SOURCE: The St. Petersburg Times
DATE: Issue #607 (0), Friday, September 29, 2000
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TITLE: Politics Mixes With Rights in Kids' Pamphlet
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Ten thousand St. Petersburg schoolchildren have been given a booklet explaining their basic rights as set out by a United Nations convention, courtesy of a number of local organizations including the local branch of the Unity faction.


But the book's authors have also seen fit to include a potted biography of the man "who is responsible for everything in your country" - Vladimir Putin. And they have included a short history of Unity and its head Boris Gryzlov, as well as Deputy Prime Minister for Social Affairs Valentina Mat vi yen ko and other Unity politicians.

The booklet sets out some of the fundamental articles of the 1989 United Nations Convention on the Rights of the Child, illustrating it with cartoons and explanatory aphorisms.

For example, Article 30, which is devoted to the protection of ethnic, linguistic and religious minorities, is in the booklet accompanied by a cartoon of monks holding icons, dancing Hare Krishnas and fakirs sitting on beds of nails, with the caption: "Molis Khristu ili mantry poi/Tvoi prava vsegda s toboi" ("Pray to Christ or sing a mantra, your rights are always with you").

But the booklet is spiced up with a few more patriotic pieces of information, such as what the Russian flag and the St. Petersburg coat of arms are.

There are also spaces in which children are encouraged to write to "The Big Bear" - the "Bear" being Unity's other name - with a message the party promises to pass on to Putin.

The president himself, "while nobody knew he would be president," was nevertheless - according to the booklet - known to all boys and girls as "a true friend in whom one could trust."

"When he grew up, he helped good people and really disliked bad ones," says the biography, illustrated will childhood pictures of the president.

It goes on to say that Putin often had to leave the country, but glosses over the fact that one of his main destinations was East Germany, and doesn't mention what he did there.

It does refer, however, to Putin's exploits as a fighter pilot, skier and frequenter of war zones "so that the war will stop." And Putin-watchers are also informed that the president doesn't smoke.

Simplifying the UN Convention on the Rights of the Child was the idea of Andrei Lopatin, an art teacher at a local shelter for homeless boys.

"There are 26 boys aged from seven to 18 years old in our shelter, and all of them have brutal and complicated life stories," said Lopatin. "Many of them used to live in sewer holes, some have been raped or beaten." 

"It was obvious that they had no idea of their rights, [but] when I read the UN convention, I saw that the language was too official for a child to understand," he said.

Together with Vladimir Borisov, the director of another children's shelter called Vospitatelny Dom, Lopatin began to "rewrite" the convention and gather drawings for its illustration. Unity officials attracted sponsorship from the Regions' Development fund, which aims to support various events of this type in the city, and which is headed by Viktor Yurakov, first deputy head of the local Unity branch.

Some local media compared the booklet to the kind of propaganda on Vladimir Lenin that was fed to children in the Communist era as a matter of course - from Lenin as head of the Society of Clean Plates to movements like the Pioneers.

Kommersant newspaper spoke of nostalgia for the series of books "When Lenin was little," and went on to say, "Future voters are slowly growing up, so let them know beforehand who their president is." Other local papers offered similarly ironic criticism.

"This is not a political advertisement," said Vladimir Ivchenko, vice president of Regions' Development. "This is our interpretation for children of the convention on children's rights - rights which we are responsible for."

"We had the best intentions in showing children their rights, their national symbols, and the president who is responsible for defending their rights," he added.

"In the United States, every child learns this sort of information and is proud of his country. Here, on the other hand, this aspect [of education] has been ignored as of late, and now we are facing problems at schools like drugs and violence." 

"But adults often mix up everything with politics."

Leonid Kesselman, a sociologist at the Russian Academy of Sciences, said that the inclusion of Putin's biography was a thinly veiled attempt to cozy up to the president. "But Putin is clever enough to see through it," he said.

But Ivchenko denied Unity's St. Petersburg faction was trying to draw attention to itself. "We weren't out to praise Putin - who doesn't know about this book, by the way - but we want him to fulfill his duties because the majority of the population voted for him."

"As for the Unity pages," Ivchenko said, "we wanted to point out to the children who can help them. Besides, we have nothing to be ashamed of in what we do."

"Yes, the president is very young in the pictures," said Unity spokesman Vadim Sergiyenko by telephone on Thursday. "But looking at him, children can see that Putin was also a child, and that they might become president one day, too." 

Yury Kozyrev, deputy director of school No. 80, where the book has been distributed among first-grade pupils, said that children weren't paying much attention to the page on the president. "Mostly, they just look at the colorful pictures," he said.

"But I think the people who created the book have the right to include a page on themselves."

TITLE: Russian Child Pornography Seized by Italian Authorities
PUBLISHER: The Associated Press
TEXT: ROME - Italian and Russian authorities investigating an international child pornography ring have arrested 11 people and seized thousands of videotapes and photographs, according to Italian police.


Investigators believe the suspects - eight Italians and three Russians - are part of a Russian-run gang specializing in the production and distribution of images showing children - some just 2-years-old - being sexually and physically abused.

The images were sold over the Internet to pedophiles based mostly in the United States, Germany and Italy.

Interfax cited Moscow police as saying the three Russians were arrested late last year in Moscow, where they had set up a studio for producing the pornographic materials. Investigators had confiscated lists of Internet addresses receiving the footage. But the three men were released this spring under amnesty.

Police spokesman Giuseppe Messa said the Italians were picked up in several cities Tuesday night. 

Italian state television showed some of the photos and graphic snippets of the videos during prime time news, provoking a swift and outraged response.

TITLE: U.S. Sues Harvard For Work In Russia
AUTHOR: By Sarah Karush
PUBLISHER: Staff Writer
TEXT: MOSCOW - The U.S. government filed a $120 million lawsuit Tuesday against Harvard University and two former Harvard employees who advised Russia on economic reform.


The suit marks the second chapter in a scandal that erupted in 1997 when the U.S. Agency for International Development suspended a contract with Harvard's Institute for International Development, accusing officials at the institute of having used their positions for personal gain.

In the suit, the U.S. Justice Department claims that the former institute employees, economics Professor Andrei Shleifer and legal expert Jonathan Hay, and their wives, Nancy Zimmerman and Elizabeth Hebert, used the U.S. aid program to promote their own investments in Russia.

HIID received $43 million from USAID between 1992 and 1997 to help Russia develop capital markets and re-write civil laws.

The suit alleges that Harvard failed to provide oversight.

"We're disappointed that the government has taken this course of action and we do not believe there was a failure of oversight," Harvard vice president and general counsel Anne Taylor was quoted as saying by The Associated Press.

She said Harvard didn't know anything about the personal dealings of the individuals involved.

"The government got everything it contracted for under this contract,'' she said.

Hay and Shleifer have denied allegations of misconduct all along. Their lawyers reiterated that position Tuesday.

"Jonathan Hay's actions were lawful and proper," AP quoted Hay's lawyer, David Zornow, as saying. "We are confident that, as the civil case unfolds, the court will confirm that the Harvard program significantly fostered Russian reform and that the government received its money's worth.''

When AID terminated the Harvard project, it claimed that Hay had "used resources financed by USAID to support the private investment activities" of Shleifer's wife, Zimmerman.

AID officials claimed that Hay had instructed the staff at the Institute for a Law-Based Economy, which was set up by HIID to advise the Russian government on implementing legal reform, to assist Zimmerman in her private investments.

AID also said that Hay bought GKO treasury bills despite regulations that forbid AID employees from investing in project countries. The agency also questioned whether Hebert used AID resources to set up a mutual fund.

Lloyd MacDonald of Boston, who is representing Hebert, told AP his client had "no relationship to the Harvard program or to the U.S. government.''

Harvard announced in January that it was closing the Institute for International Development, but said that the closure had nothing to do with the investigation by the Justice Department.

While they were advising Russia, Shleifer and Hay had close ties to then-First Deputy Prime Minister Anatoly Chubais, who rushed to their defense when HIID dismissed them in the wake of the scandal.

Critics of the Harvard team have said that it relied too heavily on Chubais, now the chief of national power grid UES, and the so-called St. Petersburg clan that he led.

Janine Wedel, author of a book on Western aid to post-communist Eastern European states, which devotes almost an entire chapter to the Harvard project, said by telephone from Pittsburgh, Pennsylvania on Tuesday that both the U.S. and Russian sides needed to examine further alleged corruption during the attempts at economic reform in the 1990s.

On the U.S. side, Treasury officials were responsible for the allocation of resources and were connected to the defendants, she said.

"Russians need to ask how did they allow policy to be dictated by a small clan, notably the Chubais clan, with huge input from U.S. Treasury officials and those connected with them?" Wedel said.

Chubais and other members of the St. Petersburg group - such as Finance Minister Alexei Kudrin and Economic Development and Trade Minister German Gref - hold influential posts in today's White House and Kremlin.

But, like his allies from Harvard, Chubais may be facing political trouble, analysts say.

A UES statement Monday states that Chubais will travel to Switzerland in late October to take a month-long course in management has fueled speculation that he may be in political trouble.

"The head of the national power company right at the start of the winter season heading to Switzerland to go to business school - it's improbable. Obviously, he's in some sort of trouble," said Jonas Bernstein, an analyst at the Jamestown Foundation.

The revival of the Harvard case came just six days after U.S. Republicans blasted U.S. President Bill Clinton's policy on Russia in a 209-page report.

One of the key points of the report, written by 12 Republican members of the House of Representatives Speaker's Advisory Group on Russia, is that the U.S. officials "ignore[ed] and suppress[ed] evidence of wrongdoing and failure by officials including Viktor Chernomyrdin and Anatoly Chubais, who had come to personify the [Clinton] administration's Russia policy."

TITLE: Angry Captains Scuttling Ships
AUTHOR: By Andrey Musatov
PUBLISHER: Special to The St. Petersburg Times
TEXT: The captains of six ships that have been detained in St. Petersburg since May 1999 began filling one section in each vessel with water at 11 p.m. on Thursday in order to bring their plight to the attention of City Hall. 


The vessels were originally detained by St. Petersburg customs authorities, on the order of their Vladivostok department, in May 1999 for non-payment of taxes. They have been held since then as legal disputes continue over their ownership. 

Filling the compartments with water will eventually cause the vessels to sink, two compartments being enough to do so according to one captain. Thursday's action meant that only a meter-and-a-half remains between the ships and the sea-bed. 

However, Ivan Okhtinsky, the first deputy captain of the St. Petersburg Sea Port, said on Thursday in a telephone interview that when the police and port inspector arrived on board the ships their captains "were not threatening to sink their vessels."

"Hell has broken loose with what's happening here," Okhtinsky said. "As a human being I can understand their situation, but they can't just sink ships in the middle of a port, and we will not let them. Moreover, I don't believe they can. It's physically impossible to sink the ships with [only] the five or six men who are on board each vessel."

The captains announced their willingness to sink the ships at a press conference last Friday. They also confirmed that the main reason for their protest is the lack of supplies on board the detained ships, and an unwillingness on the part of the local administration to relieve the captains of responsibility for the ships' safety. 

According to the ruling, made in May by a federal court in the Kirovsky region, the owners were told to pay all debts due to the ships' crews, as well as custom duties and legal fees. In the case of the owner's refusal, the ships were to be auctioned starting Aug. 7.

Meanwhile, the captains of the ships - ownership of which is disputed by Russian authorities and foreign investors - claimed that their crew members, totaling 120 sailors, are owed at least $1.5 million in wage arrears.

Following the court's ruling, the stand-off has been maintained, however, with the company paying no debts and the ships not yet being sold.

The plight of the ships is a part of long-running series of business disputes over the Far East's profitable shipping industry.

In a series of purchases since 1993, the six cargo ships were sold to Cypriot companies by Vostoktransflot, a now bankrupt firm, once Russia's second largest shipping company. However, the Cypriot companies ran into financial trouble as the purchased ships failed to bring in any revenues.

Since last year, about $1 million in fuel, provisions and legal fees for all six ships were paid by the Bank of Scotland in Edinburgh and the De Nationale Investeringbank in the Hague, whose $23.88 million loan to the Cypriots was arranged through Tufton Oceanic Limited, a shipping finance and investment company.

"Ever since Gov. Yevgeny Nazdratenko of [Primorye], supported by Viktor Ostapenko [former manager of Vostoktransflot] tried to seize these Cypriot-registered assets, and used their influence to persuade Baltic Customs and Federal Border Guard Service to detain the ships without any correct legal procedure, the situation of the vessels, and especially the Russian crews, has been made intolerable," said Alan McCarthy, the senior vice president of Tufton Oceanic Limited, in an e-mail response to questions on Thursday. 

He added that the captains have not informed the banks of their decision to sink the vessels, so the banks were in no position to comment, other than to say that they would never condone any action that was contrary to law.

"Since the detainment of the ships we have appealed to courts at all levels in St. Petersburg, but despite our efforts we have had no success," Nikolai Zhuravlev, the captain of the Anton Gurin said at last Friday's press conference.

"Following our initial detainment, none of the boats was officially withheld - the port simply wouldn't allow us to leave. Only in May 1999, were the ships officially detained."

"Neither the officials, nor the company are doing anything to secure the release of the ships and their crews. If nothing is done over the next few weeks, we will become a memorial to the dictatorship of the law," he added.

Zhuravlev also said that after filling the first sections of each vessel with water, the captains will wait a week to see what, if any, results are brought about before filling the second compartment. The captains maintain that this would be enough for the ships to overturn or sink.

"The filling of one compartment is the warning signal, which will cause no harm to ships or the gulf. However, I am amazed that we survived last winter, without fuel for emergency diesel generators when the outside temperature was 15 degrees below zero. The ships are sure to sink this winter anyway unless something is done," Zhuravlev said.

He added that if the vessels are eventually sunk by the captains, they will "wash their hands before they put the handcuffs on," as according to Russian law they will be "responsible for the damage of seized property."

"But in prison we will at least know what we are guilty of and when we'll get out. There will be food in jail too," Zhuravlev said.

"We are not blackmailing the city, so sleep calmly, St. Petersburg. I will not sink my vessel - it will sink by itself. We'll wait for winter and then we'll go home then," Alexander Krivosheyev, the captain of the Vasily Polischuk, said in a live broadcast on Petersburg Television on Thursday evening. 

"Gov. Nazdratenko's letter to Gov. Yakovlev of September 1999, in which he blatantly asks Yakov lev effectively to use force to register the ships under the Russian flag illegally, highlights very clearly why Western creditors find it difficult to have faith in the Russian legal system," McCarthy said.

TITLE: Book Stores Stage Strike Over Rent Hike
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: Buying a book in downtown St. Petersburg became a lot more difficult for an hour on Tuesday, as book stores went on strike to protest a City Hall initiative that would effectively raise their rents.


Dom Knigi, the Writers' Bookstore, and the Iskusstvo rare book shop were among those closing their doors from 4 p.m. to 5 p.m., as leading city writers and representatives of the book industry gathered on the streets to voice their opposition to the move.

The initiative came to light last week when the Legislative Assembly received a draft law from St. Petersburg's governor, Vladimir Yakovlev, which would abolish financial privileges for cultural, social and non-profit organizations renting municipal territory in the city center.

Despite a last-minute amendment reducing the law's impact, it was rejected by the assembly at Wednesday's session. However, leading members of the city's cultural community say they are still worried by future Smolny policy.

According to the law as it stands, the organizations in question only pay one- tenth of the real cost of real estate owned by City Hall. The amended law would have forced organizations to pay the full cost if the property's value was more than $75 per square meter a month.

"[If the law was passed], we would have to leave our premises and close our company," said Olga Orlova, a lawyer for the Center for the Development of Non-Commercial Organizations, on Wednesday.

The center is located on Malaya Konyushennaya Ul., and pays $9,300 a year for its 350 square meters.

"We do not have the kind of money [to pay two times this amount,]," Orlova said. "It would mean the city would have to take on our consultancy work."

Galina Uzdina, a spokeswoman for the City Property Committee, said that the aim of the law was to increase budget income from tenants in the city center.

"Some of these companies occupy huge premises and pay kopeks," she said.

"It is standard practice in every European country to give this kind of space to businesses, in order to increase budget income."

Uzdina said that out of the approximately 18,000 companies renting space from City Hall, about 18 percent were given financial privileges - an annual loss of 2.5 billion rubles ($89 million), according to the Property Committee.

Uzdina also said that over 70 percent of organizations calling themselves cultural, social or non-profit were in fact fakes who had registered as such specifically to get financial breaks. She did not say which organizations these were.

Leonid Romankov, a local lawmaker who heads the Legislative Assembly committee on culture and education, said that the attempt to raise rents was "clumsy." 

He also said that the rejected law was illogical, since the Property Committee had introduced another amendment lowering rents for cafes and restaurants.

He said that information given to him by the Property Committee pointed to a loss in this case of 4.5 billion rubles.

"It seems to me that Yakovlev would like in this way to pay back organizations who financed his election campaign," Romankov said in an interview on Wednesday.

TITLE: IN BRIEF
TEXT: Pope Charged


MOSCOW (AP) - Prosecutors have officially charged U.S. businessman Edmond Pope with espionage and sent his case to court, officials said Wednesday.

Officials have said the trial would take place in October, though no date has been set. Last week, the court turned down Pope's appeal for release on health grounds. 

The Federal Security Service arrested Pope on April 5, saying he had illegally bought plans for a torpedo. Pope denies doing anything illegal.



'Calm' Cuts to Army


MOSCOW (AP) - President Vla di mir Putin says Russia won't make hasty cuts in its bloated armed forces as earlier announced - but warned that redundant forces were wasting tax money. 

"There will be no massive, wholesale reductions of Russian armed forces," Putin said Wednesday at a meeting of the advisory Security Council. "Measured, calm and smooth work is needed to optimize the country's military machine." 

Earlier this month, Defense Minister Igor Sergeyev announced plans to cut the ministry's 1.2-million-strong Defense Ministry by 350,000 troops. But Putin said that "objections" had been registered from military commanders, and more time was needed for reforms. 



Afghan Security


MOSCOW (Reuters) - Interior ministers of Russia, Pakistan, Uzbekistan and Tajikistan will meet soon to weigh security fears caused by instability in Afghanistan, an aide to Russian President Vladimir Putin said on Thursday.

Sergei Yastrzhembsky said the meeting was arranged during a visit this week to Islamabad. 

Yastrzhembsky, quoted by his spokesman, said Russia and ex-Soviet Central Asian states were concerned that Afghanistan had increasingly become a source of drug trafficking and a training base for radical Islamist fighters. But he said he did not discuss recent military advances by Afghanistan's Taleban forces which took them up to the border of Tajikistan and sent a wave of fear rippling through the region. 



Chechnya Lecture 


STRASBOURG, France (Reuters) - The Council of Europe's parliamentary assembly said Thursday that Russia must improve human rights in Chechnya if its voting rights in the assembly are to be restored next January.

The assembly passed a resolution voicing "hopes that progress [by January] are convincing enough to allow Russia to fully enjoy its rights." The assembly stripped Russia of its voting rights last April over allegations of massacres and indiscriminate bombing in Russia's year-old military campaign in the Caucasus territory.



Election Warning


MOSCOW (AP) - Russia will not join Western governments in their call for Yugoslav President Slobodan Milosevic to step down after Sunday's election, Russia's foreign minister said Thursday. 

"Russia won't pressure anyone in Yugo slavia," Foreign Minister Igor Ivanov said. "This is an internal affair of Yugoslavia."

Many foreign leaders say Milosevic lost outright to challenger Vojislav Kostunica, but Milosevic has defied calls to step down. While Western countries have dismissed the talk of a runoff and urged Milosevic to concede defeat, Moscow has warned other governments to stay out of Yugoslav affairs. 

Russia opposed the NATO-led bombing campaign against Yugo slavia last year, and has repeatedly welcomed Yugoslav officials to Mos cow. But it has shown signs of trying to distance itself from Milosevic in recent months.

TITLE: Media-MOST Faces Further Charges
AUTHOR: By Peter Graff
PUBLISHER: Reuters
TEXT: MOSCOW - Prosecutors launched a criminal embezzlement case on Thursday against the heads of companies belonging to Media-MOST. 


The charges raise the stake in a quarrel between the Media-MOST group and its creditor, state-dominated natural gas monopoly Gazprom, which has led to doubts over President Vla di mir Putin's commitment to free speech. 

A spokeswoman at the Prosecutor General's Office confirmed the case had been launched but declined to name the individuals concerned. 

Among the heads of companies within Media-MOST are some of the country's most respected journalists. Media-MOST spokesman Dmitry Ostalsky said it was not yet clear whether they were included. 

Media-MOST says it has been targeted by a Kremlin determined to take control of its media properties. 

"Prosecutors have demonstrated their adherence to Mr. Putin's promise not to interfere in a matter between two companies," Ostalsky said. 

Gazprom's media arm has accused Media-MOST's managers of hiding assets abroad to shield the group from creditors. Media-MOST denies this. 

Ostalsky said the group's boss, Vla di mir Gusinsky, had been summoned to answer questions from prosecutors Friday, but would remain abroad, afraid of arrest if he returned to Russia. 

"What do you think? A hostage of racketeers would voluntarily return to captivity?" Ostalsky said. 

Gusinsky left the country in July when a previous criminal case was dropped six days after he agreed to sell out to Gazprom in a secret deal. 

Gusinsky has since repudiated that deal, saying he signed it "at gun point."

It included language offering Gusinsky protection from prosecution, and was signed by Press Minister Mikhail Lesin. Gu sinsky says that proves the state was behind it. 

Earlier on Thursday, Prime Minister Mikhail Kasyanov delivered a sharp public rebuke to Lesin for getting involved.

He told a cabinet meeting Lesin's signature had wrongly given "a political color to this conflict."

"I'd like to point out once more that such actions are unacceptable," Kasyanov said. "You've been a minister more than a month. You should know by now that public service, and work as a federal minister in particular, comes with restrictions." 

But the dressing-down, while stinging in tone, fell short of dismissal and will therefore probably not satisfy critics who have said that Lesin should lose his post over the affair. 

"This seems to be the final word on the matter," a correspondent for RTR television said. "From this we can conclude that Lesin will remain in the government."

TITLE: Norwegians To Retrieve Kursk Sailors
PUBLISHER: The Associated Press
TEXT: MOSCOW - Russia will hire a Norwegian company to help retrieve the remains of 118 sailors from the sunken nuclear submarine the Kursk, a top government official said Wednesday. 


Deputy Prime Minister Ilya Klebanov, who is overseeing the salvage mission, told lawmakers that a contract would be initialed Saturday with a Norwegian company, which he did not name. 

Klebanov said the retrieval work would begin before Oct. 10, and could be finished next month. But he cautioned that the operation would be complex, "because sections one through five [of the submarine] are just heaps of metal," the ITAR-Tass news agency reported. 

While Klebanov wouldn't name the company that will help Russia do the work, he said it was not Norway's Stolt Offshore. A deal with Stolt had been expected, but reportedly fell through over the amount of the fee. 

According to the newspaper Kommersant, Stolt Offshore wanted $12 million but Russia offered $9 million. 

Russian divers don't have the equipment or the training to conduct the operation alone. 

The Kursk was shattered by an explosion and sank in the Barents Sea during exercises Aug. 12. The cause of the accident has not been determined. 

The Russian ship Mstislav Kel dysh arrived at the scene of the disaster on Tuesday, carrying Mir deepwater capsules to examine the submarine. The capsules have been used previously to inspect the Titanic.

TITLE: Police Ease Regulations for Expat Drivers
AUTHOR: By Ana Uzelac
PUBLISHER: Staff Writer
TEXT: MOSCOW - Expatriates living in Russia have regained their right to drive using an international driving permit or a notarized translation of their national license, traffic police officials said Wednesday.


"As of mid-September, foreigners living in Russia can drive any vehicle with their international driver's license, regardless of the type of license plates it has," said Dmitry Kirillov, deputy head of the department in charge of licensing at the state traffic inspectorate, or GIBDD.

A government decree signed Jan. 1 limited the use of international permits to cars registered outside Russia. This category was expanded in June to include foreign representative office and diplomatic cars with yellow and red plates.

But expats driving locally registered cars with standard white plates were expected to have Russian licenses, obtained only after passing a complicated written exam.

Kirillov confirmed that foreigners can now drive those cars with their international permits or national licenses, provided they "conform to the UN convention on international traffic." If not, their owners should have a notarized translation of their licenses, he explained.

Over the last nine months, expats have been stopped regularly by the GIBDD and many have had their cars impounded.

The article limiting the use of international or national driver's licenses by foreigners was annulled Sept. 8 by a new government decree, No. 670.

However, traffic inspectors do not appear to be aware of the changes and continue to impose penalties on expatriate drivers for driving without a Russian license, said Bruce Bean, a partner with the Moscow office of the law firm Clifford Chance Puender.

"In practice, it will take a few weeks for the new rules to be fully functional," Bean said in an e-mail interview Wednesday. If you are stopped, he advised, pay the fine and appeal it in court.

TITLE: Palace To Be Restored as President's Retreat
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: The Kremlin is pressing ahead with plans to turn a palace near St. Petersburg into a seaside residence for President Vladimir Putin, correspondence between the presidential administration and City Hall shows.


A letter sent by the Kremlin earlier this month asked the city administration for an evaluation of the condition of the Konstantinovsky Palace, located in the suburb of Strelna, south of the city.

It follows a letter sent to the City Committee for the State Protection of Architectural Monuments in June that first mentioned the idea of a presidential residence in the area to the local administration.

The cost of renovating the palace would come to about $40 million, according to city officials. It is not yet known who would carry out the renovation, but the price would apparently be met by the federal government. Renovation would take five years.

"At first [the Kremlin] wanted to use the Alexandrisky Palace near Petergof]," Irina Malyavkina, spokeswoman for KGIOP, said in a telephone interview on Thursday, "but we said it would be very expensive to renovate ... and that the Konstantinovsky Palace would be much cheaper, and they agreed."

Officials in the presidential administration could not be reached for comment.

The Konstantinovsky Palace was built in 1720 and designed by Italian architects Niccolo Michetty and Bartolomeo Rastrelli. It was given by Tsar Paul I as a present to his son, the Grand Duke Konstantin, who turned the palace into an ideal summer country residence.

Nazi forces looted and damaged the palace during World War II, and no major repairs have been undertaken since, even though the palace was used as a naval academy for four decades.

In 1993, a private organization called the Regional Organization of Lenin grad Rescuers (ROLS) signed an agreement with City Hall, promising to find investors to renovate the palace. KGIOP filed a suit with a city court last month, however, accusing the organization of not having fulfilled its obligations.

On Tuesday, the court postponed a final ruling on the case.

"They [ROLS] rented out space in the palace [but] haven't found investors," said Malyavkina. "But this is hard, because the building is listed as a federal monument," complicating questions of ownership, she said. State law allows the rental but not the privatization of federal monuments - buildings and other objects of major cultural significance.

Anton Televich, a ROLS spokes man, said Thursday that the organization had proposed some investors to City Hall, but that they had been turned down.

Malyavkina said that ROLS had indeed put some names forward, such as an aviation company called Peter the First - which reportedly wanted to turn the palace into an entertainment center complete with casino - but that the investment plans had collapsed because there were "no further developments."

Televich said it would take far more than five years to renovate the Konstantinovsky Palace. "First the building has to be reconstructed, then the interiors restored," he said. "This is very difficult, protracted and expensive work. Then the necessary infrastructure for the president's requirements has to be set up."

"If this is going to be a presidential residence, it won't be [ready] for Putin."

KGIOP said that the renovation plans called for the restoration of the palace's park and of its nearby harbor, to make the latter suitable for yachts and small boats.

Malyavkina said that the city would pay for a part of the assessment of the palace's condition, but added that it could not afford the renovation itself.

TITLE: Tuleyev Says Tikhonov Is Not Guilty
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW - Kemerovo regional Gov. Aman Tuleyev said Wednesday that he doubted former Olympic biathlon champion Alexander Tikhonov had anything to do with an alleged plot to kill him and pointed the finger at the head of metal holding MIKOM.


Tikhonov, a close friend of MIKOM head Mikhail Zhivilo, was arrested Aug. 8 in connection with what investigators say was a plot to kill the governor. Tikhonov was freed Sunday, and Tuleyev said he personally asked prosecutors to release him.

MIKOM has been in conflict with Tuleyev's administration and was effectively driven out of the Western Siberian region in March.

Speaking Tuesday at a news conference in Novosibirsk, Tikhonov said that investigators pressured him to give evidence against Zhivilo. He suggested that investigators may try to get rid of him as the main witness defending Zhi vilo's innocence.

Tuleyev said Wednesday that Tikhonov's relation to the alleged murder plot is doubtful.

"I hold Tikhonov in the highest regard possible. I do not know him at all," Tuleyev said on NTV television.

"I would not want everything that is being said about him now to be confirmed," he said, adding, however, that it was no secret that many sports figures have become involved in the "criminal world."

The governor said Zhivilo should be the focus of the police investigation. "He [Zhivilo] is the main culprit. He needs to be looked into," Tuleyev said.

Zhivilo's whereabouts were unknown. Even MIKOM spokesman Vla di mir Kartashkov said he did not know where he was.

"I don't have any kind of relationship with Zhivilo. I work for him," Kartashkov said.

Zhivilo had also previously put himself forward as a candidate for the vacant Duma seat in St. Petersburg's district No. 209.

Tikhonov said that one reason for his arrest appeared to be his support for former Novosibirsk mayor Viktor Tolokonsky in last December's gubernatorial elections in Novosibirsk. He said one investigator told him that he should have thought about whom to support, "a Russian Ivan or the Jews." Tolokonsky defeated former Deputy Economics Minister Ivan Starikov.

Tikhonov said Tuesday he wants his case to go to the Prosecutor General's Office since the investigation involves a governor, who is a federal official. Until then, he said, he plans to refuse to cooperate with local investigators.

TITLE: Military, FSB Seize Top Chechen Rebel
AUTHOR: By Yuri Bagrov
PUBLISHER: The Associated Press
TEXT: NAZRAN, Ingushetia - Acting on a tip, Russian military and secret services captured a Chechen rebel commander in southwestern Chechnya, officials said on Thursday. 


Mumadi Saidayev, a rebel leader with close ties to Chechen President Aslan Maskhadov, was seized several days ago by army and Federal Security Service operatives, said an assistant to Sergei Yastrzhembsky, the Kremlin's chief spokesman on Chechnya. 

Another official, in the pro-Russian Chechen administration in Gudermes, said that Saidayev had been detained three days ago near the village of Gekhi, in the southwestern Urus-Martan region. 

The Gudermes official, who asked not to be named, said Chechen villagers had alerted the military that Saidayev was in the area. He said Interior Ministry troops had seized the commander and passed him on to the FSB. 

"A reconnaissance team captured Saidayev, who had on nothing but his underwear," Lieut. Gen. Valery Baranov, a Russian commander, was quoted as saying by the Interfax news agency. "His bodyguards did not have time to react." 

Russian television on Wednesday broadcast footage of a plump man in green fatigues, his eyes covered with a white blindfold, who the government claimed was Saidayev. There was no immediate confirmation of his detention from the rebel side. 

Saidayev headed Maskhadov's campaign team for the 1997 Chechen presidential elections. He became leader of the Chechen Security Council in 1999 and then the rebel forces' chief of staff. 

It was not clear where Saidayev was being held and whether he had been brought to Moscow. 

The military said on Thursday that it had captured a second field commander who was close to Maskhadov, by the name of Dasayev, Interfax reported. But that claim could not be confirmed. 

Russian officials have said repeatedly that they would try to weaken the rebels by capturing their commanders, and a few have been taken. But the most prominent leaders, such as Mask ha dov and field commanders Sha mil Basayev and Khattab, who goes by one name only, remain at large. 

Russia claims that Saidayev, who was once a major in the Soviet army, is a reconnaissance expert who oversaw money transfers to Chechen rebels from abroad. 

Saidayev played a prominent role in the previous 1994-96 Chechen War, which ended with a Russian troop withdrawal. Russian forces returned a year ago, after a series of rebel raids on the neighboring republic of Dagestan and four apartment bombings that killed some 300 people. 

Although federal forces have taken two-thirds of the republic, Russian commanders have not been willing to take the risk of a major ground offensive in the south. 

Federal forces have also faced nightly attacks in other Russian-controlled regions. Over the past 24 hours, two Russian servicemen were killed in an attack in the Chechen capital Grozny, and a Russian border guard was wounded in the Itum-Kale region of southern Chechnya, near the Georgian border, the Gudermes official said.

TITLE: Local Artists Entertain Mental Patients
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: A group of local artists and musicians went on another mercy mission this week, with a performance at a psychiatric hospital to follow up the exhibition and concert they brought to a women's detention center in March.


Sculptor Andrei Rozanov, artists Igor Churilov and Vitaly Buryanin and pianist Polina Buryanina turned up at St. Petersburg Psychiatric Hospital No. 3 on Wednesday to display their work to almost 200 patients.

"Our goal here is the same as it was at the female detention center - to draw public attention to the needs of those who have found themselves [in this hospital]," said Yelena Churilova, an art historian at the Academy of Arts, and the organizer of the two projects.

"This time, because we received support from Goethe Institute, we dedicated the event to the memory of the von Oldenburg family, a family of German princes who were famous for their charitable activities in the fields of health care, culture and education in pre-revolutionary Russia." 

Wilfried Eckstein, director of the Goethe Institute, said that those patients who were allowed to leave the hospital occasionally were invited by the institute to attend a concert given by singers from the Mariinsky Theater at a nearby music school.

"We have also invited them to a performance of a German street circus, called Upsala," said Eckstein. He added that the Goethe Institute would be offering its collection of silent films to be shown at the hospital.

Such cultural events are rare at the hospital, where twice-weekly film screenings make up most of the patients' entertainment.

"In the Soviet era, we could afford regular performances organized by Lenkonzert, the city's major state-run concert organization," said Vladimir Agishev, the hospital's chief doctor. 

"Now, however, it is only students from the St. Petersburg State Conservatory [where Buryanina studies] who perform here. They come several times a year."

There are seven psychiatric clinics in St. Petersburg, compared to 15 before the 1917 revolution. Not a single psychiatric hospital was built in St. Petersburg in the Soviet era. "Our hospital was built 130 years ago, and was the last clinic constructed specifically for psychiatric patients," Agishev said. 

Like all of the city's psychiatric institutions, hospital No. 3 suffers from severe overcrowding and underfunding. Drugs and alcohol are the main contributors to the rising number of the city's mentally ill. Hospital No. 3 houses over 2,000 patients - twice more than was intended - and a nurse's salary is typically 400 rubles a month ($14.30), while a doctor might get 600 rubles.

"We have to put beds in the corridor and the recreation rooms, which is against the rules," Agishev said. "We even removed bedside tables from rooms so that we could squeeze more beds in." 

Agishev added that violence and attacks on staff was also an increasing problem. 

"We would like to open rooms for music and art therapy, but we just don't have the room," he said.

In the meantime, the hospital has to rely on Churilova and her team to brighten up their cultural lives, and many of the patients went up to thank the performers personally.

"Thank you so much for doing this," said one. 'The music was beautiful, [and] my late husband was an artist, so this exhibition is very close to my heart."

TITLE: Kazak Tour Agents Facing Jail for Olympic Visa Scam
AUTHOR: By Simon Saradzhyan
PUBLISHER: Staff Writer
TEXT: MOSCOW - Two travel agents in Ka zakstan are facing up to four years' jail time for an elaborate documents fraud scheme that helped procure U.S. visas for 25 men and women - including a 63-year-old - posing as competitors in an American field hockey tournament. 


Vladislav Semyonov and Yevgeny Gorskikh of the ATL Group travel agency were arrested in late August and charged with document fraud after their scheme was discovered by detectives from the Kazak National Security Committee. 

Twenty-five passports were also seized, complete with their ill-gotten U.S. visas - all issued to people the ATL Group had passed off as professional athletes traveling to the Big Apple Hockey Festival scheduled for this month in New York. 

According to Azat Amirgaliyev, a spokesman for the Almaty security committee branch, the city's U.S. Embassy consular department had apparently noticed nothing strange about the applications - even though one of the travelers was 63 years old and clearly unable to compete in a professional sports tournament. 

"[The consular officials] might have thought he was a team masseur or something," Amirgaliyev said in a phone interview from Almaty. 

Khamida Isayeva, reached in Almaty at the embassy's press section, said she had "heard about" the scam, but refused to comment on why her colleagues issued visas to the self-styled hockey players even though one was 63 and another 45. 

Amirgaliyev said he could not help but admire the sophisticated lengths that Semyonov and Gorskikh had gone to in order to secure visas for their clients. 

Having learned about the tournament, the two agents allegedly forged a letter from the Kazak Field Hockey Federation and sent it to the event organizers in New York, requesting permission to register two Kazak teams - one men's and one women's - to the competition. 

The New York Islanders Field Hockey Association then responded to the Kazaks with an official letter which said that, provided they pay their own travel expenses, both teams were welcome to participate in what the organization's Web site describes as a gathering of "top players" from the United States, India, Germany, England and Canada. 

Semyonov and Gorskikh used the letter to apply for U.S. entry visas after dividing their 25 clients - who paid ATL Group between $1,000 and $1,500 a piece - into men's and women's teams, Amirgaliyev said. 

The agents' inventiveness didn't end there. Before applying for the U.S. visas, Semyonov and Gorskikh had obtained visas to India and the so-called Schengen group of European nations for their clients as well. 

They then faked Kazak border service stamps and stamped all 25 passports, hoping to create the false impression that the "hockey players" were seasoned travelers who had already proven their willingness to return home without seeking refugee status abroad. 

Amirgaliyev said the Kazak border stamps were forged so skilfully that either of the two "teams" would have had no problem leaving Kazakstan for the United States had the scheme gone undetected. 

All 25 people, he added, had in fact been planning to settle in the U.S. "in search of a better life." 

Although he would not reveal how and when his committee learned about the visa scam, Amirgaliyev said they immediately notified the U.S. Embassy. 

Isayeva declined to comment on whether the embassy was stepping up security measures in its processing of visa applications. She did note, however, that something had been published in the press saying that the embassy was "grateful" for the committee's vigilance in rooting out the agents' forgery scheme. 

Semyonov and Gorskikh have been released pending trial on the condition that they not travel outside of Almaty. The pair faces up to four years in prison if convicted. 

No charges will be filed against the "hockey players," Amirgaliyev said.

"These people paid lots of money to get their visas and they did not care whether they would be hockey players or sumo wrestlers," he said. "You know how hard it is to get a U.S. visa. We can't blame them."

TITLE: Aeroflot Fights Long-Haul Smoking Ban
PUBLISHER: Reuters
TEXT: MOSCOW - The health concerns of the anti-smoking U.S. public have gone too far for Aeroflot, the flagship airline of a country with one of the highest rates of tobacco use in the world.


The carrier said Wednesday it wanted to overturn a prohibition on smoking on its flights to the United States, condemning the ban as an infringement of its national sovereignty.

"The rules contradict the norms and principles of international law," the carrier said in the statement. "It can also be seen as an intrusion into the economic activities of foreign companies outside the United States."

Aeroflot said it held talks on the issue at the U.S. State Department last week, but without a final result.

U.S. President Bill Clinton signed the ban on April 5.

Russia's population of 145 million has one of the highest rates of tobacco use in the world. More than 50 percent of men and 25 percent of women smoke, according to the Health Ministry.

Aeroflot, one of the few major international airlines to maintain smoking zones, operates flights on Western aircraft to several U.S. destinations. The airline complains that most of its U.S. routes turn no profit.

Aeroflot last year banned smoking on flights under two hours in an effort to meet the standards of major world carriers.

TITLE: Samson Shareholders Back Ouster of General Director
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Yury Savelyev was officially removed as general director at St. Petersburg's Samson food processing concern at an extraordinary shareholders meeting held Monday.


A majority of the shareholders at the meeting voted for the executive's ouster. The vote against Savelyev actually represented 43 percent of all shares in the company, as shareholders representing 60 percent of all stock attended. Savelyev's dismissal was the only question on the agenda.

The vote itself was really just a formality, however, as Savelyev had been effectively relieved of his duties on July 20, when Samson's board of directors suspended him from his post, citing "improper economic policies," Interfax reported. 

At the end of 1999, Yuri Saveljev was one of the architects of a plan that brought Moscow Industrial Bank (MIB) into the rank of Samson shareholders. At the time the company was reeling from the negative economic effects of Russia's August 1998 economic crisis. MIB bought a 12 percent stake in the enterprise shares and provided several long-term credits for about 300 million rubles (about $10.5 million at the time).

Savelyev also approved the bank's suggestions to restructure the giant company into seven smaller, more specialized entities. However, when the process was completed, MIB focused its blame for the decay in the company's economic condition on Savelyev.

An earlier extraordinary session of shareholders was called for Aug. 28 to confirm Savelyev's dismissal and to approve the property bargains of the enterprise. However, the session was canceled because bankruptcy hearings concerning Samson were still underway in the Arbitration Court of St. Petersburg. The court began the proceedings in late July and had appointed Andrei Gulyayev, a representative of the Federal service for Financial Restructuring and Bankruptcy (FSFO).

Alexander Utevsky, head of the Northwest region branch of the FSFO, refused to comment on the objectivity of Savelyev's dismissal. 

"However, in my experience, when an enterprise gets in such a precarious situation, the director is the first person to be blamed," he said.

Meanwhile, the MIB does not seem to be in any hurry to appoint a new director for the enterprise, as a large number of questions still hang over the company. At present, Yunus Arsamakov, a relative of MIB president Abubakar Arsamakov, occupies the position of acting director.

The FSFO's investigations into the situation at Samson are continuing and, for the meantime, MIB has been ordered to return the assets moved to the seven daughter companies back to the parent company. Samson owes about 450 million rubles ($16.2 million) to about 600 different creditors, prompting the FSFO to request that the company's assets be kept together with the parent company.

TITLE: Gref Urges Caution on Economic Recovery
AUTHOR: By Jim Heintz
PUBLISHER: The Associated Press
TEXT: MOSCOW - Despite the nation's economic recovery, Economic Development and Trade Minister German Gref said Wednesday that some sectors remain disappointing and warned that the economy could still be undermined by an oil crisis.


Speaking to the Federation Council, the upper chamber of parliament, Gref cited several positive economic indicators: industrial output in the first eight months of the year was 10 percent higher than for the same period in 1999, investments were up more than 17 percent, and the gross domestic product was 7.3 percent higher.

He said real incomes were 8.8 percent higher than for the same period a year ago and inflation for the period was 11.5 percent - a high figure, but far lower than the 84 percent annual inflation that afflicted the country in the economic crisis year of 1998.

"The economic situation is shaping up favorably to continue ongoing reforms," Interfax quoted Gref as saying.

However, Gref also noted that there was little growth in investment in high-technology industries, which he identified as one of the high-priority areas for the government's economic program in the next four years.

Gref was the lead architect of President Vladimir Putin's economic program.

Much of the nation's recovery since the 1998 financial crisis has been driven by high world prices for oil, the country's top export commodity.

Gref warned legislators that oil prices could fall and cautioned them against drafting budgets that are based on projections of income that are not certain.

Some lawmakers in the lower house of parliament, the State Duma, have complained that the government's planned 2001 budget is too tight-fisted. They say the government is overly cautious in thinking oil prices will average out to $21 per barrel next year, down from about $30 now.

Gref also warned that the current high oil prices could cause a global economic crisis whose consequences Russia could not escape, radio station Ekho Moskvy reported.

In order to boost Russia's economic progress, Gref said, the country's unwieldy and inefficient national monopolies such as the railroad system and the electricity grid must be revamped.

There is no intention of breaking up the monopolies, "but they must not continue in their present state," Interfax quoted him as saying.

Gref also said the nation is losing a potential $2 billion to $3 billion a year by not being a member of the World Trade Organization and he called for increased efforts to gain admission. Membership would lower many trade barriers for Russia with the 138 countries that are now in the WTO.

TITLE: Nokia HQ Moves to Petersburg
AUTHOR: By Andrey Musatov
PUBLISHER: Special to The St. Petersburg Times
TEXT: Nokia Network Russia has announced a change in their corporate priorities, with greater emphasis to be placed on the St. Petersburg cellular telephone systems market.


A company press release issued last week said that their headquarters will be moved from Moscow to St. Petersburg, allowing the firm to pursue more effectively the development of their business in Russia's Northwest region.

Nokia Network Russia sells equipment to cell phone service providers in Russia, and its two largest customers in the region are North-West GSM and Del ta Telecom, both in St. Petersburg. 

"The Nokia Network staff will move their offices from Moscow to St. Petersburg, while Moscow-based jobs will be found for workers remaining in the capital," Nokia Network general director Veli Laine said in the release. "These changes will not affect other Nokia activities in Russia. Nokia Mobile Phones, which works as a distributor in the Russian market will continue its work in Moscow."

Analysts said that the company's shift to St. Petersburg may have been more the result of necessity than choice.

According to business daily Vedomosti, cellular operators providing services in Moscow already use equipment purchased from Nokia competitors - VimpelCom uses equipment purchased from Alcatel, Moscow Telephone Systems (MTS) from Motorola and Siemens and Moscow Cellular Systems from Ericsson. 

"Nokia's hopes for establishing a place for themselves in the capital's telecoms equipment market were dashed when Ericsson signed a contract with new Moscow cellular operator Sonic Duo, which is a daughter company of Sonera. According to the contract, Ericsson will supply equipment to Sonic Duo worth $100 million," Vedomosti reports. 

Meanwhile, Anton Pogrebinsky, telecoms analyst at J'son and Partners, said the value of the contract will probably reach about $300 million.

"It makes more sense to me that Nokia is leaving because they didn't get the [Sonic Duo] contract," Pogrebinsky said. "And, since their plans to pick up that revenue fell through, Nokia is trying to reduce it's expenditures by moving closer to its basic clients."

TITLE: Russian Software Specialists Prefer to Stay in Homeland
AUTHOR: By Andrey Musatov
PUBLISHER: Special to The St. Petersburg Times
TEXT: According to a report from the McKinsey Global Institute, Russia's offshore programming sector (involving programming specialists in Russia who design software under contract with foreign companies) is growing at a rate of 50 to 60 percent per year. And, although this growth concerns what is, for now, a very small base, the authors of the report say that this industry should be able to obtain the requisite track record and international certification to become a greater force within the world offshore programming market.


Ten years ago, most Russian programmers were anxious to emigrate abroad for better pay and living standards. But now, despite the high demand for programmers in Europe and the United States, many more Russian programmers are interested in remaining in Russia to work and live.

"Those programmers, my friends, who wanted to live in the United States have achieved these goals - they live and work there," said Vladimir Shmakov, supervisor of the Petersburg branch of secretmaker ag, a company which develops Internet security software. "America was where we could find absolutely everything we needed to be successful in life and in work."

"However, after living in the United States for half a year, it was difficult for me to adjust to the differences in the culture there," Shma kov added. "I felt bored, and missed my friends and family. That's why I decided not to extend my contract there."

"Russians feel a strong link to their national ideas and traditions," Vitaly Me leshko, a programmer at secretmaker ag, said. "For Russians, more so than for people from other cultures, these considerations are often decisive."

According to the McKinsey Institute report, the demand for foreign Internet technologies specialists in the United States is 850,000 people. Germany recently increased its quotas to admit 30,000 IT specialists per year (the annual shortage is estimated at 55,000 specialists), and France is experiencing an annual skills gap of 13,000 IT graduates and technicians. 

"It's much cheaper and quicker [with the same high level of quality] to outsource software development to offshore suppliers where highly skilled resources are abundant," the report says. "IBM, General Electric, Boeing, Motorola, Intel SAP and Microsoft have already outscored software development to Russia, and profit from its intellectual capacity."

Secretmaker ag, whose head office is based in Switzerland, opened a branch in St. Petersburg about a month ago. According to Roland Stach, general director of secretmaker ag's St. Petersburg branch, the company will employ Russian specialists, but sell their products on the European market. 

"We can't find this number of programmers in Germany, we just lack the human resources," he said. "Four years ago, the German government even closed a few universities, arguing that there wasn't enough money to keep them open. This has further contributed to the gap."

At the same time, foreign companies have deemed it productive to become involved in further developing technical education in Russia. For instance, the Russian branch of electronics manufacturer Motorola confirmed that the company already runs a number of education projects in cooperation with higher education institutions in St. Petersburg, Moscow and a number of other Russian cities.

The company gives courses in hi-tech programming and Internet technologies at different schools. The programs serve as a kind of employment pipeline for the company, as certain students are offered the opportunity to gain practical experience with the firm and, ultimately, gain permanent employment.

Stach says that even though Germany has upped the quota of programmers allowed into the country, immigration laws are not the greatest factor at play.

"The problem is that the people don't always want to come. They don't want to go too far from their families and enter a different culture," he said. "In Russia there are a lot of universities producing software developers, and there aren't so many foreign companies, so we can easily find talented staff."

According to representatives of a number of Moscow companies, sales to foreign markets are much stronger than at home in Russia.

"We started as the developers of optical character recognition [or OCR] computer programs. Today 70 percent of our sales are in Europe and the United States, while two-thirds of the remaining part is for corporate-sector clients, such as banks and large companies," Sergei Andreyev, general director of ABBYY program developers, told Vedmosti. 

"We tried to earn money producing computer dictionaries for the broader market, but discovered that the only one way to sell them is if the price of the product is as low as that of a pirated copy."

And Dmitry Ivanov, an investigator with the St. Petersburg police's special "R" detachment, which investigates crimes in the high-tech sphere, sees another sign pointing to the growth in the number of talented programmers and their abilities.

"Software development in Russia is troubled by computer pirates and low profits from the sale of licensed products," Ivanov, said. "At the same time, the number of expert hackers shows that the large number of good technical institutes here has created an abundance of well-trained programmers."

TITLE: EBRD Gives Local Branch $30 Mln Loan
AUTHOR: By Yevgenia Borisova
PUBLISHER: Staff Writer
TEXT: MOSCOW - The European Bank for Reconstruction and Development said Tuesday it has handed another $30 million to its local branch to give loans to small and medium businesses, bringing its loan portfolio to $60 million.


The cash is being disbursed by KMB-Bank, 53 percent owned by the EBRD and the rest by U.S. financier George Soros' economic development fund.

By the end of the year, KMB-Bank will have allocated more than $58 million worth of loans to more than 4,000 clients throughout the country, Elizabeth Wallace, director of the financial institutions team with the EBRD, said Tuesday at a news conference.

"Without this bank our business could not have gotten started," said Lev Okhotin, director of St. Petersburg haircare firm Yunikosmetik.

In the past two years, Yunikosmetik has taken two loans of $50,000 and $20,000 from KMB-Bank in order to finish building its factory and buy equipment.

"Now we are repaying $1,300 a month as interest and principal, but, because we have bought really good equipment, our profits are about $2,000 - the loan is easily paying for itself," Okhotin said by telephone in St. Petersburg.

Other loan recipients include a former geologist who is exporting cedar nuts from Siberia and a group of scientists that is working on new ways of disposing of nuclear waste.

Alexander Ioffe, president of the Russian Association for Small Business Development, said that the EBRD's support for small business was much greater than that provided by the government.

Ioffe said federal coffers hadn't provided a single kopek to support small businesses in the past three years, while in the 2001 budget only 90 million rubles ($3.23 million) have been allocated.

He added that small businesses have been estimated to need at least $1 billion in investment - and that is just for Moscow and only for buying equipment.

Wallace said that while before the August 1998 crisis her bank had been disbursing loans through 12 local banks, now only two banks - state savings bank Sberbank and KMB-Bank - operate as EBRD partners nationwide.

Some $55 million in EBRD money got stuck in the crisis in a few local banks, including Rossiisky Kredit, Mosbiznesbank, SBS-Agro and Inkombank, and only part has been returned, she said.

She added that if SBS-Agro, which still owes the EBRD more than $30 million, does not repay its loan, the bank's expansion will be smaller than planned.

This year, KMB-Bank is poised to open branches in Nizhny Novgorod, St. Petersburg, Novosibirsk and Omsk in addition to its 11 existing offices - but that will still cover only a mere handful of the nation's most prosperous regions.

"We have so few regions where small businesses operate on a decent scale," Ioffe said. "About half of the people employed by small businesses are concentrated in only about 10 percent of the regions, or rather regional centers.

"We still have only about 8 million people employed in small businesses, or about 16 percent of the national work force. We have a long way to go to catch up with other countries where more than half the work force is employed by small businesses."

KMB-Bank gets loans from the EBRD with interest of 9.5 percent and disburses its own loans with 14 percent to 18 percent interest on hard-currency loans or 30 percent to 35 percent on ruble loans. 

All the profits are reinvested in the program, Wallace said, adding that 99 percent of loans are paid back.

The loans vary from $100 to $125,000 and must be repaid in 12 to 36 months.

Since the EBRD was established in 1991 to aid the transitional economies of Central and Eastern Europe and the former Soviet Union, the bank has disbursed $465 million in loans to more than 40,000 companies throughout the nation, Wallace said.

TITLE: Exporters Happy With Changes to Tax Code
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: MOSCOW - Like many exporters, Sergei Terekhov wants his VAT.


During all of 1999, Terekhov, board chairman at Tekstil Povolzhe, waited for tax inspectors in Volgograd to reimburse his company for the value-added tax, or VAT, that Tekstil Povolzhe paid its suppliers.

Under current tax laws, exporters are entitled to be reimbursed for VAT they pay to the Tax Ministry within 10 days of filing with the tax police. But in practice, the system rarely works.

"Exporters have always had the legal backing, but they never get paid," said Peter Arnett, tax partner at Ernst & Young. "It's the cash mentality of the tax police."

"We live in a democratic society," Terekhov said. "Why does it have to be so difficult to get the taxes back that I'm owed?"

After a year of trying, Tekstil Povolzhe, a leading producer and exporter of textiles based in Kamyshin in the Volgograd region, did what most businesses in democratic societies do in such a situation - it sued.

When he submitted his VAT receipts to the tax police for reimbursement, Terekhov said, tax inspectors simply said either they had no money or Moscow had forbidden them from paying out. Despite repeated calls, no one at the offices of Volgograd's tax police was available to comment.

Terekhov eventually settled his suit with the tax police out of court and received his first refund last December. And last week, he said, his company received the VAT it was owed on goods it exported in May 2000.

Under the new Tax Code, which was signed Aug. 7 by President Vladimir Putin and will go into effect Jan. 1 2001, the official waiting period for exporters expecting a VAT refund will be extended from 10 days to three months, said Vladimir Konstantinov, a tax manager with PricewaterhouseCoopers.

The new code gives tax authorities three months to decide whether or not to approve a VAT reimbursement request. If the request is approved, then responsibility for the actual payment is passed from the Tax Ministry's tax police to the Finance Ministry.

"It's still going to be a problem," Konstantinov said. "If money for VAT reimbursement is currently hard to find in the government's coffers, it probably won't be any easier to find next year."

Under the new rules, however, companies will be allowed to offset their VAT payments with other tax obligations.

This already happens in practice, said Vladimir Zubakov, vice president of TVEL, a supplier of equipment to nuclear power plants. Zubakov said that while other companies often get stiffed by the current VAT system, his company, which sells its products both domestically and abroad, has found ways around the problem.

"We also pay VAT on our internal market," Zubakov said. "So what we do is lower other taxes that we owe the government."

While many companies that rely on exports for most of their revenues find their VAT accumulating on their balance sheets, some have succeeded recently in eliciting promises of VAT refunds from the government.

The Economic Development and Trade Ministry announced earlier this week that the strategic Sakhalin-1 and Sakhalin-2 oil and gas projects, which are owned by a consortium of Russian and international companies, will receive the refunds they are owed before the end of the year - about $60 million each from VAT paid from 1995 to 1999.

Terekhov, who had to sue the tax police to get his VAT back, said the new Tax Code is a step in the right direction. "From what I see so far, these changes will somehow make it easier for us."

TITLE: Duties System Gets Border Test
AUTHOR: By Yevgenia Borisova
PUBLISHER: Staff Writer
TEXT: MOSCOW - An electronic system to clear imports quickly and raise collection rates of customs duties is being introduced in Moscow this week with the intention of extending it nationwide, but professionals warn that no electronic system can control corruption.


And while some privately run Mos cow customs terminals have been told by the State Customs Committee to test the new system, the committee has not yet released any estimates of what collection targets should be, and the sources of funding the installment of the new system across the country are still unclear.

The nation's system of allowing imports to cross borders and then to let customs terminals, many of them private deep in the hinterland, clear the imports has proved a temptation to corruption that many importers and customs officials cannot resist.

Bribes are paid to customs officers who clear expensive electronic goods and furniture as spare parts, which are subject to lower tariffs. Imports often disappear on their way to terminals.

In the first six months of this year, 67,700 violations of import laws were recorded and 2,097 criminal cases were opened, 11 percent more than for the same period last year, Interfax reported in July.

Vyacheslav Repin, the head of modern computer technologies at the St. Petersburg software firm EKSI-Soft, said the Aist-RT21 program to be installed at customs terminals in the Moscow region is a client-server closed-circuit interface that links customs computers at the borders, regional computers and the Central Customs Department server.

Olga Gavrilova, financial director at Mos cow's Viba customs terminal, a recipient of the system that is to start operating this week, said: "This system is secure and it serves our clients really quickly."

She said that a trial of the system last week showed the clearance time for simple items was sometimes just 30 minutes.

"In the past, clearance sometimes took up to 10 days," she said.

Gavrilova added that the Aist system provides information about imported goods at the customs terminal just seconds after the cargo is registered at the border.

"Aist has shown good results in our region after being applied for a few years here," said Dmitry Kokko, spokesman for the Northwest Customs Department, in a telephone interview from St. Petersburg.

However, he failed to give any figures on the improvement in tax collection Aist had brought.

Anatoly Zhdannikov, clearance officer with Vinlund International Freight Forwarders, said that using computers had drawbacks as well as benefits.

"We all know they crash," he said.

"The human factor [customs officers] is still there," Zhdannikov added. "Whatever they feed into the computer system is up to their conscience."

EKSI-Soft's Repin agreed. "Living on this planet, we know there is no perfection," he said. "But I think that our product will make a dramatic change to what we have now if introduced at least at the most significant customs nationwide that clear the majority of imports."

TITLE: Budget Watchdogs Slam Air Industry Privatization
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - A new Audit Chamber report found that the government committed massive violations in privatizing the aircraft manufacturing industry in the 1990s and calls for a review of the sales.


The report, a copy of which was obtained by The St. Petersburg Times, paints a gruesome picture of a once-mammoth industry that has fallen on hard times because of violations in the 1992-99 sell-offs and the subsequent mismanagement of the enterprises.

The Audit Chamber, parliament's budgetary watchdog, said Tuesday that the report will soon be presented to the government. President Vladimir Putin has already been briefed, they said.

It was unclear Tuesday how the Kremlin would react to the report. It has largely ignored the chamber's findings in years past.

The chamber found that Russia last year produced only nine civilian planes and 21 military planes, none of which were for the military, compared with 150 civilian airplanes, 300 civilian helicopters, more than 620 military planes and 390 military helicopters in 1991.

Of the 315 aviation manufacturers inherited by post-Soviet Russia, up to 224 were privatized. The state kept a controlling stake in only seven of those 224 plants and lost complete control of 94.

The report also criticizes ineffective management such as not finishing a complete inventory of each company's assets before they were sold for costing the state hundreds of millions of dollars in the sell-offs. For example, the chamber found that in the course of privatizing the Mil Moscow helicopter plant, the state received less than $30 million at a time when it had 13 valuable helicopters on hand, including four Mi-26s worth $8 million a piece.

Also, legal loopholes led to a large-scale buy-up of the enterprises' shares by foreign companies, the report says. For example, 41.2 percent of the Mil plant went to foreign companies, as did 35 percent of the Aviastar plant, 26 percent of Tupolev's complex and 25 percent of the Perm Motors Plant.

Aviastar, which makes the An-124 cargo plane and the Tu-204 passenger jet in Ulyanovsk, is now producing at less than 10 percent of its capacity. Likewise, Perm Motors went from making 476 engines in 1992 to only three engines in 1998. The report says that 35 of the 131 enterprises in the industry are either losing money or are near bankruptcy.

If the current situation prevails, the report says, the domestic aviation industry will not be able to produce competitive aircraft in three to five years.

A number of companies mentioned in the report could not provide immediate comment. But Perm Motors' chairman, Vladimir Shmatovich, said overturning the results is highly unlikely because practically all the enterprises have been restructured. "These are different enterprises now," he said in a telephone interview from Perm.

The report's head auditor, Viktor Demedyuk, said the violations were enough to reconsider the privatizations of a number of enterprises. He added, though, that only the government or the Prosecutor General's Office could start any proceedings.

TITLE: Mailbox
TEXT: Dear Editor,

I have long admired the performance of Russian athletes, particularly men and women gymnasts. They have set a standard of excellence throughout the years. Russian training methods have been adopted by many in the sport and the discipline that they display has long been evident.


It was, therefore, with a great sense of dismay that I witnessed the unsportsmanlike conduct by members of the Russian women's gymnastic team in Sydney. When members of the team removed the silver medals from their necks not only did they display contempt but their total disrespect for the games and the participating athletes.

The coach was no better. Rather than acting as a role model for the girls, his boorish demeanor was one of contemptuous anger. I don't believe this behavior is what the country wishes the world to see nor do I believe it worthy of all of the great Russian athletes who have participated in past games, did their best and won or lost graciously. Possibly a basic course in civility should be included in the women's gymnastic program and a coach found who can instill that basic concept.

However, I also witnessed equally unacceptable behavior from an American woman swimmer soon after. The lack of civility appears to be an international plague. What happened to the Olympic spirit and what is happening to the youth of our nations?


Perry Yelton

California, United States

TITLE: On the Cox Report and Presidential Politics
AUTHOR: By Jim Hoagland
TEXT: WHEN Republicans launched a broadside against U.S. Vice President Al Gore for his dealings with Russia, they erected a weak pillar to support their most damaging charge: Gore kept himself "deliberately uninformed" about corruption and other problems that would have undermined Bill Clinton's Russia policies. But the specifics in the report of a House Republican group headed by Christopher Cox do not prove that assertion. They do portray Gore and his national security adviser, Leon Fuerth, giving confusing and at times seemingly contradictory explanations of what Gore was told about Russian corruption and when he was told it.


How do intelligent, experienced people such as Gore, Fuerth and the architect of Clinton's Russia policy, Deputy Secretary of State Strobe Talbott, become prisoners of their own policies? The inability or refusal of government leaders to listen to new, independent information that challenges their policies is the most important failing I have observed in 35 years of government-watching. New developments are systematically interpreted to conform to existing premises, almost never to challenge them.

Gore was guilty of a less dramatic policy sin, which Cox styles as "failure to make a mid-course correction" as the political situation changed in Russia. He described Russia's economic and political stability in such glowing terms in a toast to then-Prime Minister Viktor Chernomyrdin that the Russian then rose to describe his nation's deepening problems in detail. This was not long before Chernomyrdin would be dumped by Boris Yeltsin, and the Russian economy would start its nose dive.

Like any campaign document, the Cox report goes for the jugular. It suggests Gore sought to intimidate the CIA into not reporting on evidence of corruption involving Chernomyrdin and other Russian officials. Exhibit A, and the weak reed Cox leans on, is the "BS" memo. Political campaigns are often full of it, but rarely does the word take center stage. The necessity for explicitness became apparent when I was told by Gore's national security adviser that "there is no bulls**t memo."

The New York Times reported on Nov. 22, 1998, that Gore had returned a CIA report on Chernomyrdin and corruption with that barnyard epithet scrawled across it. On July 16 this year, Gore muddied the water on NBC's "Meet the Press." Gore seemed to deny that any such report had ever been made to him - "Never happened," he said in response to an ambiguously worded question. Gore then attacked the report mentioned in the question "as a very sloppy piece of work." He may have meant to deny only writing on it. This caught the attention of Cox and triggered congressional subpoenas to the CIA for a document with the BS-word or the equivalent scrawled on it and/or other documents that would have been used in the briefing of Gore described in The New York Times. The CIA responded Thursday, saying it found no annotated document but did find five documents that might have been the source of a Gore corruption briefing.

Gore gave The Boston Globe an interview on July 24 containing a description of what probably happened: "The sentiment ascribed to me was a fairly accurate description of what I thought of that particular document." In a Globe article published Aug. 13, Gore confirmed he had made the BS comment verbally, adding, "Somebody may have written it on my behalf."

We are now in classic Washington territory that beckoned the Cox group: The importance of the original policy disagreement over Gore's embrace of Chernomyrdin in the face of CIA criticism of the Russian has been eclipsed by questions of credibility and truth-telling - in short, of cover up, even if on a minor scale.

Fuerth told me of the CIA search finding no annotated document at almost the same time on July 24 that Gore spoke to the Globe. Gore's office says Fuerth had not had a chance to tell Gore of the CIA conclusion. On the BS factor, I think Gore misspoke or was a victim of timing. But Gore has been a major figure in an administration that has made an art of telling some of the people some of the truth some of the time, to keep scandal at bay. Mix-ups or misspeaking allowed to remain on the record can only fan suspicions that Gore might continue that Clintonesque pattern. That can only damage his candidacy, and ultimately any Gore presidency. 


Jim Hoagland is a columnist for The Washington Post. Reprinted with permission from The Washington Post Writers' Group C Copyright 2000. 


By Graham T. Allison 


TWELVE Republican House members, constituted as the Cox Commission on Russia, have issued a report on the policy of the administration of U.S. President Bill Clinton toward Russia that amounts to "sound and fury," in Shakespeare's fine phrase, "signifying nothing." Nothing except that, in the midst of a presidential campaign, 12 Republican members of Congress dislike Clinton and Gore and support George W. Bush.


Almost a decade has passed since the Soviet Union disappeared. Then-President George Bush and President Clinton sought to fashion policy toward a transformation in the entire international system. The Clinton administration's choices and actions regarding Russia should be examined and debated. But U.S. stakes in policy toward Russia are too important for partisan "poppy-Cox."

The starting place for an analysis of this policy begins with a simple question: Why does Russia matter? Why does Russia rank among the two or three nations in which developments could have the largest impact on Americans' lives and liberties?

With nearly 150 million citizens, natural resources that rank at the top tier in every important category, a scientific and technical elite that rivaled America's for four decades, Russia matters. If this were the whole story, Russia would count among the countries important for U.S. policy-makers. Instead, its priority in the hierarchy of U.S. interests derives from one fact: History has left a superpower arsenal of nuclear and biological weapons, missiles and know-how in the mid of a revolution deconstructing every sinew of the totalitarian Soviet state.

Start with 7,000 active nuclear warheads - armed, mounted on missiles, capable of arriving at targets in the United States less than an hour after launch. Add to this picture 5,000 tactical nuclear weapons. Remember an additional 12,000 nuclear weapons in various decaying storage facilities. Include large stockpiles of highly enriched uranium and plutonium - ingredients from which a crude nuclear device could be assembled. The overriding reason Russia must matter appears vividly as one considers the danger of "loose nukes" - the theft of one or a dozen weapons, sale to a rogue state or terrorist group, and use of these weapons to attack U.S. soldiers abroad or destroy a city on U.S. soil.

How has the Clinton administration dealt with Russia on this most important issue? According to the Cox report, "the administration has consistently de-emphasized proliferation in discussions with Russia." But examine the facts. In 1992, three newly independent states - Ukraine, Kazakhstan and Belarus - found themselves with the third-, fourth- and fifth-largest nuclear arsenals in the world. U.S. leadership, especially through Gore's Bilateral Commission, succeeded in eliminating three superpower arsenals. How many nuclear weapons do those three states have today? Zero.

A big instrument in preventing proliferation of thousands of nuclear weapons has been the Nunn-Lugar Cooperative Threat Reduction Program, which assists Russia in dismantling and safely disposing of its superpower arsenal. Under Clinton and Gore, the CTR programs have invested about $500 million annually and eliminated more than 5,000 nuclear weapons once aimed at the United States, as well as hundreds of missile launchers and submarines. They have helped secure remaining weapons and weapons-useable nuclear material at sites across Russia. About these programs, the Cox report is silent. Had the commission criticized the administration for being too timid or doing too little on this front, I might agree. But its members know that a Republican-led Congress has been the major obstacle to a bolder, expanded program.

Those who seek to serve as the next president should speak about how they propose to engage Russia in the next four years. Unfortunately, by failing to establish a bipartisan commission that would have analyzed success and failures evenhandedly, the Cox Commission missed an opportunity to inform that debate.

The next president should give highest priority to securing Russian nuclear weapons, weapons-usable nuclear material and other weapons of mass destruction. Protection of Americans' lives and liberties - not partisan politics - should take precedence in shaping U.S. policy toward Russia.


Graham T. Allison, director of the Belfer Center for Science and International Affairs and Harvard's Kennedy School of Government, is a foreign policy adviser to U.S. Vice President Al Gore. He contributed this comment to the Los Angeles Times.

TITLE: Does Putin Really Not Know What's Going On?
AUTHOR: By Yevgenia Albats
TEXT: PRESIDENT Vladimir Putin has said he won't intervene in the conflict between Gazprom and Media-MOST. That's good. Citing Mikhail Gorbachev, who met with Putin as head of NTV's public council, Putin said he "had no clue" about the state's interference in the deal between the two private entities, and he was outraged by the behavior of Information Minister Mikhail Lesin. That's bad.


Should we believe this ? If so, then Putin does not control his own ministries and has a rather vague understanding of how things are done in this country.

This merely adds to other such instances, when Putin happened to have "no clue." The nation should be concerned: If the man in whom the majority has invested the right and might to govern it has no clue, who does? But the nation apparently is not eager to ask such questions. Is it because our gut tells us that all these incidences of "had no clue" are nothing but badly performed self-defense?

Let me throw out a couple of ideas. 

Shortly after Putin's successful presidential campaign, in which NTV was his main opponent, Alfred Kokh was appointed as the new head of Gazprom-Media. Kokh, the one-time privatization minister, had never been involved in any media-related businesses. But Kokh was known as a bitter, personal enemy of Media-MOST, which in 1997 did its best to disclose some of Kokh's misdoings as a bureaucrat. 

Question: Why has Gazprom, with its many professional financial managers, employed Gusinsky's personal rival to retrieve its debts? Guess: This wasn't Gazprom's choice, but the choice of the Kremlin, which has ways to ensure that Kokh will break his back to resolve the dispute so that NTV can be controlled.

For years, Gazprom has wailed about its lack of cash to pay to the federal budget. During the same period, the monopoly's financial problems have not allowed it to pay dividends to shareholders at an amount any more than, for instance, 3 kopeks per share in 1997, the year of the nation's best economic performance. Still, according to independent consultants on the Gazprom/Media-MOST deal - and according to Kokh himself - Gaz prom was prepared to pay Gusinsky much more than NTV's estimated price and to impose on Gazprom's fragile shoulders the mountainous burden of all of Media-MOST's current and future debts. Question: If this is just a commercial deal between two private businesses, why the generosity? Why was Gazprom so eager to make a deal that was so financially unprofitable for it? Guess: This has little to do with business, but lots to do with the politics.

Just as Gazprom was pressed to "buy" a stake in NTV after the 1996 presidential elections, so the gas monopoly is trying to provide another favor to the Kremlin. Well-informed sources speculate that in fact Gazprom would not lose any money on the deal, but taxpayers will; the monopoly's expenses would be compensated by a forgiving of some of its customs duties.

Aren't these questions enough to allay your fears that Putin "had no clue"?

TITLE: What Other Papers Are Saying
TEXT: by Ali Nassor 

Gazprom scored points this week in its political and commercial fracas with Media-MOST, as the government set about seizing assets belonging to Vla di mir Gusinsky's holding. Meanwhile, President Vladimir Putin refused to get involved in a dispute in which the big loser will be freedom of the press, say observers.




Above the Law


As a court ordered the assets of at least 30 companies connected to Media-MOST seized this week, with Gazprom continuing its assault on the multi-million dollar debt, Vedomosti suspects the government of already having passed a guilty verdict on Gusinsky, specifically over the transfer of the holding's assets to offshore accounts in Gibraltar. 


The paper quotes Larisa Nikitina, a senior judge presiding over the affair, as saying that even if the Media-MOST stock is in Gibraltar, it technically remains on Russian territory.

Listing the names of the companies involved, the paper notes that most of the seized assets belong to companies that have a direct relation to the information market, hinting that the whole saga is really a scramble for control of Russian media outlets, as opposed to purely the commercial settlement that Gazprom claims it to be.

In the net are shares in NTV television station, Ekho Moskvy radio and Russkoye Video/Channel 11, as well as other media run by a variety of Media-MOST subsidiaries.



All or Nothing


But although Gazprom looks to be on the winning side at present, Kommersant casts doubt on the energy giant's eventual victory - at least, not in the near future. The paper says Gusinsky will be looking for as many delays to the case as possible.


According to the paper, Gazprom can claim possession of Media-MOST assets only if they were registered with offshore companies six months or less before a court's ruling. With this in mind, Gazprom therefore has only up to November to claim the right to the holding's Gibraltar-based property.

The paper advises Gazprom to resort to a compromise proposed by Media-MOST, which involves taking a small amount of shares now rather than hoping to get hold of the entire company later. 

However, according to a Media-MOST lawyer, Pavel Astakhov, a peaceful solution can only be reached if Gazprom acknowledges that a July 20 agreement on the debt was brokered by putting intense pressure on Gusinsky, who was in detention at the time.

But Gazprom has vowed that it will never admit to such a conspiracy theory, unless it is proved by a court of law that Gusinsky and his lawyer were legally insane at time of signing the "freedom-for-shares" agreement, the paper quotes Gazprom's Anatoly Blinov as saying.

Blinov, however, already reckons that Gazprom has won, and has gotten control of NTV by seizing enough stock to be the majority holder.


Bad Samaritan 


While Media-MOST watches the takeover unfold, it has sent an emissary to the Kremlin to seek the arbitration of the president in the case - but its pleas fell on deaf ears, says Komsomolskaya Pravda.


According to the paper, ex-Soviet leader Mikhail Gorbachev, who is currently head of NTV's public council, used his chance to meet Putin to put Media-MOST's case in the name of freedom of speech.

But Putin washed his hands of the whole affair, saying: "I shall never interfere in a conflict involving two commercial organizations ... It is up to [Gazprom and Media-MOST] or a court to decide, not the president," he told his predecessor-but-one.

The president went on to tell Gorbachev that freedom of speech was indeed a priority, but that a media outlet should be financially independent in the first place. It was an expected response, because it was the same one given to German Chancellor Gerhard Schroeder, says the paper: We support press freedom, but we also support debt collection.



Dirty Spot


But it's not all bad news for Gusinsky and his warriors. For at least one state minister who saw fit to get wrapped up in the drama got his comeuppance this week at the hands of the prime minister - and is now fighting for his job.


Rossiiskaya Gazeta quotes the Russian premier, Mikhail Kasyanov, condemning Press Minister Mikhail Lesin for getting himself involved in the dispute. "There are lots of arguments of this kind in our economy, tens or even hundreds of them. ... But Lesin's signature on the controversial document has turned it into a political one," said Kasya nov.

Kasyanov was also quoted by Kommersant as saying that Lesin's actions were "intolerable" - a remark implying not only that Lesin's days are indeed numbered, but also that the government acknowledges the deal was not entirely legal. 

Gorbachev also confirmed that Putin bitterly condemned Lesin's behavior, but gave no word as to how he might be punished, says Kommersant. The paper, however, suggests that Lesin's dismissal would not necessarily influence the outcome of the dispute: He might be fired just because he has become the source of too many controversies, and the Kremlin has finally gotten fed up.

Dispelling thoughts of partying for Media-MOST was the Prosecutor General, who on Wednesday summoned Gusinsky for interrogation, without specifying what matter he was supposed to answer questions on, reports Izvestia.

Smelling a rat, lawyer Genry Reznik recommended that Gusinsky not appear, citing the previous illegal arrest in June, the paper says.

TITLE: baltiisky dom festival promises thrilling thespian experience
AUTHOR: by Kirill Galetski
TEXT: The single most important international theater event every year in Russia is the Baltiisky Dom Festival, which traditionally occurs just as the season is gaining momentum. With 19 countries, 87 theaters and 124 productions to its credit so far, the festival has seen its share of variety, and seems to grow every year.


This year's events kick off tonight and run through Oct. 8. The current festival is a multimedia event - in addition to production performances, the festival will host the international theater conference "Theater and Time: Today in the Mirror of Theater" and will feature an exhibit by well-known British art director Ken Reynolds. The Dutch Theater Institute will give a practical seminar on modern theater marketing.

Among the plethora of productions are a few must-sees. The first is "We Play ... Schiller," a highly idiosyncratic version of Friedrich Schiller's 1800 play "Mary Stuart" directed by Lithuanian Rimas Tuminas, who wowed festival audiences last year with his rambling "Oedipus Rex." Tuminas, a contemporary of the much-lauded Eimuntas Necrosius, is just now coming into his own. "Mary Stuart" premiered in May at Moscow's Sovremennik Theater with the extremely versatile Yelena Yakovleva in the lead role. Called a "romantic tragedy" by Schiller himself, the play is given a progressive contemporary touch here, with industrial set design by Adomas Jacovskis and a moody score by Necrosius alumnus Faustas Lautenas.

No less thrilling is the return of another Baltiisky Dom Festival veteran, Kama Ginkas. An innovative, iconoclastic director, who has worked extensively on the Helsinki and Moscow stages, brought his streamlined black-and-white "Pushkin. Duel. Death." to the festival last year.

This time he presents the long-awaited St. Petersburg premiere of his version of Chekhov's novella "The Black Monk," in which stage and screen favorite Sergei Makovetsky plays Kovrin, a young professor struggling with notions of genius and insanity along with his foil, a legendary man of the cloth who may or may not be a figment of his imagination.

Theatergroep Hollandia, based in Zaandam, the Netherlands, is bringing perhaps the most intriguing and challenging production to the festival.

Called "Voices," it is a one-man show as far from traditional dramaturgy one can get while remaining a play. Directed by the theater's artistic director Johan Simons, it incorporates passages from controversial Italian writer and film director Pier Paolo Pasolini's "Affabulazione" with excerpts from a 1997 speech to Shell international employees by Cor Herkstroter, CEO of Shell. Written and acted by Jeroen Willems in all of the roles, it portrays politicians, criminals, prominent intellectuals and industrialists as those that actually control society. It purports to dissect the contemporary capitalist world and show up its hypocrisy.

"Pasolini's visionary view on society is the main reason for digging into his texts," notes Simons, "Time and time again he seems to be right in his predictive views of what is going to happen, for example in the way church and state interact."

Such socio-political themes are appealing to western European audiences. Russian theater-goers, who are generally more turned on by drama of a more personal nature, might have a hard time appreciating the production, but it provides a healthy balance with the other international theaters' material.

The Hollandia group is unique in European theater. Formed in 1985 as the result of a merging of two regional theater groups from North Holland. Director Johan Simons and composer and director Paul Koek have developed the company into something of an inventive, highly experimental phenomenon.

Using found spaces such as a farms, scrapyards, a soccer stadium, fish market and even the KLM terminal in Amsterdam's Schiphol Airport, the troupe has de-mummified theater and brought it to diverse (and sometimes unsuspecting) audiences. Koek composes original electronic music and soundscapes to go with the images. In 1996, he even founded the Veenstudio, which trains a special type of "music" actors, who perform music in their roles instead of text.

"We have been traveling all over the world with 'Voices,' commented the theater's PR manager Rick Spaan, "[Festival organizer] Sergei Shub has been following us for quite some time now and has tried before to bring Hollandia to Petersburg. He invited us to play. The Dutch Theater Institute is supporting us in paying for this trip." The journey to St. Petersburg is a natural progression. After all, Peter the Great visited Zaandam.



The Baltiisky Dom Festival. Productions are held in several different theaters. Check listings for details and/or call the Festival Center at 232-09-61.

TITLE: separating eaters from diners
AUTHOR: By Thomas Rymer
TEXT: It has always seemed to me the people in restaurants can be divided into two basic groups - eaters and diners.


The eaters are there strictly for the food and make their choice of restaurants based on a sort of algebra, taking into account cost, size of portion and speed of delivery. Simply put, these people are just plain hungry.

The diners are a slightly different lot, having turned up for one of a number of different reasons, be it the atmosphere, the reputation or because something in particular is happening in a certain place.

Given these (admittedly vague and unscientific) definitions, a friend and I arrived at Time Out as diners, there to catch some action on television either from the Olympic Games or European soccer, with the question of eating secondary.

Time Out, located on Ulitsa Ma ra ta, has a big-screen television, along with a couple of traditional-size sets making sure that those with any sight line can still find a television within it. There is a pool table in the back room, tables conducive to sitting in large groups, and walls covered with various sports-related art and memorabilia. Pure and simple, Time Out is a sports bar.

As we watched the replay of Russian wrestling legend Alexander Karelin's first loss in Greco-Roman wrestling in over 13 years, we got down to ordering what would go with our viewing.

Figuring that something in the manner of a cocktail wasn't really an appropriate accompaniment to wrestling, we both opted for a half-liter of Bochkaryov draft (30 rubles), good and cold, and started out with French onion soup (30 rubles) and a crab salad (30 rubles). French onion soup prepared in the manner I grew accustomed to seeing it before I moved to St. Petersburg is a rarity here, and Time Out doesn't make the occurrence any more rare. The soup should also have been a bit hotter. The salad was good, and mixed in a fair bit of rice.

We also shared a portion of chicken nuggets (25 rubles) which, although served with a tasty sauce, left a little to be desired from the standpoint of texture.

My main course of pork served with a mushroom sauce on the side (130 rubles) was served with a generous side of rice and was the culinary highlight for me, as the mushroom sauce was good and the pork tender. The Peruvian chicken (120 rubles) was, according to my friend, average but filling, with the chili con carne seasoned in a way that didn't quite pass muster.

Discovering that Time Out had been caught short on their dessert listings for the evening, we broke down and went the cocktail route, my friend countering the decidedly un-Mexican chili with a closer-to-the-mark Margarita (70 rubles), and I deluding myself that the orange juice in a Harvey Wallbanger (100 rubles) would somehow help to battle the cold I had coming on.

So how to rate Time Out? It's easy given the eaters-diners distinction. If you belong to the former group, Time Out is not the place you're looking for.

If, however, you want a good place to watch a game or two, drink some cold beer, maybe shoot a game of pool and not pay too much for the experience, then Time Out is one of the city's more attractive options.



Time Out, 36 Ulitsa Marata. Tel: 113-24-42. Dinner for two with a moderate amount of alcohol, 620 rubles (about $22). Open from 1 p.m. to 5 a.m. daily.

TITLE: finns bring national theater to petersburg
AUTHOR: by Galina Stolyarova
TEXT: Finnish history and Russian drama will meet on the Alexandrinsky Theater stage this October as the Finnish National Theater from Helsinki begins its tour on Tuesday.


Theater in Finland emerged back in the middle of the 19th century with drama predominating over other artistic forms. As Finnish drama still makes up nearly 50 percent of the national theaters' repertoire, it wouldn't be fair to exclude it from a foreign tour.

The National Theater's visit kicks off with the production devoted to the life of Carl Gustaf Mannerheim (Oct. 3 and 4), whose fate was closely connected with both countries. Legendary military commander and Finland's sixth president, Mannerheim counts among the country's most famous historical figures.

The show was staged by director Antti Einari Halonen and based on a play by Laila Hietamies. In this production, the main character is peformed by two actors, Otto Kanerva and Tapani Perttu, who portray their hero, in his youth and as an old man respectively.

Theatrical links between the two neighboring cities have a long history. Before the 1917 revolution, the Alexandrinsky Theater frequently toured Helsinki, with Russian drama making up a significant component of the repertoire.

Now, the relations are having a renaissance. Several productions based on the lives of prominent Russian historical figures premiered recently at the National Theater in Helsinki, including shows devoted to the lives of Nicholas II and Catherine the Great.

The two Russian capitals' most prominent directors have worked in Finland, including Georgy Tovstonogov, Yury Lyubimov, Kama Ginkas and Lev Dodin.

The second offer of the National Theater will be acclaimed Moscow director Valery Fokin's take on Anton Chekhov's "Three Sisters."

Perhaps not coincidentally, the Finns have chosen Chekhov for the St. Petersburg tour, as he holds a particular attraction for both Finnish directors and audiences. Valery Fokin showed a bright and somewhat unusual approach to "Three Sisters," bringing a sensible contemporary note in his intense, poignant production, which has been a success in Finland.

The National Theater - now under the leadership of Maria Liisa Nevala, a literary historian focusing on Finnish literature - maintains a versatile artistic policy.

The company's repertoire features contemporary drama as well as national and world classics. The stagings include productions based on works by authors as disparate as Shakespeare, Charles Bukowski, Tennessee Williams and Astrid Lindgren. The National Theater building boasts, in addition to the large stage, three small stages to host experimental projects, most frequently the very latest drama.

Contributing to the Russian-Finnish cultural exchange, the Alexandrinsky Theater, in turn, will be touring Finland in December with three productions, including Rostislav Goryaev's version of Chekhov's "Three Sisters," Vladimir Golub's interpretation of Ostrovsky's "It's a Family Affair - We'll Settle It Ourselves" and the company's most recent small stage hit, Roman Smirnov's take on Alexander Stroga nov's "Ornithology."



For ticket information, call the Alexandrinsky theater ticket office at: 312-15-45.

TITLE: russian album art pioneer gets own show
AUTHOR: by Sergey Chernov
TEXT: One of Russia's first rock photographers, Andrei "Willy" Usov will be showing his photographs at an exhibition that opens at the House of Journalists on Oct. 4. Usov became well-known in the 1980s for his photos of Russian rock acts, but apart from portraits of musicians, the exhibition will include a variety of his works - from St. Petersburg's "White Nights" to New York, Egypt and Baghdad.


Usov was born on Oct. 24, 1950 in St. Petersburg into the family of a naval officer. He was given a cheap "Lyubitel" camera at the age of eight, but took his first photos at the age of 13. 

"I worked very carefully, thoughtfully, seriously, so negatives which I still keep are very high-quality," said Usov. "But the main thing was that the camera had a square frame - so I started with arranging a square, which is probably the most difficult thing in photography. And because record covers are square, all started from there."

Usov, who was unsatisfied with the bleak covers of official Soviet records, used to redesign some items from his record collection - but the work with Akvarium made him the person who "invented" the Russian rock album cover.

The date is 1978, the release was "Vse Bratya - Syostry," an "album" (in fact, a self-produced reel-to-reel tape) by a duo of then-underground musicians, Akvarium's Boris Grebenshchikov and Mikhail Naumenko (later Zoopark), now known only to hardcore Akvarium fans.

This product was first in the series of unofficial "albums," but was followed by Akvarium's seminal albums "Treugolnik," "Siny Albom," "Taboo" and "Radio Africa" - supplied with Usov's eye-catching covers - which made the band a household name in the most distant corners of the Soviet Union and sparked the '80s Russian rock revolution.

Usov's favorite album design is that of Simon and Garfunkel's "Bridge Over Troubled Waters," but the "Treugolnik" looked like nothing seen before, with a surreal human figure with a big round object where its head should be, which was actually Grebenshchikov holding a light reflector on his shoulders.

"Grebenshchikov took the tapes wherever he went, giving them away and selling them," he said. "At one point he even tried to make a living by selling the tapes. It's impossible to imagine now how poorly we lived then - often without a kopek to our names."

Usov who followed the band and its peers everywhere, has impressive archives of Russian rock musicians, including the late Viktor Tsoi, Mikhail Naumenko and Sergei Kuryokhin. But by 1986 he was no longer a part of Akvarium's circle.

"I was just set aside, I don't know why. They were preparing to release "Red Wave" [the U.S. compilation of Russian rock], all was done very secretly. I felt something was happening, but couldn't understand what."

But despite this, and the fact that Akvarium's early albums were re-released on CDs with different covers, Usov said he wasn't bitter and still follows Gre ben shchikov's current work. "While many Russian rock groups that appeared in the '80s fell into a sort of nationalism, like Alisa, Grebenshchikov is the only one who remains relevant," he said. "He can write 10 uninteresting songs, but then he comes up with one that really grabs you."



Andrei Usov's exhibition of photos at the House of Journalists starts Oct. 4.

TITLE: past dreams recalled in propaganda exhibit
AUTHOR: by Natasha Shirokova
TEXT: The 1930s were a turning point for the United States and the Soviet Union. Both countries were attempting to create their national myths. The Soviet Union was striving for the utopian Communist future, while the United States was reconstructing the "American dream" that had collapsed during the depression.


The exhibition of 1930s photographs from both countries called "Propaganda and Dreams," which opened in the Mikhail ovsky Castle last Thursday, allows us to compare the two realities. It was previously on display in New York and Moscow, and after showing here will be shown in other parts of the country.

The concept of the exhibition is not new: to take two countries at a certain period of time and to compare different aspects of their citizens' lives.

But the similarities revealed on the basic level are striking, notwithstanding the political and cultural differences of the two countries. The shots not only reflect times of great depression and belief in utopia, but also have a personal touch in depicting people's tough lives under radically different regimes and their striving for a better future.

"In New York the exhibiton was discussed not just in the press, but in subways," says Beverly Brannan, the curator of the exhibition on behalf of the Library of Congress. "In Moscow it was as much visited as the exhibition of rare Flemish paintings. It seemed to affect people a lot. Surprisingly, people would find personal memories in these photographs which were taken by state demand."

Both governments at the time hired teams of photographers who would support their programs.

As a result, the main Soviet themes to be photographed were industrialization, collectivization, the elimination of illiteracy, and national defense. And even though the task was limiting, the photographers would use the conventional content and unexpected angles at the same time. Alexander Rodchenko, associate of renowned film director Sergey Eisenstein wrote that they were "exploring the miracles of photography in those years."

The present exhibition gives an idea of avant-garde and traditional photography in the Soviet Union at the time. Some of the pictures are on display for the first time and were taken from private archives. They represent the works of Victor Bulla, who was among the beginners of documentary and reporting genres in Russia, unique experimental shots of Alexander Rodchenko, who became famous for his futuristic images, and his disciple Boris Ignatovich.

But what seems more important is that all these everyday objects, scenes or portraits of common people or national heroes which have been photographed have become significant, even unforgettable. 

"It's like with newspapers," says Beverly Brannan. "You read them and then throw them away. In retrospect, all these ordinary things become very important and prints valuable."

The Soviet images of those years most often mingled reality and romance and had to look inspiring and encouraging, depicting construction sites, mass holidays, big sports events and pioneer training sessions.

By contrast, the American. pictures from these years look intimate and subdued. The reason for it is that American photographers tended not to address impersonal masses of people, but individuals. They had a different task. The American Farm Security Administration wanted these photographs to persuade the poor farmers to move to lands with richer soil. 

The photographers were to propagandize prosperity, portraying the hardships of present-day life. They took pictures of whatever caught their attention, showing great attention to detail. As a result, the shots of migrants by Dorothea Lange, and pictures of houses fronts, signs and railroad tracks by Walker Evans not only illustrated propaganda, but accomplished a more difficult task. They captured the portrait of rural and small-town America.

Interpreting the title of the exhibition, Beverly Brannan remarks "some dreams are national, some are personal hopes, but where does the one finish and the other begin?"

"The photographs of this epoch have a certain magic of authenticity about them. It may be called the ability to convince people, to give them confidence, or to hypnotize them," said St. Petersburg art critic Rena Gvozdeva. But what is the task of propaganda if not to hypnotize? And these photographs haven't lost their power through the years.



See listings for details.

TITLE: dog-eating monologue proves surprise hit
AUTHOR: by Tom Masters
TEXT: Yevgeny Grishkovets does not look like the sort of man to command an audience's attention. Modest, shy and effortlessly polite, it is safe to say that this 33-year-old is not a typical "theater person" and at times looks a little perplexed by his own success. Yet his one-man show "How I ate a dog" has brought him international success, a European tour and a clutch of awards.


Coming on stage bare-foot, personally warning his audience to switch off their mobile phones and using little more in the way of props than a sailor's uniform and an unfeasibly long rope, the new wunderkind of Russian drama certainly stands out from the crowd.

"How I ate a dog" is a narrative of a childhood straightjacketed into military service in the navy, at times both hilarious and extremely moving. Through a series of anecdotes refreshingly conscious of the absurdity of life and interspersed with mime and music, Grishkovets' character tells of his confinement on a navel base in the Russian Far East, the friends he makes, the sadness he feels and the experiences he has.

The eponymous anecdote is both a literal one as well as being a Russian idiom for mastering a subject. Central to the play is its objectivity, looking at childhood, human folly, Russia and the military through a prism of humor and very Russian emotion. Grishkovets seems not angry, but sad and unable to understand why childhood is snatched away and adulthood imposed so ruthlessly.

Not for nothing did he sweep the "Golden Mask" awards this year, winning both the critics' and journalists' prize and the new theater prize. Critics of contemporary Russian drama and anyone who finds the usual offerings of local repertory theater boring and unimaginative will find a breath of fresh air in "How I ate a dog." Having just returned from a tour of Europe that included London's Royal Court as well as theaters in Germany, Finland and Slovenia, Grishkovets was back in St. Petersburg last week performing at the Kommissarzhevskaya Theater in the festival for Golden Mask laureates.

When asked how such a monologue was received in Europe, Grishkovets enthuses: "People would come up to me in every country and say with amazement, is childhood really the same everywhere?" To overcome the language barrier abroad, Grishkovets employed an on-stage translator not normally involved with theater thus maintaining his fresh outsider's vision.

In London, Grishkovets performed the monologue simultaneously alongside "Shakespeare in Love" actor Barnaby Kay's English version, an astonishing achievement of timing that actually added to the richness of the original rather than stealing from it. The awards mean a lot to Grishkovets in terms of the individual working on the Russian stage. "Theater people always considered me a strange person, performing alone in small venues, and now they see me as an important development in Russian theater."

He also enjoys performing for the St. Petersburg audiences, the packed house on Wednesday receiving him like a superstar. "In Moscow the reaction is very loud and the emphasis is on the humor. In St. Petersburg, the audience is quieter, sadder and this is truer to my original intention."

Despite the lightheartedness of many of the anecdotes and mimes, there are moments of sobering gravity. A deathly silent audience sat through Grishkovets' mimed representation of a submariner drowning in slowly rising water last week, the show having inadvertently taken on topical significance since the Kursk tragedy last month.

Those not lucky enough to have seen "How I ate a dog" will be able to catch it here again soon. However, in the mean time, Grishkovets will be performing his similarly unclassifiable one-man show "At the same time" ("OdnovrEmEnno"), which played to great acclaim abroad, at the Baltiisky Dom on Oct. 3. Go along for an evening of guaranteed innovation.

TITLE: chernov's choice
TEXT: Lou Reed was rumored to be visiting St. Petersburg to say a word about New York bohemian art guru Andy Warhol at the opening of the artist's exhibition at the Hermitage - but as the museum's spokesperson said Thursday, there will be no "rock'n'roll animals" present. Instead, directors of the Hermitage and the Andy Warhol museum will speak - and probably the director of BMW, which lent the BMW M1 painted by Warhol in 1979.


Reed would have made a great but unnecessary addition - Russia's first- ever Warhol exhibit is quite an event in itself.

The exhibition will feature over 80 works from the collection of the Andy Warhol Museum. Located in Pittsburgh, Pennsylvania, where Warhol was born and grew up, the museum offers more than 500 works of art and extensive displays of related archival material.

During the Soviet era, Warhol, with his Campbell soup cans and multi-colored Marilyn Monroes, was a perfect target for party art criticism, but at the same time he was idolized by the art and music underground and independently thinking public.

Shortly before his death in 1987, he showed interest in St. Petersburg's underground - there is a photo depicting him with a painting by local artist Timur Novikov. He also sent signed Campbell tomato soup cans to several local artists and musicians - rumor has it that while Boris Grebenshchikov put his on display in his kitchen, the late Kino leader Viktor Tsoi ate his.

The exhibition will open on Tuesday, Oct. 3 and will last through Nov. 28.

After Jean-Luc Ponty and Bryan Ferry both performed their shows perfectly and left, there are more Western acts coming. The first is Tuxedomoon, the California avant-pop which experimented with both electronic and acoustic instruments. Many bands and DJs have cited Tuxedomoon as an influence or inspiration. The reformed Tuxedomoon with the founding members will finally begin in Germany in November 2000 and will continue throughout Europe, North and Latin America. The St. Petersburg concert is due in November.

Another reformed and once even more influential band is The Skatalaties - a Jamaican band is credited for the invention of ska. The act is expected in Russia some time in December.

Also wait for Coil in January.

But Michael Franks will not be coming, as his Russian concerts were cancelled when it dawned on the local promoters that Franks is totally unknown in Russia. People's musical taste in this country doesn't generally include the Carpenters or Melissa Manchester, who performed songs by this U.S. songwriter. This is not America.



- by Sergey Chernov

TITLE: EU Holds Breath on Denmark Euro Vote
AUTHOR: By Ian Geoghegan
PUBLISHER: Reuters
TEXT: COPENHAGEN, Denmark - Denmark's crucial referendum on joining Europe's single currency was too close to call in the final hours of voting on Thursday, with exit polls showing a late spurt by euro supporters.


Exit polls among 15,000 voters, published by broadcaster TV2 with two hours of voting to go, put the 'no' vote at 50.8 percent against 49.2 percent for the 'yes' camp.

The first of these controversial polls, released at midday, had given the anti-euro camp a clear 52.5 to 47.5 percent lead. Some experts said the early 'no' lead may have been inflated by euro-sceptic pensioners who traditionally vote in the morning.

The exit polls, which have a margin of error of 2 percent, mirrored pre-vote polls which gave the 'no' votes the edge, but pointed to a tense photo-finish.

Voting closes at 8 p.m. and a preliminary final result is expected around 10:30 p.m. A 'no' vote could further hit the battered single currency and spark fevered debate on the future of European integration.

Looking to head off any attacks on the euro in the event of Danish rejection, one of Europe's top monetary officials warned markets that the Group of Seven big powers were ready to step in to support the euro.

"With a 'no' from the Danes, there would certainly be a loss of confidence in the euro," German Bundesbank governing council member Klaus-Dieter Kuehbacher said in Frankfurt.

"The European Central Bank would not stand accused of acting only once," he said, referring to concerted central bank action last week. "Further interventions could therefore be expected."

Most pre-vote polls gave a slim lead to opponents of closer European ties who do not want to give up the Danish crown. But, with turnout forecast at 86 percent, experts said as few as 20,000 undecided voters could tip the balance.

Prime Minister Poul Nyrup Rasmussen, a staunch pro-euro campaigner, admitted he was worried at the polls' early trend, but hoped "all Danes will go out and vote on this very important decision for Denmark's future. ... It is going to be very close."

The referendum, the first time a European Union state has had the chance to vote on the issue, is seen as a test of public confidence in the EU's single currency, which has slumped against major currencies since its launch last year.

But the implications could rumble far beyond the borders of the small, north European state of 5.4 million people.

If Danes heed the anti-euro call, which plays in part to fears of less sovereignty and more immigration, some political commentators predict the European Union could split in two, with euro zone members forging ahead with closer ties.

Ralf Pittelkow, former adviser to Rasmussen, said a Danish 'no' would have a short-term impact on the euro, but the broader repercussions would be longer lasting.

"In the longer term, this would be another step in the direction of a two-speed Europe. I think the euro zone will be the power engine in the future and those left outside will be, let's say, second-rate members," he told Reuters Television.

TITLE: Americans Advance to Basketball Semifinals
AUTHOR: By Chris Sheridan
PUBLISHER: The Associated Press
TEXT: SYDNEY - For the first 20 minutes, Vince Carter and the U.S. team were the ugly Americans. For the final 20 minutes, they let their basketball do the talking.


In a game with more than its share of rough stuff and trash talk, the U.S. team made it to the Olympic semifinals by defeating Russia 85-70 Thursday.

Carter, after missing two dunks and taking an elbow to the gut, looked as if he was trying to restart the Cold War as he went after a Russian player as the teams left the court at halftime. 

The Americans again fell behind by 10 points in the early going and led by only five at halftime - their smallest lead at intermission in either the 1992, 1996 or 2000 Olympics - but were never seriously challenged in the second half as they led by at least 10 points throughout the final 10 minutes.

With 85 points, the U.S. team had its lowest point total since the bronze medal game of 1988 - four years before NBA players started representing the United States.

Next up is a semifinal game Friday against Lithuania, which lost to the Americans by only nine points in the preliminary round. A victory would put the U.S. team into the gold-medal game Sunday against Australia or France.

Kevin Garnett scored repeatedly from inside of three meters and led the Americans with 16 points.

Alexander Bachminov led Russia with 12 points before fouling out.

Carter didn't find it a laughing matter in the final minute of the first half when he caught an elbow in the lower abdomen as he went up for an alley-oop dunk. He lay on the ground writhing in pain for several seconds before getting up clutching his belly.

As the first half ended, Carter went after a different Russian player from the one who had elbowed him, yelling as if he wanted to fight.

The American coaches restrained Carter, but two other U.S. players - Gary Payton and Baker - continued mixing it up with the player who had elbowed Carter, Yevgeny Pachutin, who himself had to be bearhugged by one of the referees as he tried to retaliate.

Payton made two free throws with 15:41 left to give the U.S. team its first double-digit lead, 58-47, and Shareef Abdur-Rahim scored on a drive with 1:07 to go for the Americans' biggest lead, 85-68.

"It is clear they are the best team and the result is determined by how they want to play, and tonight they played well," Russian coach Stanislav Eremine said. "Can they be beaten? Yes. But they have to play poorly and the opponent has to play A-plus."

Like they had done several times during the Olympics, the Americans started slow. They had three turnovers and a missed shot on their first four possessions, while the Russians repeatedly beat them downcourt in transition.

Russia went ahead 12-2 on a 3-pointer by Pachutin, and the United States wouldn't catch all the way up until Ray Allen drove around Nikita Morgunov for a slam dunk that made it 22-22 with 10:09 left before halftime.

The score was 24-24 when Carter found it so funny that he had blown his missed dunk, and Jason Kidd gave them the lead for good shortly thereafter by making one of two free throws. The U.S. team led for the rest of the first half - but never by more than seven.

TITLE: Outcry as Suharto 'Too Ill' for Trial
AUTHOR: By Achmad Sukarsono
PUBLISHER: Reuters
TEXT: JAKARTA, Indonesia - An Indonesian court on Thursday ruled former autocrat Suharto was too ill to stand trial for corruption, all but ending efforts to punish him for widespread graft and abuses during his army-backed rule.


In a decision that triggered street clashes and raised fears of further violence following a spate of bomb blasts that have coincided with the case, the court also lifted Suharto's city arrest order, allowing him to travel anywhere.

Prosecutors said they would lodge an appeal and Attorney General Marzuki Darusman said he was disappointed justice had not been done.

The trial was seen as a test of Da rusman's credibility and the government's commitment to punish those responsible for widespread corruption and human rights abuses during Suharto's 32-year, army-backed rule.

Independent doctors told the South Jakarta Court the 79-year-old former president, who has suffered three strokes since stepping down in 1998, had the comprehension of a young child and was mentally and physically unfit to stand trial.

"The court has decided that the criminal case of Suharto cannot be accepted," said chief judge Lalu Ma riyun. "Therefore the case is closed."

On the volatile streets of Jakarta, the reaction was quick.

Troops fired warning shots above the heads of scores of outraged students as they headed toward Suhar to's luxury home in central Jakarta. The students fled, but later burned a motorcycle after torching a bus.

Local residents then tried to attack two plainclothes security officials nearby, who were forced to draw pistols and fire shots in the air to protect themselves.

Riot police later fired tear gas as protesters clashed with Suharto loyalists near the ex-autocrat's luxury home. Some of the pro-Suharto group said they were paid up to 200,000 rupiah ($20) to attend.

The Australian Embassy warned its citizens in Indonesia of the risk of a further violent backlash over the ruling and a planned 12 percent fuel price hike from Sunday.

And chief security minister Susilo Bambang Yudhoyono said security would be beefed up at potential targets ahead of the price rise.

Almost all goods in the impoverished nation are shipped by road, so fuel prices affect all prices and rises have triggered riots in the past.

As the turmoil envelopes his capital, President Abdurrahman Wahid is on yet another overseas trip.

His frequent forays abroad since taking power 11 months ago have won him few friends, and will do little to reassure world leaders furious at his failure to rein in Timorese militias who slaughtered three foreign UN aid workers and several locals in West Timor three weeks ago.

TITLE: Peru Downplays Talk of Coup As Fujimori Visits Washington
AUTHOR: By Monte Hayes
PUBLISHER: The Associated Press
TEXT: LIMA, Peru - President Alberto Fujimori flew to Washington before dawn Thursday for urgent meetings with the Organization of American States as coup rumors unsettled the nation.


Fujimori, who has ruled for a decade, flew out of Lima's international airport on his presidential jet at 2 a.m., only hours after an opposition congressman who had defected to his ranks charged that the army high command was pressuring lawmakers to participate in a plot to provoke a coup within 20 days.

"He will be there for a couple of days and will return to Peru on Saturday," Prime Minister Federico Salas said on Radioprogramas.

He downplayed the coup rumors, saying, "I haven't observed any indications that would make me think we are heading toward a coup d'etat."

The congressman's warning that the army was plotting to restore power to Fujimori's deposed spy chief, Vladimiro Montesinos, put Peruvians on edge just when it appeared that dialog was pushing the country toward repairing its damaged democracy.

Eduardo Latorre, the OAS' permanent secretary in Peru, met with Fujimori for nearly two hours in the Government Palace shortly after the congressman's denunciation of the coup plot.

Afterward, he downplayed the congressman's charge, saying it had been mentioned in passing during the meeting with Fujimori. Latorre said Fujimori planned to fly to Washington on Thursday to meet with OAS Secretary General Cesar Gaviria "to discuss the fortification of the democratic process here in Peru."

The army's information office issued a statement Wednesday night calling Congressmen Miguel Mendoza's allegations of a coup plot "absolutely false."

Mendoza, who defected from the opposition to join Fujimori's Peru 2000 party, said the army intended to permit the return of Montesinos. He announced Wednesday that he was quitting Fujimori's party and said joining it had been a mistake.

"I am denouncing that a group of congressmen from Peru 2000 have been pressured to sign letters of resignation, prepared in the army's high command, to form a congressional group in favor of Vladimiro Montesinos," Mendoza said.

A meeting between government and opposition representatives was suspended soon after Mendoza made his allegation. The talks are aimed at repairing Peru's damaged democracy and are being held under the auspices of the OAS.

Fujimori announced Sept. 16 that he would call new elections in which he would not be a candidate. The decision was prompted by a corruption scandal surrounding Montesinos, who was caught on videotape apparently bribing an opposition congressman to defect to Fujimori's ranks.

TITLE: 66 Dead in Greek Ferry Calamity
AUTHOR: By Lisa Orkin
PUBLISHER: The Associated Press
TEXT: PAROS, Greece - The captain and three crew members of a Greek ferry boat that sank, killing at least 66 people, were charged Thursday with multiple counts of murder.


Investigators were focusing on reports that the ship loaded with more than 500 passengers was apparently on automatic pilot minutes before striking a well-marked rocky outcropping, bolstering accounts by survivors that crew members were watching a soccer match on television Tuesday night when the ship sank over three kilometers from shore.

Efforts by navy divers and rescue crews to find at least eight missing people were hampered by a fierce gale that has stopped all boat traffic to and from this holiday island. Rescue teams said there could be up to 14 missing.

Greece's worst ferry sinking in 35 years has dealt a serious blow to this nation that prides itself on a maritime tradition dating back more than 2,000 years. In 1965, 217 people died in the sinking of the passenger ship Iraklion.

Survivors have also accused the crew of panicking and failing to organize the evacuation of the ship, saying life boats were not quickly deployed. 

The ship's captain Vassilis Yannakis, his deputy, Anastasios Psychoyos, and two crewmen were charged with four felonies, regional prosecutor Dimitrios Dadinopoulos said.

The charges included multiple counts of homicide with possible malice, causing serious bodily injuries with possible malice, violating maritime regulations, violating international regulations on avoiding an accident, and sinking a ship.

The ship left Athens Tuesday afternoon and headed for Paros, the first of six stops that would eventually bring it to the tiny Lipsis islands near the Turkish coast. About 10 p.m., the 110-meter, 4,407-ton ferry struck the Portes islet.

Officials say it is not clear how the ship hit the rocks if it is true that at least one crew member was on the bridge.

"It's a rock with a light on it ... in a frequently traveled area that has been passed thousands of times. ... My question is, why did this happen?" asked Coast Guard chief Andreas Sirigos.

Coast guard investigators were examining passenger reports that most of the crew was watching a European Champions League soccer match when the ferry crashed.

TITLE: IN BRIEF
TEXT: Gas Blast Kills 36


BEIJING (Reuters) - A gas explosion in a coal mine in southwestern China has killed 36 miners and trapped another 122 underground, the official Xinhua news agency said on Thursday.

83 people were also hurt in the blast that ripped through Muchonggou coal mine in Shuicheng province Wednesday evening, Xinhua added.

Hundreds of rescue workers were trying to restore the air supply in a bid to save the stranded miners.

Xinhua gave no further details about the cause of the blast and local officials were not available for comment.



S. Korea Gives Aid


CHEJU, South Korea (AP) - South Korea will give 500,000 tons of grain to North Korea to help the communist state overcome food shortages this winter, the South Korean government said Thursday.

The announcement was made on the resort island of Cheju where high-level negotiators from the two Koreas began talks on ways to ease tension on the divided Korean Peninsula.

South Korean officials have been mulling the timing and size of the food loan amid some criticism that they were pampering the Pyongyang regime at a time of economic uncertainty at home. 



Twins To Be Separated


LONDON (Reuters) - The parents of seven-week-old Siamese twins have decided not to challenge a British court's order to separate the girls, killing one to save the other, their lawyer said on Thursday.

The decision by the devout Roman Catholics from Malta clears the way for the operation that will give Jodie a chance at life without her conjoined sister Mary, who would soon draw the lifeblood from her.

Their lawyer John Kitchingman said they would not appeal to Britain's highest court, the House of Lords.

"The parents, having taken this case to two courts before four judges, whose decision was unanimous, feel that they have done the best they can for both daughters and are unable to take this any further,'' he said in a statement.



Sharon Sparks Protest


JERUSALEM (Reuters) - A visit by Israeli party leader Ariel Sharon to a holy site in Jerusalem on Thursday touched off violence between Palestinian protesters and Israeli police, casting a fresh shadow over the Midlle-East peace process.

In another potential setback for the process, an Israeli soldier died of wounds that he received on Wednesday in a bomb attack on a convoy of Jewish settlers' cars, which were being escorted by the army in the Palestinian-ruled Gaza Strip.

Police, who fired in the air to disperse the stone-throwing protesters in Jerusalem and the West Bank city of Ramallah, said 25 police had been hurt in Jerusalem.

Palestinian officials said that six protesters were injured in Jerusalem, while ambulance staff claimed that five were hurt in Ramallah.

TITLE: Defense Mauls Key Witness At Lockerbie Bombing Trial
PUBLISHER: Reuters
TEXT: THE HAGUE, the Netherlands - Defense attorneys at the Lockerbie trial hammered away at a key prosecution witness on Thursday, portraying him as a man with Walter Mitty-like delusions.

The cross-examination on Abdul Majid Giaka may have harmed the case against Abdel Basset al-Megrahi and Al-Amin Khalifa Fahima, two Libyans accused of planting a bomb on Pan Am Flight 103 that blew up over Lockerbie, Scotland in 1988, killing 270 people.

Majid, who became a CIA mole in 1988, was on the stand for 2 1/2 days until midday on Thursday. His appearance was concealed and his voice muffled.

After calling the self-professed former double agent a desperate liar on Wednesday, defense co-counsel Richard Keen summed up his cross-examination by comparing him to Walter Mitty - a fictional fantasist who makes things up to impress others.

"Have you managed to dip into the gems of American literature such as short-story writer James Thurber? Have you encountered someone called Mitty, first name Walter?" he asked.

The prosecution is seeking to prove that Megrahi and Fahima, posing as employees of Libyan Arab Airlines (LAA) in Malta, put a bomb on a plane bound for Frankfurt that was eventually transferred to the Pan Am flight at London's Heathrow airport.

Keen, who earlier said that Majid would do anything to secure passage to America, also sought to show he was highly motivated by money.

"Have you made any plans on how you would spend the $4 million reward if the accused in this case are convicted?" he asked, referring to funds offered by the United States for information leading to the conviction of the two.

Majid, who has lived under protection in the United States for nine years, said he had not been promised such a sum. "This is all rubbish," he said.

TITLE: Opposition Pressures Milosevic To Resign
AUTHOR: By Philippa Fletcher
PUBLISHER: Reuters
TEXT: BELGRADE - The Yugoslav opposition said on Thursday it would launch a widespread protest campaign to force President Slobodan Milosevic to admit he was defeated in presidential elections.


"We will call people onto the streets and tell them not to leave until he gives up power," one opposition leader, Zoran Djindjic, told Reuters.

It was the first indication of how the opposition hopes to keep up the pressure on Milosevic to leave office and make way for their candidate Vojislav Kostunica, who received strong support from a huge rally in Belgrade on Wednesday night.

Milosevic also came under pressure from other directions, with increasing signs of dissent among his former backers and a declaration of support for Kostunica from the country's Serbian Orthodox church.

Hardline Serb leader Vojislav Seselj, a onetime ally of Milosevic and deputy prime minister in the Serbian government, said Kostunica had won outright victory in Sunday's presidential election and he rejected a planned runoff vote on Oct. 8.

Djindjic said the opposition would call for continued protests, including a strike campaign and boycotts of schools, offices, theaters and cinemas.

He spoke after the government-run Federal Electoral Commission issued a final ruling that Milosevic and Kostunica must face a runoff vote on Oct. 8 because neither won a majority in the first round.

The opposition condemned the Commission results as a fabrication. Their results show Kostunica won more than 50 percent support in Sunday's poll, enough for outright victory.

The church decision to back Kostunica came in a statement from the Holy Synod, led by Patriarch Pavle, that described him as Yugoslavia's "elected president" and saying that when he took charge of state he should do so peacefully.

Seselj, a radical nationalist, backed the opposition's claim that Kostunica had been denied victory by fraud and called for the resignation of Serbia's powerful interior minister.

Seselj said Vlajko Stojiljkovic should step down because party elites had misused the police during the election campaign.

Stojiljkovic is a member of Milosevic's ruling Socialists, which is still formally in coalition with Seselj, although Seselj's Radical Party ran separately for the elections.

In Montenegro, Serbia's smaller sister republic within Yugoslavia, Milosevic's political allies said they were unsure whether they would stay in a coalition with his Socialist Party.

"When we have definite results from all the elections, we'll sit down and make a decision about who we will work with in the new parliament," Zoran Zizic, deputy leader of the Montenegrin Socialist People's Party, told Reuters.

"Our primary goal will be to make a coalition for a stronger Yugoslavia," he said. The Montenegrin party holds the balance of power in both houses of the parliament elected on Sunday.

However, there was no sign of Milosevic backing down. He met the top leadership of his party on Thursday to prepare for the next round of voting, state news agency Tanjug reported.

The U.S. and Europe have backed Kostunica but have avoided making threats to Milosevic which might backfire among anti-Western voters in Serbia. They have stuck to the line that the opposition must carry its campaign by itself.

In Moscow on Thursday, French Foreign Minister Hubert Vedrine said that he saw little support for Milosevic from the Kremlin, and ruled out a split between the West and Russia over Yugoslavia's elections.

Kostunica's party was due to hold a news conference later to outline details of the protest campaign.

But opposition leaders were united in rejecting the surprise late-night announcement of a runoff by the Election Commission.

The Election Commission's statement of the final poll results said Kostunica won 2,474,392 votes, or 48.96 percent, and Milosevic 1,951,761 votes, or 38.62 percent.

TITLE: Kafelnikov Seals Gold in 5-Set Marathon
AUTHOR: By Larry Fine
PUBLISHER: Reuters
TEXT: SYDNEY - Russian Yevgeny Kafelnikov defeated Tommy Haas of Germany in five grueling sets on Thursday to claim Russia's first-ever Olympic tennis gold.


The fifth-seeded Kafelnikov, a master of five-set matches, claimed a 7-6 (7-4), 3-6, 6-2, 4-6, 6-3 victory in a baseline battle that took three hours and 34 minutes to produce a champion.

The victory put a golden finish on a frustrating season for former world number one Kafelnikov, who entered Sydney without a single tournament title this year.

After the unseeded Haas hit a backhand wide on the first match point, the 26-year-old Kafelnikov hurled his racquet high into the stands at Sydney's Olympic Park Tennis Center before taking a Russian flag on a victory lap around the court.

"To win the gold medal is beyond all expectations," said Kafelnikov, who hit a low after his third-round defeat at this month's U.S. Open. "I'm really proud of myself and proud of my country."

The 49th-ranked Haas, who has battled through hip and back injuries this season, was more thrilled by his unexpected run to the final, than disappointed by his defeat.

"It is a great result," said Haas, a one-time protege of Boris Becker. "I'm very happy and pleased with the way I played. It's been a great event, a great experience and [I'm} going home with a silver[medal]"

Kafelnikov, a former French and Australian Open champion, had won four of five five-set matches he played in grand slam tournaments this season, including three at the French Open, and the Russian proved to be too tough for Haas in the climactic set.

The first set of the seesaw match went to Kafelnikov, who won the tie breaker 7-4 after falling behind 3-0.

He had reached the men's final without losing a set, but the hard-hitting Haas changed that in the second when he broke the Russian in the eighth game with a ferocious forehand winner.

In the third, however, Haas had trouble holding serve and Kafelnikov regained control with a break in the sixth and another in the eighth to take a two-sets-to-one lead.

He sagged at the start of the fourth set, however, and Haas took advantage of a double fault and some loosely played points to break serve and ultimately send the gold-medal match to a fifth set.

The Russian said he geared himself up for the final set.

"I talked to myself and said, 'You came all the way here and to play the final match in the Olympics and not to win it, you will regret it for the rest of your life,"' Kafelnikov said. "That's what got me motivated."

TITLE: SPORTS WATCH
TEXT: Sisters Win Doubles


SYDNEY (AP) - The Williams Invitational, also known as Olympic women's tennis, ended with a fittingly ferocious flourish.

The sisters dominated in Sydney from start to finish, beating the Dutch team of Boogert and Miriam Oremans in the final Thursday, 6-1, 6-1.

The gold was the second for Venus, who won the singles title Wednesday.

"For me, this is almost bigger than singles," she said. "To have a victory like this with Serena, my sister and best friend, doesn't happen very often."



Appeal Denied


SYDNEY (AP) - Facing the world for the first time since her numbing disappointment, angelic, Andreea Raducan smiled and spoke loud and clear. In her heart, she insisted, she knows she did nothing wrong.

But shes still won't get her gold medal back. 

"All I did was take an innocent pill," Raducan said calmly after her fate was decided Thursday. "I don't understand why everything has turned out this way. But in my heart, I am at peace."

Arbitrators denied the Romanian's appeal to have her gold medal restored, upholding a decision by the International Olympics Committee. The IOC cited an unbendable drug policy that couldn't excuse what has been termed a simple doctor's mistake.

Raducan was supposed to be the next Romanian hero, the first to win all-around gymnastic gold since Nadia Comaneci in a small country where great Olympic moments are few and far between.

But she tested positive for the banned stimulant pseudoephedrine, a drug found in over-the-counter cold medicine, after the all-around finals.



Jones Takes 2nd Gold


SYDNEY (AP) - Marion Jones completed what probably was the most one-sided sweep of the sprints in Olympic history with her runaway victory in the 200 meters. Two gold medals down, three to go.

"I don't think anybody, at least I hope none of you guys, doubted me in the sprints," she told reporters with a smile after the race Thursday night.

Jones brushed aside the controversy surrounding her husband's positive test for steroids as if it was one of those pesky moths at Olympic Stadium, then won the 200 by 0.43 seconds, the largest victory margin in the race since Wilma Rudolph won by 0.45 seconds in 1960.

In the 100 final Saturday, Jones won by 0.37 seconds, the second-largest margin in the Olympics ever, man or woman.

TITLE: Norway's Women Take Soccer Gold in Overtime Scrap
AUTHOR: By Joseph White
PUBLISHER: The Associated Press
TEXT: SYDNEY - As the U.S. women's soccer team assembled behind the silver-medal podium, Mia Hamm left her place in line to talk to her teammates. Some were smiling, some were crying, some looked dazed.


"She said, 'Hold your head high - and be proud.' And we were," defender Brandi Chastain said. "I think you could see that in everybody's eyes. We're very, very proud of what we accomplished. And I hope everybody who watches the game understands it wasn't easy."

In the 12th minute of sudden-death overtime, substitute Dagny Mellgren scored to give Norway a 3-2 victory Thursday over the Americans and an Olympic gold medal. It also gave it the right to claim a spot next to the United States as the top team of the past decade in major international women's soccer.

"Maybe we are the best team in the world now," said Norway coach Per-Matthias Hagmo. "We have beaten the United States four times this year, China three times."

With the victory, Norway adds the 2000 Olympic title to its 1995 World Cup championship. The United States can claim the 1991 and last year's thrilling World Cup triumph in front of U.S. fans at the Rose Bowl, as well as the gold medal at the 1996 Atlanta Games.

The victory also means Norway is still the only nation with an all-time winning record (15-13-2) against the United States. The Norwegians are also the only team to beat the Americans in a World Cup or Olympic tournament, the other victory coming in the 1995 World Cup semifinals.

"Norway did what they had to do," coach April Heinrichs. "They kept their game plan very simple and they never gave up."

The game was by far the best of the Olympic tournament. The U.S. team took an early lead, lost it just before halftime, then fell behind in the second half before forcing overtime with Tiffeny Milbrett's goal seconds before the end of regulation.

"When the U.S. team scored very early I thought 'No, not again. Why should they win again and again and again?'" said Gro Espeseth, who scored Norway's first goal. "It was terrible when Tiff scored the goal when they were a few seconds from the end. But we came back. Dagna scored a wonderful goal and it was a magic moment."

Although these Olympics weren't a cumulative last hurrah for the stars of the U.S. team, it's likely that the lineup will change before the 2003 World Cup.

Carla Overbeck is the only player definitely retiring from international play this year, but it's inevitable that younger players will start to challenge longtime veterans such as Kristine Lilly, Julie Foudy, Joy Fawcett, Chastain and Hamm.

The loss is a tough one for Heinrichs, who has been under pressure to match predecessor Tony DiCicco's success. Heinrichs' aggressive style and unusual tactics have drawn critics, but her team won every tournament it entered this year before the Olympics.

"They won the silver medal but their game was golden tonight," Heinrichs said. "I'm incredibly proud of each one and incredibly proud of their achievements. ... We couldn't have started better and it was a coach's dream to push the ball around the way we did and have as much possession as we did."

The winning goal came when Mellgren took a deflection off defender Fawcett's head as they played a long ball from Hege Riise. The ball hit Mellgren's shoulder and landed at her feet before she pushed it to the left of goalkeeper Siri Mullinix from six meters.

Foudy appealed to referee for a hand ball, but referee Sonia Denoncourt replied: "Don't do this to me, Jules."

Norway nearly had it won in regulation, but Milbrett's second goal with seconds left in second-half injury time tied the game. Milbrett outleaped defender Goeril Kringen to knock home Hamm's long cross from the right wing. There was literally no time left - when the ball was returned to the center circle for the kickoff, Denoncourt signaled the end of the second half.

An interesting moment occurred with the score tied 1-1 in the 60th minute, when Lilly's drive was headed off the line at the post in a great defensive play by Kringen. A year ago, in the World Cup final at the Rose Bowl, it was Lilly's header on the line in overtime that prevented a China victory and sent the game to penalty kicks.

Hamm did almost all the work, and Milbrett scored the goal as the Americans took a 1-0 lead in the fifth minute. Hamm took Foudy's pass and fought off Kringen in the left side of the box, drew the goalkeeper out and passed to Milbrett, who one-touched the ball into the open net from seven meters.

The Americans put on a clinic of smooth passing to dominate possession in the first half, while Norway unsuccessfully tried to work the longball. But the Norwegians kept at it - scoring all three goals using the set pieces and long balls at which they excel.

TITLE: Russian Giant Falls to Unknown American
AUTHOR: Alan Robinson
PUBLISHER: The Associated Press
TEXT: SYDNEY - Rulon Gardner, seemingly destined to be America's most improbable star of the Sydney Olympics, celebrated the night of his life at Michael Johnson's birthday party - a surprise guest in every sense of the word.


When Gardner left home in Colorado Springs for the Olympics, few knew this Greco-Roman wrestler with the 135-centimeter chest and an indefatigable work ethic built on endless hours of labor at his family's dairy farm.

When Gardner goes home, he may be in for a surprise nearly as big as his 1-0 victory over the supposedly unbeatable man of wrestling, three-time Olympic champion Alexander Karelin of Russia.

The whole nation is going to know, or at least will think it does, this 29-year-old with a sharp mind and a pleasant disposition who isn't quite "aw, shucks" but is refreshingly real. The man who now wears the gold that everybody had conceded to Karelin.

The man who ruined Karelin's tomorrow, then found himself on "Today" talking to a country eager to know much more about him.

"Even though I didn't think I was going to win, I was going to work as hard as I could," Gardner said. "If I didn't win, fine. But if I did, well, it's just incredible."

For those in wrestling, it wasn't difficult to put Gardner's upset into perspective: It was the biggest in the history of the sport.

Karelin was unbeaten in international competition, a man who had lost only once, as a 19-year-old in the 1987 Soviet championship. A man who gives up a point every decade or so.

Gardner's upset landed him an invitation to Johnson's birthday party at Planet Hollywood on Wednesday night - and it possibly ruined Karelin's retirement party.

Karelin was expected to wrestle his way through an unbeaten, unscored-upon tournament as always, get his fourth gold medal from IOC president Juan Antonio Samaranch and retire comfortably to his job as a Russian colonel and a member of parliament.

Now, the man seen as the perfect wrestler cannot win four golds in a row even if he wins in Athens in 2004.

No, the streak is over, with no protest possible, and Karelin must decide if, at age 33, there is anything left to wrestle for. Except, perhaps, to prevent his last match from being his only international loss.

Karelin said nothing about his plans - or, for that matter, anything else. His only known words were a few mumbled in Russian to Gardner at the end of the match.

While Gardner didn't quite believe the moment until it happened, he realized long ago it was possible. He and U.S. coaches Dan Chandler, Steve Fraser and Rob Hermann studied tapes of Karelin that showed him slower than before, of being less capable of hitting his famed reverse body lift and other scoring moves. At times, he even looked slow and tired.

"Look at his scores," said Fraser, who, with Jeff Blatnick, won the only previous U.S. Greco-Roman gold medals, both in 1984. "They're 1-0 and 2-0."

Their great hope, of course, was that Gardner could somehow get a point and force Karelin to wrestle from behind - something he hadn't done in over a decade, especially not in his third match in a day.

Gardner got that point when Karelin broke his hands on a clinch early in the second period, the point American silver medalist Matt Ghaffari could not get in his 1-0 overtime loss to Karelin in Atlanta in 1996.

With the lead, Gardner could use his strength and stamina he built up during years on Reed and Virginia Gardner's dairy farm in Afton, Wyoming, milking cows in sub-zero weather, then lifting frozen-cold bales of hay to feed them. Not a hard-scrabble life, for sure, but also not an easy one.

"I know it's cold in Siberia [Karelin's home] but it can get to 40 below where I grew up, too," Gardner said. "I don't know if it can get that much colder even in Siberia."

Maybe that's why Reed Gardner never feared that even Karelin, the great Karelin, could wear down his son. Not this night, not any night.

"It's twice a day, 365 days a year, 730 times a year, milking the cows and taking care of them," said 70-year-old Gardner, the father of nine college graduates. "There are no days off in the dairy business. He had his jobs to do and he did them, every day. He would go to football practice or wrestling practice [at Star Valley High School], then come home and do his work."

Even if, at the time, Rulon Gardner cursed his fate as being the youngest of the nine, with no one left at home to help this all-state football player and wrestler with the daily chores.

"I would go out, as a kid, and I could barely pick up a bale of hay," he said. "By the time my senior year came around, I was grabbing four bales of hay at a time, each [40 kilograms]. Just grabbing them and walking with them and seeing how physically strong I could be.

"The reason I think I won is because I work harder than anyone else, train harder. And every day I live my life, I do everything I need to do to put my life in order."

Gardner doesn't know where this upset of upsets will take him. He planned to go to Athens in 2004, but that might not be necessary now. He is certified to teach school, just as his wife, Stacy, does. He has no idea how much money he will make from the nine biggest minutes of his life.

"I don't know how big a deal this is," he said. "All I know is that I did tonight what I always try to do, go out and win a match. It's personal satisfaction knowing I did it. But this isn't my ultimate goal.

"My ultimate goal is to know that I can do the best that I can. I don't think money or this can give you happiness. You have to find happiness from doing your work."

TITLE: U.S. Team Ends Cuba's Baseball Domination
AUTHOR: By Joe Kay
PUBLISHER: The Associated Press
TEXT: SYDNEY - No names, no more. "I said that when this is over, everybody in the world is going to know about these players," manager Tom Lasorda said. "And by golly, they do."


By doing what no one thought possible, a ragtag bunch of U.S. minor leaguers won their country's first baseball gold medal and fulfilled the prediction of its blustery Hall of Fame manager.

A 4-0 victory Wednesday night over Cuba gave the Americans an identity as well as a medal.

Ben Sheets - the pitcher who brought the Cuban baseball dynasty to its knees.

Mike Neill - the outfielder who homered and made the diving catch that clinched America's first Olympic baseball gold medal.

Ernie Young - the player who shoved the Cubans' catcher and beat their hardest thrower.

Beat them? They shut them out, leaving them without a gold medal for the first time in the three Olympic tournaments.

The Big Red Machine of international baseball tore through the competition in Barcelona and Atlanta, going undefeated while picking up a matching set of gold medals.

Cuba brought the core of that team to Sydney, where professionals were allowed for the first time and bats were made of wood, not metal. Thirteen of the Cubans already had Olympic gold medals.

The Americans? They had a pitching staff of high draft picks and an everyday lineup of big-league castoffs. The most prominent player was 37-year-old catcher Pat Borders, who was the MVP of Toronto's 1992 World Series championship.

"I know that when this team was picked, a lot of people looked at the list and said, 'Who are these guys?"' said Doug Mientkiewicz, who twice won games with homers.

In the end, they were the guys celebrating on the field with flags draped around their shoulders and a look-at-us-now expression on their faces.

"I managed the Dodgers for 20 years and had a lot of great moments," Lasorda said. "But this is the greatest moment of my life."

Cuba's undefeated streak in Olympic baseball ended at 21 games with a loss to the Netherlands during the preliminaries. The Cubans recovered by beating the Americans 6-1 Saturday in a game remembered for a bench-clearing push.

Outfielder Ernie Young shoved the Cuban catcher after being hit in the back with a fastball.

Borders also got spiked at home on a play as the game wound down with raw feelings.

"We said to ourselves, 'We can't get into that type of game,"' Mientkiewicz said. "You let a sleeping dog lie. They started arguing among themselves."

It was more like grumbling. One after another, the Cubans went down on harmless ground balls induced by Sheets. Through eight innings, they had only three singles and 16 ground-ball outs.

No one could remember the last time Cuba's vaunted offense failed to score.

"As far as records go, I'm pretty bad," manager Servio Borges said. "I really don't remember, but it could have happened some time."

The United States scored on Neill's tension-breaking solo homer in the first and a three-run fifth inning featuring Borders' RBI double and Young's bases-loaded single. By the eighth, they sensed that a wild celebration was only three outs away.

"I've never wanted to make an out in my life, but I couldn't wait to make an out in the eighth and get us back on the diamond," Mientkiewicz said.

Sheets struck out the first two Cubans, then got Yasser Gomez to hit the fly down the left-field line that Neill caught with a jarring dive.

Sheets slid to his knees and screamed. He was soon engulfed by teammates who joined hands and raised index fingers.

"Cuba has been the dominating team of all time," Young said. "Baseball was started by us, it's played by us and now we won the gold."