facilities like that in Ventspils, Latvia.

POT, which owns and operates the terminal, was founded in 1995 by the Sea Port of St. Petersburg to bring about construction of the facility. According to Alexander Dyukov, chairman of the POT board of directors, the company spent about $45 million on the construction project, $32 million of which was put up by POT itself. The remaining $13 million came from a number of banks, including BNP-Dresdner Bank, International Mos cow Bank and the joint-stock bank Tokobank.

The oil terminal opened on Friday, however, is just one part of a bigger project which will ultimately include the building of further storage tanks, railway trestles for the shipment of oil to the docks, and a deepening of the port to accommodate larger tankers.

According to POT data, the completion of the project will allow 75 percent of the 20 million tons of Russian oil which annually pass through terminals in the Baltic states to be shipped directly from St. Petersburg.

"During the Soviet period, the majority of resources went to the construction of the oil terminals in Latvia, Lithuania and Estonia. As a result, from the beginning of the 1990s Russia has had to export oil from what became foreign ports," Teleshev said.

"In 1999 the capacity of the oil terminal was 3.5 million tons of oil per year, and in 2000 we plan to have a capacity of 6 million tons," Dyukov said. "The activity of the new units will provide the federal and city budgets with about $8 million in tax revenues, and mean about a $100 million rise in gross domestic product. It will also help the employment situation, as every new job at the terminal should create another six or seven more through increased infrastructure activity - such as in the railways sector."

According to POT calculations, the remainder of the project will take about five years to complete, at a cost of about $150 million, and will raise the facility's capacity to 15 million tons a year.

Dyukov said that, at the moment, the terminal handles production from Surgutneftegaz and the Kirishi Oil Refinery, which together account for about 80 percent of oil flowing through the terminal.

"The primary position of these manufacturers at present doesn't mean that we don't work with others," Teleshev said. "With the continued development of the terminal and the rise in export volumes over the next few years, these figures will change."

"The opening of the new terminal will probably mean a rise in the volume of oil exported," Steve Allen, an oil and gas analyst at Renaissance Capital, said in telephone interview. "The old terminals in Latvia will also be used, but to handle smaller volumes."

Dyukov also said that the opening of a new facility at Primorsk, which is to be completed some time in 2001 and will serve as a terminal for the Baltic Pipeline, will not have a significant effect on the volumes being handled by the POT terminal.

"The Primorsk is designed to provide a channel to the Baltic sea for the export of the crude oil," Dyukov said. "With government coordination we hope to share the oil flows, with our terminal handling the shipment of fuel oil. As such, Primorsk is not our competitor."

TITLE: Electrosila Expanding Into Engine Production
AUTHOR: By John Varoli
PUBLISHER: Special to The St. Petersburg Times
TEXT: AO Electrosila, Russia's leading maker of generators for power stations and one of St. Petersburg's leading industrial concerns, said it will invest between $50 million and $70 million over the next two years to begin production of traction engines for use in electric suburban trains (elektrichki), city trams and subways.


Alexander Pasyonov, Electrosila spokesperson, said that the company hopes that this new market will become one of the company's most important.

"The market for electric train engines is increasing in Russia, and we estimate their sales will account for up to 33 percent of our total sales in 2001," said Alexander Pasyonov, Electrosila spokesperson.

Such a move represents a radical change in Electrosila's production profile. Currently, about 80 percent of the company's production is made up by massive electric generators which are used in nearly all of Russia's power stations. In the post-World War II period, the company also built such generators for power stations throughout the Eastern bloc, and today it continues to sell abroad, including Finland, China, India, and Iran.

The changes at Electrosila, however, are due to big plans by Russia's Railways Ministry (MPS) to spend billions of dollars over the next decade to modernize the country's rail stock.

"We decided to invest in producing these engines because of plans by MPS to order new elektrichki," said Pasyonov, who added that Electrosila is negotiating with Sberbank of Russia for a $20 million credit to finance the plans.

"But we also plan to export such engines," he added. About 33 percent of Electrosila sales come from exports.

Electrosila's total sales in 1999 were 730 million rubles ($26 million at the current Russian Central Bank rate), or a 23 percent jump from the figure for 1998. The company also expects similar growth in 2000.

MPS spokesperson in Moscow, Yelena Yuga, said there is indeed a major order to rebuild the country's train stock, but as of press time on Monday she was not able to provide details.

According to Railways Minister Nikolai Aksyonenko, Russia's railways are in dire need of modernization, requiring 600 billion rubles ($21.6 billion) over the next five years. In August, the Railways Ministry approved a plan to incorporate itself, however, it does not clearly explain how the ministry will attract investment

"There is a big order and a federal program to buy up to 20,000 such trains in the coming years," said Roman Romanovsky, who works in equity sales at Len stroimaterialy, a local brokerage. "Whether or not the government will finance the program remains to be seen, but if things go well then Electrosila can count on receiving up to 60 percent of the engine orders."

Electrosila was founded in 1898 by legendary German industrialist, Karl Siemens, as "Siemens and Haltz." It was originally located on Vasilevsky Island, but moved to its present location on Moskovsky Prospect in 1911, when it changed its name to "Siemens and Schuchert" after the these two giant German companies merged.

After the Revolution of 1917, Siemens and Schuchert was nationalized as with nearly all other factories and enterprises in Russia, and soon after given the name "Electrosila."

But in 1993, the former German owners returned to Electrosila when Siemens AG bought 16.96 percent of the company during privatization - a stake which it retains to this day.

Electrosila's other major shareholders are the St. Petersburg investment company ZAO Alexander V. Kostikov and Partners with a 25.4-percent stake, and the investment company, ZAO DKK, with a 19.5-percent stake. Both companies are nominal holders of the shares on behalf of other investors.

In the past year, however, Interros, one of Russia's leading financial-industrial groups, has increased its control over Electrosila and other Russian power engineering equipment makers such as AO Leningrad Metal Factory (LMZ).

While Interros, which is controlled by leading Russian oligarch, Vladimir Potanin, does not own a direct stake in Electrosila, the factory confirmed the group owns stakes through third parties.

Last year, Interros wrested control of Electrosila and LMZ away from the Moscow-based holding company, EMK, or Energomash Korporatsiya.

EMK was founded five years ago in Moscow to unite Russia's factories in the power engineering sector, and up until 1999 it united 26 major machine-building enterprises in Russia - the most significant of which were St. Petersburg-based factories that included Electrosila, LMZ, and the Turbine Blade Factory (ZTL).

TITLE: Merger of 4 Major Enterprises Will Create Aluminum Giant
AUTHOR: By Igor Semenenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - Two aluminum barons mapped out a merger plan Monday to create a business with combined annual revenues of $1.4 billion and 20 percent of Russia's total aluminum output.


"The idea behind the merger is to increase the market value of the business and increase investment attractiveness," said Viktor Vekselberg, head of Siberian-Urals Aluminum Company, or SUAL, which will merge with Trustconsult.

The four major enterprises to be grouped in the new SUAL-Holding include:


. Four aluminum smelters: one in Irkutsk, one in Kandalaksha in the Murmansk region, and two Urals-based enterprises.

. Four bauxite mines, including sites in the Northern Urals, Southern Urals and Timan in Timan-Pechora.

. Manufacturing operations, including two metal processing plants in the Urals region plus two cable factories, in Irkutsk and in Kirsin in the Kirov region.

. Separately, the partners will also merge two silicon producers, one located in the Urals and the other in Irkutsk.


The 12 companies forming the core of SUAL-Holding have total annual revenues of $1.4 billion - $800 million from exports.

"The merger will bring synergy effects," said Vasiliy Anisimov, head of the Trustconsult group.

The two companies' combined production this year will equal 1.7 million tons of alumina, 600,000 tons of primary aluminum and 50,000 tons of silicon, but volumes are expected to grow respectively by 5 percent to 7 percent, by 5 percent and by 25 percent in 2001.

The two partners will each hold a 50-percent stake in the new company.

"Only on a parity basis can the representation of the two sides' interests be guaranteed," Vekselberg said.

Since SUAL's assets have a higher market value, Trustconsult will make a cash payment to compensate the other side.

The two companies have drafted a two-year investment plan worth $170 million, of which $90 million will be funneled to develop the mining operations, while the rest will be almost equally split between smelters, alumina producers and the manufacturing of aluminum products.

The investment program will be funded by the reinvestment of profits and from banking loans, both foreign and domestic.

SUAL has already signed a loan agreement for a total of $100 million with Sberbank earlier this year to develop the Timan bauxite deposit, and has received the first tranche of about $50 million.

SUAL-Holding will begin operating Oct.1 after shareholders at four aluminum smelters approve the swapping of their shares for shares in the new company.

To secure power supplies, it intends to participate in the UralTEK project, which merges power generating units in Sverlovenergo with coal companies in Kazakhstan.

Anisimov and Vekselberg denied the merger was in response to the creation earlier this year of Russian Aluminum - a holding company that unites the world's two largest smelters, in Bratsk and Krasnoyarsk - that produces 75 percent of the nation's alulinum.

However, the owners of Bratsk Aluminum Smelter held talks with the founders of SUAL-Holding on the possibility of selling a stake in the company, but it went instead to Russian Aluminum, which became the world's second largest aluminum company. With output of 600,000 tons, SUAL-Holding will take seventh or eighth spot, Vekselberg said.

TITLE: IN BRIEF
TEXT: BOJ Report Positive


n TOKYO (AP) - The Japanese economy is recovering gradually, with corporate profits and business investment on the rise, the Bank of Japan said in its monthly report today.

The central bank's outlook for the economy, which is slowly emerging from its worst downturn in decades, largely matched its view last month.

"Overall, the economy is likely to recover gradually, led mainly by business fixed investment unless there are major adverse external shocks," it said.

The BOJ only changed its assessment for a few economic areas, such as public investment, which was expected to decrease because fiscal spending that was part of the supplementary budget last fiscal year has peaked.



Oil Output Up Again


n LONDON (Reuters) - OPEC powerhouse Saudi Arabia expects the oil producers' group to raise production before its Nov. 12 extraordinary meeting if prices keep raging at current high levels, a Saudi source said on Monday.

"If prices stay as high as they are, there is no doubt that OPEC will reach an agreement to increase production. There is no doubt it will happen," the Saudi source told Reuters.

OPEC would lift output by at least the 500,000 barrels per day (bpd) agreed under an informal pact to boost supplies if the price of a basket of OPEC crudes stays above $28 for 20 consecutive working days, the source said.



BT in AT&T Talks


n LONDON (AP) - British Telecommunications PLC confirmed Sunday it is in "continuing" talks with AT&T Corp. to consider partnerships in business services as part of a "major strategic review" it announced in April.

BT had earlier referred to reports the two telecoms giants were in merger talks as "pure speculation."

"Naturally, the strategic review includes continuing discussions with AT&T," the company said on its Web site. The two firms are partners in the Advance wireless alliance and in the Concert joint venture, which combined their international operations.

BT said the discussions "include exploring ways of broadening and strengthening the scope of the relationship between BT and AT&T in business services. These conversations are continuing and may or may not lead to any change in the existing alliance arrangements."

The firm said it would make a further announcement about its strategic review later in the year.



Cadbury Buys Snapple


n LONDON (Reuters) - Cadbury Schweppes Plc. said on Monday it would buy the Snapple Beverage Group from Triarc Cos. for $910 million in cash, its second-biggest ever acquisition which builds its U.S. drinks business.

Cadbury's takeover of "new age" beverage brands Snapple and Mistic initially went down well with investors looking for a new deal for the sweets and soft-drinks group since its stock has been less in favor than some of its food peers.

Its shares rose more than 6 percent in early trade in a generally lower British market, but then eased on concern over the price of the deal, and some analysts' views that Cadbury still needs to bolster its confectionery business.

Cadbury's chief financial officer David Kappler said that Snapple was an attractive target since it was a leader in the fast-growing non-fizzy drinks segment of the market.

TITLE: Spanish Fishermen Strike Over Rise in Diesel Price
AUTHOR: By Daniel Woolls
PUBLISHER: The Associated Press
TEXT: MADRID, Spain - Fishermen angered over rising diesel prices blocked the entrance to the port of Barcelona on Monday as the Spanish government held last-ditch negotiations to avert nationwide fuel protests.


Nearly two dozen fishing boats dropped anchor just outside the mouth of Spain's second-busiest port before dawn and remained there as talks began with representatives of the protesters around noon, port authorities said.

At least 13 vessels were waiting to dock in Barcelona, and a cruise ship was diverted to the Mediterranean island of Mallorca, the news agency Efe said.

Elsewhere in Spain, farmers and truckers parked their vehicles outside fuel depots in cities in the central Castilla-Leon region, said the Union of Small Farmers, an agricultural lobby.

The protests came as the government began crucial talks with truckers associations that are part of the National Platform of Fuel Consumers, a makeshift coalition of sectors including fishermen, taxi drivers and farmers who depend on fossil fuels.

The coalition is threatening to put a stranglehold on the nation's fuel supply with French- and British-style blockades of refineries and other facilities unless the government lowers taxes that make up as much as 60 percent of the pump price in Spain.

The government is adamant in its refusal to reduce taxes, saying Spain's percentage is low compared to what consumers in other European Union countries pay.

The platform says its members are struggling to make a living because of rising fuel prices. For instance, diesel fuel sold to farmers at a special rate has gone up 55 percent since August of 1999, agricultural associations say. Diesel fuel sold to farmers costs 45 cents a liter.

The European protests began in France, where truckers began the blockades Sept. 4, winning a tax break from Paris and inspiring protests in other countries.

Elsewhere in Europe on Monday, truckers in Sweden, Norway and Finland briefly obstructed traffic at harbors, oil terminals and roadways.

Eleven terminals in southern and western Norway were blocked for several hours until the state oil company Statoil filed a police complaint. The truckers withdrew rather than face possible police action.

In Sweden's second-largest city and major port Goteborg, truckers blocked freight traffic. Passenger traffic and trucks with medicine or perishable goods would be let through, trucker spokes man Haakan Alexandersson said.

Protests will continue until "the government will give us a positive answer," he said.

Norwegian truckers claim their fuel costs mean they operate at a loss. Norway is the world's second-largest oil exporter, yet the country's 4.5 million people pay among Europe's highest prices for gas - largely because taxes add more than 70 percent to the pump price.

TITLE: Dresdner Bank To Buy Wasserstein Perella for $1.37 Billion
AUTHOR: By Thomas Atkins
PUBLISHER: Reuters
TEXT: FRANKFURT - Germany's Dresdner Bank AG said on Monday it had agreed to buy U.S. investment bank Wasserstein Perella in an all-share deal worth about $1.37 billion.


Germany's third-largest bank said it would combine Wasserstein with its own investment banking division, Dresdner Kleinwort Benson, to create Dresdner Kleinwort Wasserstein, the world's sixth-biggest mergers and acquisitions adviser.

Under the deal it is to issue 30.5 million shares, which it said would dilute its earnings per share slightly once Wasserstein was integrated, and added that it had set aside a further $190 million to pay to key staff at Wasserstein around 2002-2003.

"We want to keep the people medium-term," said a Dresdner spokesman, adding that layoffs from the takeover, which excludes Wasserstein's merchant banking and private equity business, would be very limited.

Industry experts say the Wasserstein deal will also give Dresdner a confidence boost after its merger attempts with Deutsche Bank and later Commerzbank collapsed earlier this year.

Analysts viewed the deal as an expensive but credible attempt to restore confidence after earlier merger failures.

"Dresdner has to move forward with its investment banking unit and a small dilution to earnings is irrelevant. The value of Dresdner Kleinwort Benson has to keep growing, it's such an important part of the group," said analyst James Alexander at Commerzbank in London.

Analyst John Leonard at Schroders Salomon Smith Barney in London agreed that the deal will strengthen Dresdner's investment banking unit, particularly in the high-yield bond business, but questioned the deal's price.

"But is this the best use of $1.4 billion? I still find it very expensive," he said. "Even a few years out, it could only be making $75 million to $80 million in profits for Dresdner."

TITLE: Deutsche Boerse Plans Consortium To Bid for LSE
PUBLISHER: Reuters
TEXT: FRANKFURT, Germany - Frankfurt's Deutsche Boerse AG plans to form a consortium with the Milan and Madrid bourses to make a bid for the London Stock Exchange and is prepared to launch a hostile bid if necessary, a German magazine said on Sunday.


Focus, citing American financial circles, said Deutsche Boerse head Wer ner Seifert was also talking with Nasdaq Chief Executive Frank Zarb about the U.S. exchange's potential participation in the consortium.

On Friday, a source close to talks between the three exchanges told Reuters the bourses were considering making a friendly bid for the LSE LSE.CAZN with Nasdaq possibly taking part.

A Deutsche Boerse spokesman declined to comment.

Friendly or unfriendly, observers said time is running short for the Boerse amid competition from rivals.

Swedish stock exchange operator OM Gruppen has already made an Pound820 million ($1.16 billion) hostile offer for the LSE.

Last Tuesday, the LSE pulled out of its plan to merge with Deutsche Boerse to create megabourse iX, saying there were problems that were difficult to resolve and that it needed to focus on fighting off OM Gruppen's hostile bid.

Britain's Sunday Telegraph reported that the LSE was considering a special dividend offer of seven pounds per share, worth around Pound200 million, as part of its defense against the OM bid. LSE shares closed at Pound29.50 on Friday.

There has been talk for some time that the Deutsche Boerse may mount a bid in conjunction with Milan and Madrid, which had already signaled their willingness to join iX.

TITLE: Bankers Meet in Jittery Prague
AUTHOR: By Ondrej Hejma
PUBLISHER: The Associated Press
TEXT: PRAGUE, Czech Republic - The venue is a paradox - a sprawling building put up by communists hosting the assembled captains of global capitalism. But that's only one curiosity surrounding the world's annual money summit.


The congress center in Prague where the International Monetary Fund and the World Bank will hold their annual gathering Sept. 26 to Sept. 28 is still known under its old official name, Palace of Culture. It was built in the 1970s to play host to the likes of Cuban leader Fidel Castro and North Korea's late ruler Kim Il Sung.

Across the Vltava River lies the Hradcany Castle, the seat of the Czech president, Vaclav Havel, paradox No. 2.

Penniless after the Communist regime confiscated his family's riches in 1948, Havel became a playwright and dissident, and 40 years later led the movement that toppled the Communist regime. Now that the vast family property has been restored to him, he's worth millions.

And now, as president with a hippie past and fondness for Frank Zappa will have the responsibility of defending capitalism against its fierce foe, the anti-globalization movement, which hopes to mobilize thousands of protesters on the streets of Prague.

Paradox No. 3: the Czech Republic.

In 1993, when the country won its bid to put on the gathering, it was the darling of the West, a textbook example of a successful transition from communist command economy to the free market under IMF tutelage.

Today, it is more likely to be chastised by economists for slow economic growth and bogged-down privatization of money-losing state-owned firms.

Many Czechs wonder whether the event is worth it - whether it will result in money and prestige, or in a disaster similar to Seattle, where the 1999 World Trade Organization meeting was trashed by protesters claiming globalization enriches the rich and deprives the poor.

The Prague gathering "will be an opportunity for a general analysis of the situation this world is in," says Havel, the philosopher-president. "We should be happy to be there when it's done."

The police are taking no chances. Under the guidance of FBI experts, they have revived anti-riot squads that have been idle since the downfall of communism in 1989.

The black-clad police recently showed off their crowd-control skills to reporters by taking on a small army of volunteer "protesters" who hurled fire bombs, tomatoes, apples and insults.

The Czechs are offering real protesters a sports stadium as a campground. But Jan Krecek, a self-styled anarchist, sees a more sinister intent. He thinks authorities may use crowd control as cover for evicting homeless squatters from buildings.

Havel, ever the believer in dialog, plans to open the Prague Castle to congress delegates as well as anti-globalization protesters, hoping the beauty of the castle gardens will calm passions.

Last year, one visitor to the castle was the 26-year-old Krecek, who was in the audience at the ceremony in which Havel signed his country up as a NATO member. Krecek's method of dialogue was to blow a loud whistle and get thrown out.

The IMF-World Bank meeting, sometimes called "the Olympics of international finance," will be attended by financiers, central bankers and treasury officials from more than 180 countries.

Schools will be closed for the week of the meeting, along with some public parks and gardens. The musical theaters that are a lively fixture of this graceful medieval city will close. Their owners don't expect many tourists to brave possible street protests.

The U.S. State Department warned last month that Czech authorities estimated up to 20,000 demonstrators may gather in Prague, and "some demonstrations may become disorderly or violent."

Therefore, said a travel advisory, "Americans may wish to exercise prudence, and to consider avoiding non-urgent travel to Prague during the second half of September."

TITLE: Vyakhirev Comes Under Attack Once More
AUTHOR: By Yulia Bushuyeva and Yelizaveta Osetinskaya
PUBLISHER: Vedomosti
TEXT: MOSCOW - Clouds are again gathering over the head of Rem Vyakhirev, chief executive of natural-gas monopoly Gazprom.


This time the threat is coming from the company's private shareholders, who have sent several top government officials a letter severely criticizing Gaz prom's leadership and calling for the management to be fired and replaced.

About a month ago five Gazprom directors who represent the interests of the state on the board were sent a document titled "Gazprom - the First 100 Days."

The five Gazprom directors are Deputy Prime Minister Viktor Khristenko, Property Minister Farit Gazizullin, Economic Development and Trade Minister German Gref, Anti-Mono poly Minister Ilya Yuzhanov and Dmitry Medvedev, deputy head of the presidential administration.

Accompanying the document was a letter by another board member, Boris Fyodorov, a former finance minister. The document listed complaints he said were made by private investors against top Gazprom management.

Representatives of three of the five officials have confirmed they received the document.

A high-ranking government official, who read the document and the letter, noted they are primarily aimed against the way Gazprom and its subsidiaries manage their assets and the unsatisfactory state of sales of its shares.

A separate clause speaks about the natural gas firm Itera Group, which, the authors say, has become almost as big as Italian gas conglomerate ENI thanks to Gazprom's help.

It has been impossible to establish which shareholders wrote the document.

According to a government source, who declined to be named, the document is not signed. Only Fyodorov's letter says it lists complaints of private shareholders.

Fyodorov last week refused to name these investors.

"Because I represent minority shareholders on Gazprom's board, certain influential companies have asked me to help make their opinion known to board members who represent the state.

"All I can say is that I am speaking about the owners of more than 1 percent of Gazprom's shares," he said.

According to Reuters, representatives of investment-funds groups such as Salomon, Hermitage and Beloye Ozero voted for Fyodorov during elections of board members on June 30.

The question remains whether the complaints of these mysterious investors will have any consequences for Gazprom managers. That will depend on the state, which controls 38.8 percent of the company's shares. However, it seems the principal shareholder has not made up its mind yet.

On the one hand, a high-ranking presidential administration official said last week the Kremlin is satisfied with the way Vyakhirev is doing his work and his resignation is not an issue in the near future.

On the other hand, a source close to the cabinet said the management of the company's assets is expected to be discussed at a meeting of the board late next month. Vyakhirev's fate may also be decided at the meeting, he added.

TITLE: PM Says Investment Key To Continuing Growth PM Says Investment Key To Continuing Growth
AUTHOR: By Jim Heintz
PUBLISHER: The Associated Press
TEXT: MOSCOW - Russia's economy has made great strides forward since the financial crisis two years ago, but the government needs to do more to encourage necessary investment, Prime Minister Mikhail Kasyanov said Monday.


To solidify the gains made since the ruble's value plunged by two-thirds in August 1998, Russia needs billions of dollars in investment and new measures to infuse investors with confidence, Kasya nov said at an investment conference.

"It is important that those investing in Russia today realize they are really investing in a new Russia," the Interfax news agency quoted him as saying. "The main thing is that the processes taking place in our economy become predictable."

Many investors have been skittish about entering Russia, where the potential market is great but where business laws are labyrinthine and the court system often appears ineffectual.

Nonetheless, in the past year Russia's economy has shown signs of recovery, benefitting from renewed investment and high world oil prices.

Investment this year is 17 percent higher than for the same period a year ago, Kasyanov said, and the federal government has a 2.5 percent budget surplus. He also noted that the final inflation rate for the year is expected to be about 18 percent, down from 36 percent a year ago and 84 percent in 1998.

Russia hopes that the streamlined tax code that is to take effect next year will boost investment. Kasyanov also said that the government was considering encouraging investment by eliminating tariffs on imports of production machinery.

Also Monday, the Finance Ministry said Russia made a $56.5 million loan payment to the International Monetary Fund. Moscow has been diligent about keeping up with its payments to the IMF, and wants to remain in the fund's good graces in hopes of resuming loans that were suspended after a 1998 financial crash.

TITLE: Only 3 Remain in Bidding for Onako
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW - Only three investors are bidding for the state's 85-percent stake in Onako, the nation's 11th largest oil producer, Vedomosti reported Monday.


Bids closed Thursday, but government officials were silent Friday on how many bids had been made. The winner of the tender will be announced Tuesday.

Vedomosti reported that although many companies had said they intended to bid, only three remained after bids closed. They were Profit House, which represents a joint bid by oil majors Yukos and Sibneft and Gazprom subsidiary Stroitransgaz, Tyumen Oil Co. and Sibir Energy, the newspaper said.

Vedomosti said the omission of the nation's No.1 oil firm from the list of bidders was surprising. LUKoil head Vagit Alekperov had said that the company would take part in the tender, but LUKoil seems to have declined to deposit the necessary $85 million with the State Property Fund, the official seller of the state's stake in Onako, to participate.

TITLE: Potanin Pulls Off Bank Merger
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: MOSCOW - Two months after settling with creditors and two years after its default after the August 1998 crisis, Uneximbank announced Monday the completion of its merger with Rosbank.


"This is no longer just a plan, the process is over," said Vladimir Potanin, president of the Interros holding, which owns Rosbank, metals giant Norilsk Nickel, oil producer Sidanko and the newspapers Izvestia and Komsomolskaya Pravda.

Before the crisis, Uneximbank was the nation's leading private bank and the center of oligarch Potanin's empire.

As of Sept. 1, the shareholder's equity of Rosbank came to 4.9 billion rubles ($176.7 million). Rosbank is considered one of the top four banks in Russia.

The financial crash of 1998 left Uneximbank with more than $2 billion in debt - $800 million to foreign creditors. The bank reached a settlement with creditors in July that included a cash downpayment of $105 million, or 10 cents on every dollar owed.

After the crisis, all of Uneximbank's viable activities were transferred to Rosbank, a move that was validated by making a legal merger one of the key components of the debt-restructuring proposal.

At the time, the transfer was criticized and perceived as asset stripping and a way to leave creditors high and dry.

The market value of the settlement, which also includes Eurobonds, is now calculated to be 34 cents to the dollar, or 70 percent more than the original deal.

Potanin said the creation of the new financial entity, which will continue to be called Rosbank, is Russia's first post-crisis bank restructuring The accomplishment justifies Interros' "moral and psychological right to operate in the banking industry," he added.

But not everyone agrees.

"I would take anything they say with a big chunk of salt," said Kim Iskyan, banking analyst at investment bank Renaissance Capital, "because they were saying all the same things two years ago."

Even though the management hasn't changed - Mikhail Prokhorov, former president of Uneximbank, is a member of the board of directors of Rosbank - foreign investors will probably come flocking back, Iskyan said.

"The frightening fact is that people have a short memory," he said.

Yevgeny Ivanov, chairman of Rosbank's board, admitted Monday that Rosbank had taken a couple of steps backward in their relationship with foreign investors during the process.

He insisted the bank management intends to take certain measures to reinstate trust with investors. The bank's financial records will be made more accessible to the public, and the hiring of an international auditor is in the works, he added.

"The primary element of trust is openness," Ivanov said. "It's returning in phases."

Potanin replied to reporters' criticism that he had failed to pay back Uneximbank's creditors by distancing himself from the financial arm of Interros.

"We want to respond to this kind of criticism," Potanin said, looking at Prokhorov. "But the company needs to answer for its own actions."

He added that Interros is holding Rosbank at arm's length, and he wants the bank to be as "divested" and as "depoliticized" as possible.

TITLE: New Policy Dangerously Vague
AUTHOR: By Robert Coalson
TEXT: IN recent months, a new word has entered the vocabulary of media-watchers in Russia: informbezopasnost, or information security. In June, the Security Council produced a draft "information security doctrine," a 46-page policy statement that will guide the actions of the executive branch in regard to the mass media. President Vla dimir Putin put his signature to the document this week. (See www.scrf.gov.ru for the complete document.)


The interesting thing about this document so far has been the widely contradictory reactions it has provoked. While some observers see it as tantamount to the reintroduction of total state control over the media and even Soviet-style censorship, others contend that this policy will improve access to information by providing guidelines for executive-branch press offices. Mikhail Fedotov, secretary of the Union of Journalists and author of the present law on mass media, stated, "There is nothing wrong with thinking about [information security], and we should have begun thinking about it much sooner." On the other hand, Naum Nim, editor of the magazine Dossier on Censorship, believes that "the most disturbing thing about this document is that the very term 'information security' has come into fashion. ... It doesn't even provoke alarm or concern."

Indeed, it is difficult to have a clear-cut view of this document, which is written in a turgid, bureaucratic style. "You can characterize it as a bureaucratically formalized collection of banalities about society, the state, the individual and information," summarized Vitaly Tretyakov, Nezavisimaya Gazeta editor.

The very vagueness of the document is what alarms me most, especially since the Security Council spent many months drafting it. In my experience, vagueness is an indication of an effort to hide one's real intentions. Furthermore, in a document of this type, which will now be distributed to hundreds of executive-branch offices throughout the country and interpreted individually by thousands of bureaucrats, vagueness in language will inevitably lead to arbitrariness in implementation. The result will be a slew of conflicts on which the Press Ministry can weigh in as it sees fit. 

In spite of itself, though, the new information security doctrine says some things very clearly. First, its mere existence demonstrates that Putin considers the mass media to be foremost an issue of national security, discussed in the context of the military and the security organs. Alexei Simonov of the Glasnost Defense Foundation commented that "the doctrine is intended to defend the state from its citizens and not to defend their privacy from the state."

This is crucial to recognize because many of us think it is more logical to consider the mass media as an economic and social issue. That is, the state's media policy should be directed primarily to improve the media's role as an advertising vehicle, as a watchdog against corruption and as a means of encouraging informed public participation in political and social life. There is not a whiff of this kind of thinking in the new doctrine or in any of the actions of the Press Ministry.

Second, the information security doctrine demonstrates unambiguously that Putin views the media as an appropriate sphere for executive-branch administration and control. This is no surprise, but it shouldn't be overlooked. Instead of grounding freedom of the press and the rights of citizens to information in law and in binding legal precedents, this document continues the distressing tradition of "administering" the press at the whim of whoever controls the executive branch. Just as has been the case with privatization, the only possible result of executive-branch administration is insecurity and uncertainty - the kind that turns every election into a major national crisis.

In an interview with Moskovsky Komsomolets this week, Press Minister Mikhail Lesin acknowledged that "in a developed society with clear democratic traditions and principles there is most likely no need for wholly owned state media." Russia, according to Lesin, is not such a country. "Therefore, in the immediate future the state will remain one of the major players on the media market." What is unclear is how the new information security policy and the Press Ministry's "secret" budget for media subsidies are going to move Russia from where it is now to the kind of society that does not need state media. How are these policies going to give birth to "a developed society with clear democratic traditions and principles"?


Robert Coalson is an independent media analyst based in St. Petersburg.

TITLE: British, Russian Leaders Are Both Out of Touch
AUTHOR: By Peter Morley
TEXT: WHEN Tony Blair was elected prime minister of the United Kingdom in May 1997 with the largest parliamentary majority in living memory, it was largely due to his image as a leader who would deliver firm but fair government for the "ordinary people" he made such an effort to woo.


On Wednesday night, out of nearly 750,000 "ordinary people" who voted in a phone-in poll on a late-night television news program, 94 percent thought that the prime minister's handling of the petrol-shortage in Britain had been bad.

When Vladimir Putin was elected president of Russia earlier this year, it was largely due - like Blair's victory - to the common perception of him as a leader who would deliver firm but fair government for all.

In August, Putin's popularity plunged after 118 sailors died on the nuclear submarine Kursk, exposing a high-level culture of complacency and cover-ups, which left Putin, his government and the military severely damaged and compromised.

On both occasions, the governments looked at best to be chronically out of touch with their voters and, at worst, arrogant and mendacious.

On Thursday, British Health Secretary Alan Milburn condemned the "campaign of illegal intimidation," and said that the government "cannot and will not yield to intimidation." It is only a short step from this to much of Putin's rhetoric about "terrorists" and "bandits" in Chechnya.

The mothers who created all the problems for Putin over the Kursk affair have their British equivalent in the hauliers and farmers who, a week ago, began blockading fuel refineries and persuading tanker drivers not to deliver fuel.

Security mania, and a complete inability to make any sort of concessions to public opinion for fear of being seen as weak-willed, is a fault common to Blair and Putin. Control from the center and spin-doctoring are features important to both governments.

After all, Putin's idea of strong, centralized government attracted plaudits from Blair, the first foreign leader to visit Russia after Putin was elected, who described him as "a man we can do business with."

Putin and Blair, in their terms of office, have been accused of control-freakery and even paranoia. Both have now faced severe public discontent, and both have emerged the worse for it. The recent debacles over petrol and the Kursk should send a wake-up call to both leaders.


Peter Morley is a freelance writer based in Britain. He contributed this comment to The St. Petersburg Times.

TITLE: THE WEEK IN REVIEW
TEXT: l Oil major Tyumen was given a U.S.-backed $292 million loan to revitalize Siberia's giant Samotlor oil field.


The 10-year loan, guaranteed by the Export-Import bank of the United States, will let Tyumen Oil Co. buy oil equipment and services from the Texas-based Halliburton Co., formerly run by Republican vice presidential candidate Dick Cheney.

The $292 million is part of what will eventually be a $672 million loan package - the largest ever granted to a Russian company by the Export-Import bank.



l Deputy Prime Minister Alexei Kudrin warned that the country's recently healthy economic growth will slow in the second half of 2000 and during the next year, and urged the government to speed up reforms that will help lead to sustained growth.


Kudrin said that the government expects Russia's gross domestic product to grow by 5.5 percent in 2000 and slow to 4 percent growth in 2001 after posting 7.5 percent growth in January through July.



l The Communications Ministry startled the investment community by ordering the capital's two largest mobile-telephone operators to give up a combined 52 frequencies.


Analysts said the seizure of Vimpelcom and MTS frequencies, which was temporarily blocked by Communications Minister Leonid Reiman the next day, was meant to free up some airspace to hand over to partially state-owned Sonic Duo, which plans on leaping into the cellular market next year.



l The government closed its first privatization tender under the new, supposed-to-be reform-minded leadership of President Vladimir Putin.


The sale, for an 85-percent stake in No. 11 oil company Onako, was considered by investors as a major test of the government's pledges to distance itself from well-connected tycoons and sell off a prime asset fairly .

The starting bid was fixed by organizer Dresdner Kleinwort Benson at $425.25 million plus a $4.5 million fee to cover the costs of the tender.



l Prime Minister Mikhail Kasyanov announced that the government had collected more revenue in the first half of 2000 than in any other six-month period in the past decade.


Kasyanov also labelled the year-on-year gross domestic product increase of 7.3 percent and the industrial production increase of 10.3 percent as being unprecedented in the recent history of the country.

TITLE: Labelling Is the Law for All Modified Foodstuffs
AUTHOR: By Baker & McKenzie
TEXT: THROUGH the use of genetic engineering, scientists are able to insert specific genes into the genetic codes of plants, allowing them to alter an array of the plants' characteristics. This process of genetic modification gives scientists more precise control over intended modifications of these characteristics - especially in plants grown for food - than is possible with more traditional forms of alteration based on breeding techniques. While the benefits of these "genetically modified" (GM) products appear to be numerous, such products call for a great degree of scrutiny in order to protect consumers from any potential negative characteristics. The need for such scrutiny has resulted in the creation of new consumer protection legislation in many countries, including Russia.


In order to provide better monitoring of GM food products in Russia, Gennady Onishchenko, chief of the Russian State Sanitation and Epidemiological Service, issued Resolution No. 7 on April 6, 1999 - requiring that, effective July 1, 1999, all GM food products, GM raw materials, and GM food additives manufactured, distributed, or sold over-the-counter in Russia must be registered with the Russian Federation's Register of GM Food Products.

On Sept. 26, 1999, Onishchenko stated in Resolution No. 12 that, beginning July 1, 2000, the sale of GM food products in Russia without appropriate labeling on the packaging was forbidden. To clarify these requirements, the resolution referred to further instructions to be issued by the Chief Sanitary Officer of the Russian Federation - Onishchenko himself - or by the Ministry of Health.

One such set of instructions was issued by Onishchenko in July 2000. It contains a list of food products, made from GM raw food materials containing protein and DNA, which require special labeling on their packaging. 

Food products made from GM raw materials which do not contain protein and DNA are listed in this instruction as not requiring such mandatory labeling on their packaging.


For more information or advice, please contact James T. Hitch or Elena Mocha lo va at Baker & McKenzie's St. Petersburg Office (phone: 7-812-325-83-08, fax: 7-812-325-60-13)

TITLE: Blair Is Taking a Daring Stand
AUTHOR: By Paul Krugman
PUBLISHER: New York Times Service
TEXT: Tony Blair showed real backbone last week. Faced with a stunningly effective blockade by truckers protesting high fuel prices, the British prime minister flatly refused to give in to demands for tax cuts. The initial result was extensive disruption - not just closed gas stations but shortages of bread and milk in supermarkets, delays in medical procedures and in general a state of chaos all too reminiscent of the U.S. gasoline shortage of 1979. By the end of the week, however, the protests seemed to be subsiding in Britain, though similar protests were still growing elsewhere in Europe. So for the time being Blair has won - though no good deed goes unpunished, and he is likely to pay a heavy political cost for his stand on principle.


But Britain's fuel crisis - and even more important, the public reaction - may have implications that reach far beyond the political prospects for Blair and his party.

There is little question that Mr. Blair was right to be so intransigent. It's true that because of the high taxes the British government levies on petroleum products, gasoline and diesel fuel are very expensive, even compared with prices in other European countries. (Gasoline currently costs about $4.25 per gallon.) But the overall tax take of the British government, while high by U.S. standards, is actually low by European standards. Basically, high taxes on fuel are more than offset by lower general sales taxes and income taxes - and any reduction in fuel taxes would eventually have to be matched by increases in other taxes.

And there are good reasons why fuel should be singled out for high taxation. Among other things, traffic congestion is, believe it or not, a much worse problem in Britain than in the United States. A tax that discourages motorists from getting on the road and hence getting in the way of other motorists serves a social purpose over and above the revenue it raises.

Even if Britain should eventually decide to tax fuel less and other things more, there's a question of timing: reducing fuel taxes in the face of a world oil shortage would be a terrible idea. There's the question of precedent: If Blair had given in to the protest on fuel prices, he would in effect have signaled every other interest group with a plausible grievance that disruptive protests were an effective political tool.

Also, cutting taxes on oil when oil prices rise gives exactly the wrong signal to the oil cartel. It tells the Organization of the Petroleum Exporting Countries not to worry - higher oil prices won't reduce sales because importing nations will make sure that those higher prices aren't passed on to consumers.

So Blair has the theory of the case on his side. Yet according to polls the vast majority of Britons sided with the protesters. And the same is apparently true in the rest of Europe.

Why do fuel-price protests command such wide support? American conservatives - and Britain's hapless Conservative opposition - would like to think of this as an anti-tax movement. After all, don't truckers want a cut in fuel taxes? But while the letter of the protesters' demands may involve tax cuts, the spirit of the protest is quite different. This isn't a rebellion against taxes per se: it's a rebellion against markets. In effect, European truckers have been saying that it isn't right that they should suffer just because the world price of the fuel they need has gone up.

It is a telling detail that the wave of European fuel-price protests began in France, the Western nation that has been most reluctant to let market forces rip. Of course the government of France, true to form, quickly caved in to the protesters' demands - to the fury of other European governments that are trying to make a stand on principle. But it turns out that the French are not that exceptional - even in post-Thatcherite Britain most people support the truckers.

What this says is that what seems to be the defining feature of Western political economy at the turn of the millennium - the triumph of free-market ideology - is far less complete than some would imagine. Ordinary people, when push comes to shove, feel that sometimes the market just isn't fair - and have sympathy for those who protest that unfairness, even if those protests adversely affect the population at large.

TITLE: Recent Cuts to Military Forces Mask a Sham
AUTHOR: By Pavel Felgenhauer
TEXT: Last week, the authorities announced that the nation's armed forces would be slashed by around a third over the next three years, to 850,000 men from the present standing strength of 1.2 million. Many have implied that this decision was a direct result of the tragic sinking of the Kursk nuclear submarine last month - as if President Vladimir Putin was suddenly struck by the appalling state of the military and decided to begin reforming it immediately.

Of course, our bureaucracy never moves that quickly. The idea of the cuts has been discussed for many months, and the final decision had nothing to do with the tragedy in the Barents Sea.

A year ago, federal forces were massing near the borders of Chechnya in preparation for an invasion, and it turned out that the Defense Ministry could muster fewer than 60,000 men, including paratroopers and marines sent in to fight as common infantry in the mountains. The force was beefed up to 100,000 with units from the Interior Ministry, the Border Guard and posses formed by regional police forces, among others. Kremlin insiders say Putin was shocked to know the nation could muster so few fighting troops. The decision to accelerate military reform was made then, but it took a year of interdepartmental strife to hammer out the first step.

In 1991, Russia inherited 2.8 million Soviet military personnel. Since then, the Defense Ministry has already cut 1.6 million, which dwarfs the recent 350,000 reduction. But has this cut been beneficial?

Since the demise of the Soviet Union, Russia has kept the real number of its soldiers secret. "Staff positions," not real men, are slated to be cut from 1.2 million to 850,000. But will the overall number of personnel change?

Thousands of "staff positions" in the army, designated to conscripts or lower-ranking officers, are unoccupied at any given moment, while hundreds of thousands of military officers on active duty are "temporarily" without a commission or are working in other governmental departments or even in business firms. For a decade, staff positions in the Defense Ministry were cut regularly, while the number of government bureaucrats grew. Today, there are five generals serving as viceroys in the newly formed federal districts - with many active service officers comprising their staff. Perhaps not all the cuts of the last decade were really made?

In 1997, Yury Baturin, defense aide to then President Boris Yeltsin, disclosed that the overall number of military personnel in all government departments was 2.6 million. At the same time, the number of "civilian employees" in the Defense Ministry and other departments was 1.5 million. On top of that, the number of police personnel, including paramilitary OMON units, is estimated at 1.5 million. (The true number of police is secret; most policemen are former soldiers). Since 1997, the number of the nation's military personnel might have dwindled, but to what are the real numbers?

Former Defense Minister Pavel Grachev is still in active military service (four years after being ousted from his top post), receiving all active-service allowances and serving in the arms-trading company Rosvooruzheniye. And no one has heard of Putin's officially retiring from active service since he headed the Federal Security Service in 1999.

But at the same time, plans are circulating in the Kremlin to form divisions of a praetorian presidential (republican) guard, loyal to Putin personally. The reduction of the military for a decade was not a "reform," but a sham; its main result - increased militarization of government. 


Pavel Felgenhauer is an independent, Moscow-based defense analyst.

TITLE: Nostalgia for Soviet Times
AUTHOR: By Boris Kagarlitsky
TEXT: THIS fall, the army will induct draftees who don't remember the days of Leonid Brezhnev. Yes, 15 years have passed since the beginning of perestroika. The Soviet era has slipped away. For most of us, the Soviet Union is our biography. For our young people, it is history.


But even those who lived most of their lives during the Soviet period have adapted to the changes. In 10 years, the nation has seen the birth of a new society. It's not a question of whether it's better or worse than the old society; the answer to that question depends on what social group you belong to. Besides, society has been living according to its own rules for a long time now. The transition is over.

During the early 1990s, some people tried to break out of the mold of Soviet life; others tried to return to it. The struggle was a victory for the "democrats," a triumph that included the shooting of parliament. The privatization of 1993 to 1995 radically changed society's economic and social structure, its values and orientation. But after the Soviet way of life was totally routed, Russia - like all of Eastern Europe - was paradoxically smitten with nostalgia.

The past elicits nostalgia precisely when we feel that the past is irrevocably gone. This distance allows us to evaluate better past achievements; past grievances slowly fade. After all, it's always pleasant to speak well of the dead.

But the longer we're separated from the Soviet period, the more difficult it is for our rulers to blame their failures on the past, to complain about the "bad inheritance" from Soviet forebears. Against the backdrop of today's Russia, much of our Soviet heritage doesn't look half bad, and the nostalgic mood has only exacerbated the feeling of dissatisfaction with life among most Russians.

In the beginning of the new period, the authorities tried to fight this nostalgia. Then they did an about-face, using nostalgia as their own weapon. Such ideological acrobatics might seem strange at first glance. In the early 1990s, when government property was being seized and distributed, the nation's elite needed an overarching ideology. It was easier to grab factories and oil industries if it was being loudly announced that all these factories - and the economy as a whole - cost nothing.

But now that the pie has been carved up, radicalism has been replaced by conservatism. Now they're saying that what was seized must be protected, that society must be taught respect for authority, power, order. All that was conservative and authoritarian in Soviet culture is back in vogue.

The paradox here is that the reformers are thus appealing to the worst qualities of the Soviet experience, to what actually led to the superpower's demise. Derzhavnost is now in vogue. They're remembering the "big battalions" and the "strong hand." And at the same time, the authorities are trying not to think about the more attractive features of Soviet society, particularly in its early, heroic period - relative (i.e. in relation to the bureaucracy) equality and the possibility of those lower on the food chain to forge a brilliant career.

The society that developed during the 1990s inherited much from its predecessor. We have maintained a complex system of state security, nuclear missiles and that horde of generals - who now have fewer soldiers. We have maintained a system of generally accessible education and free health care. And at a time when all that was Soviet was called awkward, dangerous and outdated, many journalists explained to us that our system of education was no good, because innumerable hours were spent studying the history of the party and Marxism-Leninism. That criticism was accurate, but for one point: Soviet education was in fact superb. And hundreds of thousands - perhaps millions - of our compatriots showed they could make it on the international labor market, amazing their Western colleagues not only with their splendid knowledge, but also with their surprising ability to adapt to any conditions.

This combination of "market elements" and "social guarantees" is perhaps the main characteristic of the "Russian model" that has developed over the last decade. And this combination is as necessary as it is inevitable. Because for the privatizers to proceed unhindered in their seizure and distribution of everything that is truly valuable, the rest of society must be guaranteed at least a minimal existence. If not, the situation could easily have spun out of control, which was demonstrated by the small civil war during the fall of 1993.

In the last seven years, people have already forgotten these unpleasant events, and today a new wave of liberal reformers is poised to "correct Russia." The economic plan presented by German Gref, the economic development and trade minister, should eliminate the incongruity between freedom in the market and social guarantees. And this will happen - naturally - at the expense of social guarantees.

In essence, the year-2000 liberals plan to break the post-Soviet model just as radically as the Soviet model was smashed in 1992-93. Today's rulers are convinced that all of this will happen without particular problems because, after 10 years of "democratic changes" in this country, there is practically no opposition. There are various political parties, yes, but no true political opposition. In waving the banner of nostalgia, the authorities are counting on their ability to consolidate everyone, to sell the Communists on a market economy and finally to inoculate liberals with the mentality of derzhavnost.

The coming to power of the "second-wave reformers" or liberal-derzhavniki signals the end of Soviet nostalgia. A pining for the past is no longer sincere; it has become an instrument for political propaganda. But any propaganda sooner or later loses its effectiveness, eventually eliciting repulsion. In this country, one indicator of a crisis in propaganda has always been the political joke. 

Soviet society chuckled at the falsity of the official system, showing the censor's inability to deprive people of freedom of thought - and freedom of laughter. Today, on the heels of Soviet rhetoric and propagandistic Cold War cliches, we're returning to the joys of the political joke. By the way, have you heard the official explanation for the Ostankino fire? It burned because it was hit by another television tower - a foreign one, of course.


Boris Kagarlitsky is a sociologist. He contributed this comment to The St. Petersburg Times.

TITLE: Security Scam Keeps Athletes Out of Village By John Rice
AUTHOR: By John Rice
PUBLISHER: The Associated Press
TEXT: SYDNEY - A man was arrested in connection with allegedly stolen Olympic athlete security passes in a case that briefly kept Olympic hero Ian Thorpe and others from the Olympic Village on Monday.


Acting Sgt. David Rose of New South Wales state police said a 33-year-old man was arrested in connection with the alleged theft of athlete accreditation passes from the Uniform Distribution and Accreditation Center in the Sydney suburb of Redfern.

Rose said the man was arrested at his home in the Sydney suburb of Canley Vale by detectives from the Olympic Security Command Center.

He was interviewed by police and will be given summonses alleging eight offenses of stealing, officials said.

Police would not say what if any involvement the man had with the Olympics, such as as an organizing committee employee or a volunteer.

Thorpe was briefly stopped from entering the Olympic Village because his security pass had become invalidated. But he was easily recognized and not delayed for long.

Officials said there was no unauthorized access to the tightly controlled village.

Before announcing the arrest, officials said a worker at the accreditation center apparently had used a computer to print out a souvenir copy of Thorpe's credential - an act that automatically invalidated the original.

The Australian Associated Press also quoted an unidentified official as confirming that Thorpe's credential had been copied.

Liz Smylie, a spokeswoman for the Sydney Games organizing committee, said passes of "a handful of athletes" were copied.

Others stopped briefly included champion Australian swimmer Grant Hackett, a favorite in the 1,500-meter freestyle, according to Michael Wenden, assistant chief of the Australian Olympic Committee.

TITLE: IN BRIEF
TEXT: McEnroe Lashes Out


n LONDON (AP) - John McEnroe says the Williams sisters, while playing winning tennis, unfortunately lack respect and humility.

The mellowed bad boy of the sport took the sisters to task in a column in Britain's Sunday Telegraph newspaper.

"What they have achieved is great, but they have no respect for anyone in the game," McEnroe wrote.

McEnroe objected to comments by Serena Williams, who last year said she would like to play in a couple of men's tournaments.

"Do women golfers say they could go out and beat Tiger Woods?" he asked.

McEnroe also accused Venus Williams of displaying a lack of humility while winning Wimbledon this year.

"Enough is enough," wrote McEnroe. "Would it kill them to say hello to people in the locker room?"

McEnroe restated his opinion - earlier expressed to the New Yorker magazine - that "a lot of male college kids and members of the seniors' tour could beat the sisters." But he said that, contrary to press reports, he had never challenged the sisters to a match - even though he had been offered $1 million by Donald Trump to take on one of the pair.



Cyclist Dies 


n BOSTON (AP) - Nicole Reinhart, a two-time U.S. National track cycling champion, was killed Sunday when she was thrown from her bicycle and struck a tree during a race.

Reinhart, 24, of Mertztown, Pennsylvania, was in the final 5-kilometer lap of the BMC Tour of Arlington when the accident occurred just before 1 p.m. local time.

The race was the final event of the 17-race Saturn Professional Tour, which Reinhart was leading.

At the Olympic velodrome in Sydney, U.S. team officials didn't tell two of Reinhart's friends from Pennsylvania, Marty Nothstein and Tanya Lindenmuth, until they had competed in qualifying races Monday morning.

Race organizer Shawn McBride said a videotape showed that Reinhart, racing in the lead pack, was squeezed by other riders just before a turn.

"There were too many riders and too little space," McBride said.

Reinhart was taken to Mount Auburn Hospital in Cambridge, where she died.



Colt Facing Charges


INDIANAPOLIS (AP) - The NFL will hold a hearing Tuesday in New York to consider possible sanctions against Indianapolis Colts' Mustafah Muhammad.


Greg Aiello, the NFL's vice president of public relations, said Sunday that the hearing would not necessarily result in an immediate fine or suspension. Muhammad was convicted Aug. 29 for beating his pregnant wife, Nichole Muhammad.

She died 10 days later as the result of injuries sustained in an auto accident, and the baby was stillborn.

The punishment will be handed down by commissioner Paul Tagliabue under the league's personal conduct policy. Precedent suggests a one-game suspension, which was imposed on Tennessee defensive back Denard Wal ker and Detroit running back Mario Bates, who also were involved in similar cases.



Olympic Boss Mourns


n SYDNEY (Reuters) - Hundreds of people packed a Sydney church on Monday for a memorial service for Maria Teresa Salisach-Rowe, wife of International Olym pic Committee president Juan Antonio Samaranch. Olympic flags have been flying at half mast since Maria Teresa, 67, lost her months-long battle with cancer over the weekend.

Australia's Gov.r Gen. Sir William Deane and swimming great Dawn Fraser, who accompanied Samaranch to Friday's Olympic opening ceremony, were among more than 350 people who crammed into St. Patricks, one of Australia's oldest churches.

TITLE: WORLD WATCH
TEXT: Aid Worker Slain


n GENEVA (AP) - A UN refugee worker was killed and a second was kidnapped in a raid Sunday in West Africa, officials said. The motive for the attack was not immediately clear.

Mensah Kpognon, 50, of Togo, was slain at his home by unknown gunmen in the southeastern Guinea town of Macenta, near the border with Liberia, the UN High Commissioner for Refu gees said.

UNHCR said it had heard that the attackers abducted another of its staff members, Sapeu Laurence Djeya of the Ivory Coast.

The raid was a new blow to the UNHCR two weeks after the slaying of three UN staff members in Indonesian-controlled West Timor. Kpognon's killing came in a region rife with tensions over refugees from Liberia and Sierra Leone and cross-border attacks.

"Yet another humanitarian has been savagely killed trying to help refugees," said Frederick Barton, deputy high commissioner, at the agency's Geneva headquarters. "We haven't even buried our three other colleagues murdered in West Timor 10 days ago, and now we have lost another friend and co-worker."



Rebels Bombarded


n ZAMBOANGA, Philippines (Reuters) - Four civilians have been killed in fighting in the southern Philippines, where a military assault on Muslim rebels holding 19 hostages entered the third day on Monday, the government said.

Defense Secretary Orlando Mercado told Reuters four civilians were killed, but he gave no details. "Air strikes are continuing," he said.

The military began bombarding bases of the Abu Sayyaf rebels on the southern island of Jolo on Saturday. Residents have said scores have been killed or wounded in the attack but the military has released few details.

The government has said it believes all the hostages, who include six foreigners, are alive.

On Sunday, armed forces chief Gen. Angelo Reyes said that six rebels had been killed in the fighting and 20 captured. Four soldiers have been wounded, he said.



Octuplet Baby Dies


n MILAN (Reuters) - A second octuplet born to an Italian woman died on Monday morning, a hospital spokes woman said. The baby girl, Cristina, had suffered from blood problems overnight.

The 31-year-old Sicilian mother, Marinella Mazzara, gave birth on Sunday to the remaining seven babies of the eight she had been carrying but one, a boy, died shortly after birth.

The first of the octuplets, a girl, was born naturally last Wednesday. One baby, a boy, was born naturally early on Sunday night. The others - three boys and three girls - were delivered by Caesarian section several hours later.

The six surviving babies, each weighing some 500 grams were "relatively well," the spokeswoman at Milan's Niguarda hospital said.

Mazzara, a housewife from the small rural town of Ballata in Sicily, would have set a world record if all her babies had lived beyond the first week.



Colombians Kidnapped


n CALI, Colombia (AP) - Gunmen kidnapped at least 30 people Sunday from two restaurants located in the weekend playground of the well-to-do outside Colombia's third-largest city in an operation blamed on leftist rebels.

About 50 armed men, many wearing military-style uniforms and bulletproof vests, barged into the restaurants in the highlands outside Cali on Sunday, police said. Gunmen also seized a couple from a nearby farm.

Police told journalists at the scene of Sunday's kidnapping that it may have been carried out by the ELN group working with members of Colombia's biggest rebel group, the Revolutionary Armed Forces of Colombia, or FARC.

"We estimate that about 30 people were taken,'' said Cali police commander Rafael Pardo. Other police officials put the number of hostages between 25 and 40.

The hostages were snatched from the Cabana Restaurant and the Embajada de Ginebra restaurant, 16 kilometers outside Cali. Among those taken was Alvaro Tenorio, owner of the Embajada de Ginebra, or Embassy of Geneva.

There were no immediate demands for ransom or claims of responsibility.



Mid-East Deal Stalls


n JERUSALEM (Reuters) - Israeli and Palestinian negotiators resumed formal talks on Sunday, keeping alive a flagging peace process plagued by wide divisions on key issues - but apparently making no progress toward a deal.

"We still have yet to see any movement on the Palestinian side," Israeli Prime Minister Ehud Barak's office said in a terse statement after the talks in Jerusalem.

The downbeat statement, which gave no details of what was discussed, termed the negotiations "part of on-going contacts." There was no immediate comment from Palestinian officials.

Earlier, a senior Palestinian official said Israel's Gilad Sher and Palestinians Saeb Erekat and Mohammed Dahlan met in a first formal session since the Palestinian mini-parliament last week delayed a statehood declaration until at least Nov. 15.

The current round of peacemaking is widely expected to last four to five weeks, a time frame leading to the return from summer recess of Israel's parliament - which is eying early elections - and the U.S. presidential ballot in November.

A Palestinian official said on Saturday the talks with Israel would be held without the participation of the United States, and negotiators would try to bridge what he called big gaps on all final-status issues.

Barak and Palestinian President Yasser Arafat failed to achieve a final peace deal during intensive U.S.-brokered talks at Camp David in July aimed at resolving issues including the fate of refugees and Jerusalem.



Yates Found Dead


n LONDON (AP) - TV personality Paula Yates, girlfriend of the late INXS singer Michael Hutchence, was found dead at her London home on Sunday, police said. She was 40.

Scotland Yard said the cause of death was not immediately known, and that an autopsy would be scheduled. Detective Inspector Mike Christensen said there were no signs of violence in the house.

He said the body was discovered by a family friend, and an ambulance and police were called to the scene.

Yates was Hutchence's partner from 1994 until November 1997, when he committed suicide by hanging himself in a hotel room in Sydney, Australia. She had a daughter with him in 1996, Heavenly Hiraani Tiger Lily.

News reports in Britain had said Yates was treated for depression after Hutchence's death.

TITLE: Ivory Coast Leader Still In Charge After Attack
AUTHOR: By Alan Raybould
PUBLISHER: Reuters
TEXT: ABIDJAN - Ivory Coast's military ruler, Gen. Robert Guei, is still in charge of the country after an armed attack on his private residence was repelled during the night, the junta's spokes man said on Monday.


"Guei is in command," Communication Minister Henri Cesar Sama told state radio. He confirmed that armed assailants had managed to get inside Guei's residence in the early hours of Monday, but added: "Fortunately, loyalist forces got the upper hand."

Guei was alive, a senior military source who declined to be named told Reuters, but he would not say if the general was injured nor even if he had been at home at the time of the attack. The source said the assailants had forced the driver of an armored vehicle guarding the residency to break down the gates and had gone inside. He confirmed that loyalist forces had retaken the residency and the area appeared quieter by morning. However, bursts of gunfire could still be heard in the surrounding area and soldiers were blocking off main roads in the area.

Sama told state radio that armed elements were still at large in the city and he promised that they would be shown no mercy. Although he advised citizens to be cautious if they went outdoors, he also said that state schools should start their new term on Monday as planned.

Military and paramilitary forces were on the streets in heavy numbers, checking identity papers. However, many people were moving around town normally. Buses and taxis were circulating.

Witnesses had reported firing from the vicinity of Guei's house, just outside the central Plateau business and administrative area of Abidjan, from just after 3 a.m. local time. Asked shortly afterwards if Guei's residence was under attack, Chief of Defense Staff Diabakate Soumahila had told Reuters by phone: "Yes, and we are in the process of counterattacking."

Diabakate was unable to say who had launched the attack. According to reports, the assailants were in civilian clothing. Continuous firing was heard for around 45 minutes and short bursts of occasionally heavy firing could still be heard two hours after the shooting started. "There were a couple of big bangs, mortars or grenades or something," one man who lives nearby said of the initial attack. "The firing was quite concentrated."

There were some reports of gunshots in other parts of Abidjan, including near the president's offices in the Plateau district and near the headquarters of state television, but witnesses said they had not heard heavy gunfire. There was no official word on casualties. Workers at the PISAM private clinic in Abidjan said five wounded soldiers had been brought in. Their wounds were not life-threatening.

Guei took power in a military coup in December 1999. There have been bouts of military unrest since then, often over pay, although Guei has also suggested political motives. Some members of the military are known to be unhappy with Guei's decision to stand as a candidate in a presidential election due on Oct. 22. At least six members of Guei's personal bodyguard have been arrested in the past two weeks and charged with threats to the security of the state, although those charges have since been reduced, diplomats said.

A Reuters correspondent who lives near the Akouedo military barracks said all was quiet in his area.

TITLE: Clean Living Best Taught By Example
PUBLISHER: Reuters
TEXT: NEW YORK - If you want your spouse to quit smoking or get off the couch and exercise more, stop nagging and get moving.


According to a recent study in the Personality and Social Psychology Bulletin, people are more likely to motivate their spouse to take up healthy habits when they engage in the desired health behavior.

Making it easier to develop a habit by cooking healthy meals or scheduling doctors' appointments - a strategy commonly used by women - was also an effective way to encourage healthier behavior, report Joan S. Tucker and Jennifer S. Mueller of Brandeis University in Waltham, Massachusetts.

Their study included 44 married couples who described how they encouraged their partner to develop healthier lifestyle habits and how their spouses' attempts made them feel.

Both men and women said they were more likely to change if their partner engaged in the behavior with them, played an active role such as cooking healthier food or making doctors' appointments, or provided emotional support.

Women were more likely to change if their partner served as a good example or discussed health issues with them, and men said that it helped them if their wives requested that they make a change.

TITLE: Canada Is Biggest Winner Following First-Round Victory
AUTHOR: By Chris Sheridan
PUBLISHER: The Associated Press
TEXT: SYDNEY - All the men's basketball teams have played just one game, but it's already clear who's the big early winner - Canada.


By defeating favored Australia in an opening-round game, Canada increased its chances of avoiding the United States until the gold-medal game. In this tournament, that's about as big a victory as a team can get.

"You want to avoid the Americans," Canada coach Jay Triano said Monday, a day after his team defeated Australia 101-90 behind 29 points from Michael Meeks and 15 assists from Steve Nash.

If Canada can defeat Angola and Spain in its next two games, its chances of winning a medal in men's basketball for the first time since 1936 will have improved tremendously.

Victories in those two games would give Canada a record of 3-0. The Canadians then would play games against highly regarded Yugoslavia and Russia but, even if they lost both, they almost would certainly finish no worse than third since they already own the tie breaker over Australia.

The mathematics of this equation are tricky since there are so many variables that could throw everything out of whack. But if the rest of the first round goes as expected, Canada will be right where it wants to be - no lower than third in Group B.

The fourth-place team in Group B will have to play its quarterfinal game against the top-seeded team from Group A, which is virtually certain to be the United States. The third-seeded team from Group B will play the second-seeded team from Group A, and the winner of that game will play the winner of the game between the top team in Group B and the fourth-place team in Group A.

Although it seems as if a degree in higher mathematics and a working knowledge of calculus are prerequisites for figuring all this out, the coaches of the teams from the rest of the world know how the formula works. The bottom line: Don't finish fourth in Group B.

"The coaches try to keep us away from all that so we can focus on the task at hand," said Nash, who plays for the Dallas Mavericks of the NBA.

Nash's performance was brilliant, his passes leading to nearly half of Canada's field goals.

Canada's coaches also deserved credit for switching defender Sherman Hamilton onto Australia's Andrew Gaze in the second half, shutting down the home team's best player.

The loss was a bitter disappointment for the Australians, who were expected to be among the top contenders for a silver medal. But after jumping out to a big early lead behind the cheers of the partisan crowd, they allowed Canada to nip away at it and put the game out of reach well before the final buzzer.

"We really don't like to play games that fast or high-scoring. We want a more Canadian tempo," Triano said. "But with the way they were scoring, that's the kind of game we had to play."

The victory was similar to the one Canada pulled off in San Juan, Puerto Rico, last summer to qualify for the Olympics, defeating the home team before another hostile crowd whose decibel level and fervor was many times greater than what the Canadians faced Sunday night.

"I never underestimate the heart of these guys," Triano said. "When we go bowling or play pool or bocce, these guys are unbelievably competitive. I'm not surprised at their resiliency."

TITLE: China Beats Russia to Gymnastics Gold Medal
AUTHOR: By Nancy Armour
PUBLISHER: The Associated Press
TEXT: SYDNEY - Let the party begin: The Chinese finally have the medal they've always longed for. The Americans, meanwhile, are going home empty-handed. Again.


China, the underachieving silver medalist in the last two Olympics, easily won the men's team gold medal Monday night. The squad, with so many good gymnasts it could afford to leave some home, scored 231.919 points, setting off the all-night victory party that's been in the works since the team arrived.

"Getting a gold in this event is just a dream for us," said Huang Yubin, the Chinese coach. "We've fought for this for 40 years. We hoped we could take this aspiration into the new millennium. All drinks taste of champagne."

Ukraine won the silver medal, but it wasn't even close to catching the Chinese as they finished a whopping 1.613 points behind. Russia, the defending gold medalists, took the bronze.

There will be no parties in the United States - unless pity parties count. Looking for their first team medal since 1984 - and their first in a non-boycotted Olympics since 1932 - the Americans blew it, finishing fifth.

They were 1.036 points away from a bronze medal, farther back than they were when they finished fifth in Atlanta.

"I thought we could have won a medal, for sure. We could have tonight, easily," Kormann said. "We got a bad break on vault at a bad time, then we got a bad break or two on high bar. Take those away, and we're right in there."

John Roethlisberger, the emotional center of the U.S. team, couldn't even bear to watch his bumbling teammates, burying his face in his hands on the sidelines.

"It's disappointing, but we went out there and fought hard," Paul Hamm said. "We did everything we could. When you do the best you can and end up fifth, that's the way it is."

The Americans finally got some life in the parallel bars, gliding between the apparatus with such ease they looked as if they were playing on the jungle gym back home. But the respite was brief. 

"I'm not going to judge this team's success by anybody else's standards," said Roethlisberger, who blew a kiss to the crowd and turned to look at the arena before he walked off the podium one last time. "They're A-1 in my book."

In everyone else's book, that honor belongs to the Chinese.

They've wanted Olympic gold to go with their five world titles for so long now. They came to the Olympics as the favorite in 1992 and 1996, only to fold under the pressure and finish second to the Russians.

This time would be different, they vowed. Though they finished second to the Russians in the preliminaries, they came out Monday night like they owned the place. They took a lead after the first rotation and never looked back.

They were slapping high-fives all night, pumping their fists like they were cocky Americans. By the time the fourth rotation was over, they led by more than a point and the rout was on.

They were so far ahead that they let their final gymnast simply drop off the still rings instead of doing a dismount.

Egged on by enthusiastic fans who yelled "Go for it, China!" over and over, things got so rowdy the Chinese were actually huddling together for group hugs. This from a people who come from a country where kissing in public is just now being accepted.

As the last rotation was winding down, the Chinese broke out in big smiles, congratulating each other and turning to salute their cheering fans. They walked out of the arena, some waving their fists in the air, others flashing No. 1.

Let the party begin; the gold is theirs.

"This gold is for all of the people in China," said Zheng Lihui, the second-highest scorer on his team.

TITLE: Dutchman Sinks Thorpedo ToTake Gold
AUTHOR: By Barry Moody
PUBLISHER: Reuters
TEXT: SYDNEY - Flying Dutchman Pieter van den Hoogenband blocked the triumphant Olympics progress of Australian swimming hero Ian Thorpe Monday when he robbed him of a third gold medal in the 200-meters freestyle.


Despite the cheers of a frenzied home crowd, van den Hoogenband ruined the Australian party by winning a magnificent four-lap showdown and beating the "Thorpedo" into second place.

The Dutchman equaled his own world mark of one minute 45.35 seconds, set in the semifinals Sunday, when he served notice that Thorpe would not get everything his own way.

After five world records on Saturday's opening day and another three Sunday, van den Hoogenband's performance was the only historic swim on the third day of the Games.

The eight new world marks and one equaled world record are still an astonishing number compared to the four set during the whole of the swimming at the 1996 Atlanta Games.

Thorpe, famous for his size 17 "flipper feet" that have been compared to an outboard motor, has become the darling of Australia after taking two gold medals Saturday, when he broke his own 400-meters freestyle world record and shared a second world mark by anchoring Australia's 4x100-meters freestyle relay.

But his grueling assault on swimming's world records finally caught up with him Monday.

"I was just so flat. I was really hurting at the end of the race," Thorpe said. "But Pieter really swam a great race. It was a real privilege to swim that race."

Thorpe still has another chance at a gold on Tuesday when Australia is favored in the 4x200-freestyle relay.

In other swimming action, the gold medal was won by 16-year-old Diana Mocanu of Romania in the women's 100-meters backstroke, 16-year-old Megan Quann took the women's 100-meters breaststroke crown and fellow American and world champion Lenny Krayzelburg added the men's 100-meters backstroke to his collection.



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SYDNEY - Dutch swimmer Inge de Bruijn has been given the royal stamp of approval after winning gold in the 100-meters butterfly at the Sydney Olympics.


De Bruijn, 27, captured her country's first Olympic swimming title in 16 years on Sunday with a world-record swim of 56.61 seconds, sparking wild celebrations from her army of orange-clad supporters, including 3,000 who partied away at Sydney's Darling Harbor.

But the biggest thrill for de Bruijn was when she returned to the Athletes' Village and received a letter of congratulations from Queen Beatrix of the Netherlands.

"There's been a great reaction back home," a Dutch team official said.

"The Queen congratulated the team and especially Inge for the gold medal and the world record."

De Bruijn is trying to keep a lid on her celebrations because she still has to compete in the 50 and 100 freestyle, events in which she also holds the world record.

"She has a break of two days to relax. She's just trying to focus on the whole eight-day competition," the official said. 

- Reuters

TITLE: Alou Leads Houston to Sweep
PUBLISHER: Reuters
TEXT: HOUSTON - Moises Alou drove in four runs to become just the fourth player in Astros history to record multiple 100-RBI seasons as Houston completed a four-game sweep of the Pittsburgh Pirates with a 5-3 victory Sunday.


Alou belted a solo homer in the second inning and added a two-run double in the sixth and a sacrifice fly in the seventh to join Jeff Bagwell, Jimmy Wynn and Glenn Davis in the Astros' multiple 100-RBI club.

"The guys in front of me are doing a great job of getting on base for me," Alou said. "I've taken advantage of those chances."

Alou's homer also gave the Astros three players with 30 homers in a season for the first time in team history. Bagwell has 44 and Richard Hidalgo 39.



Cardinals 4, Cubs 2. In St. Louis, the Cardinals reduced their magic number for clinching the NL Central title to two, with a 4-2 victory over the Chicago Cubs, as right fielder Sammy Sosa's error allowed three runs to score in the bottom of the eighth inning.


The Cardinals can break out the champagne as early as Tuesday night when they host Houston.

Held to only two hits over seven innings by Kerry Wood and Tim Worrell, St. Louis was trailing by a score of 2-1 in the eighth.

With two out and the bases loaded, Edgar Renteria hit a fly ball into the right-field corner. Sosa raced to reach the ball, but it hit the heel of his glove and the bases cleared.



Expos 5, Mets 0. In Montreal, rookie Tony Armas Jr. tossed seven scoreless innings and Vladimir Guerrero hit a pair of solo homers as the Expos blanked the New York Mets 5-0. 


Armas retired the side in order four times, did not allow a runner to reach third base until the seventh inning and recorded a career-high seven strikeouts. The Mets managed only four singles and three walks off Armas (6-8) and two relievers to fall a full three games back of the first-place Braves in the East on the eve of a crucial three-game series in Atlanta. 


(For more results see Scorecard)

TITLE: Fujimori To Step Down in Peru
AUTHOR: By Jude Webber
PUBLISHER: Reuters
TEXT: LIMA, Peru - President Alberto Fujimori summoned his closest allies to the presidential palace after leaving Peru in political limbo with the bombshell announcement that he was calling new elections but would not run in them.


As congressmen and ministers arrived for a meeting with Fujimori on Sunday, the man who wants to take his place in the palace flew home from the United States to a hero's welcome.

Hundreds of supporters with banners and balloons mobbed Alejandro Toledo as he arrived at Jorge Chavez airport to rally Peru's splintered opposition ahead of the new election.

"There are great reasons to celebrate. This is a gigantic step toward the recovery of democracy and liberty," Toledo said, inviting supporters to a rally in central Lima's Plaza San Martin at 6 p.m. local time on Monday.

Fujimori, re-elected in May in a runoff that the opposition boycotted and the international community condemned as flawed, stunned the nation on Saturday with the news that he was calling an election as soon as possible but would not seek another term.

Although he gave no time frame, his announcement indicated that Latin America's longest-serving elected leader - with one of the region's worst human-rights records - was preparing to leave after 10 years of holding on to power in the face of criticism.

Prime Minister Federico Salas denied that Peru was in a political vacuum, saying Fujimori was "calm" and the cabinet was "continuing, and will continue, to work."

But Salas told a television interviewer that the cabinet, which had been a "boat in a storm on the Atlantic" even before the announcement, was now "not in a storm but a hurricane."

He said he himself would not be a candidate for president.

The fresh political uncertainty was expected to weigh on Peru's sol currency, stocks and Brady bonds on Monday.

"Starting last night, Fujimori is a lame duck. This will put some uncertainty on the outlook for economic reform and the country's long-term privatization agenda," said Lacey Gallaher, director for Latin American economics at Credit Suisse First Boston in New York.

Peru's armed forces, which staged a coup in 1968 and ruled until 1980, gave no hint of how they would react. Military headquarters remained calm amid suspicion that Fujimori's surprise announcement was an effort to head off damaging divisions in the armed forces.

His address to the nation on Saturday was prompted by a scandal centering on allegations that his powerful spy chief - a man widely believed to have hand-picked many of the military's top brass and rallied them behind Fujimori - had bribed an opposition lawmaker.

Vladimiro Montesinos had turned Peru's national intelligence service (SIN) into the nation's most feared institution. Salas said that the former army captain, whose career has been shadowed by allegations of corruption and rights abuses, was still in Lima and had not been arrested but that an investigation was under way.

In telling Peru that the intelligence service was also being abolished, Fujimori apparently severed ties with his closest adviser and henchman for a decade. Analysts said he might have been seeking to safeguard his record of having rooted out terrorism and put Peru on the path to growth.

But they also speculated that Fujimori might have come to a deal with Montesinos and the army.

Military experts said some sections of the armed forces had tired of "constant meddling" from Montesinos. Respected former general Daniel Mora said the prospect of a military coup grew more distant as the hours and days passed, "but you can't rule anything out."

Vice President Francisco Tudela told a local television station that the new election should be preceded by a referendum on constitutional and electoral reforms to ensure fairness.

"We need a realistic, practical agenda, with three or four points to allow us to make progress, I think. One is necessary reforms to bring forward the elections, and the second is to renew the electoral system and install an adviser so that there aren't doubts about how well it works," he said.

He said a pre-vote referendum could be put to Peruvians in 60 to 90 days but did not give a date for the election.

Tudela, a former foreign minister and ambassador to the United Nations who is seen as having better democratic credentials than Fujimori, has been tipped as a possible interim leader if Peru installs a transitional government.

Another candidate from government ranks would be Congress Speaker Martha Hildebrandt. Peru's respected ombudsman, Jorge Santistevan, has indicated he would accept an interim post if he was the consensus choice. Fujimori has groomed no political heir.

Health Minister Alejandro Aguinaga has suggested that voting could take place in six to seven months, but some experts have said it would be impossible to organize inside a year.

The international community praised Fujimori for having grasped the nettle of democratic reform, but the way ahead looked difficult. The opposition agrees only that it wants no more of Fujimori.

Toledo said in Miami earlier that he had been surprised at "how, in the end, everything was so quick."

"But what is true is that this was a government that was rotten to the core, and many factors came together to finally bring it down," he said.

TITLE: New Line Leads SKA to 1st Victory
AUTHOR: By Christopher Hamilton
PUBLISHER: Special to The St. Petersburg Times
TEXT: SKA St. Petersburg picked up its first win of the season on Friday, defeating Torpedo Nizhny Novgorod 4-2 at the Yubileiny Sports Palace.


Head coach Rafail Ishmatov's decision to add 19-year-old winger Andrei She fer to Oleg Kuzmin and Viktor Be lya kov's forward line proved successful as the trio factored in all the team's scoring.

"This one line played well and won the game for us," SKA coach Alexander Zhukov said following the game. "We're really pleased, but we still have a lot to pull together."

Belyakov opened the scoring during an early power play. Kuzmin passed the puck through the slot to Belyakov who tipped it in past visiting goalie Mikhail Shukaev at 2:59 in the first period. 

At 7:19 Shefer made it 2-0, chipping the puck up into the left corner over Shukaev. Defenseman Alexei Danilov, who picked up the team's best player award, was credited with an assist.

Midway through the first, Torpedo capitalized on defensive mistakes and broke into an odd-man rush. Dmitry Altarev made a quick pass to Vitaly Chinakhov who beat SKA goalie Andrei Chernoskutov at 11:28. 

Maxim Ovchinnikov tied the game at two at 1:40 in the second. Shefer struck again at 9:39 in the second with a shot from the right side of the crease, putting SKA back in front with a 3-2 lead. 

With three minutes remaining in the second, Kuzmin capitalized on a two-man advantage. From deep in the corner, Belyakov fed the puck to Kuzmin who one-timed it past Shukaev. 

SKA held on in the third for the win. Chernoskutov made 16 saves in the final period and turned away a total of 30 shots.

TITLE: Little Lifter Is on Top of the World
AUTHOR: By Gideon Long
PUBLISHER: Reuters
TEXT: SYDNEY - Chinese weightlifter Yang Xia smashed three world records in a gripping battle with a former teammate to take the Olym pic gold medal in the women's 53 kg competition Monday.


Taiwan's Li Feng-Ying took silver and Winarni Slamet of Indonesia won bronze.

Li, who competed with Yang on a team in China's Hunan province before moving to Taiwan, set the first world record of the contest with a snatch of 98 kg but failed with her second effort of 100 kg.

Yang stepped up to the platform and showed how it was done, succeeding at 100 kg to eclipse Li's record immediately and become the first woman to snatch a three-figure weight.

From then on, the tiny Chinese woman was in control.

She lifted a world record 122.5 kg in her first attempt at the clean and jerk before upping the record to 125 kg with her second lift for a total, and a new overall world record, of 225 kg.

For a moment it seemed she would use her third lift to try to take the record higher still, but she declined, walking off the platform with a clenched fist held high.

Yang has now won gold at the Chinese Games, the Asian Games and the Olympics, and holds all the world records in her weight category.

"My future aim is to get the world championship so I can claim all the world titles for myself," she said.

She said she remained a friend of Li, who left China for Taiwan after marrying a Taiwanese.

"On the lifting platform, yes, we are com petitors but away from the platform we are friends," Yang said.

Li finished the competition with a total of 212.5 kg, 12.5 kg behind her Chinese rival.

Slamet's total was 202.5 kg.

"I'm happy with my performance ... I will work really hard for the next Games," the Indonesian said.

Romania's Marioara Munteanu, who took her place in the competition after the International Weight lifting Federation postponed a ban on Romanian lifters following a series of doping offenses, finished eighth.

She snatched 82.5 kg and jerked 97.5 for 180.0 kg.