SOURCE: The St. Petersburg Times
DATE: Issue #616 (0), Tuesday, October 31, 2000
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TITLE: Neo-Nazis Taking Bite out of Dracula
AUTHOR: By Erik Kirschbaum
PUBLISHER: Reuters
TEXT: SCHENKENDORF, Germany - Count Dracula, an affable antiques dealer living in a castle near Berlin, is being driven out of Germany - not with garlic, crucifixes or sunshine but by neo-Nazi arsonists and intransigent local bureaucrats. 


The 60-year-old Berlin native and adopted descendant of the Romanian royal family has turned his famous name into a thriving restaurant, beer garden and antiques business in a rural hamlet south of Berlin. 

A philanthropist at heart, Count Dracula also hosts a popular "blood donor" festival on his estate for the Red Cross each June, rising from a coffin to open the party that draws thousands of donors who have left behind more than 3,000 liters of blood. 

"You can do a lot with a name like this," Count Dracula told Reuters. 

Yet Ottomar Rodolphe Vlad Dracula Prince Kretzulesco, heir of the 15th-century Transylvanian prince whose rule inspired Irish novelist Bram Stoker's 19th century "Dracula," says he no longer feels welcome in eastern Germany. He wants to move to England, Ireland or perhaps even the United States. 

"I want to get out of here," said Dracula, who was formally adopted by heir-less Dracula descendent Katarina Olympia Princess Kretzulesco Caradja in 1990, four years before her death. "I don't want to live here anymore. I'm afraid. I want to live in peace. I can't sleep nights without worrying the place may be burned down." 

In a region with an unemployment rate of 20 percent, many idle youths in this sleepy village 60 kilometers southeast of Berlin, have turned to neo-Nazi gangs that in the decade since German unification have terrorized foreigners. Dracula suspects the fact that the castle and the 12.95-hectare estate once belonged to a wealthy Jewish family may be the cause of his troubles. 

"There was a bunch of about 35 in the beer garden singing Nazis songs and carrying Nazi flags," said Dracula, who was born in west Berlin as Ottomar Berbig and trained as a baker. 

"They were making anti-Semitic remarks like 'Jews get out' and 'Jew swine.' I went over and told them to leave. They said 'Get lost Dracula, we're going to suck the blood out of you.' 

"It scared me afterward to think that there were 35 of them and I was all alone. But they left." 

For Dracula, the last straw was the bureaucrats who have made his life miserable and defied his efforts to capitalize on his moniker by turning his 46-room "Dracula Castle," which he also hires out for parties and mediaeval jousting festivals, into a bona fide tourist attraction. 

They have fined him for violating strict noise rules by holding country and western concerts in his beer garden and have sent in the police to write hundreds of parking tickets whenever he has organized big events on his spacious estate. Local authorities forced him to cancel a vampire festival last summer. 

He said he has had four offers from local investors in the southern state of Bavaria to open a Dracula castle. The authorities in Bavaria, he said, seem to understand what a tourist magnet the Dracula business could be. But he has his heart set on Britain or the United States. 

The Bram Stoker novel "Dracula" is arguably the most famous vampire story of all time. It was loosely based on Prince Vlad of Transylvania, also known as Vlad the Impaler or the Dragon (Dracula in Romanian) who drove Turkish armies from the country in the 15th century. 

With his elegant tailcoat, long curly black hair and his full mustache, Germany's Count Dracula gives visitors the instant impression that he is something extraordinary. The menu at the restaurant includes "Dracula sausages" filled with garlic and blood-red schnapps. 

"My dream is to get on a talk show one day in America," he said with the deadpan humor that matches his Berlin accent.

TITLE: More Bodies Retrieved From Wreck of Kursk
PUBLISHER: Combined Reports
TEXT: MURMANSK, Far North - Divers working in the Barents Sea retrieved eight more bodies from the wreck of the Kursk submarine on the weekend, a spokesman for Russia's Northern Fleet said on Monday.


The salvage operation continued a day after a memorial ceremony was held in Severomorsk's central Courage Square for the 118 crew who died when the submarine sank on Aug. 12.

"Forgive us," Defense Minister Igor Sergeyev said during the ceremony. "Farewell, and let the ground beneath you be soft as down."

President Vladimir Putin did not attend, instead making an appearance at a mass in Moscow for victims of a military plane crash last week. On Monday he was in Paris for an EU-Russian summit.

The family of Lt. Capt. Dmitry Ko les nikov, who scrawled his final note in darkness after the accident, was due to take his body back to his home town of St. Petersburg.

Divers found a note last week in Ko les nikov's pocket, scribbled after the submarine was rocked by an explosion.

In a telephone interview with The St. Petersburg Times, Kolesnikov's widow Olga was mildly criticial of the salvage effort.

"I think they should have waited and brought up the submarine together with the whole crew later," she said. "I think the boys themselves would have wanted to be together right to the end."

"It's difficult for me to say I'm happy that they found [his body], but I am glad at the same time," she said.

"I was against the operation," said Vla dimir Mityayev, father of Capt. Alexei Mityayev who was also on the Kursk.

"But if they've started, they should finish the work," said the former submarine officer.

Kolesnikov's former classmates, who had gathered at the St. Petersburg Submariners Club on the weekend to talk about funeral arrangements, said the sailor had had premonitions of disaster before the Kursk's fatal journey.

Irina Goreva, who also went to St. Petersburg school No. 66, said Ko les ni kov had congratulated her when she was pregnant, but said he was afraid he would never have his own children.

"We love him, not because he is a hero, but because he was a great person," she said.

Olga Kolesnikova said her husband had written her a poem about death before the disaster.

"I asked him where these sad thoughts came from, and he said he didn't know - they just came to him," she said.

A total of 12 bodies have now been pulled from the wreck, including four which were recovered last week, said the Northern Fleet spokesman.

The spokesman, reached by telephone at the fleet's Severomorsk base, said efforts were continuing on Monday to recover more of the bodies.

The multinational team of divers is operating from a platform sent from Norway. The divers can work for around six hours at a time at the depth of 108 meters where the Kursk came to rest.

Naval officials have said divers should take no unnecessary risks in their work, made extra hazardous by the cold and twisted metal from the two blasts that tore through the Kursk.

The exact cause of the disaster is still yet to be established.


- Reuters, SPT

TITLE: Customs To Halt Culture Exports
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: As the months-long conflict between Pulkovo customs and Culture Ministry officials rages on, those thinking of taking home even innocent souvenirs beware: They stand a good chance of being confiscated.


The battle over who gets which taxes for the export of so-called cultural valuables will take a new twist from the beginning of November, with airport customs looking set to seize everything it deems culturally valuable.

The problem is in the definition of valuable. While any item over 100 years old must automatically stay in Russia, observers of the case say that there are no clear rules for assessing the worth of paintings bought from a street artist, Russian folk art sold in hotels, or manuscripts from the 1950s.

Up to now in the saga, customs officials have been stopping items they are unsure about - a tactic that has exasperated the St. Petersburg Board for the Preservation of Cultural Valuables, where the items get sent if they are not reclaimed by a friend or relative seeing the owner of the item off at the airport.

The board has complained about receiving any and every kind of trinket, as well as valuable paintings, confiscated by beady-eyed customs officials.

"[State] law offers a list of items that are to be considered valuable, instead of a [unifying] idea of what a cultural valuable is," said Andrei Leshchinsky, head of the board.

"At present, any painting, drawing, stamp or piece of fabric, glass or porcelain - absolutely everything can legally [qualify]."

While mass print runs of Alexander Pushkin's poetry probably won't merit a second glance, any item that could be thought of as one of its kind will come under the microscope, no matter how worthless it may be.

"Is a threadbare bra that was made in 1812 a cultural valuable?" asked Boris Zaitsev, a professor at the Urals University and a government art expert. "To any normal human being, obviously not. But the law says it is, since it is over 100 years old."

In the past, the board assessed the worth of works of art brought to it for inspection, and this assessment was the basis of the 100 percent export tax.

But this summer, the board got fed up and claimed that the tax was illegal. Federal law, it said, does say that exported art should be taxed, but it does not specify at what rate. Therefore Pulkovo's figure of 100 percent was arbitrary and illegal.

This resulted in the board effectively stopping its work, leaving customs with no cost evaluation and no basis for taxes. 

The State Customs Committee has acknowledged that the law is vague, but refuses to back down on the grounds that the state budget is losing revenue without the export tax.

Result: stalemate, with the individual caught in the middle - the tourist who bought the art, but now unable to take it home.

According to Oksana Kudryavtseva, a spokeswoman for Pulkovo customs, without the board's evaluation, the only evidence of a cultural valuable's worth was the check from the store where it was bought. 

"People paid 100 percent of the sum on the receipt, and that was it," she said.

"But from Nov. 1, nothing will be allowed to be exported - checks notwithstanding - until we get instructions from the government clarifying the situation."

An exception will be made for artists taking their own works out of Russia for exhibition abroad, Kudryavtseva said.

"I anticipate the consequences will be nightmarish, but we have used all other means to get [our point of view] heard," she said.

"We have long been in the difficult situation when whatever we do is wrong. This is, of course, an emergency measure, but it is the only way we can force the government to finally resolve the issue."

The Duma's culture committee has assembled a group of experts to resolve the situation by amending and specifying legislation on the matter.

According to Sergei Korneyev, vice president of the Russian Association of Travel Agencies and one of the experts invited by the Duma to thrash out a compromise, recommendations from all sides are being taken into account, as well as international law.

"We will also have to coordinate potential amendments to the Russian Constitution and other legislation in related fields," Korneyev said. 

Until that has been done - and amendments to the law will go before the Duma for approval no earlier than the spring - the conflict shows no sign of ending.

"Developing a new law is a very time-consuming process taking up to one year," said Anatoly Vilkov, the head of the national division of the Board for the Preservation of Cultural Valuables.

"[But] I believe it is possible to solve the situation by [amending] the existing law."

"We would like to make a very clear distinction between pieces of art and household items," Vilkov said. "It should be possible to export items of insignificant artistic value without multiple restrictions."

TITLE: Geologist Claims Prehistoric Finds in Oblast
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: When St. Petersburg geologist Mikhail Karchevsky led a group of children on an archaeological expedition over the summer, the kids expected to find some interesting rocks and perhaps some old tools buried in the dirt. 


Instead, they may have found evidence of a 4,000-year-old civilization that existed on three islands in the Vuoksa River region of the Leningrad Oblast.

The evidence, according to Karchevsky, was a series of rock carvings and paintings that were discovered at the foot of some cliffs on one of the islands as the expedition worked for two months to scrape away moss and dirt. 

More evidence of an ancient civilization, said Karchevsky, is an 8,000 year old staircase - apparently man-made - found on a separate island to the paintings and sculptures.

But according to Olga Smirnova, an archaeological expert at the Hermitage Museum, the staircase is more likely to have been constructed by Finnish tribes in the 12th century. 

The paintings and sculptures will now need to be examined by other petroglyphic experts before they can be declared evidence of an ancient civilization.

"If Karchevsky finds a petroglyphics expert who is able to confirm these findings then we may have to start speaking about an unknown culture that existed here at those times," Smirnova said. 

On Nov. 8, Karchevsky and his youthful archeologists will get a chance to run their discovery by the experts at the Russian Geographical Society located in St. Petersburg.

The summer expedition was no accident. After finding out about the staircase the previous summer, Kar chev sky suspected there might be more to discover.

"I got the feeling that it wasn't the only thing we could find there but I didn't tell the kids because I didn't want to give them blind hope, said Karchevsky.

"I just decided to bring them back during the summer, remove the moss and small bushes from some of the rocks and see what was underneath."

What they discovered when they scraped off the moss and brushed down the rocks, according to Karchevsky, was a series of paintings that resembled a fish, a dog, and a prehistoric sign for the sun.

Under the debris on another rock, Karchevsky said that they discovered several sculptures that were as big as five meters.

"One of those sculptures looked like the huge head of some kind of monster with deeply carved eyes and a nose which has apparently fallen off," said Kar chevsky, showing pictures of the find.

"The other two seemed to be the smooth heads of two snakes with small eyes," he said.

Indeed, the Leningrad Oblast, Karelia and Scandinavia were all densely settled by tribes who built sculptures and painted petroglyphs all over these regions. 

"The thing is that the Vuoksa region resembles Onega Lake in Karelia, where many petroglyphs as old as 4,000 years have been found," said Karchevsky. 

It took scientists 50 years to establish the veracity of France's famous Lascaux Cave Paintings, so Karchevksy will have to be patient. Indeed, there were many doubters among scientists interviewed in relation to the find. 

Andrei Mazurkevich, one of the members of the Hermitage's Eastern Europe and Siberia archeology department, who saw a picture of the staircase, said that there was only a 20 percent chance the sculptures were made by man. 

"You know that sometimes nature can create such things that we can only wonder how they can be possible," he said - adding that other expeditions have revealed several other similar disappointments. 

But Karchevsky himself is sure about his discovery.

"As a geologist, I can tell man-made rock sculptures from those created by nature. My point is that there can't be so many naturally created sculptures and paintings in one place," he said. 

"But since I'm not an archeologist myself, I can't say for sure how old the sculptures and paintings are," he added.

TITLE: Belarus Opposition Stays Out of Round 2
AUTHOR: By Marine Babkina
PUBLISHER: The Associated Press
TEXT: MINSK - Belarus opposition groups boycotted runoff votes Sunday in parliamentary elections, claiming the balloting was rigged in favor of President Alexander Lukashenko. International groups denounced the vote as undemocratic.


Runoffs were held in 56 districts where no candidate won more than half the votes cast in the first round two weeks ago. The first results were expected Monday.

The United States, the European Union and the Organization for Security and Cooperation in Europe said the first round of voting did not meet standards for democratic elections.

They cited interference with the judiciary and bias in the state-controlled media. 

Opposition parties accused Belarus' government of rigging the poll in favor of backers of Lukashenko, who has been criticized by Western leaders for consolidating power, suppressing dissent and resisting reforms in the ailing, Soviet-style economy. 

After casting his ballot, Luka shen ko hinted he might cede some of his sweeping powers after next year's presidential election, which he suggested he will win. He said the period of chaos that prompted him to dissolve parliament in 1996 and extend his term in a widely criticized referendum has ended.

"It is possible to hand over some of the president's powers to parliament or the government," Lukashenko said. "After the presidential election, we will take an important step.

"Maybe we will have to initiate a referendum to make the constitution more flexible." 

He did not elaborate, and any power the president relinquishes is likely to fall to his supporters. The government is made up of Lukashenko loyalists, and the current parliament consists of lawmakers he appointed after disbanding an opposition-led legislature in 1996. 

Lukashenko is popular in this impoverished nation of 10 million sandwiched between Russia and Poland, partly for his defiance of Western criticism. 

"Why should the president of a proud state behave like some kind of a spineless creature?" he said Sunday. 

Voting proceeded peacefully Sunday, with no opposition protests.

TITLE: IN BRIEF
TEXT: Duma Nixes Observers


n MOSCOW (AP) - The State Duma on Friday turned down a motion by hardline lawmakers to send observers to monitor the U.S. presidential election for violations. 

The lower house voted 267-12 against putting the draft on the agenda. Even the Communists dismissed the move as "legally absurd," saying the United States has not invited any observers.

The motion was put forward by nine lawmakers angered by U.S. statements that recent elections in Belarus were not democratic. Authors of the motion said they were concerned by reports of an Internet site that offered to sell votes. It also said it feared falsification in Texas, California "and in other territories forcibly annexed to the United States." 



Kostunica To Talk Gas 


n MOSCOW (Reuters) - Newly elected Yugoslav President Vojislav Kos tunica was quoted as saying Thursday he planned to address economic issues, particularly the need to restart supplies of Russian gas, during his visit to Moscow on Friday. 

"Yugoslavia needs help and is firmly convinced Russia will offer it," Interfax quoted Kostunica as saying in an interview. 

Kostunica said apart from gas supplies, he would discuss with President Vladimir Putin Yugoslavia's old gas debts and the possibility of paying the debts with goods. 



Which Rebels? 


n MOSCOW (Reuters) - Russian and Georgian officials argued Thursday about the location and identity of at least 50 Chechen guerrillas moving close to the mountainous border between the two countries. 

"On Wednesday night a group of 50 to 60 fighters tried to cross the border into Russia but we sent them back to Georgia," said Konstantin Makeyev, a Kremlin spokesman on Chechnya.

"I can definitely say that there was no effort on the part of the Chechens to cross into Georgian territory," countered Korneli Saliya, acting head of the country's border guards. 

He said that the group might not be the same one that left Georgia earlier on Wednesday, five days after crossing the border and demanding shelter for the winter or free passage to another country.



Ozone Gets Protection


n MOSCOW (Reuters) - Russian enterprises that have almost half the world's remaining capacity to produce ozone-depleting substances are to be closed using money from the World Bank and Western governments, the World Bank said Thursday.

It said that it had agreed to grant Russia $26.2 million to finance closure of seven enterprises producing the substances. 

Ozone depleting substances such as chlorofluorocarbons have been phased out in most developed countries following growing alarm at the thinning of the ozone layer around the Earth.



Japan Officer Ousted 


n TOKYO (AP) - A Japanese naval officer accused of selling defense secrets, including information about U.S. naval units in Japan, to a Russian military attache was dishonorably discharged Friday. 

Lt. Com. Shigehiro Hagisaki, 38, was arrested in September on suspicion that he gave Capt. Victor Bogatenkov, an official at Tokyo's Russian Embassy, two documents bearing the third-highest classification of secrecy, Defense Agency spokesman Koichiro Oshima said Friday.

One of the documents was a manual on naval fighting strategy and the other was related to electronic communications, he said.

TITLE: Russia Leads Flying Challenge to Iraq Sanctions
PUBLISHER: Combined Reports
TEXT: UNITED NATIONS - After a decade-long UN embargo on air travel to Iraq, the Saddam International Airport has started to bustle with planes carrying few passengers but packed with political significance.


A Russian plane landed in Baghdad on Monday with a big delegation of businessmen, the second in four days to sanctions-bound Iraq, the state INA news agency reported.

The agency said the Russian-built Ilyushin-86 of Vnukovo Airlines, Russia's largest domestic carrier, landed at Saddam Airport with a 255-strong delegation of Russian businessmen, heads of oil and industrial firms and journalists.

Vnukovo flew to Iraq on Friday with a 36-member delegation of businessmen and representatives of Russian companies participating in a Baghdad fair which opens on Wednesday.

On Sunday, a Palestine Airways flight became the 36th of a new breed of arrival to touch down in Baghdad since a Russian Yak-42 carrying oil executives first challenged the embargo in August. The surge of flights from European and Arab nations has followed to show support for the Iraqi people, who these nations say have been unfairly hurt by the economic sanctions imposed by the United Nations after Iraq invaded Kuwait in 1990. 

Sanctions forced the suspension of regular air services to Iraq since the 1990-91 Gulf War triggered by Iraq's invasion of neighboring Kuwait. Iraq reopened the airport on Sept. 17 after 10 years of enforced closure.

"It is the beginning of the collapse of sanctions," Iraqi Foreign Minister Tarik Aziz told reporters in Baghdad after the first few aircraft landed in the capital last month. 

Russia's flagship carrier Aeroflot said early this month it had signed a memorandum with an Iraqi Airways delegation on restoring regular air service to Iraq, although no date had been set for the start of flights.

Iraq says there are no UN Security Council resolutions governing the 1991 Gulf War cease-fire that prevent Baghdad from flying civilian aircraft in and out of the country.

France and Russia were the first countries to test the boundaries of the sanctions. Both are veto-wielding members of the UN Security Council who have long argued that broad sanctions are hurting Iraq's people, not the regime.

The effort has taken off at a time when looming national elections and high oil prices make the United States, reluctant to confront Baghdad. 

"We don't have a grand policy decision reorienting sanctions," said James Cunningham, who handles the Iraq issue for the U.S. mission at the United Nations. "But ... we agree with the other members. We want to make sanctions as effective and targeted as possible." 

France, Russia and China hold the most contracts under the current oil-for-food program, which allows Iraq to buy nonmilitary supplies with oil revenues through the UN. While French Foreign Minister Hubert Vedrine insists that his country's foreign policy is not swayed by commercial considerations, France tops the list with $2.61 billion in contracts, followed by Russia with $2.14 billion and China with $1.94 billion. 

France, Russia and China, however, are careful to point out that they still support the United Nations' core demand: that Iraq must allow UN inspectors to verify that the country has no weapons of mass destruction.


- Reuters, LAT

TITLE: Cherkesov Assumes More Power
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: The governor general of the Northwestern region, Viktor Cherkesov, last week set up a so-called security coordination council - officially the Council for Military Management and the Solving of Emergency Problems - concentrating the power of all regional military and security structures in his own hands. 


The coordination council's first meeting Wednesday morning included officials of the Leningrad Military District, the regional branch of the Federal Security Service, or FSB, the Baltic and Northern fleets, the regional department of the Border Guards, the Leningrad Military District and the Regional Emergency Services Ministry.

The move was seen by some analysts as part of a concerted effort to strip regional leaders of all but economic control over their regions. 

Representatives of the governor general's office were even more frank, saying that the move could be regarded as a direct attempt to deprive governors of influence over military and law enforcement bodies in their areas.

"All these structures are subordinate to the state, and it is not a governor's business to deal with them as has been the case in past," said Alexander Chiz ho nok, spokesman for Cherkesov, in a telephone interview on Monday.

Chizhonok said the first meeting of the coordination council focused in part on downsizing the Leningrad Military District - which is in charge of all military activity in the Northwest region. 

"There was discussion of military reform, of social questions linked to military reform and the [upcoming plan] to cut down military staff," Chizhonok said.

Vladimir Bobryshev, head of the Le nin grad Military District, agreed, saying work would be more effective and the cost less.

But political analyst Sergei Markov of the Carnegie Endowment for International Peace in Moscow, poured cold water on the idea of reforming the Leningrad Military District, saying that reforms would be too difficult in such a militarized environment.

"They would be better off thinking about the possibility of involving the military in economic activity," such as using military satellites for civilian purposes, Markov said.

But Markov was skeptical of Cherkesov's move uniting the power structures - although he supported the notion that, in principle, it was high time it happened.

"But the problem is that most of the seven governors general are people linked to the military or the security services, and thus they think from the point of view of security rather than that of development," said Markov in a telephone interview Monday. 

Locally, City Hall was adjusting to its loss of clout within the power structure. While Cherkesov's move has driven a sizable wedge between Gov. Vladimir Yakov lev and any power he would have over the local FSB or the military, his spokes man Alexander Afanasiyev nonetheless tried to put a positive spin on events. 

"What the governor general is doing is right," Afanasiyev said in a telephone interview on Monday.

"It is Cherkesov's job to control structures such as the military and the FSB. But at the same time he will never be building roads or keeping order in the city." 

"If I were to appoint my wife as representative to control my daughter's activity, it doesn't mean she would automatically start washing my daughter's socks and other such things," he said.

TITLE: Judge Denies Pope's Wife a Second Visit
AUTHOR: By Anna Badkhen
PUBLISHER: Staff Writer
TEXT: MOSCOW- Cheri Pope, wife of U.S. businessman and accused spy Edmond Pope, said last week that her husband was ill, sad and alone.


He has not been allowed to read most of the letters his family has written since his arrest in April or see his wife more than once during her visit to Moscow this week, and his Russian friends have all fallen silent, she said.

"I don't blame them. They must be afraid," Cheri Pope said in an interview Friday.

Pope, 54, a former U.S. Navy intelligence officer and a businessman dealing in marine technologies, is being tried on charges that he tried to buy secret blueprints for a high-speed Russian torpedo. He contends he was gathering information that has been public for years.

Cheri Pope met with her husband in Lefortovo Prison for an hour Wednesday, but Friday the presiding judge, Nina Barkina, denied her another visit before she leaves Russia Saturday.

"[He feels] terrible, he is very stressed and mentally very sad," Cheri Pope said. "He is very weak, he is exhausted from trying to stay positive and understanding that his opportunity to defend himself is very limited."

Barkina also refused to allow Cheri Pope to sit by her husband's side in the courtroom during the trial, which is closed to the public. "It appears she [the judge] only knows how to say no," said Rep. John Peterson, Cheri Pope's congressman, who came with her to Moscow. During her visit to Lefortovo Wednesday, prison guards did not allow her to give Pope letters from herself and his family, the Bible verses she has copied out for him, warm clothes or pictures of their grandchildren - on the grounds that mail is only accepted on the first and third Thursday of each month.

Likewise, Pope was not allowed to give his wife his letters to her.

"I asked them to please let him have letters I have written to him. Please let me have letters that he has written to me," Cheri Pope said. "But they said no."

She said that of the hundreds of letters she had written to her husband since his arrest, he had only received four or five. She said she had only received two letters from him.

Pope suffers from a rare form of bone cancer, which was in remission when he arrived in Russia on his latest trip, and his wife said she was concerned about his health. Earlier this week, she told reporters she was afraid he would die if were not released in the near future.

Cheri Pope said she wrote a second letter to President Vladimir Putin this week, asking him to release her husband. Her first letter to Putin, written in August, went unanswered.

At a news conference Friday, Peterson suggested a political deal that he said would satisfy both sides.

"The FSB gets their piece of pie, they've convicted an American ... and then the Americans will get their win by Mr. Pope being sent home," the congressman said, Reuters reported.

"Obviously the deck is stacked against Edmond Pope. We would like the trial to finish quickly because the only hope is a political settlement between our leaders," he said.

TITLE: EU: Solution Needed in Chechnya
PUBLISHER: The Associated Press
TEXT: PARIS - Russian President Vladi mir Putin and European leaders agreed Monday on the urgent need to find a political solution in the breakaway region of Chechnya, but insisted that Russian sovereignty must not be compromised.


The talks came the day after a powerful explosion tore through a Chechen cafe frequented by Russian troops, killing the owner and several patrons, a Russian news report said.

Several Russian servicemen were in the cafe south of Chechnya's capital of Grozny at the time of the explosion, the Interfax news agency reported, citing officials in the town of Chiri-Yurt, 30 kilometers south of Grozny. It was not immediately known what caused the blast.

"Europe is concerned about the situation in Chechnya," French President Jacques Chirac, whose country currently holds the rotating European presidency, told a news conference after the European Union-Russia summit.

France has been one of the most severe critics in Europe of Russia's war against Chechen separatists. The issue has soured Russia's relations with France and the European Union in recent months. 

In a joint declaration, Russia and the EU said they "agreed on the need and the urgency of finding a political solution [to the Chechnya issue], with respect for the sovereignty and territorial integrity" of Russia. 

However, Putin told reporters that Russia will not negotiate with "terrorists."

Putin said Russia was taking into account Europe's concerns and said the conflict in Chechnya had to be resolved in the long-term politically. 

However, speaking firmly, Putin simply denied there was any major military activity on the part of the Russian authorities. 

"The war is not continuing," he said, calling the confrontation a "conflict" provoked by fundamentalists and terrorists. He defended Russia's right to protect its territory against those who would try to secede. 

Chechnya's rebels continue to mount small but demoralizing attacks on Russian forces, despite Russia's claim that the rebels are on the verge of military defeat.

Russian artillery continued to shell groups of rebels in the villages of Agishty, Elistanzhi and Tsa-Vedeno in the southern Vedeno region, Interfax reported.

The rebels also attacked the Russian Emergency Ministry units in Grozny, but there were no Russian casualties in any of the attacks, Itar-Tass said. 

The joint statement in Paris came at the close of a summit that lasted just several hours between Putin and European Union leaders. 

Meanwhile, a group of prominent French intellectuals and lawmakers demanded that French leaders denounce Russia's war against Chechnya and withhold foreign investment from Russia. 

Besides Chechnya, Chirac said attention had been paid to Europe's policy of security and defense. Russia and the EU have decided to hold "specific consultations" on security issues, the French leader said.

TITLE: Georgia Mourns Victims of Air Crash
AUTHOR: By Misha Dzhindzhikhashvili
PUBLISHER: The Associated Press
TEXT: TBILISI, Georgia - Flags flew at half-staff and priests chanted requiem masses Friday as the nation observed a day of mourning for the 83 people killed when a Russian military plane slammed into a mountain in western Georgia.


Investigators continued to scour the mountainside for remains of the 80 Russians and three Georgians who were on board the Il-18 transport plane when it crashed Wednesday, said Russian Emergency Situations Minister Sergei Shoigu.

Rescuers so far have recovered 68 bodies, ministry spokeswoman Anastasia Tomilova said.

Shoigu told ORT television that nine bodies had been identified, but that the rest of the remains recovered so far "are in such condition that it's hardly likely they'll be identified."

Authorities still don't know what caused the four-engine turboprop plane to veer off course on its approach to the Georgian Black Sea port of Batumi. Some Russian officials said that the weather was harsh, but they also speculated that pilot error or technical problems had caused the crash.

Rescuers on Thursday located two black boxes. Shoigu said investigators would try to decipher them Friday.

Russian Security Council secretary Sergei Ivanov, who heads the joint Georgian-Russian investigation into the crash, said Friday that the remains would be sent to a military forensic laboratory in Rostov-on-Don, Itar-Tass reported.

The flight was carrying Russian servicemen and their families, as well as 11 crew members, in addition to 1,300 kilograms of supplies to Russia's military base in Batumi, according to Itar-Tass. The passengers were returning to Batumi after being on leave or away on missions.

It was the biggest aviation disaster in Georgian history. The head of Georgia's Orthodox Church, Catholicos Ilia II, was to conduct a requiem service in Tbilisi's main Sion Cathedral, and churches of all denominations held memorial services in Batumi.

Tbilisi Mayor Vano Zodelava said that all the entertainment scheduled for this weekend's Day of Tbilisi festivities had been canceled.

TITLE: Russian Crew Members Ready for Stint in Space
AUTHOR: By Marcia Dunn
PUBLISHER: The Associated Press
TEXT: BAIKONUR, Kazakstan - The first commander of the international space station says the biggest challenge of his four-month mission will be "throttling," or reining in, his two hard-charging Russian crew mates.


In the traditional day-before-launch news conference held on Monday, NASA astronaut Bill Shepherd said that he's eager to get going after almost five years of training for this flight. 

He borrowed a line from the world's first space man, Yury Gagarin: "Gagarin said it all - poyekhali (Let's go)."

Shepherd said that he and his crew are "exceptionally well-prepared," taking into account all the delays that they have had to endure because of Russia's money crunch, which stalled space station work.

"To be honest with you, the plan that we've got to start out on [the] station is fairly ambitious. We've got a lot to do for the first few weeks," Shepherd told reporters from behind a glass wall erected to keep out germs.

"I think my biggest challenge is going to be throttling these guys and keeping the work pace kind of under control because they're very competent and aggressive guys and they're going to work real hard. My job is just to make sure the crew stays on an even keel."

Shepherd and cosmonauts Yury Gidzenko and Sergei Krikalev are scheduled to lift off on Tuesday aboard a Russian Soyuz rocket from the Baikonur Cosmodrome in Central Asia, for a two-day ride to the space station. The rocket was transported by rail to its launch pad on Sunday.

Shepherd, 51, a U.S. Navy captain, will be only the second American to ride a Russian rocket to orbit. As a result, a NASA official was present when the Russian space program's top commission gave the crew the official go-ahead to launch on Tuesday.

Both cosmonauts have considerably more space experience than Shepherd, a three-time space shuttle flier who hasn't been in orbit for eight years and has never been aboard a space station.

NASA insisted from the start that the space station's first commander should be American - no matter what.

Shepherd was diplomatic when asked about the disgruntlement among some Russians regarding the choice of commander.

"A good leader sometimes has to be a good follower," he said. "We're a team in orbit. Everybody understands that."

Krikalev called the coming mission "very significant." 

A lot of responsibility is riding on this crew, he said, since everything the three men do will set the tone for years to come. 

NASA expects the space station to fly for at least 10 years, once construction is completed in 2006.

"This mission, and this program, is the keystone for the future of human exploration," Shepherd said. "What more do you want to say?"

Shepherd said his goal is to "turn over a good ship" to his replacements when they arrive in February via space shuttle Discovery.

He said he also hoped that by that time the complex will have a name other than simply "international space station," or ISS as it's known in space circles, pronounced letter by letter.

"For thousands of years, humans have been going to sea on ships," Shepherd said. "People have designed and built these vessels, launched them with a good feeling that a name will bring good fortune to the crew and success to their voyage."

"We're waiting for some decision from our managers as to whether we will follow this tradition or not."

TITLE: Putin Shows His Special Moves
AUTHOR: By Kevin O'Flynn
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russia's leaders have filled bookshelves and bookshelves with their scribblings. Lenin wrote prodigiously, Stalin wrote badly, Leonid Brezhnev pretended he could write, and now President Vladimir Putin has joined the literary line with his first book. 


Just don't expect an insight into his political philosophy or the answer to whither Russia. 

But if you want to know how to block a man coming at you in a kimono with a knife in his left hand, then "Judo: History, Theory, Practice" is the book for you. 

Co-written with two longtime judo friends, Vasily Shestakov and Alexei Levitsky, the book was published in Arkhangelsk last week. 

The 154-page glossy book is not your usual Russian sports manual. Printed in Finland, it is a high-quality, glossy edition worthy more of a coffee table than a tatami mat. 

But the book, priced at a hefty 250 rubles (about $9) and with a print run of 20,000, is a comprehensive study of the martial art and obviously aimed at committed judo fans. 

Indeed, it would require a very committed Putin devotee to take an interest in the detailed pie charts on the most frequent throws or the mathematical equations that measure the quality of an opponent's defense. 

Sixty pages of illustrations reveal the techniques for the best ways to throw and drop an opponent, and fill most of the book. 

It is written in a plain style you might expect of Putin with headings such as "Defense against a blow to the side of the head" or "Assailant attacks you with a knife from below (knife in right hand)," but literary critics hoping to pick apart the prose of the president will be sorely disappointed because none of the text is specifically authored. 

The hot-selling tabloid Komsomolskaya Pravda tried to liven up its story on the book by reprinting an illustration, found on page 77, showing a hold that involves grabbing your opponent between the legs. 

Shestakov, who is the head of a sports complex in St. Petersburg, said he co-wrote the Practice part of the book with Putin, while Levitsky wrote the History and Theory sections. 

"The first grips that are shown, they are his [Putin's] special moves those he demonstrated in Japan," Shestakov said Friday by telephone. 

Putin visited Japan on a state visit in July. He said at the time that his favorite move was the deashibari - a swift attack aimed at knocking an opponent off his feet - although he still managed to be thrown by a young Japanese girl, to the consternation of his bodyguards. 

Shestakov, who like Putin is a master of sport and a qualified judo trainer, said he has known the president since childhood. 

"We've been together on the tatami since we were 14 years old," he said, referring to the judo mat. 

The idea for the book came up two or three years ago and the work has been going on since then, he said. 

"We met periodically and swapped notes and information and came to a general opinion," said Shestakov, who added that he still meets regularly with Putin. 

The book is published by Severny Komsomolets, which also publishes a judo magazine. 

Komsomolskaya Prav da said the book would bring the three authors about $5,000 and that they had already decided to give the money they earned from their writing to a children's sports school. 

Shestakov, who is still professionally involved in the sport, said he respects Putin's judo skills. 

"In Japan they awarded him the sixth dan and gave him a red and white belt. That's considered a very high level," he said. There are 12 levels of proficiency, or dans, at the grade of black belt. 

"If he hadn't left sports, I think he'd have had a lot of success," Shestakov said, adding that Putin is better at judo than he is. 

In an interview before last December's parliamentary elections, he said Putin was in great shape. 

"Not everyone is able to do 15 chin-ups in a row," he said. "Vladimir Vladimirovich can." 

But does a president have time to write judo books? 

"In connection with his career in Moscow, things have become more difficult," Shestakov said. "But even so, sometimes he finds time and we go on the tatami."

TITLE: BAT Smuggling Charges To Be Investigated
PUBLISHER: The Associated Press
TEXT: LONDON - The British government announced Monday that it will launch an investigation into allegations that British American Tobacco, the world's second-largest publicly traded tobacco company, orchestrated the smuggling of cigarettes.


Stephen Byers, secretary of the Department of Trade and Industry, said he had ordered the investigation in response to a Parliamentary committee report unanimously recommending the probe.

"I have decided to appoint investigators to look into this and to report back to me as soon as possible," Byers said. "I will then decide what further steps I must take and whether the facts support a reference to other authorities."

In a statement, British American Tobacco said it was "naturally disappointed" by the move. Among other brands, BAT makes Kent and Lucky Strike cigarettes.

"We will, of course, cooperate fully with the investigators but will be making no further comments during the course of their work," the statement said.

In February, BAT deputy chairman Kenneth Clarke had sought to counter accusations that the company was involved in large-scale cigarette smuggling.

The accusations stemmed from research conducted by the group Action on Smoking and Health and investigative material aired by Britain's Channel Four Television.

According to the allegations, BAT's own internal documentation showed the company was involved in arranging and controlling cigarette smuggling in Asia and Latin America in the early 1990s via intermediaries.

Smuggling enables a company to avoid government taxes and import fees.

Clarke, a former Conservative Party treasury chief, acknowledged to the House of Commons Health Select Committee that cigarettes were smuggled into markets such as Colombia, but insisted BAT was not involved.

"There is no evidence I have ever seen that BAT is a participant in this smuggling. We seek to minimize it and avoid it," Clarke said, calling BAT "a company of integrity and a good corporate citizen."

BAT chairman Martin Broughton also strenuously denied that his company was involved in any smuggling activity.

Clive Bates, director of Action on Smoking and Health, on Monday applauded the decision to investigate the tobacco giant.

"We think the evidence that BAT has been controlling and facilitating tobacco smuggling is overwhelming," Bates said.

"I think this will be a turning point in the fight against tobacco smuggling because the authorities will have the evidence that the tobacco industry itself is a major player in global smuggling," he said. "While not doing the smuggling themselves, they are doing everything necessary to make sure smuggling happens in their commercial interests and on a very large scale."

TITLE: EU Reaches WTO Deal With China
AUTHOR: By Adrian Croft
PUBLISHER: Reuters
TEXT: BRUSSELS - China has moved closer to World Trade Organization (WTO) entry by ironing out disagreements with the European Union over European firms' access to its insurance and retail markets, EU officials said on Friday.


In talks with the EU, China confirmed it would grant seven further licenses to allow EU insurance companies to operate in the Chinese market, in addition to two already issued, the officials said.

The two sides reached a bilateral agreement paving the way for China's WTO entry in May but disagreed later over the interpretation of several parts of the pact. These differences were resolved to the EU's satisfaction in talks during and after an EU-China summit in Beijing on Monday, EU officials said.

The EU-China agreement should help ease a holdup in Beijing's bid to join the WTO. Both EU and U.S. trade officials had said China's bid to join the WTO by the end of this year was in doubt after talks in Geneva last month stalled over how Beijing would meet its WTO obligations.

"The fact that we've managed to solve the important issues that remained outstanding for the full implementation of our bilateral deal clinched last May is in itself another step on the way to China's accession to the WTO," EU Trade Commissioner Pascal Lamy said in a statement.

"We will now be able to concentrate our efforts exclusively on working together in order to resolve the remaining multilateral issues as quickly as possible," he added.

The EU and China agreed to work together to conclude the multilateral negotiations, due to resume in Geneva on Nov. 2, "at the earliest available opportunity," the EU said.

In May, Beijing agreed to grant nine licenses to European insurance companies but has so far granted only two, to Assicurazioni Generali SpA of Italy and ING Groep NV of the Netherlands.

EU spokesman Anthony Gooch said the EU had been given a "clear road map" for the remaining licenses to be granted.

China has undertaken to name the European companies which will benefit from the licenses by early November.

The licenses will be formally granted to companies by the time the WTO Working Group on China's accession completes its work, the EU said.

In distribution, China has confirmed that European-owned hypermarkets, department stores and warehouses will be able to set up in China and be free to operate without restrictions, beyond those agreed in May, as soon as China enters the WTO.

"There was some doubt about that. That is an important confirmation," Gooch said.

An EU official said the differences had arisen because in the rush to sign the bilateral agreement in May, Chinese negotiators had tried to pull back from commitments made earlier and some pages were left unsigned.

"Now we have it all signed and sealed," the official, speaking on condition of anonymity, said.

He said it would now be easier to resolve outstanding issues at the multilateral talks in Geneva.

He believed that "early next year" was a reasonable target for China to join the WTO.

TITLE: AT&T Reveals the Details of Its 3rd Breakup
AUTHOR: By Jessica Hall
PUBLISHER: Reuters
TEXT: NEW YORK - AT&T Corp. on Wednesday said it would restructure into a family of four separately traded companies, marking the biggest restructuring of the corporate icon since its 1984 breakup that created the Baby Bells.


The move dismantles nearly three years of bold acquisitions, worth more than $100 billion, by the largest U.S. long-distance telephone and cable television company and comes after AT&T's stock has dropped by nearly half this year.

Investors reacted coolly to the restructuring plan, which was announced as AT&T reported lackluster third-quarter results and slashed its growth outlook for the next 15 months. AT&T's stock fell 13 percent.

AT&T said its third-quarter profits fell 12 percent as long-distance price wars and increased competition hobbled revenue growth in its business services unit and pushed sales to consumers down 11 percent.

"Financial engineering is only going to kind of offset the lousy fundamentals in business and consumer," said one industry analyst, who declined to be identified. "It puts somewhat of a silver lining on a very dark cloud."

Salomon Smith Barney analyst Jack Grubman, one of Wall Street's most influential analysts, downgraded AT&T's stock to "neutral" from "outperform," saying, "We believe the business is melting down." Janney Montgomery Scott analyst Anna-Maria Kovacs put a "sell" rating on the stock. Rating agencies Fitch and Moody's Investors Service said they may cut AT&T's debt ratings.

The restructuring will allow each of AT&T's major units - consumer, business, broadband and wireless - to focus on its particular market niche and compete more nimbly, AT&T said.

The new companies' dividends will be "substantially less" than AT&T's current dividend, it said. That essentially ends AT&T's legacy as a safe-haven stock for widows and orphans.

AT&T shares fell $3-1/2, or 13 percent, to close at $23-3/8 in heavy trading on the New York Stock Exchange. Its 52-week trading range is a high of $60-3/4 and a low of $21-6/16. It was the second most actively traded stock on the Big Board Wednesday.

As separate stocks, investors will be able to track the growth or decline of each unit instead of trying to value the entire conglomerate with its disparate parts.

Analysts criticized the deal, saying AT&T buckled under the pressure of its weak stock price rather than sticking to its long-term strategy.

"I think it's the beginning of the end of an icon. It's a sad day in corporate history. It's the surrender to Wall Street, which was foolishly looking for near-term results and stock gains on a five- to 10-year turnaround project," said Gartner Group analyst Ken McGee.

The reorganization marks a reversal of AT&T's strategy to become an "all distance" communications company that sold packages of local, long-distance, wireless telephone and Internet access services.

"They are going to have to prove that this restructuring is going to put the company on the right track," said Stanley Nabi, vice chairman at DLJ Asset Management, with $35 billion under management. "When a company has an operation that is losing money, and they sell it, they write it off. Here, all they are doing is reshuffling the deck."

AT&T defended its move as a logical next step to create shareholder value and dismissed criticism that it had abandoned its long-term strategy.

The reorganization "was not a short-term financial engineering step at all," AT&T Chairman C. Michael Armstrong told Reuters in an interview. "This phase of our future needed to be addressed ... this was done for very fundamental and strategic reasons."

Armstrong told a meeting with analysts that it "seems to be a lot of fun to write that this is a reversal or a repudiation of our strategy. I find that not only wrong, but offensive."

"After 30 to 40 companies being integrated and the tens of million of dollars of investment in ourselves, to suggest that this phase of the transformation is some kind of repudiation, I just don't buy into it ... the journey hasn't been simple, but I think the outcome is going to be very successful."

Armstrong said he briefed Federal Communications Commission Chairman William Kennard on Tuesday about the restructuring. Kennard didn't raise any potential regulatory red flags at that meeting, AT&T said.

Kennard said on Wednesday he would continue to talk to AT&T "to ensure that this restructuring does not adversely impact the quality of consumer service, competition in the telecommunications markets, and the integrity of the telecommunications network."

Over the past few months, AT&T has weighed several options to boost its stock and distinguish its fast-growing data, Internet and broadband cable television units from its struggling consumer long-distance business.

Armstrong compared the struggle to transform AT&T in the face of an evaporating long-distance telephone industry to his tenure at Hughes Electronics Corp. Armstrong joined Hughes just as government defense industry spending halved, forcing him to reorganize, cut jobs, divest units and focus on new growth markets such as commercial satellite services.

Some analysts viewed the AT&T reorganization as a sign that Armstrong ran out of time in his ambitious attempt to create a massive telephone, data and cable conglomerate.

AT&T became a casualty of investor impatience and a broad decline in telecommunications stock prices. The long-distance telephone market also collapsed more quickly than AT&T and the rest of the industry expected.

"They failed to rise to the occasion to become a new-era company. They're still a big, fat, dumb telephone company ... the employees did not rise to the occasion in the legacy areas of the business by letting go of bureaucratic, lethargic and arrogant ways," McGee said.

TITLE: Microsoft, Murdoch in Satellite Talks
PUBLISHER: Reuters
TEXT: LONDON - Microsoft Corp. is in talks with Rupert Murdoch's News Corp. about investing more than $1 billion in the media firm's Sky Global Networks Inc. satellite TV unit, the Wall Street Journal said Monday.


If a deal is reached, Microsoft will take a 3.5 percent stake in Sky Global, Murdoch's soon-to-be-floated unit which consolidates News Corp.'s global satellite TV assets, the newspaper said citing "people familiar with the situation."

Microsoft could not immediately be reached for comment and News Corp. representatives in London referred calls to its New York office where no one was immediately available either.

Bringing Microsoft on board would be an important coup for Sky Global, which is likely to see its plans for a flotation pushed back until next year amid volatility in the tech sector, analysts said.

British Sky Broadcasting - which is 37.5 percent owned by News Corp. and a key asset in Sky Global - saw its shares rise more than 6 percent on the prospect of Microsoft becoming one of Sky Global's minority partners.

"This doesn't surprise me as Murdoch has been looking for minority partners who can bring something to Sky Global and Microsoft could bring its interactive TV and technology capability," said Marc Lenoux, analyst at Commerzbank.

For Microsoft, Sky Global would provide an additional platform for its interactive TV software and fit in with its strategy of taking minority stakes in various cable companies, including United Pan-Europe Communications of the Netherlands, Britain's Telewest and NTL as well as interests in AT&T and Comcast in the United States.

News Corp. hopes to line up a number of private investors to raise cash for Sky Global before taking it public and has held talks with various potential partners, including France's Vivendi SA which owns a 20 percent stake in BSkyB.

Murdoch said earlier this month that News Corp. had also been in talks with two possible U.S. partners - Hughes Electronic Corp. and EchoStar Communications Corp. Hughes owns U.S. satellite TV broadcaster DirecTV.

Mobile-phone giant Nokia has also been mentioned as a possible partner, given its valuable link to wireless technology and networks, while Yahoo! could distribute Sky Global content over the Internet.

Murdoch has already done a deal with U.S. cable TV tycoon John Malone whereby Malone's Liberty Media Group will take a 4.76 percent stake in Sky Global.

As well as BSkyB, Sky Global's principal assets include Asian satellite service Star TV as well as interests in Italy's Stream, Sky Latin America, News Broadcasting Japan and programmed listings company TV guide.

TITLE: LOMO: Much More Than Just Rocket Science
AUTHOR: By Anatoly Temkin
PUBLISHER: Vedomosti
TEXT: The Leningrad Optical-Mechanical Association, or LOMO, plans to become the center of the local optical-mechanical sector by uniting enterprises of the same profile into a single holding company. The process will begin with the transfer of part of the company's orders from St. Petersburg to the Vologda Optical-Mechanical Factory, a block of shares in which was recently acquired by one of LOMO's shareholders. General director Arkady Kobitsky says the company should go further and expand by utilizing production operations that are in decline.


LOMO is part of the defense industry holding New Programs and Concepts. NPK owns about 30 percent of LOMO's shares. Last year LOMO manufactured goods worth 760 million rubles ($27.2 million). LOMO produces optical equipment for the consumer market, such as telescopes and night vision equipment, as well as medical equipment, including microscopes and endoscopes. Parts for the Igla self-guided missile are also produced by the company.



Q: Recently one of your shareholders, financial broker BOSI [owning 1.5 percent and the nominal holder of 32.5 percent of the shares of LOMO], acquired 24 percent of the Vologda Optical-Mechanical Factory, or VOMZ. LOMO announced it has plans to work with VOMZ and transfer part of its orders there. Why did this need arise, and which orders will you send to Vologda?


A: LOMO is having trouble keeping up with demand. All the necessary documentation has been submitted for making a number of lines to produce military equipment. We plan on passing $1 million in orders to Vologda. Most likely these will be for the production of certain types of microscope. We also plan to build a workshop for high accuracy lenses. The factory was in an appalling state when BOSI bought it - it had massive debts. In one year, the company made 120 million rubles while costs totaled 160 million rubles. Furthermore, production levels have been falling every year, workers have been laid off and April's wages were paid in August. In fact, the place has essentially been bankrupt for three or four years.


The general director at the plant has been changed - this was a necessary step. Progress since then has been apparent. The previous management would simply give up when confronted with difficulties. They had no idea of how to work in the market. 

The factory's new team have set about the job with a vengeance - fundamental changes have been made to the control system. With our help, they have begun paying off debts. We hope to set up a form of exchange. In St. Petersburg, we have a shortage of qualified workers, but on the other hand, we've got the hang of working in a consumer-oriented market. We don't just carry out purely scientific research, rather we're developing projects to meet demand.



Q: The head of NPK, Boris Kuzik, has spoken of the possibility of forming an optical holding. Could the union of the Vologda factory and LOMO be seen as the first move in this direction?

A: The creation of a holding is still a long way off. The principles by which a holding would be established have yet to be agreed. Kuzik believes it should include the Mechanical Engineering Design Bureau and the Degtyarev Factory as designers while LOMO would act as the manufacturer. But LOMO only produces parts for the Igla. The self-guiding technology in the head of the rocket is the responsibility of other factories in Tula and Izhevsk. We also work with Moscow's Vimpel design bureau in this area. 


There are all sorts of problems connected with an optical holding. Not all enterprises in this area have been privatized. At meetings of the Conventional Weapons Agency, I always say, "we must privatize." But in the provinces, the Soviet Union lives on. In the meantime, competition has kicked off. We used to buy domestic glass for endoscopes, but now we buy imports - they make better quality and cheaper glass abroad. Russian technology is getting old fast. 


Q: What role does [defense industry holding] NPK play at LOMO?

A: NPK owns about 30 percent of LOMO stock via two off-shore companies. They put no pressure on us whatsoever. We simply work together. For example, we are winding up a very serious project for building a new self-guided ground-to-air missile. It will most likely be unveiled next year at the earliest. LOMO is an independent enterprise both on the securities market and on the loan market. 




Q: What projects does LOMO have in mind for the consumer market?

A: In 2000, we will focus on semiprofessional telescopes that we are manufacturing specially under contract with the LOMO-America company who distributes our goods in North America. So far, we do not plan to sell these goods on the Russian market - it isn't ready for them. The market price of a home telescope varies between $300 and $3,000. We are launching our night-vision equipment on the U.S. market, though sales are difficult. However, they [LOMO-America] give us ideas about what would be better suited for the U.S. market and we develop equipment in line with their orders. So far, we are winning in terms of price in developed countries' consumer markets. Every year China offers more and more competition, though they have yet to learn how to make complex and high-quality equipment. Our goods are sold in Japan, England, Germany and Austria. Even some in Australia. Germany - home to Zeiss - buys microscopes from us.




Q: Who are your competitors on the international market?

A: As far as weaponry is concerned in the West, I can only think of the Stinger company. 


As far as nonmilitary goods are concerned, then we have plenty of competition, but we are trying to carve out new niches. Olympus, for example, no longer makes color endoscopes or spare parts for them. We bought a production line from it 15 years ago for manufacturing optical parts, and consequently, we are able to repair old Olympus endoscopes.



Q: So the company is loaded with work. How are next year's orders looking?

A: I should say that this year is ending with difficulties. We had hoped to make serious money. We planned to make $40 million, but unfortunately, signing has dragged on with a number of contracts with India - in connection with the president's visit. Contracts for military goods will not be signed earlier than November, so funds will only start to come in after six months. As a result, our figures will be rather humble - about 900 million rubles. That is still up by 23 percent on 1999.


We are hoping that in 2001 our production will grow a further 33 percent. Our nonmilitary production in this case would comprise 50 percent of our total output. LOMO's consumer goods are entirely geared to export. We are putting our money on medical equipment - we hope endoscopes and microscopes will be in demand, particularly in connection with the government's anti-tuberculosis program. 

Our biggest clients for military equipment are India, China and Southeast Asian countries. The Igla brings in the biggest profits in this area. We are pressing on and consulting with European countries on cooperation in military technology, but it's still early days.

TITLE: Gazprom Asks for Ease in Rules
AUTHOR: By Elizabeth LeBras
PUBLISHER: Staff Writer
TEXT: MOSCOW - In a move to boost its capitalization and borrowing power, the board of natural gas monopoly Gaz prom asked the government Friday to liberalize regulations on trading its shares.


The board also asked the government to let its shares be sold at two of the country's main trading venues so that foreign and local investors could buy local shares and convert them into American Depository Receipts, or ADRs.

Under current regulations, dubbed the "ring fence," foreign individual investors are barred from directly holding domestic shares in Gazprom and only have the right to take a stake in the company through ADRs, which cover 10 shares and are traded at a heavy premium, approximately $9 compared with roughly $0.30 for individual local shares.

Apart from limiting foreigners to ADRs, Gazprom also caps foreign ownership at 20 percent. As a result, however, current total foreign ownership in the gas giant is only 5.48 percent, 1.8 percent through ADRs, with the rest belonging to Germany's Ruhrgas.

The board rejected a proposal to increase the allowed level of foreign ownership in the company up to 40 percent.

Analysts said the government is likely to comply with the board's requests, which would not only give Gaz prom increased liquidity but also allow it to attract the investment it desperately needs to stem falling production

The board's decision was also seen as a partial victory for Boris Fyodorov, a representative of minority shareholders on the board who led the charge to end the two-tier system. The board didn't go as far as Fyodorov wanted, however, which was to eliminate the ring fence all together.

Steven Dashevsky, oil and gas analyst for the Aton brokerage, said that the moves will be "strongly beneficial to domestic shareholders" and give a massive raise to the company's liquidity.

Domestic shares are currently traded only on the tiny Moscow Stock Exchange, which Yury Kafiev of the investment bank Olma said is the reason Gazprom's liquidity has plummeted over the past four years.

The board wants its shares traded on the Russian Trading System, or RTS, and the Moscow Interbank Currency Exchange, or MICEX, in addition to the Moscow exchange. The Aton brokerage said Friday that the shares would most likely be made available on the exchanges by December or January.

Konstantin Reznikov, oil and gas analyst at Alfa Bank, said that purchases of ADRs will steadily diminish as foreign investors gain access to Russian stock exchanges. "ADRs will continue to exist, but foreigners will buy domestic shares," he said.

Another positive outcome was support expressed for limiting Gazprom's ability to transfer assets, said United Financial Group's Dmitry Avedeyev.

Ahead of a planned privatization tender next year, the government has adopted strict rules on Gazprom's ability to manipulate its equity interest in various companies. "Gazprom cannot reduce the shares in its subsidiaries without permission," Avedeyev said.

TITLE: French Firm Assures Ukraine Pipeline Only 'Under Study'
PUBLISHER: Reuters
TEXT: PARIS - French natural gas company Gaz de France said a plan to build a new pipeline exporting Russian gas to western Europe that bypassed Ukraine was only at the study stage and it would take at least six months for a deal to be finalized.


"The study will take several months, at least six, possibly a year," a Gaz de France spokeswoman said Thursday.

Natural gas monopoly Gazprom announced Oct. 19 it had signed a letter of intent with German Ruhrgas and Wintershall, Gaz de France and Italy's Snam.

The three companies are to create a new export channel bypassing Ukraine to ship more gas to energy-hungry Western customers.

The Gaz de France spokeswoman said the six-member consortium was not a legal structure as such.

The consortium will only become a legal entity if the companies involved decided to go ahead with the project.

The 600-kilometer pipeline, with a maximum capacity of 60 billion cubic meters of gas per year, could have two lines and would run through Belarus, Poland and Slovakia bypassing Ukraine. Its cost is estimated at $2 billion.

The decision to circumvent Ukraine came after Gazprom's repeated criticism of Kiev for massive gas debts and for siphoning off gas transited across its territory to western Europe.

Kiev has shrugged off fears the plan will hit its economy.

TITLE: BP Confirms Company's Interest in Sakhalin Field
PUBLISHER: Combined Reports
TEXT: NEW YORK - Oil major BP is in preliminary talks with state-owned oil major Rosneft to buy a stake in offshore oil and gas project Sakhalin 1, chief executive John Browne said.


"We have had preliminary discussions. We will continue talking. We'll see what will emerge," Browne said in New York this week.

This was the first time BP has confirmed actual discussions on the deal.

BP told Rosneft last month that it was interested in buying half of the Russian firm's 40 percent stake in Sakhalin 1.

Sakhalim 1 is an offshore oil and gas project still in the exploration stage in Russia's Pacific waters near the Sakhalin Islands.

The size of BP's offer has not been disclosed but oil analysts said that between an upfront payment and future investments the stake could go for as much as $400 million.

Rosneft this month said that it had rejected a $170 million offer for the stake by India's Oil and Natural Gas Corp., prompting the conclusion that the Russian firm was holding out for a larger bid.

Rosneft controls the country's ninth-largest crude oil reserves of about 4 billion barrels and is one of a few major oil firms still in state hands after a series of privatization deals in the mid-1990s.

Last month, President Vladimir Putin postponed the government's plans to privatize a blocking stake in state oil firm Rosneft and has made the company the state's agent for selling its share of oil from Sakhalin energy projects.

Analysts say the Sakhalin stake would be a safer bet for BP since the project is covered by a production sharing agreement, or PSA, with the federal government that guarantees attractive investment terms, such as tax breaks.

Rosneft and its subsidiary Sakhalinmorneftegaz own a consolidated stake of 40 percent in Sakhalin 1, of which they plan to sell 50 percent.

ExxonMobil Corp. is the project operator with a 30 percent stake, while Japan's Sakhalin Oil and Gas Development Co. LTD, or SODECO, holds the remaining 30 percent. SODECO is owned by Mitsubishi Corp. and Itochu Corp., among others.


(Reuters, SPT)

TITLE: McDonald's Staff Takes Case to Duma
AUTHOR: By Yevgenia Borisova
PUBLISHER: Staff Writer
TEXT: MOSCOW - A parliamentary commission held public hearings Friday on conflicts between workers and management at a McDonald's food-processing factory, and State Duma deputies urged the company to sit down immediately for negotiations with a union there.


The hearings were inspired by a two-year conflict between the management and workers at the McComplex food processing factory in the Moscow suburbs. The Moscow-McDonald's parent company has refused to recognize the union or to sign a collective bargaining agreement with any of its members, and union members report that management has instead harassed them.

McDonald's officials were invited to the hearings, held by the Duma's commission on labor conflicts, but did not attend. Duma Deputy Andrei Isayev, who chairs the conflict commission, said he considered the absence of McDonald's officials from his hearings a mark of "disrespect for the State Duma."

McDonald's did provide deputies with a copy of a letter signed Oct. 23 in which the company agreed, for the second time, to start negotiations with the 17-person union formed and led by worker Natalya Grachyova.

A similar promise was written by July, after the company was criticized by international labor groups and Moscow Mayor Yury Luzhkov. The city owns 20 percent of Moscow-McDonald's.

Food-processing plant workers told parliament and the public harrowing stories about working for McDonald's.

"One of our colleagues got frostbite on his penis!" said Innokenty Duk hov linov, who works in the food freezers. "We regularly get ear infections.

"Look, we have to work an hour in our freezer shop, where the temperature is minus 26 [degrees Celsius], and we have only 5-minute breaks to warm up."

Dukhovlinov said that when he complained about such work conditions, the personnel department chief told him, "I will draw a circle on the floor with chalk and you will have to warm up in it."

"She told me that I am alone and she has the whole organization behind her," Dukhovlinov told parliament. "But isn't that like a scene from 'The Octopus'? [a popular Italian film about the Mafia]."

Dukhovlinov blamed his working conditions and a hostile management atmosphere for a stomach ulcer he contracted.

Many of the other workers who appeared testified they simply left.

"I worked two years there," Mik hail Demishev said. "But after they started to mock me and threaten me because I joined the union, I decided to quit."

Yevgeny Druzhinin, a forklift operator at McComplex and a member of the union committee, recounted taking management to court after he was reprimanded for breaking a piece of equipment. On Oct. 16, a Moscow court agreed with Druzhinin that the equipment broken was not nearly as expensive as McComplex management had asserted. But he said his path to that court victory was paved with intimidation.

"Igor Lobanov, our security boss, told me that he would have me taken to jail," Druzhinin told parliament. "And indeed, a certain Captain Titkin called me two days after this and ordered me to come to 38 Petrovka [city police headquarters]. Titkin said I must talk less and then there would be fewer problems for me at McComplex. I understood that Titkin was Lobanov's friend."

The McComplex union was created in November 1998 by a group of about 17 workers who lost two-thirds of their salaries and also part of their working hours after the August 1998 ruble crash.

Grachyova testified to parliament that management repeatedly asked her to stop her unionizing activities, because otherwise they themselves might get sacked.

She said she was offered better wages and even a higher position at the factory as incentives to desist. Then, when that did not work, she recounted, she received telephoned death threats.

Duma Deputy Isayev said at the hearing that McDonald's is intentionally obstructing the activities of the labor union, and that this is in direct violation of Russian law. Duma deputies in a resolution urged the company to open negotiations within a week, and also recommended to the Federal Labor Inspectorate that it audit all of McDonald's 58 enterprises in Russia to check their compliance with the labor laws.

TITLE: Petersburg's Hackers Break Into Microsoft
AUTHOR: By Melissa Akin
PUBLISHER: Staff Writer
TEXT: MOSCOW - Unknown hackers with a St. Petersburg e-mail address have accomplished what a U.S. Justice Department antitrust lawsuit failed to do: extract the secret blueprints for Microsoft's Windows operating system.


"They did in fact access the source codes," Microsoft chief executive Steve Ballmer told reporters Friday in Sweden. "You bet this is an issue of great importance. I can also assure you that we know that there has been no compromise of the integrity of the source codes, that it has not been tampered with in any way."

Source codes contain the blueprints for Windows and other Microsoft products.

"We're still looking into it. We're still trying to figure out how it happened," company spokesman Rick Miller told The Associated Press. "This is a deplorable act of industrial espionage, and we will work to protect our intellectual property."

Microsoft has called in the FBI, the Commerce Department and the National Security Council to investigate the break-in.

It was unclear if Russian authorities were cooperating in the case. Officials at the Interior Ministry's high-tech crime division were unavailable for comment Friday.

Microsoft discovered Wednesday that passwords used to transfer source codes outside the company walls were being funneled to a St. Petersburg e-mail address, according to The Wall Street Journal, which broke the story Friday.

The Journal said the hackers had had access to the codes for three months. The AP quoted a Microsoft official as saying the breach had lasted no more than five weeks.

The culprits got into Microsoft's network with a so-called Trojan horse program, which hides in an e-mail attachment and finds a back door into systems, the Journal reported.

Company spokesman John Pinette said that Microsoft was taking steps to limit and prevent damage to its software, adding that no customers would be affected by the security breach, AP reported.

Microsoft's Moscow spokeswoman Maria Pichakhchi would not comment on the breach.

The editor of Moscow-based Hacker magazine, Sergei Pokrovsky, said in a telephone interview that the break-in was breathtaking, even though the hackers had used a common Trojan that security experts had thought was licked.

"I want to meet them [the hackers]," Po krov sky said. "They are real professionals."

Hacker magazine reporters are trying to track them down for a feature in an upcoming edition, he said.

The U.S. Justice Department launched an antitrust case against Microsoft last year, claiming it held an unfair monopoly on software and tried to stifle competition. During antitrust proceedings, the software giant hinted that it might release the source code for its Windows operating system, on which a majority of the world's computers run. Doing so would end Microsoft's choke-hold on the software market by allowing competitors to write competing operating systems or Windows-compatible software.

In February, Microsoft founder Bill Gates suggested to the Bloomberg news agency that he might be willing to open the code to settle the antitrust case filed by the Justice Department "if that's all it took."

Microsoft representatives immediately denied that Gates had said any such thing.

A court ruled against Microsoft earlier this year, and the software giant is now appealing.

Until now, the code has remained a secret to everyone except Microsoft and a few trusted partners.

So what if the Windows source code has ended up in the hands of some teenage computer whizzes in St. Petersburg?

"It would be like having blueprints to a jet fighter if you are Ecuador," Keith Blackwell, head of Bristol Technology Inc., was quoted by the ZDNet IT news server as saying Friday. Bristol is a software developer that has the rights to some of the Windows source code.

"What would people want with the Windows source?" Blackwell said. "We're talking about tens of millions of lines of code. You'd need an army of engineers to do anything with it."

The Wall Street Journal speculated that the break-in could be a "data hostage" case, similar to the one that hit Bloomberg earlier this year when hackers used systems information to extract money from the owners.

Daniel Dougayev, editor of Internet.ru, a St. Petersburg-based Russian-language Internet news site, said he has kept an eye on the Microsoft court case in hopes that the source code would be revealed.

"That would, first, help many companies produce more effective software than Microsoft's own [and], and second , reveal whether rumors of privacy violations by MS were really true," Dougayev said in an e-mail interview Friday. "At the moment, we don't know if Microsoft Windows sends any information on its users to some obscure processing server belonging either to the corporation itself or to someone else, say the Ministry of Defense. If it does - and why not - that's unlawful."

However, Blackwell said that studying the code could help hackers find vulnerabilities to make future sabotage easier.

Pokrovsky at Hacker magazine said he would like to take a look at the source code merely to appreciate the superlative programming talent that created it.

"This is an amazing code," Pokrovsky said. "Top professionals work at Microsoft."

TITLE: OPEC Opts for a 4th Output Hike in 2000
AUTHOR: By William Maclean
PUBLISHER: Reuters
TEXT: LONDON - OPEC oil exporters said Monday they would raise production by 2 percent Tuesday to curb a price rally stoking fears of inflationary damage to the world economy.


International crude markets reacted calmly to news of OPEC's fourth production rise this year, having already fallen 3 percent, or $1, on Friday on expectations of the move.

Benchmark Brent crude in London Monday was 5 cents off at $30.90 a barrel after a delayed start because of transport chaos in Britain. U.S. light crudes were 2 cents higher at $32.76.

Iran, Kuwait, Algeria and Qatar said they would abide by a price stability pact mandating a collective OPEC increase of 500,000 barrels per day (bpd).

"Iran will proceed with the earlier decision of OPEC and supply our share of the increase," Iran's OPEC governor Hossein Kazempour Ardebili told Reuters in Dubai.

Analysts said the rise was unlikely to make much difference to the volume of physical supply because most members, apart from OPEC kingpin Saudi Arabia, are already pumping flat out.

Already pumping more than at any time in the past 20 years, some OPEC members say global crude supply is already more than sufficient to meet world demand. Three previous OPEC increases since March were aimed at quelling a relentless rally that has seen the highest prices since the crisis over Iraq's 1990-91 occupation of Kuwait.

Kazempour said Tehran had received notification of action from Venezuela's OPEC President Ali Rodriguez to produce the extra oil under the informal price mechanism.

There was no official word from the Vienna headquarters of the Organization of the Petroleum Exporting Countries or from dominant OPEC power Saudi Arabia, the world's largest oil producer and exporter.

But Rodriguez said on Friday, without elaborating, that the 10 OPEC nations taking part in output restraint would announce a supply rise of a total 500,000 bpd at midnight Monday.

OPEC's action is in line with the informal pact stipulating a hike of 500,000 bpd when the price for a cartel basket of crudes remains above $28 for 20 consecutive working days.

That point was reached Friday, when the price closed at $30.91. The Friday price was announced by OPEC Monday. The hike will create a new 26.7 million bpd official output ceiling by the 10 OPEC members subject to output quotas. Eleventh member Iraq plays no part in output restraint.

Independent consultant Petrologistics estimated OPEC to be on course to produce an average 29.51 million bpd in October including around 2.9 million for Iraq. Those numbers imply the OPEC 10 are already producing around the new ceiling.

The 11-member cartel is scheduled to review oil markets on Nov. 12 at an extraordinary policy-making meeting.

The threat of imminent disruption to Iraqi oil sales receded Monday with Iraq accepting dollar-denomination payment for oil loading in the first few days of November.

Last week Iraq panicked dealers by indicating it might halt exports - about 5 percent of world exports - from Nov. 1 if it did not get the go-ahead for a switch to euros from dollars, the usual currency for international oil trade.

An Iraqi official said dollar letters of credit had been processed for several cargoes loading in the first few days of the month. 

Industry sources said any delay to Iraq's order for euro payment would not represent a climb down by Baghdad. The time frame for the shift, however, may have been too optimistic. The UN, which monitors sanctions-bound Iraqi oil exports under the oil-for-food program, is due to discuss the plan Monday.

TITLE: Swedish Investors Backing Cable TV Project
AUTHOR: By Andrey Musatov
PUBLISHER: Special to The St. Petersburg Times
TEXT: St. Petersburg's Telix company has begun the construction of a new cable TV network based on broadband technology in the city's Kalininsky District. Once the work is completed, subscribers to the Telix network will receive programming from as many as 25 channels, both domestic and satellite-based, according to a company press release. 


The construction of the entire network is scheduled be completed in 2003, but the company will begin providing service in different areas in the region earlier - as soon as the systems in those areas have been put in place. The first subscribers to Telix are set to begin receiving programming in November.

In compliance with the license issued to Telix by the Communications Ministry, the company has the right to serve up to 79,000 subscribers. 

The Telix TV network was created in 1991 under the Sprut brand name. According to Olga Kaplunova, assistant spokeswoman at Northwest Media Group (NWMG Co.), which handles public relations for Telix, cable networks sprouted up in the city during the early 90s and each St. Petersburg district had its own cable operator. Telix operated in the Kalininsky district. But, while the company served most of the region initially, at present they provide coverage to "only a few buildings," Kaplunova said.

With its present work to re-establish its system, Telix is undertaking the first construction of a cable network here involving the participation of foreign capital, as Sweden's Telia bought a 65 percent stake in the company in May of 2000. 

According to Kaplunova, the Sprut service was handicapped by poor picture quality and the absence of satellite channels so, in 1997 the management of the company started looking for partners interested in developing the network. The company was renamed Telix to more closely resemble the Telia name.

"With the money from the Telia deal, they are planning to build a new optical-wire network, using the existing underground paths already set up for telephone cables," Kaplunova said

Kaplunova expressed optimism for the plan. "Telix should be popular and will make a good profit with its satellite channels, especially if it sets up an Internet connection system."

"The question of using the fiber optic lines to provide Internet connections has not even been discussed," Sergey Ivanov, the general director of Telix said in telephone interview on Monday. "Our plans are to build a cable TV system over the next three years and only in the Kalininsky district - not even in the whole city. The Internet connection project is more expensive and would probably only be possible after we have a sufficient number of subscribers." 

However Hans Larsson, manager of Telia's international cable television operations, sees the Kalininsky region program as a possible jumping off point for bigger things.

"This program is an important first step in Telia's continued expansion into a neighboring foreign market," Larsson said. "This is a foreign market with about 150 million inhabitants and probably the most important growth market in Europe over the next few decades."

Telia already owns broadband and cable television operations in Estonia (Starman Kaabeltelevisiooni AS), Latvia (Telia Multicom AS) and Denmark (Stofa).

TITLE: Global eye
TEXT: Mission Aborted 


CNN, as we all know, is a network carved in the mold of its maverick creator, Ted Turner: cutting-edge, iconoclastic, edgy, out-there, anti-establishment. We all know they would never suck up to the powers-that-be - or even to the powers-that-could-be-soon. No, like that wise old Shakespearean counselor, Polonius, CNN "will find where truth is hid, though it were hid indeed within the center."


Curious, then, to witness the sudden and preemptory spasm of self-censorship the network engaged in last week, after porn magus Larry Flynt announced on CNN's "Crossfire" that he had the goods on George W. Bush's involvement in an illegal abortion in the early 1970s. 

The show's theme was, appropriately enough, censorship on the Internet. At the end of the program, host Robert Novak invited Flynt to "tell me what you wanted to say about the election." Flynt said that an eight-month investigation had uncovered the abortion - which occurred back in the good old days, before those liberals so hated by Bush legalized the practice. "I just think it's sad that the mainstream media, who's aware of this story, won't ask him that question when they were able to ask him the drug question without any proof at all, and we've got all kinds of proof on this issue." There followed a brief shouting match between Novak and Flynt, and the program ended. 

For a couple of days, interested citizens could read a transcript or view the video of the show on the CNN Web site. But then both records were subtly altered. The entire show was still available - except for Flynt's comments about Bush. Meanwhile, the mainstream media, which picked up a howlingly false Matt Drudge story about an alleged Bill Clinton "love child" last year and blew it around the world in a matter of hours, sat in stony silence on the Bush allegation (as they have done on the substantial allegations of his ditching two years of legally mandated military service, his close connections to Mexican crime figures, his family's lucrative financial deals with cult loon Sun Myung Moon, and so on). However, the serious, substantial mainstreamers did spend several days this week earnestly discussing rumors that Rolling Stone had enhanced Al Gore's crotch area in a cover photo. 

When political Web sites began commenting on CNN's self-cutting episode, the network promptly yanked the entire (or not-so-entire) show from the Web site. Maybe Turner's corporate overlords at Time Warner put the squeeze on him so as not to upset the oligarchs' apple cart. Or maybe he was scared of a libel case, even though Flynt (who would, after all, be the actual target of such a move) said he was ready to lay out his proof in court, if Bush cared to call his bluff.

In any case, the CNN screen on the case is dark now - recalling Hamlet's comment, as he was carrying out the carcass of the formerly so-informative Polonius: "This counselor is now most still, most secret and most grave, who was in life a foolish prating knave."



Undistinguishing 


If the punditburo can tear their eyes away from Al Gore's crotch long enough, there is yet another deeply significant political event on its way to the magazine stand: right-wing pin-up gal Paula Jones undraping for Penthouse magazine.


Yes, in a blast from what now seems like an ancient and immensely unlamented past, the repackaged Paula (new nose, eyes, breasts, etc.), whose lawsuit was the tail (so to speak) that wagged the big dog of impeachment, is baring all for prodigious bucks, Salon reports.

But PJ, whose highly Christian sensibilities were offended by Bill Clinton's alleged offer of afternoon delight all those years ago, said she is not disrobing out of prurient interest; no, she's "doing it for my kids." (Who no doubt have a deep psychic need to see their mother "feeling herself up by a swimming pool" and so forth.) And besides, she feels she got shafted (so to speak) by the hard-right moneybags who feasted on Clinton's flesh.

Paula now says they gave her "the raw end of the stick" (so to ... oh, forget it), adding, "I felt that I should have got more than what I got."

But surely that's what all the surgery was for, dear.



Something Fishy 


The spirit is willing, but the flesh seems to be mighty weak over at the breast-beating, hymn-singing, gay-bashing, Bush-backing, Clinton-hating, card-carrying hardcore Christianite political faction known as Focus on the Family. For the second time this month, one of the head cheeses at the mediagenic ministry has fallen on his sword (so to speak) for sex-related shenanigans.


As faithful readers of the Global Eye (all three of them) will recall, just a few weeks ago FoF's chief "curer" of homosexuality stepped down from his post after being caught taking a walk on the wild side at a gay bar. Now this week, one of FoF's top talking heads has walked the patriarchal plank after confessing to a tres Clintonian bout of adultery, the Religious News Service reports.

The latest Focuseer caught with dancey pants is Mike Trout, 53, co-host of the organization's flagship radio program, where he does the Jesus jawboning with FoF founder, president and all-around bon vivant, James Dobson. Together, they have presided over a fundamentalist empire that pulls in $116 million a year in tax-free offerings from listeners frightened by Mike and Jim's vision of a government-led Satanic conspiracy against corporal punishment, female obedience, missile defense, capital gains and other godly concerns.

Trout, married (for 31 years) with three children, said his Trixie trot was "not a long-term thing" and was "over now," although he referred compassionately to the woman and the liaison as "a cancer in my own life."

Meanwhile, FoF spokesapostles were quick - very quick - to assure the public that the unnamed Jezebel involved "does not and has not worked for Focus on the Family."

But has she posed for Penthouse?

TITLE: MARKET MATTERS
TEXT: Companies Do Battle With Counterfeiters 


THERE'S no such thing as a free lunch, goes the saying, but counterfeiters might disagree.


While international companies often spend millions of dollars on advertising, turning a simple TV slot into an entire mini-series, there are people working on imitating the very same product in a quiet basement somewhere, whose fakes effectively get the same advertising results as the real thing.

Almost all commonplace consumer goods can fall prey to the counterfeiters: washing powder, tea, coffee, chocolate bars, razor blades, the list is endless. The business is worth it because of the low production costs involved, and the fact that the fakers are riding on the back of well-known brand names.

Unlike the big companies, who are looking to establish a long-term presence on the market, counterfeiters are in it for the fast sell, rather than the repeated purchase. And there are certain gloomy foreign businessmen around who will tell you that the racket is often very well organized.

Nonetheless, counterfeiters have not had things all their own way since the companies got together and founded the Brand Protection Group, in an effort to stop the flow of millions of dollars that was not going where they thought it should. The group acts pretty confidentially, but among its activities are research, ad campaigns against fake products, and organizing raids on the open-air markets where counterfeits are known to be bought and sold.

Has it done any good?

Well, a bit. For example, I recently learned that Moment glue is a frequently counterfeited product - its producer, Henkel, says it was losing around 2 or 3 million Deutsch marks a year a couple of years ago, when falsification of the product was at its peak. That has now come down to around 1 million Deutsch marks, and your chances of buying fake Moment glue are now less than 10 to one.

This is not only thanks to the Brand Protection Group, however, because Henkel itself took some steps, such as changing the volume of the tubes the glue came in - more effective, spokesmen said, than just chasing distributors of counterfeit glue away from the markets. Other companies have followed suit in changing the packaging of their products, which takes the counterfeiters a month or two to catch up.

A similar but more secretive move is to keep the name of your packager secret - actually having the real tubes, cans or boxes, stolen or purchased from an unscrupulous packager, would make a counterfeiter's life a great deal easier, so it makes sense to keep that part of the product under wraps, as it were.

Henkel says that it also investigated a glue tube supplier somewhere in Eastern Europe which is suspected of feeding fake Moment glue to the Russian market. I assume, given the recent fall in counterfeit glue, the company met with some success.

But Henkel's losses are significant - as is the fact that it admitted that they were losing money to counterfeits in the first place. What it loses is still less than Moment's annual advertising budget, but popularity should be earned. 


Anna Shcherbakova is the St. Petersburg bureau chief of Vedomosti newspaper.

TITLE: EDITORIAL
TEXT: Do the Ends Justify Means In Regions? 


THERE is little reason to be sorry to see Alexander Rutskoi lose the governor's office in Kursk.


He was by any measure a terrible governor. When he was not calling on farmers to raise ostriches he was busily installing relatives in government positions and then making a family-wide effort at running the region into the ground.

So we could have supported an open Kremlin drive to defeat Rutskoi at the polls. President Vladimir Putin could have used his popularity and moral authority to argue it was time to dump Rutskoi and make room for the Kremlin-friendly former FSB man, Viktor Surzhikov. Whatever else it might have been, that would have been democracy in all of its messy glory.

Instead, a Kursk court removed Rutskoi from the ballot the day before the vote. Rutskoi says he was removed on Kremlin orders; the Kremlin and the Central Elections Commission are both shrugging and pleading ignorance. But before anything can be sorted out, we are already hurrying on to new elections, where other unfriendly governors are having shiny new legal troubles.

The newspaper Novaya Gazeta reported Monday that Rutskoi is right and the Kremlin even has methodical election-by-election spread sheets of who is to be removed.

If so, perhaps President Putin & Co. believe they are doing the nation a favor. The governors have long been derided as 89 feudal princes. So it's possible the Kremlin thinks it's cleaning up the nation by freeing the regions from bumbling rulers like Rutskoi. Simply striking a Rutskoi off the ballot is an invitation to continuing corruption and tyranny in the regions, not a cure.

One solution, forwarded by Governor General Viktor Cherkesov, is to concentrate all power structures in his own hands, essentially stripping governors of anything but roadwork. In such a system there is no predicting whether these power structures will be used to enforce Novaya Gazeta's blacklist. 

But if nontransparent and nondemocratic means are used, then we will get the same as we have now: nontransparent and nondemocratic governors. Happily, federal law prevents governors from serving more than two terms. 

In the case of Tatarstan, Mintimer Shaimiyev has not said whether he will seek a third term. And the Kremlin has not said whether he legally can.

So here's another one of those if-then constructions so beloved of Russia-watchers, who enjoy setting the nation tests and tasks: If the Kremlin undemocratically removes one political boss, Rutskoi, and then undemocratically keeps another, Shaimiyev, will this be "cleaning up the regions?"

Or will it be running Russia the way Rutskoi ran Kursk?

TITLE: Chechnya and Mideast Are Both Results of a Bad Peace
AUTHOR: By Boris Kagarlitsky
TEXT: THE news out of the Middle East lately has become more and more reminiscent of reports from Chechnya. In fact, the very essence of the two conflicts seems surprisingly similar. Both the current crisis in the occupied territories and the second war in Chechnya are not merely the continuations of long-running conflicts; both are to a large extent the unfortunate results of a failed cease-fire, of a bad peace.


The old saw that "a bad peace is better than a good war" is certainly true, but it is also true that a bad peace will inevitably end up leading precisely to another conflict. It is hard not to notice the similarities between the Oslo Peace Accords and the Russian-Chechen cease-fire that was signed in Khassav-Yurt. In Oslo, the Palestinians sought autonomy and settled for a partial troop withdrawal. Meanwhile, Palestine itself was given "indeterminate status," exactly as Chechnya was after the 1996 agreements. For both of these nations, this indetermination has meant the constant fear of reoccupation, while for Israel and Russia it has meant the constant fear of terrorism.

Moreover, both Palestinian "autonomy" under Yasser Arafat and "independent" Ichkeria under Aslan Maskhadov have turned out to be complete disasters. The Palestinian administration has proven incapable of ruling: It is both corrupt and incompetent. Living standards have fallen and economic dependence on Israel has increased. Chechnya has been pure chaos.

No sooner had Palestinian officials and Chechen warlords achieved both peace and power than they set about establishing dubious ties with the very people they had vowed to protect their people from - the Israelis on one hand and the Russian oligarchs on the other.

Psychologically, the cease-fires were based on a general war-weariness. After just a few years, that weariness passed and was replaced by a general frustration that the anticipated fruits of peace had not materialized. In both cases, the fighting resumed with a violence and intensity that would have been unimaginable a few years ago.

You have to hand it to Ariel Sharon. His visit to the Temple Mount was a stunning provocation. Not only did he manage to offend the Palestinians but, more importantly, he fired up Israeli Jews as well. You see, emigres from the former Soviet Union play a crucial role in Israeli politics. But under ordinary circumstance they are not very much concerned with the fate of Jewish holy sites. They eat pork Saturdays and think more about salaries, housing and jobs than about the symbolic significance of Jerusalem for the Jewish nation. Therefore, despite their strong suspicions of the Arabs, they generally vote for the liberals who promise them peace and jobs. Until, that is, violence flares. As soon as that happens, former Soviet Jews immediately turn into rabid hawks and call for bombing. Slogans like, "They are killing our people," easily overwhelm the voice of reason.

Sharon's move was right on target. Jews who had left the Soviet Union fell into line as soon as the fighting started and Israeli conservatives had their little victory over the liberals. And it would seem they are completely satisfied with the price they paid for it: the destabilization of the entire Middle East and the sparking of a crisis that may end up taking hundreds or even thousands of lives.

These developments are also startlingly similar to events in Russia. The Kremlin elite wanted to win the parliamentary elections in 1999 and the presidential election this spring. The Chechen war was an amazingly successful campaign strategy. The goal was achieved - the Kremlin's choice has become president. But the war continues and no one can come up with an acceptable way out.

Both the Israeli and Russian leaderships were quick to pronounce that those sitting across the table from them were unacceptable negotiating partners. "Maskhadov doesn't control anything," was Moscow's line, while Israel maintains that "Arafat is not capable of managing the situation." And indeed, the leadership elites in both conflicts had lost control over events. Both in Chechnya and in Palestine, the uprisings are now driven by radical Muslims. The moderate forces that were the political base for both Arafat and Maskhadov have steadily lost their influence as their nations' "indeterminate status" made it impossible for them to improve living conditions for the majority of their people. The longer these conflicts continue, the more these moderate forces become prisoners of the radicals.

It is easier to bring the crowds out into the streets than to get them to go home again. In these conflicts, all sides have long since taken the stand, "We'll fight until we win." Really, though, they all understand that the only solution is some sort of compromise. But how can you explain that to people whose passions have been inflamed by nationalistic slogans?

Lately, President Vladimir Putin has been hinting at possible contacts with Maskhadov and Israeli Prime Minister Ehud Barak met with Arafat in Egypt. These partners, which just recently were dismissed as "irrelevant and powerless," have suddenly turned out to be extremely important. However, it is obvious that neither Arafat nor Maskhadov will be able to stop the violence unless they can do something to show their people the blood spilled has not been in vain. And that means something must be done to restrict Israeli and Russian "great-power patriotism."

As a result, both Israel and Russia will most likely end up with peace agreements that are much worse than the ones they might have had if they had been willing to negotiate reasonably from the beginning. And those less-than-desirable agreements will only have been reached after long, bloody and completely senseless fighting. Only then will the next wave of war-weariness once again overwhelm the disenchantment caused by the last bad peace.


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

TITLE: Soldiers Stage Rebellion in Peru
AUTHOR: By Rick Vecchio
PUBLISHER: The Associated Press
TEXT: LIMA, Peru - Just when President Alberto Fujimori appeared to be wresting control of Peru's military from his ex-spy chief and stabilizing weeks of political turmoil, a group of 51 soldiers staged a daring revolt - demanding Fujimori resign and the shadowy spy master be put behind bars.


Fujimori held an emergency meeting at the Government Palace with the newly appointed army chief and radio reports Monday morning said he left the meeting in a heavily armed caravan for a military air base in Lima's port of Callao. The caravan was seen returning to the palace shortly afterward. The purpose of the trip was not immediately clear.

Expressing disgust with Fujimori and the continued influence of his former intelligence chief, Vladimiro Montesinos, the insurrectionists seized a southern mine before dawn Sunday and then fled with five hostages - a brigadier general and four workers.

The soldiers started their revolt in the copper mining town of Toquepala, 850 kilometers south of Lima, before heading north into the Andes, possibly toward a military garrison near Lake Titicaca, which separates Peru from Bolivia.

Military helicopters took up the chase, but so far no information was released indicating that they had been located.

The army said in a communique that Lt. Col. Ollanta Humala led the revolt with his brother, Antuaro, a retired army major. The army pledged to put down the uprising to re-establish "social and political stability."

Retired army Gen. Sinecio Jarama said Sunday's uprising was a dangerous sign that could "seriously effect the establishment of the state and the unity of the military." But he did not believe the movement was strong enough to create a coup.

The rebellion was the latest twist in a six-week saga that has seen a breakdown of Fujimori's authoritarian rule and the unraveling of a sinister web of influence spun by Montesinos, who remains in hiding.

Humala read a statement broadcast over radio: "I will lay down my arms when the chain of command is legitimate and there is a president who has been truly elected by the people to whom I would swear subordination and valor."

Humala said the military high command hand-picked by Montesinos was "a cancer to the nation" that had tarnished Peru's proud military with corruption, narcotics trafficking and arms dealing.

Their father, Isaac Humala, a labor lawyer, said he was proud of the action taken by his sons. "I support it," he told Peru's CPN radio. "If they have gone this far, there is no turning back until it is finished."

Peru has been in turmoil since the mid-September release of a video showing Montesinos apparently bribing a congressman to support Fujimori.

The ensuing scandal forced Fujimori to announce he would step down in July after new elections. He also distanced himself from Montesinos, who fled the country.

But the crisis intensified a week ago when Montesinos returned to Peru after a failed asylum bid in Panama and promptly went underground.

The break between Fujimori and his spy chief - considered by many here the person truly in control of Peru over the last decade - became the source of repeated coup rumors and general political instability.

Over the course of the 1990s, Fujimori handed control of Peru's armed forces to Montesinos, eliminating a time-honored promotion system and allowing him to install loyalists in most key posts.

Fujimori appeared to begin to dismantle that control on Saturday, forcing the resignations of the heads of the army, navy and air force - all rumored to be protecting Montesinos. He also dismissed army Gen. Luis Cubas, Montesinos' brother-in-law, as commander of Peru's Lima-based tank division - a strategic key to impede any coup attempt in the capital.

But the president's choice of Gen. Walter Chacon to head the army and command the military joint chiefs of staff drew criticism from human rights groups and some political leaders. Chacon, previously the interior minister, is widely viewed as controlled by Montesinos as well.

Francisco Diez-Canseco, president of Peru's Council for Peace, said Fujimori had only himself to blame for Sunday's revolt, which he said was sparked by the president's "attempt to present cosmetic changes in the army high command."

Sunday's revolt occurred in the Third Regional Command, the army's most powerful post, run by Montesinos loyalist Gen. Abraham Cano.

TITLE: U.S. Election Poll Shows Bush Leading Over Gore
AUTHOR: By Alan Elsner
PUBLISHER: Reuters
TEXT: WASHINGTON - Republican George W. Bush held a three-point lead over Democrat Al Gore in Sunday's Reuters/MSNBC national daily tracking poll, but separate surveys of nine key battleground states showed the race could still go either way.


The national survey of 1,213 likely voters in the Nov. 7 election, conducted Thursday to Sunday by pollster John Zogby, found the Texas governor with 45 percent and the vice president with 42 percent. On Saturday, Bush led Gore by 44 percent to 43 percent. Just over a week remains until the Nov. 7 election.

Green Party nominee Ralph Nader polled 5 percent; Reform Party candidate Pat Buchanan stayed at 1 percent; Libertarian Harry Browne also had 1 percent, and the rest remained undecided.

The race remained well within the statistical margin of error of plus or minus three percentage points. A candidate would have to be more than six points in the lead to be outside that zone of uncertainty - something neither man has achieved since the poll began on Sept. 29.

In the equally tight race for the House of Representatives, voters preferred the Democrats by one point. The Democrats need a net gain of seven seats to regain control from the Republicans.

In a race this close, national polls cannot predict a winner because the election is likely to be decided in key swing states. Reuters and MSNBC began publishing daily tracking polls in nine such battleground states on Sunday.

The results showed either man could win the election. Gore led by seven percentage points in Florida, which most analysts believe is a must-win state for Bush.

Gore also had a nine-point lead in Wisconsin and a seven-point lead in Illinois. He was narrowly ahead in Washington state and Michigan.

Bush had a nine-point lead in Gore's home state of Tennessee and narrow leads in Pennsylvania and Missouri. He led by six points in Ohio.

In total, 153 votes in the Electoral College are up for grabs in those nine states. At the moment, Gore would win 87 and Bush would take 66 of those votes.

A total of 270 electoral votes are needed to be elected president. Most analysts believe both candidates have definitely secured about 200, leaving some 138 to be fought over.

In the national poll, 81 percent said they were unlikely to change their minds before Election Day. Thirty-nine percent have ruled out voting for Bush and 44 percent for Gore.

Respondents were asked whether they liked and respected the candidates. Fifty-six percent liked Gore and 39 percent did not. Sixty-one percent liked Bush; 32 percent said no.

Bush had an edge on respect, with 72 percent saying they respected him, against 64 percent who said they respected Gore. 

Only 23 percent said they did not respect Bush; 32 percent said they did not respect Gore.

Men backed Bush, 52-34 percent; women preferred Gore by 49-39 percent as the electorate continued to show a huge gender gap.

Reuters and MSNBC will be releasing a new poll every day up until the election.

TITLE: Israel Uses Special Tactics on West Bank
AUTHOR: By Sergei Shargorodsky
PUBLISHER: The Associated Press
TEXT: JERUSALEM - Israel will take the offensive against Palestinian gunmen and deploy special army units trained in guerrilla warfare, the deputy defense minister said Monday, as embattled Prime Minister Ehud Barak launched a fight in parliament for his political survival.


The death toll in more than a month of Israeli-Palestinian fighting rose to 141 on Monday after the body of a 20-year-old Palestinian was discovered in a West Bank olive grove that was the scene of clashes the night before. The man's brother was killed by Israeli fire in the same incident, Palestinian doctors said.

In the Gaza Strip, a roadside bomb went off near an Israeli military convoy, close to the border with Egypt. An Israeli officer was lightly injured, the army said.

Israel's deputy defense minister, Ephraim Sneh, announced Monday that the army is changing its tactics in dealing with Palestinian gunmen who have been shooting at Jewish settlements and army outposts in the West Bank and Gaza, usually at night.

Sneh said troops would no longer only respond to Palestinian fire, but take the initiative. "Now we are saying that instead of following a method which is somewhat mechanical, we will use a method which uses our advantages ... small units, units well-trained in guerrilla warfare," Sneh told Israeli army radio.

Israel's response to gunfire has included tank shells and missiles shot from helicopter gunships. On Sunday, the army sent tanks and armored personnel carriers to secure free movement of Jewish settlers on a key road cutting through Gaza, site of violent Palestinian protests. The tanks were soon shooting from mounted machine guns in response to fire from Palestinian police.

Israel's parliament, meanwhile, returned from a three-month summer recess Monday, heightening Barak's worries about his political survival. Barak, who controls only 30 seats in the 120-member parliament, has been courting the leader of the hawkish opposition, Ariel Sharon, whose visit to a disputed Jerusalem shrine last month has been cited by the Palestinians as the trigger for the current violence.

However, Barak and Sharon remained at odds Monday over the terms of their cooperation. Sharon wants the right to veto negotiations with the Pa les tinians. "If he [Barak] agrees to abandon, to leave the mistaken path, we will go with him," Sharon said.

However, Barak has balked at Sharon's demands. "Sharon wants to push us to the termination of the peace process," complained Sneh, who is close to Barak.

Political commentators said it was unlikely Sharon's Likud would join Barak's coalition. Despite his failure to woo Sharon, Barak appeared in no immediate danger of being toppled. The ultra-Orthodox Shas party, citing a national emergency, said it would not vote against the government for the next month.

Without Shas, which controls 17 seats in parliament, a drive by the opposition to topple Barak would lose its momentum. Shas is a former member of Barak's coalition, but defected in the summer to protest concessions to the Palestinians.

With Barak's apparent failure to bring Sharon into his government, the way remained open for an eventual resumption of peace talks. Both sides have said they are interested in returning to negotiations, though with conditions attached.

TITLE: Rugova Wins Kosovo Election
AUTHOR: By Mark Heinrich
PUBLISHER: Reuters
TEXT: PRISTINA, Yugoslavia - Moderate ethnic Albanian leader Ibrahim Rugova claimed victory over guerrilla war veterans in Kosovo's first free elections, and analysts said the outcome could foster dialogue with estranged minority Serbs.


OSCE organizers of the municipal vote, the precursor to parliamentary polls next year, put off releasing preliminary results based on a 90 percent count until Monday night or Tuesday, citing logistical glitches.

But a spokesman did not dispute Rugova's claim that his Democratic Party of Kosovo (LDK) had swept most of the 30 municipalities in the battered Balkan province.

Rugova, head of the oldest, most mainstream Kosovo Albanian party, said the fair conduct of Saturday's poll justified faster moves toward independence from Yugoslavia, resisted by Serbs.

But he said he was dedicated to cooperation across party and ethnic lines in shaping Kosovo's future, to be decided by the UN Security Council after a parliament is elected.

"The LDK cultivates tolerance and cooperation with other political groups. We will continue protection of minorities, which should be integrated into Kosovo institutions."

If the LDK's victory is confirmed, it will mark Rugova's return from the political wilderness after a passive resistance drive he led against Serbian nationalist autocrat Slobodan Milosevic for 10 years was eclipsed by a guerrilla uprising.

The rebels broke Belgrade's grip and emerged as folk heroes after Serbian security forces, targeted by NATO bombings, halted mass expulsions of Albanians and quit Kosovo. NATO peacekeepers and UN administrators arrived in mid-1999.

But diplomats said the guerrillas' star waned over charges of political intimidation, targeting mainly Rugova's supporters, and involvement by some in racketeering which plagues Kosovo.

"The big story coming out of these elections is that the guerrillas stand to be booted out of the local positions of power they grabbed in the chaotic aftermath of the Serb withdrawal," a senior Western diplomat said.

The LDK's resurgence may also spur Serb-Albanian cooperation and, longer term, the stability for foreign investment Kosovo needs to escape poverty.

"This was a vote for moderation and dialog, so it's welcome," said Louis Sell, director of the Kosovo office of the International Crisis Group think tank.

Kosovo's 75,000-odd minority Serbs refused to vote in protest at Albanian reprisals that put over 100,000 to flight and left the rest isolated in NATO-protected pockets. UN officials plan to appoint Serbs to municipal posts and allow by-elections to redress the imbalance.

Rugova said Kosovo deserved swift independence after the vote, which was largely free of violence and seemed up to democratic standards, according to Council of Europe monitors. "Based on initial results, the Demo cratic League of Kosovo has won 60 percent of the vote throughout Ko sovo," he told reporters. "This is reaffirmation and recognition of LDK policy. This election had both a local and national context - which is independence for Kosovo. I am for straightforward, formal recognition of Kosovo, better now, when KFOR and UNMIK are here. Today or tomorrow. For me, better today." KFOR is the 40,000-strong NATO-led peace force and UNMIK is the UN administration under Bernard Kouchner, whose mandate is to bring "substantial autonomy" short of independence.

Kosovo Serbs hope their plight will be relieved by Yugoslavia's new democratic government under President Vojislav Kostunica, a reformer able to compete with Kosovo Albanians for the ear of the West on the road ahead.

Kostunica's cabinet, in a statement on Sunday, said the elections were invalid because Kosovo Serbs had not taken part and minorities were unable to live safely in the province as the UN Security Council mandate required. However, Kostunica has said he will seek cooperation with UNMIK, replacing Milosevic's hostile propaganda which Western officials blamed for local Serbs boycotting Saturday's vote.