SOURCE: The St. Petersburg Times
DATE: Issue #671 (38), Tuesday, May 22, 2001
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TITLE: Manhunt on for Oblast Jailbreakers
AUTHOR: By Masha Kaminskaya
PUBLISHER: Staff Writer
TEXT: Twenty prisoners and detainees broke out of the remand jails of two police departments in the Leningrad Oblast early on Monday morning.
 Ten of the escapees, who are all male, have already been recaptured, while the police have been joined by around 100 servicemen from Interior Ministry military units located in the region in the continuing search. Most of the escapees have been charged with serious crimes and were awaiting trial.
 Fourteen suspects escaped from the police building in the town of Gatchina and another six from Volosovo. The two towns are located to the south and southwest of St. Petersburg respectively. 
 According to information from the police press service for St. Petersburg and Leningrad Oblast, in Gatchina the prisoners broke through the wall of their cell, while in Volosovo the escape was effected by sawing through and removing the bars in the window. The two breakouts happened around the same time at 5 a.m. Police reports said no guards or local civilians were hurt during the escape.
 By 4 p.m., eight suspects had been recaptured - seven from Gatchina and one from Volosovo - and were interrogated by police. By Monday evening, one more from each jail had been caught.
 "These fourteen [from Gatchina] are suspected of different crimes, mostly grave crimes such as murder, robbery and banditry," said Sergei Sosov, Gatchina police deputy head, in a telephone interview on Monday.
 "Out of those we've already recaptured, one had already been convicted and the others were awaiting trial."
 In Russia, a remand prison - or temporary detention unit, sometimes located in a police station - is used to hold those under arrest, awaiting trial or already convicted, as opposed to the glass boxes in police precincts where suspects are held if not formally charged. 
 According to Sosov, the escape would add up to eight years of imprisonment on top of any sentences received.
 "This must be why the rest of the prisoners in that cell didn't try to escape," said Sosov, adding that there had been 29 people held in the Gatchina cell.
 He also said he did not see any connection between the two breakouts, which happened 40 kilometers apart, calling their timing "a coincidence."
 Sosov said he believed that the getaways did not pose a threat to the local population, citing the fact that no guards had been hurt and that police had not found any ammunition to be missing from the prison. 
 However, he said, an "unpleasant" internal investigation would take place, though he said that as far as he knew the guards were doing their jobs well and were not involved in the incident.
 According to Volosovo regional prosecutor Lyubov Gei, none of the six escapees in Volosovo had used violence during the breakout. She said that they presented "a certain danger, but [we hope] that the incident will not have any unpleasant consequences."
 Galina Chilikidi, a spokesperson for the Leningrad Oblast Prosecutor's Office, which is supervising the investigation, could not be reached for comment on Monday.
 Mikhail Zharkoi, a spokesperson for the Justice Ministry's Main Prison Service (GUIN), said that he had never heard of a bigger mass breakout in recent history. The last comparable escape, he said, was in 1992, when 10 people escaped from a remand prison in Severo-Baikalsk in Buryatia.
 "Escape attempts are more frequent in spring and summer, when escapees are less dependent [on finding shelter]," Zharkoi said.
 Zharkoi also said that a similar escape to the one in Gatchina took place in the mid-1990s in Irkutsk, when several detainees broke down the wall of their cell. "The problem is that over 60 percent of remand prisons in Russia are housed in 18th- and 19th-century buildings, which need major repairs." However, he added that escapes from prison camps, where prisoners are not isolated in guarded cells, are more common.
 Although GUIN is not involved in the search for the escapees, Zharkoi said that he thought the majority would be recaptured. He said, however, that it had become more difficult for law-enforcement bodies to unite their efforts in such cases since the fall of the Soviet Union.

TITLE: Trial Begins in Case of Rebel Attack in Dagestan
AUTHOR: By Nabi Abdullaev
PUBLISHER: Special to The St. Petersburg Times
TEXT: MAKHACHKALA, Dagestan - One early spring morning in Chechnya, a column of 48 servicemen left Vedeno for a town up in the mountains, but part way into the trip one truck's radiator overheated and the column came to a halt. A band of Islamic rebels spied the vulnerable troops and attacked. 
 Only five of the servicemen survived to tell the tale. The rebels killed 32 men on the spot and took 11 more prisoners, later offering to trade them for Colonel Yury Budanov, who was in military custody on charges of murdering a young Chechen woman. The offer was turned down, and the mutilated bodies of the prisoners were later found in a nearby village.
 On Monday, seven men accused of participating in the attack on the Perm OMON unit on March 29, 2000, went on trial in Dagestan's Supreme Court. They face from 20 years behind bars to life imprisonment if convicted.
 The suspects appeared in court before Judge Butta Ivaisov to begin hearing the case against them. Six of them sat together inside the defendants' cage, but the seventh, Eduard Valiakhmetov of Tatarstan, sat outside. He has given evidence against the others and was afraid to be confined with them, a court officer said. 
 Some of the suspects' relatives and a delegation from the Perm OMON joined journalists in the courtroom.
 The accused acted strangely, as if under the influence of drugs. They reacted slowly to questions and had to have questions repeated several times. One of them, Magdi Magomedov, 35, kept pressing his head with his hands.
 Investigators say the defendants were under the command of Abu-Quteiba, a warlord of Arab origin who is based in the Shatoi region. 
 Valiakhmetov, 18, and Shamil Kitov, 31, from Karachayevo-Cherkessia, are not accused of taking part in the attack, but are on trial with the others because they are suspected of belonging to the same rebel formation.
 The other five - Magomedov, 35; Imamshamil Atayev, 26; Gadzhi Batyrov, 22; Khairula Kuzaaliev, 27; and Atai Mirzayev, 31 - are all from Karamakhi, Dagestan, and are followers of Wahhabism, an austere brand of Islam.
 Investigators told the court that Atayev was found to be mentally ill and asked that he be sent for treatment. No decision was made Monday.
 In 1998, residents of Karamakhi proclaimed the village to be independent Islamic territory and drove out all state officials. The Wahhabis introduced Islamic Sharia law and punished violators by beating them with sticks, a job carried out by Magomedov, according to investigators.
 Dagestani law enforcers tried to take back the village several times, but without success. For more than a year, armed Wahhabis guarded their independence in Karamakhi, located 140 kilometers southwest of Makhachkala, the Dagestani capital. 
 Then in September 1999, federal troops moved into Dagestan in response to incursions by Khattab and Shamil Basayev, two rebel commanders based across the border in Chechnya, and pounced on Karamakhi. The conflict lasted a month and ended with the total destruction of the village where 3,000 people had lived.
 Many of the Wahhabis joined the separatists in Chechnya.
 On March 29, 2000, Perm OMON officers together with Chechen policemen from the Vedeno interior department set out from Vedeno in two military trucks and two armored personnel carriers. They were headed to Tsentoroi, a village up in the mountains of southern Chechnya.
 Investigators pieced together the story of what happened that day from survivors and perhaps some of the men on trial. Their account has been published in the local press.
 The column had only gone several kilometers when at about 7 a.m. near the village of Zhani-Vedeno the radiator of one of the trucks boiled over. The vehicles stopped, except for one of the APCs, which continued down the road and disappeared behind a hill.
 At this time, rebels from Abu-Quteiba's detachment were in the area conducting reconnaissance and decided to attack the stalled military column. First they captured the APC that was separated from the rest, killing everyone inside. They tried to drive off in the APC, but when it died they burned it to ashes and turned their attention to the rest of the OMON group.
 The din of the battle was heard in Vedeno and a new federal detachment was sent to help their trapped comrades, but it was ambushed along the way by more of Abu-Quteiba's fighters. By the time officers reached the original battle ground, they found only five OMON servicemen alive.
 The rebels had killed 32 servicemen and taken 11 prisoner. They addressed the Russian authorities with an offer to exchange the captured men for Budanov, but the offer was declined. On May 1, their bodies were found near the village of Dargo in the Vedeno region. Budanov is now on trial in a military court in Rostov-on-Don.
 During the course of the investigation, prosecutors established the names of five more men suspected of taking part in the attack. They are on Russia's wanted list.
 The trial is expected to last for several weeks because of the large number of witnesses to be questioned, many of whom live outside of Dagestan.
 Charges brought by the North Caucasus directorate of the Prosecutor General's Office include murder, participation in illegal armed formations, hostage-taking and illegal weapons possession.

TITLE: Documents Show Gazprom Assets a Family Affair
AUTHOR: By Florian Hassel
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW - Over the last decade, Gazprom executives have transferred to their relatives assets potentially worth billions of dollars in a series of murky deals, documents obtained by the The St. Petersburg Times show.
 At the heart of this tangled corporate web lies a low-profile businessman named Mikhail Rakhimkulov and a joint-stock company called Interprocom which he registered in Budapest, Hungary, on June 15, 1989 - the same day former Soviet leader Mikhail Gorbachev was in Germany talking about tearing down the Berlin Wall. 
 Some 500 pages of documents, originally acquired over the course of a five-week investigation by the German daily Frankfurter Rundschau, detail how Interprocom got the assets, including:
 . a 10 percent stake in Panrusgas, an enterprise created by Gazprom and Hungarian gas monopolist MOL to supply an estimated $23 billion worth of gas to Hungary through 2015.
 . a valuable 1.5 percent stake in Gaztelecom, owner and operator of Gaz prom's fiber-optic network, a part of which has the capacity to handle all telephone calls between Russia and Europe simultaneously.
 . a 38 percent stake in Interprocom LAN, a computer company that has contracts with several major firms in Russia.
 . a large stake in Intergazkomplekt, an importer of gas distribution equipment that had 93 import contracts to Russia last year, according to the State Customs Committee.
 Along the way, Interprocom went from being a partly state-owned enterprise to a fully private company, with a majority stake owned by Rakhimkulov, a former Soviet gas executive, and his deputy Oleg Veinorov.
 On Oct. 15, 1997, Rakhimkulov and Veino rov summoned the handful of remaining shareholders to a meeting in Mos cow and transferred - free of charge - 100 percent ownership of Interprocom to a company called Khor khat, according to Moscow Registration Chamber documents.
 The nominal owners of Khorkhat, registered in Moscow in 1991, were Rakhimkulov's wife Galina and a woman named Irina Kravtsova, who was registered as living in the same apartment as Veinorov.
 A year later, on Nov. 2, 1998, five people - including the sons of Rakhim kulov (Ruslan Rakhimkulov) and former prime Minister Viktor Chernomyrdin (Vitaly Chernomyrdin), and the daughters of Gazprom boss Rem Vyakhirev (Tatyana Dedikova) and his deputy Vyacheslav Sheremet (Yelena Dmitriyeva) - each paid 8.1 rubles for an 18 percent stake of Khorkhat, the documents show.
 In all, 90 percent of Khorkhat, which owns 100 percent of Interprocom, was sold for a total of 40.5 rubles, or about $2.50 at the then-exchange rate. Kravt sova, who got the stake for free, kept the remaining 10 percent.
 Outspoken Gazprom board member and critic Boris Fyodorov, a former Finance Minister, said that by his estimation some "$2 billion to $3 billion disappears from Gazprom each year through corruption, nepotism and simple theft." 
 He was quoted by Itar-Tass as saying in Washington this week that when he first demanded an independent audit of Gazprom last year, Gazprom management threatened to throw him in jail.
 The story of Interprocom is not unique. The case of Intergazkomplekt follows a similar pattern. When it was established in 1992 as an importer of gas distribution equipment, Gazprom owned more than a third of the company. Over time, as Gazprom's stake in the company decreased, Interprocom's increased. 
 By the end of 1997, Intergazkomplekt belonged completely to Interprocom and Gayar Rakhimkulov, presumably the Interprocom founder's relative.
 On Nov. 2, 1998 - the same day as the sale of Interprocom to Khorkhat - Ga yar Rakhimkulov sold 18 percent of Intergazkomplekt to Timur Rakhim ku lov, another son of Mikhail. The price for nearly a fifth of the firm: 1,620 rubles - about $100. Again, the daughters of Vyak hirev and Sheremet and the son of Cher nomyrdin got the same deal, according to terms of the sales contracts.
 Mikhail Rakhimkulov is also a central figure in another series of murky deals, this time involving one of Hungary's fastest growing banks.
 As Russia and Hungary laid the groundwork for their 1996 gas deal, Rakhimkulov was named general manager of both Panruzgas, the joint venture set up for the deal, and Altalanos Ertekforgalmi Bank (AEB), which Gazprombank bought 100 percent of in 1996.
 Gazprom chief Vyakhirev apparently left nothing to chance and sent his son, Yury, to be Rakhimkulov's right hand man as deputy general manager of Panruzgas during the critical initial phase between January 1995 and November 1996. Yury Vyakhirev today heads Gaz prom's export arm, Gazpromexport.
 Under Rakhimkulov and the younger Vyakhirev's watch, not only did Gazprom inexplicably give 10 percent of its 50-50 share in Panruzgas to Interprocom, it later transferred another 9 percent to AEB. 
 Gazprombank head Viktor Tarasov and Sergei Dubinin, Gazprom's chief financial officer and a former Central Bank chairman, were on AEB's board of directors at the time, as they are today. 
 When Gazprom bought it, AEB was a loss-maker. But within a year it was turning a profit and posted a $31 million profit in 2000.
 The secret of its success? AEB handles all payments for Gazprom's gas exports to central and Eastern Europe. In the last year alone, AEB handled $2.3 billion in payments to Gazprom.
 Kent Moors, who has studied Russian capital flight for years as the head of the East European investment consultancy Asida, based in the United States, says that AEB is one of the ways Gazprom management move its cash out of Russia.
 "AEB is a small part of a widely distributed system of offshore companies and foreign partners, with whom the Gazprom managers shift their cash abroad or park it there," Moors said.
 Which may explain why the more profit AEB makes the more stakes Gazprombank sells to obscure holding companies - and to Rakhimkulov. Gazprombank has now parted with three-quarters of its original 100-percent stake in AEB.
 Hungary's official financial watchdog, PSZAF, said that Gazprombank in May 1997 held only half of AEB - 20 percent belonged to the Singapore-registered holding company ACMA Investments and its subsidiary Citycom. 
 At the same time, the companies Interenergo and Intergazprom Invest, which belongs to the British Virgin Islands-registered Undall, each held a 10 percent stake.
 In May 1999 another 10 percent stake went to IGM Kereskedelmi, which is owned by Cubbaren Ltd., registered on the Isle of Man. 
 Rakhimkulov has also become an AEB shareholder after Gazprombank sold him an 8.5 percent stake Dec. 21, 2000, according to PSZAF. 
 Rakhimkulov would not reply to questions asking how much he paid for the stake. 
 Rakhimkulov continues to be a controversial point man for Gazprom in Hungary - and his activities have gone beyond AEB and Panrusgas.
 Last fall, the banker showed up as a representative of the Dublin, Ireland registered Milford Holdings. According to a document obtained from the Dublin Company Registration Office, Milford's nominal owners are Limassol, Cyprus-registered companies Greepeak Consulting and Outbreak Consulting.
 Despite its share capital being registered as 2 Irish pounds ($2.33), Milford declared a pretax profit of 33 million Irish pounds $36.7 million) and a bank balance of $184 million in 1999, according to the Irish Independent. When it became known in Budapest that this unknown company had secretly bought up a quarter of BorsodChem, Hungary's second-largest chemical concern, Rakhimkulov admitted at the end of October 2000 that Milford is "in Gazprom's sphere of the influence."
 Neither Gazprom nor any of its subsidiaries or employees would respond to questions for this article.

TITLE: Putin Offers Solution to Church Dispute
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: President Vladimir Putin cast his two kopeks on a St. Petersburg property dispute involving the local Swedish Lutheran community's battle to reclaim St. Catherine's Church from a gymnastics training school that has been operating in the cathedral since 1936.
 The president, speaking at the Russia/European Union Summit Thursday, put forth the idea of repatriating the church on Malaya Konyushennaya back into the hands of the community that built it. 
 But there's a catch: Putin wants the Swedish government to repay the spiritual debt with a tract of land in Stockholm, where a Russian Orthodox church would be built. 
 The suggestion has outraged members of St. Petersburg's Lutheran community, who say it could derail the entire plan. 
 "[The Russian government] should buy this plot of land in Stockholm" instead of getting it in exchange for returning St. Catherine's to its parishioners, said Olga von Shlippenbah, chairperson of the parish council for Swedish St. Catherine's Church in an interview on Sunday.
 "We are talking about restitution, not an exchange," she said.
 "I have a feeling that our state, one of the richest in the world, prefers to paint itself in bad colors. They ought to show they know what conscience is by offering it." 
 Von Shlippenbah said the Swedish government has agreed to dole out 3.5 million Swedish Krona ($342,000) to renovate St. Catherine's.
 Authorities at the Swedish Consulate in St. Petersburg would not comment on the offer, but did confirm that negotiations are in process. 
 Meanwhile Kremlin sources, speaking on the condition of anonymity, said the Swedish government has already agreed to present a plot of land for the construction of a Russian Orthodox church there, and added that the church would be handed over to the Swedish Lutherans as soon as the Foreign Ministry and the Swedish government ironed out the details. 
 St. Catherine's was built in 1769 by Lutheran Swedes who had migrated to Russia on land that was given to them by Tsarina Anna Ioanovna. 
 In 1936, the Bolsheviks appropriated the church and turned it into a gymnastic training school. The school had full control of the building until 1991, when the Swedish Lutherans got permission from city authorities to hold services. 
 Ever since, the Lutherans and the gymnasts' academy have been tense bedfellows. A decree signed by Governor Vladimir Yakovlev in 1997 awarded the church to the Lutherans, and stipulated that the sports academy should fully vacate the premises by Jan. 1, 2000. 
 But difficulties in finding a new abode for the athletes has protracted their move. According to the school's director, Sergei Vazhenin, the gymnasts have found a new address near Moskovskiye Vorota metro station, which would cost about $1 million to renovate. But he said that ever since the presidential administration stepped in and took the issue out of City Hall's hands, the move has all but stalled. 
 "The draft plan of renovation was ready last year," Vazhenin said.
 "But since the presidential administration said this, we have not heard anything for months." 
 For the time being, Vazhenin said the school has "a strained relationship" with the Lutheran community.
 "They don't like the young girl gymnasts wearing so little in the church - they say it's nearly pornography," Vazhenin said. 
 "I understand this and think that we should move, of course, but they should understand us too - that this is the uniform of this sport. Additionally, I pay all the bills here and fix the building out of my own pocket just to keep it from falling apart."

TITLE: Maria Fyodorovna To Be Reburied Alongside Romanovs
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Three years after the belated burial of the remains of the Romanovs, Russia's last royal family, President Vla dimir Putin has approved the burial of yet another Romanov - Nicholas II's mother Maria Fyodorovna - whose remains are currently buried in Denmark. 
 During a meeting last week with Governor Vladimir Yakovlev, Putin gave the nod to the re-burial of the last Tsar's mother in the Romanov crypt at the Peter and Paul Fortress, according to press reports. No date for the funeral has yet been set, though it will most likely take place before the end of next year. 
 The burial of Maria Fyodorovna - unlike that of Nicholas II, his wife and three of their children - will be a quiet affair, because there is no doubt as to the identity of her remains. She also stipulated that she be buried in Peter and Paul Fortress with her husband and son. 
 In Nicholas II's case, scientists took decades to establish with DNA testing that the bones pulled out of a mine shaft near Yekaterinburg in 1973 were indeed his and those of his wife and three of their five children. With that established, bitter political and religious divisions erupted, and Alexy II, patriarch of the Russian Orthodox Church, refused to attend the 1998 burial of the Romanovs because of doubts he had over the validity of the DNA tests. The then president Boris Yeltsin also balked at attending, but grudgingly appeared for the funeral. 
 As for Maria Fyodorovna, she was buried in Copenhagen's Roskilde Cathedral in 1928. She was born in 1847 as Maria Sofia Frederick Dagmara, daughter of the Danish king, Christian IX. 
 In 1866, she married Tsarevich Alexander of Russia (the future Tsar Alexander III), converted to the Orthodox faith and changed her name to Maria Fyodorovna Romanova. Together they had six children, among them Nicholas. 
 After her son abdicated the throne in 1917, she escaped from St. Petersburg with her daughter to the Crimea, and in 1919 from there they escaped Russia for England and later Copenhagen. Even in the last hours of her life, she refused to believe that the Bolsheviks had murdered her son and his family. 
 The decision to rebury her remains was initiated by Duke Nikolai Romanov, great grandson of Tsar Nicholas I, who now heads the Romanov Dynasty Association in Switzerland. He wrote to both Putin and Yakovlev and met Denmark's Queen Margrethe II. 
 "We should keep in mind that the up-coming event is not an act of glorifying the Romanov or the monarchy, but a matter of respect to all Russian history," said Ivan Artsishevsky, head of the State Protocol Department in St. Petersburg, which is handling the arrangements.
 "Everybody has the right to have any opinion of the Romanovs, and some go so far as to consider them responsible for bloodshed in the country - but we can't ignore the fact that the dynasty ruled the great empire for more than 300 years." 
 He said for now it is difficult to say how much the ceremony will cost, but in his opinion the budgeting is most likely to come from the St. Petersburg city budget, the Danish royal court, and the Romanov family.

TITLE: Nation Remembers Physicist Sakharov on 80th Birthday
AUTHOR: By Sarah Karush
PUBLISHER: The Associated Press
TEXT: MOSCOW - Andrei Sakharov, the late physicist who was harassed by Soviet authorities for his outspoken criticism of the communist regime, was honored by Russians on Monday on what would have been his 80th birthday. 
 Sakharov, who designed the Soviet hydrogen bomb, became a staunch promoter of human rights and world peace and was awarded the Nobel Peace Prize in 1975. 
 Sakharov's birthday was marked by ceremonies in Moscow and Nizhny Novgorod, the provincial city where Sakharov spent seven years in exile. Television news shows featured retrospectives on his life. 
 Former Soviet president Mikhail Gor bachev laid flowers on a bust of Sak harov at Moscow International University. 
 The reformist Gorbachev released Sakharov from exile in 1986, but Sakharov continued his vocal criticism and their relationship was often tense. On Monday, RTR state television showed footage from the 1989 Congress of People's Deputies, at which Gorbachev reluctantly allowed Sakharov to take the floor, but then harshly interrupted him, saying he had exceeded the allotted time. 
 Gorbachev on Monday called Sak ha rov "a man of conscience, an impressive moral authority for all of us," the Interfax news agency reported. 
 "He was a great citizen, quiet and delicate, but an unbending man." 
 In Nizhny Novgorod, known in Soviet times as Gorky, scientists and community leaders laid flowers at the house where Sakharov lived and broke ground for the Sakharov Garden next door, the ITAR-Tass news agency said. 
 A tribute concert at the Moscow Conservatory on Monday evening featured violist Yury Bashmet and the State Symphony Orchestra. Sakharov's ailing widow Yelena Bonner, who lives most of the time in the United States and had been expected to address the audience, did not appear. 
 Since his death in 1989, Sakharov has received wide recognition from Russian authorities, to the point that a street in central Moscow bears his name. But Bonner remains a harsh critic of the authorities and says the country's leaders do not understand her husband's legacy.

TITLE: Nuclear Workers Running for Normality
AUTHOR: By Kevin O'Flynn
PUBLISHER: Staff Writer
TEXT: MOSCOW - It's not easy being "greenies."
 More than 300 people who work in the nuclear industry took part in a 370-kilometer marathon Friday and Saturday in a bid to show the world that they are normal, healthy people who just happen to spend their days next to radioactive uranium.
 "They call us greenies," complained Ivan Gradobitov, deputy head of the Russian nuclear energy and industry workers union, describing the attitude of the general public. "They think it's harmful. Vodka's harmful. It just depends on the dose."
 The marathon, the sixth of its kind, saw nuclear workers from 12 countries, including European countries and the United States, run from the Smolensk power station to the slopes of Red Square. Most participants ran in hour-long legs and rested in between on buses.
 "We are starting to say to people: 'Look, we don't have three ears or four legs. We look normal because we are normal,'" said Andre Maisseu, a Frenchman who is the technical director of the La Hague reprocessing plant.
 The annual marathon, which took place last year in Germany, is organized by the World Union of Nuclear Power Workers.
 &quot;It's to show the world that we're not mutants, we're healthy <i>muzhiki,&quot; </i>said Sergei Yegorshin, a nuclear scientist. 
 The event was an added chance for Nuclear Power Minister Alexander Rumyantsev to promote his ministry's plan to import spent nuclear fuel for reprocessing, which has met with strong opposition from environmentalists. 
 &quot;We need to convince them of the facts,&quot; said Rumyantsev, who met the runners on Red Square.
 &quot;The Greens say they want to recycle everything except fuel. It's crazy,&quot; said Maisseu.
 &quot;If something happens, it happens to us. It's us and our friends who will pay the price. We're not crazy. We are on the front line.&quot;

TITLE: IN BRIEF
TEXT: Prosecutor Arrested
 

ST. PETERSBURG (SPT) - St. Petersburg police have arrested Nevsky District Deputy Prosecutor Valentina Smirnova on charges of bribe taking, Interfax reported Friday. 
 According to police, Smirnova was detained after she allegedly took a bribe of $1,000 from the lawyer of a defendant in a case she was prosecuting, Interfax said. 
 The agency quoted police sources as saying Smirnova had ostensibly taken the bribe in exchange for releasing the defendant from the remand prison where he was being held pending trial. Police did not say whether or not Smirnova had confessed. 
 Interfax said that Smirnova was arrested as the result of a special police sweep on organized crime, but police refused to give further information. 
 
 
2 Charged in Lenoblast
 

ST. PETERSBURG (SPT) - Police in the Leningrad Oblast town of Vsevolozhsk arrested and charged two suspects allegedly linked to an assassination of Eduard Burmagin, a reporter for a Vsevolozhsk newspaper, the agency of investigative journalism reported last week.
 According to police, Burmagin - who wrote for Sertolovo i Okrestnosty - was last seen on December 10, 2000, when he left home on his Lada car. In February of last year police in St. Petersburg's Nevsky District found Burmagin's car. His body was found later in a rubbish dump on Ulitsa John Reed in southwestern St. Petersburg. 
 According to the police report the suspects are two brothers from Moldova who are also facing charges of car theft.
 Gennady Ryabov, the City Prosecutor's Office spokesperson, said the investigators have not yet proved that the two suspects are linked to the assassination, but said that the investigation will continue.
 "It is very hard to say if Burmagin was a reporter at all. He cooperated with this newspaper as a photographer during election campaigns, but his main professional activity was taxi driving," Ryabov said in a telephone interview on Monday.
 
 
Gongadze Widow Fury
 

KIEV (Reuters) - The widow of a Ukrainian journalist murdered last year, now a political refugee in the United States, has expressed outrage at the way authorities are investigating his death. 
 "I've said again and again we need an open investigation," Myroslava Gongadze, who fled to the United States with her twin daughters earlier this year, told reporters by telephone from Washington. 
 "If the authorities in Ukraine do not allow an independent investigation to be conducted and try to blame the crime on innocent people, that just makes them complicit in this awful crime," she said of the death of her husband, Georgy. 
 Interior Minister Yury Smirnov said last week that the case had been solved. He said Gongadze had been killed in an act of coincidental "hooliganism," and the murderers were themselves killed by people who were now in detention. Opposition politicians called the explanation a ham-fisted cover up. 
 
 
Scientologists To Stay
 

MOSCOW (AP) - A Moscow court has dismissed an appeal by prosecutors seeking to shut down a Russian office of the Los Angeles-based Church of Scientology, the group's lawyer said Friday.
 Prosecutors had accused the group of conducting illegal business activities, Interfax reported.
 Moscow's northeastern circuit court rejected the charges against the Humanitarian Hubbard Center in a ruling Tuesday, but prosecutors appealed, said lawyer Galina Krylova. The appeal was turned down Thursday. 
 Prosecutors first moved against the Hubbard Center in 1998 on accusations the group caused psychological harm to its members, but the case was dismissed when no victims could be found, Krylova said. Authorities later filed tax evasion charges that were also dismissed, she added.
 
 
Clash of Cultures
 

KIEV (AP) - The Russian Foreign Ministry has protested against an attack on a Russian cultural center in the western Ukrainian town of Lviv, calling on Ukraine to take steps to avoid further incidents.
 Moscow "expects an appropriate reaction by the Ukrainian authorities to the action of western Ukrainian radical right-wingers," the ministry said, according to Interfax.
 Before dawn Thursday, unknown attackers set fire to a side door of the center, located in downtown Lviv, smashed a window and painted a nationalist slogan on the wall. 
 Center director Valery Provozin on Friday blamed ultra-nationalists for the attack, saying for them "the word 'Russian' means 'the worst."' He linked the attack to the Russian Orthodox Church's protests against Pope John Paul II's planned visit to Lviv and Kiev next month. Many nationalists are members of Ukraine's Greek Catholic minority. 
 
 
Cargo to Space Station
 

MOSCOW (Reuters) - Russia launched an unmanned cargo ship on Monday to resupply the International Space Station, mission control in Moscow said.
 The Progress M1-6 unmanned cargo craft took off from Russia's Baikonur space base in Kazakhstan at 2:33 a.m. Sunday and will dock at the space station on Wednesday, a mission control duty officer said.
 The ship was functioning normally, she said.
 The International Space Station is being built mainly by the United States and Russia, along with the participation of other countries such as Canada, Japan and several European countries. Its crew, the second on board, now consists of a Russian captain and two Americans. 



TITLE: Kremlin Plan To Give UES Shot in the Arm
AUTHOR: By Andrew McChesney
PUBLISHER: Staff Writer
TEXT: MOSCOW - The government over the weekend approved a sweeping overhaul of Unified Energy Systems that will see the state-controlled electricity giant spin off its national power grid and power stations into two holdings in three years.
 The revamp, based on an Economic Development and Trade Ministry proposal, will lead to a doubling of electricity tariffs by 2004 but at the same time give the crumbling power industry a long-needed shot in the arm, Economic Development and Trade Minister German Gref said Saturday.
 &quot;We are incapable of investing in the grid infrastructure now, and the growth in tariffs is needed to attract investments,&quot; Gref told reporters after attending a government meeting that green-lighted the restructuring plan.
 The program is &quot;cautiously conservative&quot; and &quot;far from perfect, but it can be fully implemented,&quot; UES chief Anatoly Chubais was quoted by Interfax as saying.
 &quot;But what counts most is that there has been a decision,&quot; he said.
 Chubais has for more than a year been pushing for a cleanup at UES, whose debts and tariff arrears reach into the billions of dollars. But a feud with minority shareholders that feared their stakes would be devalued in a revamp has kept reforms from being implemented.
 The government stepped into the dispute last year and ordered that UES be overhauled to avoid the eventuality of a nationwide blackout.
 UES, which is 52.5 percent government-owned, currently controls the national power grid and holds stakes in most of the country's 90 or so regional power stations, or energos. Foreigners own 34.3 percent of UES.
 Gref said the plan approved Saturday was a broad framework for reforms to keep the power industry from folding and to spark competition.
 Starting this year, energos directly controlled by UES will be consolidated into a half dozen generating units, while regionally controlled power stations will be consolidated into about 55 subsidiaries, Gref said. Those companies will be grouped into a holding and eventually sold off.
 The government will keep control of the remaining UES, which then would be left with the national power grid.
 Gref said that it remains to be worked out how UES would take over the parts of the grid that belong to regional power stations.
 &quot;Control of the networks should stay with the government, but there have been no suggestions about seizing property,&quot; Gref said.
 The split at UES will take place by March 31, 2004, Chubais said.
 Gref said the government had nixed a UES request to consolidate and then split the company over five years, picking instead three years.
 He also said that the government had planned an appeal by UES to rapidly boost electricity tariffs.
 &quot;It is the government, not UES management, that is responsible for reforms, and consumers just will not be able to take a steep rise in tariffs,&quot; Gref said.
 He said tariffs would inch up 100 percent to 120 percent by 2004.
 Gref said details such as ownership would be hammered out with a Kremlin-ordered working group composed of government officials, UES management and minority investors. The working group had offered an alternative plan to the Economic Development and Trade Ministry's.
 Gref assured minority shareholders that they would be compensated in stock swaps or buyouts at fair market prices.
 While foreign investors digested the few details about the restructuring plan over the weekend, a handful of government officials bitterly lashed out.
 Andrei Illarionov, President Vla di mir Putin's economic adviser, said the decision only reflected the interests of UES management and warned that it hearkens back to the privatizations of the mid-1990s when prime assets were sold off for pennies.
 &quot;It's a handover of enormous portions of state property to God knows whom at giveaway prices,&quot; he said.
 &quot;The government has made the decision it sees as necessary,&quot; he said. &quot;Thus, all responsibility for the implementation of the decision rests with the government.&quot;
 Gref said earlier Saturday that UES management would be charged with carrying out reforms and would face the ax if they failed.
 Communist Party leader Gennady Zyu ganov on Sunday called the reform plan &quot;criminal.&quot;
 &quot;As long as this tormentor [Chu bais] continues to lead this monopoly, all plans to reorganize it will fail. Moreover, it [the plan] will further worsen electricity supplies,&quot; he was quoted by Interfax as saying.
 UES shares have dropped 22 percent in value over the past year. UES ordinary shares closed Friday at $0.114, up 0.1 percent from the previous day. Preferred shares also rose 0.1 percent, to $0.051.
 Chubais said he expected UES shares to rebound under the reforms.
 &quot;It's my gut feeling that a rise in UES share prices is inevitable,&quot; Chubais was quoted by Interfax as saying.
 So confident is Chubais that he said he bought some UES shares himself.
 &quot;I believe I will make money on them,&quot; he said.

TITLE: Minister Announces Bolstered Base Wage
AUTHOR: By Simon Ostrovsky
PUBLISHER: Staff Writer
TEXT: During a visit to St. Petersburg, Labor Minister Aleksander Pochinok announced Monday that Russia's minimum wage will be raised by 50 percent to 300 rubles ($10) July 1, according to a report by Interfax.
 The Minimum Wage Unit (MROT) represents not only the minimum monthly amount employers may legally pay their workers, but is also used within government structures to define everything from the salaries of public sector workers to the amount citizens pay for services such as passport issuance.
 Although the MROT, which was raised from 132 rubles (about $4.55) to 200 rubles ($6.8) Jan. 1, will be bumped, the coming hike will really only affect public sector employees as a portion of their wages is set in the multiple of MROT they receive monthly.
 &quot;This change won't make any difference in the pay of most workers out there,&quot; said Yekaterina Stekachyova, a consultant at the economic department of the St. Petersburg Federation of Workers Unions. &quot;It will only affect those people working in the government sector.&quot; According to the federation's figures for March, the average wage across St. Petersburg is 3,475 rubles ($120), well above the minimum wage. The corresponding figure for all of Russia is 2,867 rubles ($99) per month.
 Most economic analysts, however, take official figures for average wage in Russia with a grain of salt, as a good part of the economy - including wages - takes place in the gray sector and goes unreported and unmeasured.
 Ignoring questions of the gray economy, it is still difficult to determine what effect the move will have on public-sector wages, as portions of these are set out using methods other than the MROT.
 While analysts say that the move may serve to raise the nominal level paychecks for government workers, the question of where the government plans to find the money is causing some concern.
 &quot;Raising the minimum wage will likely spur inflation as the Central Bank, which is already printing money to buy foreign currency, will also have to do so to pay public sector employees,&quot; Lev Sovulkin, a senior analyst with St. Petersburg's Leontieff Center, said. &quot;As a result, the ruble's buying power drops and this dampens the effects of the raise.&quot;
 But Pochinok put a more positive spin on the raise in MROT.
 &quot;A significant number of public-sector workers will receive, as a result of the hike, a 50 to 60 percent raise in their salaries and, most importantly, move above the poverty line.&quot;
 The St. Petersburg Administration Labor Committee reported a poverty-line figure of about 1,550 rubles (about $53) for February (the latest statistics available).

TITLE: Kremlin Setting Up Petroleum Hedge Fund for Rainy Day
AUTHOR: By Igor Semenenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - The idea of setting up a rainy-day fund with oil revenues that was floated by President Vladimir Putin in his state-of-the-nation address last month continues to take shape. 
 Deputy Prime Minister Alexei Kudrin said Friday that the Finance Ministry was working on plans to set up a stabilization fund next year to reduce fluctuations in oil prices.
 He said the fund's size would depend on macroeconomic and fiscal performance as well as inflation figures. 
 Kudrin and presidential economic adviser Andrei Illarionov, who hammered the idea of setting up the fund into Putin's head, are now locking horns over where to set the cutoff rate for the stabilization fund's tax on oil exports. While the Finance Ministry is keen to set the rate at $17 per barrel, Illarionov keeps pushing for $10 per barrel.
 For next year, the government forecasts gross domestic product will grow 3.5 percent, inflation in the range of 12 percent to 14 percent and an exchange rate of 31.5 rubles to the dollar.
 The 2002 budget will be based on an oil price of $17 per barrel, and everything above that level will end up in a stabilization fund, Anton Siluanov, head of the Finance Ministry's macroeconomic department, said Thursday in an interview with the AK&M agency.
 Earlier, Economic Development and Trade Minister German Gref said $1 billion to $2 billion could be put aside each year to fill the fund's coffers.
 Illarionov said that in several years the fund should be able to accumulate $33 billion to $35 billion.
 It is not clear whether the oil fund will become part of the nation's foreign exchange reserves managed by the Central Bank. Its chairman, Viktor Gera shchen ko, said this week that the country should collect a $45 billion safety cushion to protect it from global economic flux.
 The idea to create stabilization funds is not new. 
 Essentially, Russia intends to follow the trail blazed by other commodity exporters. 
 According to Illarionov, Kuwait created the first stabilization fund in 1960.
 Then, in November 2000, Mexico launched an oil stabilization fund with an initial deposit of $600 million. One-third of Mexico's budget depends on proceeds from oil exports.
 Venezuela created a macroeconomic stabilization fund, or FIEM, that absorbs half the nation's revenues from sales of oil priced higher than $9 per barrel. FIEM has collected $6.1 billion, up almost 200 percent this year.
 Russia's Finance Ministry reported Friday that the government will collect an extra 100 billion rubles between January and June 2001. The extra tax revenue for the whole year is estimated at 165 billion rubles.
 In the first quarter of the year, the government posted a budget surplus of 82.7 billion rubles and, after debt service, a total deficit of 5.6 billion rubles.
 Revenues stood at 318 billion rubles, or 16.9 percent of the GDP.

TITLE: Aeroflot Ownership a Mystery
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - Aeroflot kept investors guessing about its ownership structure at its annual shareholders meeting Saturday as it voted in a new board of directors.
 The shareholders meeting also approved the airline's annual report, dividends and changes to Aeroflot's charter.
 The new nine-member board, approved by a majority of the 88.13 percent of shareholders present, will be composed of seven government representatives and two Aeroflot executives, CEO Valery Okulov and CFO Alexander Zurabov.
 Representatives of a shareholder who bought a 29 percent stake in 51 percent state-owned Aeroflot earlier this year did not identify themselves at the meeting. Vedomosti reported that the shares were purchased by companies close to Sibneft owner and Chukotka Governor Roman Abramovich. 
 Okulov said Aeroflot has two new shareholders, offshore companies Carroll Trading SA and Nimegan Trading. He said each company had acquired a stake of about 10 percent in the airline.
 &quot;I think that shareholders are sensible and interested in the stable development of the company. I think this is reasonable,&quot; Okulov said, without providing further details about the companies.
 Minority shareholders are not represented on the new board.
 American citizen David Herne of Brunswick Capital Management, who was elected the first ever foreign board member last year, declined to serve another term on May 8 after media reported that Abramovich had bought Aeroflot shares. 
 &quot;I withdraw my candidacy in large part because other commitments will simply not allow me to devote the necessary time and energy to board work,&quot; Herne wrote in a note to shareholders.
 Another candidate for minority shareholders - Oleg Kuzmin, general director of Absolut Invest investment company - did not win enough votes.
 &quot;The new shareholders behaved decently in that they did not go against the company,&quot; said Yelena Sakhnova, analyst at Aton. &quot;It looks like they divided up their votes among board members from the state and the management.&quot;
 Yulia Zhdanova, transportation analyst at Unifed Financial Group, said she would not be surprised if the shareholders called an extraordinary meeting to pick a new board with one of their representatives.
 Meanwhile, Okulov said Aeroflot's 2000 net profit under Russian accounting standards soared tenfold year-on-year to 1.23 billion rubles on revenue of 36.2 billion rubles, the best results in the company's history.
 The airline expects to turn a $15 million net profit under international accounting standards after losing $59 million debt last year.
 The number of Aeroflot passengers increased 11 percent to 5.1 million. Aeroflot accounted for about one-fourth of all traffic carried by Russian airlines. 
 Aeroflot doubled its domestic market share to become No. 1 while remaining the leader in international flights.

TITLE: Severnaya Neft Plays Role Of Little Firm That Could
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: USINSK, Komi Republic - About 200 kilometers north of the Arctic Circle is a petroleum war zone where Severnaya Neft is determined to leave its mark.
 Severnaya Neft isn't LUKoil, Yukos or another typical vertically integrated oil company that acquired its assets through the privatization schemes of the 1990s. The company insists that it also isn't like many of the small oil producers, leftovers from the industry's consolidation that look set to wither or be bought up.
 &quot;This company is in a unique position between these two layers,&quot; said Se ver naya Neft general director Alexander Samusev, whose hair - white, slightly long and swooshed back - is reminiscent of that of a mad scientist's. His mathematical training, which he uses to run investment models, enhances the effect.
 Since its inception in 1994, Severnaya Neft has quietly concentrated its operations in the Komi republic's area of the Timan-Pecho ra region. Ti man-Pechora's oil and gas reserves have attracted the likes of international energy company TotalFinaElf and LUKoil, which has plans to invest $4.7 billion in the region's development.
 Severnaya Neft was forced into the limelight a couple of months ago when it won a tender to develop the Val Gamburtsev oil fields. Oil majors eager to add the fields with an estimated 470 million barrels of recoverable reserves to their assets cried foul. LUKoil, Surgutneftegaz and Sibneft, among others, had offered tender bonuses upward of $100 million, while Severnaya Neft bid just $7 million. 
 However, this isn't the whole story. Severnaya Neft had many advantages in the tender. For one, it already had built a drilling infrastructure in the region; a similar feat by one of the majors would have cost millions of dollars. Also, according to a memo by the Natural Resources Ministry, Severnaya Neft was the only participating company whose plan fulfilled all the requirements of the tender.
 &quot;We went through all the documents line by line to make sure everything was solid from a legislative point of view,&quot; Samusev said. 
 And how did the general director react to news of the oil majors' wrath and the resulting legal action? 
 &quot;When I heard about LUKoil's lawsuit, I didn't even give it a second thought,&quot; Samusev said. &quot;By now, I know what to expect from those people, and it just becomes part of my workday. I was more disappointed by Surgutneftegaz. I've been acquainted with [Sur gut neftegaz general director Vladimir] Bog danov for many years, and I thought we had feelings of mutual respect for each other.&quot;
 While Samusev's words bespeak self-confidence, his gestures tell another story.
 Samusev said that after joining Severnaya Neft's board in 1999 and examining the company's balance sheet, he wasn't sure Severnaya Neft was going to make it. Among other things, the company had a bitter history with LUKoil.
 LUKoil, Russia's No. 1 oil company, had bought the region's energy company KomiTEK earlier in 1999. Komineft, a subsidiary of KomiTEK, held 25 percent of Severnaya Neft. This stake was diluted - illegally, LUKoil claims - with a new share issue. Since then, LUKoil has been fighting a series of unsuccessful battles over its holding.
 &quot;We only see Se vernaya Neft's management in court,&quot; said spokesperson for, LUKoil, Dmit ry Dolgov, referring to the terse relations between the two companies. 
 The Russian press calls the dispute a war.
 Another specter that haunts Severnaya Neft is its nontransparent ownership. Officially, Severnaya Neft is owned by a group of faceless offshore investment companies. One of the few main shareholders who has identified himself is Andrei Vavilov, a former first deputy finance minister whose reputation has been tarnished by a series of scandals. Vavilov has been accused of using government funds to put together deals for oligarchs in the late 1990s, a time when the federal budget was short of cash.
 It is difficult to determine whether the tug-of-war for oil is a personal vendetta between Vavilov and LUKoil president Vagit Alekperov - as alleged in the media - or a struggle for economic dominance in Timan-Pechora.
 If dominance is the goal, then Severnaya Neft is fighting an uphill battle, Samusev and his colleagues readily admit. Severnaya Neft is still only an extraction company, although it has expanded downstream with the construction of mini-refineries able to produce diesel fuel. It also has already begun to incorporate activities earlier outsourced, such as crude oil storage and testing.
 &quot;This is a new oil company that started with absolutely nothing,&quot; said Andrei Iskov, a lead oil field supervisor with Severnaya Neft.
 The problems faced by small oil producers are numerous. Imported equipment is prohibitively expensive. Domestically produced machines and monitors are unreliable. Roads are costly and difficult to build, and most sink into the swamp in a matter of months.

TITLE: City Food Megastores Set To Merge
AUTHOR: By Andrey Musatov
PUBLISHER: Staff Writer
TEXT: Aiming to rationalize their warehouse and stocking systems, as well as to offer lower prices, St. Petersburg's five largest supermarkets and groceries wholesaler Uniland-Neva plan to merge into one commercial network, to be called Unisam.
 Joining Uniland-Neva will be the Nevsky, Pulkovsky, Severniy, Tallinsky and Yuzhniy supermarkets, which totaled $45 million in revenues in 2000.
 According to a Uniland-Neva press release, the operations at the entity created by the merger will be coordinated by a newly created management company. The management firm will be responsible for business development, advertising and price policy.
 Uniland-Neva, which gets about 5 percent of its sales through supplying these five stores at present, will continue in the role of wholesale supplier in the new relationship, but will take on added importance as it will provide increased central storage space for stock.
 The press release also said that the group's plans called for total revenues to top $60 million for the year 2001.
 Uniland-Neva refused further comment on Monday, stating that more information would be provided at a press conference scheduled for Ma, 29.

TITLE: Between Law and Code is the Clarification
AUTHOR: By Igor Gorchakov and James T. Hitch
TEXT: As most of the foreign investors operating in Russia know, Russian law provides for certain benefits to a Russian company whose foreign investors make in-kind contributions into the charter capital of their Russian subsidiary. In particular, in accordance with Resolution of the Russian Government No. 883 of July 23, 1996, imported goods received by such a Russian company are exempted from customs duties if they are not subject to the Russian excise tax; they are classified as &quot;fixed production assets&quot;; and if they are contributed by a foreign investor to the charter capital of its Russian subsidiary within the period for formation of charter capital identified in the constituent documents of the subsidiary. In addition, Article 150 of the Tax Code provides for the exemption of such goods from import Valued-Added Tax (VAT), provided that these goods are also classified as technological equipment.
 This means that a Russian company with foreign investment is better off receiving fixed production assets, as defined by Russian accounting regulations, as an equity in kind or in-kind capital contribution from its foreign investor, rather than receiving cash investment from its foreign parent company and using the cash to purchase and import into Russia the same imported machinery, equipment, and other fixed production assets. In the latter case, the Russian subsidiary will be obliged to pay customs duties on the imported machinery and equipment.
 Moreover, if the imported goods do not qualify as technical equipment as defined by Russian tax regulations, then the subsidiary will need to pay import VAT on those items, whether they are received as equity in-kind contributions or are purchased and imported for cash.
 Furthermore, under certain circumstances, the Russian subsidiary of a foreign investor may subsequently be obliged to pay the unpaid exempted customs duties and import VAT with respect to in-kind contributions of such imported items to its charter capital. In particular, Article 2 of Resolution No. 883 provides that such customs duties and import VAT should be paid in the event of the &quot;realization&quot; of the contributed good.
 The exact meaning of the term &quot;realization&quot; has raised numerous questions in the practice of the Russian customs authorities, who are responsible for the actual collection of customs duties and import VAT. Commonly, the customs officials have tended to rely on various clarifying letters issued by the State Customs Committee (SCC) interpreting the relevant laws and normative acts, rather than on the laws and normative acts themselves.
 For example, it was not clear for a long period of time whether the lease by a Russian subsidiary with foreign investment to a third party of such exempted imported equipment should be deemed a realization for the purposes of Resolution 883. The SCC clarified this point in its Letter No. 01-33/1827 of Jan. 25, 1999, stating that a lease of goods is not realization and that, therefore, a Russian subsidiary of a foreign investor may lease such exempted imported goods without paying the customs duties and import VAT.
 If the lease agreement provides for the further purchase of this equipment by the lessee, however, then the customs duties and import VAT must be paid by the lessor, i.e., the subsidiary, on the date of purchase.While the above interpretation of the law by the SCC complies with the applicable legislation, sometimes such clarifications of the SCC do not fully correspond to the law.
 For example, in accordance with SCC Letter No. 09-12/18870 of July 9, 1999, in the case of the sale by a foreign investor of its shares in its Russian subsidiary, the subsidiary must pay the customs duties and import VAT on any and all in-kind contributions of the investor, which were previously subject to the exemption and not paid. This position does not appear to comply with Article 2 of Resolution No. 883, which deals with the realization of the goods contributed in kind by a foreign investor, and not the shares of the foreign investor in the Russian subsidiary.
 Likewise, in practice, the customs authorities may request a Russian company with foreign investment to pay exempted customs duties and import VAT in the case of the reorganization of the Russian company, e.g., a merger. Article 39 of the Tax Code, however clearly stipulates that the transfer of property of a reorganized company to its legal successor does not constitute a realization.
 Thus, it appears that benefits for in-kind capital contributions by foreign investors continues to be a contentious issue.
 
 <i>James T. Hitch is managing partner and Igor Gorchakov is an associate at Baker & McKenzie law firm's St. Petersburg office. </i>

TITLE: City Hall Loses Out In Astoria Share Saga
TEXT: The infamous 35 percent block of shares in the Astoria Hotel that has long been a bone of contention between various business groups and the city authorities no longer exists, ending a chapter in one of St. Petersburg's more tortuous financial stories.
 Earlier this month, an additional issue equal to 50 percent of the hotel's existing stock was distributed among three companies that had already collected a controlling stake. After purchasing the new issue for approximately $7.5 million, the companies now have 71 percent of the shares in the most profitable of the luxury hotels in St. Petersburg. City Hall's stake in the Astoria has been diluted from 35 percent to 23 percent. 
 The three organizations who win in this deal include two run by British hotelier Rocco Forte, who added the Astoria to his portfolio by purchasing a 25.5 percent share in 1997, and the Jersey-registered Hospitality Development Ltd., which holds 31 percent.
 The city administration holds the remainder, and has tried twice to sell it. Both times - in 1998 and 1999 - Aro ma Investment, a small firm controlled by St. Petersburg entrepreneur Alexander Sabadash, won the auction, and both times the contest was nullified. The companies of Rocco Forte participated in both auctions as well, but could not compete with the wealth of Sabadash, who is known as a vodka king. 
 With Sabadash out of the way, the other shareholders tried to persuade Smolny to sell its share. The administration tried bargaining, but since the decision to issue more shares was taken against its will, it has lost. Only about half its stake comprised voting shares. By law, City Hall can either suck on the decision, or sell its remaining 23 percent.
 The price of City Hall's share should come to about $3.5 million, but the administration does not consider this to be enough. For the first auction, Sabadash's bid was about $5 million; the second time around, the price soared to $10 million. Nonetheless, there was no sell, and the future of Smolny's stake remains unclear - perhaps the city will hang on and continue to receive dividends, as the Astoria is the only five-star joint that pays them.
 While the auction price set for 23 percent of the hotel's stock will probably be significantly lower than for 35 percent, there is one other factor to consider. Yury Voropayev, head of consultancy company MCD and the man who valued the city's share at $3.5 million last year, is bullish about the hotel market and about the Astoria in particular. 
 According to Voropayev, because of the development of the local tourist market, the value of hotel stock will rise as occupancy rates increase. Tourist trends are generally positive, and competition among the upscale hotels is on the up: Radisson SAS has announced that it is entering the market this summer with another hotel - the first in which there is to be no governmental share. For City Hall, that means no dividends, but on the other hand, at least it means no disappointments, either.

TITLE: Proctor &amp; Gamble Bids To Buy Clairol
AUTHOR: By John Nolan
PUBLISHER: The Associated Press
TEXT: CINCINNATI, Ohio - Procter & Gamble Co. is buying Clairol for $4.95 billion in cash in a deal that would add the Clairol, Herbal Essences and Nice 'n Easy brands to its lineup of hair-care products like Pantene, Pert and Head & Shoulders.
 The deal with Bristol-Myers Squibb Co. announced Monday, subject to regulatory approval, would be P&G's biggest acquisition. It comes as the consumer-products giant is cutting jobs and a number of non-core brands in the food business to try to increase profits.
 Acquiring Clairol, a world leader in hair-coloring and -care products with about $1.6 billion in sales, is part of P&G's plan to revitalize itself by focusing on building sales of big brands, company officials said.
 Sales in the worldwide, $37 billion market for hair-care products - including a $7 billion hair-coloring segment - are increasing by 3 percent annually. The Clairol acquisition will complement P&G's consumer-research and marketing expertise in hair care and will help Procter save money through bulk purchasing, A.G. Lafley, P&G's president and chief executive, told analysts Monday in New York City.
 Wendy Nicholson, an analyst for Salomon Smith Barney, told clients in a note that the acquisition was &quot;an excellent strategic fit.&quot;
 But some analysts had concerns that P&G is still restructuring itself and cutting its work force. And Clairol seems to have been less effective in appealing to younger customers than bigger rival L'Oreal, said analyst Carol Warner Wilke of Credit Suisse First Boston.
 &quot;L'Oreal has been taking share, and the Clairol brand needs to be repositioned,&quot; Wilke cautioned her clients in a research note. &quot;A key growth area in hair color is among younger customers, and we do not believe that the current brand image of Clairol positions it to take advantage of this growing market segment.&quot;
 In midday trading on the New York Stock Exchange, P&G shares were down $2.47 at $65.01 while Bristol-Myers Squibb lost 50 cents to $55.50.
 New York-based Bristol-Myers Squibb put Clairol up for sale last September so it can focus on its drug business. Japan's Kao Corp., whose holdings include the Andrew Jergens lotion products, had also wanted to buy Clairol.
 The acquisition is expected to add $900 million in hair-care sales and $700 million in hair-coloring sales annually to P&G's $7.4 billion beauty-care business.
 Hair coloring gives P&G another way to reach consumers it already serves with shampoo, conditioner and styling products, Lafley said. He said sales of hair-coloring products are increasing at three to four times the sales of shampoo products worldwide.
 The expense of buying Clairol will cost 6 to 8 cents per share against P&G's earnings during the first year after the deal is completed, Lafley said. In the second year, the company expects Clairol to slightly benefit P&G's overall earnings.
 It is unclear how many of Clairol's 4,000 jobs worldwide would be cut by P&G, which has its own distribution, research and manufacturing capabilities.
 But P&G said it expects to save about $200 million in costs from combining the operations.
 The deal also saves P&G potentially greater expenses of trying to develop and establish its own hair-coloring brands.
 P&G has been test marketing coloring products through its Vidal Sassoon brand that it developed from its research labs in Britain. But it has been reluctant to introduce an entirely new hair-coloring brand because of the high costs.
 Clairol controls 39 percent of the U.S. hair-coloring market, according to market research concern A. C. Nielsen; L'Oreal controls 50 percent. Worldwide, Clairol has a 12 percent share of the $7 billion hair coloring business, also No. 2 behind L'Oreal.

TITLE: Blame Game Leads to Industry Breakup
AUTHOR: By Nedra Pickler
PUBLISHER: The Associated Press
TEXT: WASHINGTON - Bridgestone/Firestone Inc. is ending a century-long relationship with Ford Motor Co. that became strained in the last year following the recall of millions of Firestone tires linked to at least 174 U.S. traffic deaths.
 &quot;Business relationships, like personal ones, are built upon trust and mutual respect,&quot; John T. Lampe, chairman, CEO and president of Bridgestone/Firestone, wrote in a letter Monday to Ford CEO Jacques Nasser. &quot;We have come to the conclusion that we can no longer supply tires to Ford since the basic foundation of our relationship has been seriously eroded.
 &quot;This is not a decision we make lightly after almost 100 years of history. But, we must look to the future and the best interests of our company, our employees and our other customers.&quot;
 Last August Bridgestone/Firestone recalled approximately 6.5 million ATX, ATX II and Wilderness AT tires. Federal safety investigators have collected more than 6,000 accident reports linked to blowouts, tread separations and other problems with the tires.
 Officials from Ford and Bridgestone/Firestone have exchanged blame for the tire failures, but both companies had said they thought the recall was adequate to cover all defective tires.
 But last Thursday Ford officials met with federal investigators to say they are concerned other Wilderness ATs not included in the recall might pose safety problems.
 Bridgestone/Firestone was not included in the meeting and Lampe sent Nasser a letter Friday saying he was outraged to learn of it through the media.
 &quot;We have always said that in order to insure the safety of the driving public, it is crucial that there be a true sharing of information concerning the vehicle as well as the tires. Ford simply is not willing to do that,&quot; Lampe said in a statement Monday. &quot;We believe they are attempting to divert scrutiny of their vehicle by casting doubt on the quality of Firestone tires.&quot;
 Lampe met Monday morning with Carlos Mazzorin, Ford's group vice president of global purchasing, at the tire maker's Nashville, Tennessee, headquarters to inform him of the decision to sever business ties.
 Bridgestone/Firestone will honor the terms of its existing agreements with Ford but will enter into no new tire- sales agreements.
 Most of the recalled tires were sold as original equipment on the Ford Explorer, the world's best-selling sport utility vehicle. And most deaths occurred when a tire failed and the Explorer rolled over.
 Both companies have analyzed the tire failure and concluded it was a problem with the design and a unique manufacturing process at Bridgestone/Firestone's plant in Decatur, Illinois.
 However, Bridgestone/Firestone officials say that the Explorer's design and Ford's decision to recommend an inflation level lower than what the tire-maker suggested also played a role.
 Both companies are facing hundreds of lawsuits as a result of the string of accidents.
 Ford has said that its costs relating to the tire recall totaled about $500 million. Lampe has said Bridgestone/Firestone spent at least $450 million on the recall and recently began a multimillion-dollar advertising campaign to assure the public that its tires are safe.
 On Sunday, Ford announced a recall of more than 50,000 new Explorers and Mercury Mountaineers because some of their tires may accidentally have been cut by a narrow assembly line. The tires that are involved are Goodyear and Michelin brands. Ford says the cuts are simply cosmetic and would not have any effect on the tire performance.
 The vehicles are also made at a St. Louis plant, but it had a different conveyor system that could accomodate the two-inch wider models. Ford has widened its conveyor belt in Louisville by three inches.

TITLE: IMF Tells Indonesia To Shape Up </strong>
PUBLISHER: The Associated Press
TEXT: JAKARTA, Indonesia - The International Monetary Fund said Monday it will not resume lending to Indonesia until the country amends its controversial central bank law in line with advice from an independent panel of advisers.
 Indonesia has largely ignored recommendations from the panel, which included Reserve Bank of New Zea land Governor Don Brash, said John Dods worth, the IMF's Indonesia representative.
 The fund suspended its $5 billion lending program to Indonesia in December over a number of concerns, including fears the government's plans to amend the central bank law would lead to political meddling in monetary policy.
 The IMF welcomed, however, the government's decision Monday to delay a plan to issue up to $1 billion in bonds backed by sales of natural gas to Singapore.
 Both the IMF and World Bank had raised objections to the plan, which surfaced earlier this year, saying it would increase Indonesia's already huge $70 billion foreign public debt, and contravene multilateral lending rules.
 Countries that rely on World Bank loans, such as Indonesia, are forbidden to pledge national assets to other creditors, putting at risk the security for their loans from the Washington-based bank.
 &quot;This helps to clear some of the remaining obstacles to further talks,&quot; Dodsworth said of the decision to put the gas-backed bond plan on hold.
 Indonesia first raised the plan to issue the bonds in January, only one month after the IMF delayed a $400 million loan tranche from its lending program to the country.
 Jakarta also submitted to Parliament on Monday its revised budget for the current fiscal year, which was also holding up IMF loans, Dodsworth said.
 Indonesia's revised budget aims to raise tax revenues and cut spending, mainly through a plan to raise fuel prices by an average 30 percent next month.
 The country's lenders, including the IMF, are concerned the budget deficit will shoot past a planned 3.7 percent of gross domestic product this year as the rupiah's decline to 31-month lows has pushed up the cost of servicing public debt.
 Tightening the fiscal belt may help Indonesia keep the deficit at the projected level, analysts say.
 Plans to issue gas-backed bonds would have further raised Indonesia's total debt burden, which already equals the country's GDP.
 &quot;Our main concern is the future sustainability of the current debt,&quot; Dodsworth said.
 Meanwhile, Standard and Poor's, a credit ratings agency, Monday lowered Indonesia's long-term foreign currency rating citing concerns over the country's ability to remain current on its sovereign debt.

TITLE: Another Strike Waiting in The Wings at Lufthansa
AUTHOR: By Tony Czuczka
PUBLISHER: The Associated Press
TEXT: BERLIN - Lufthansa and its disgruntled pilots resumed pay talks Monday as the threat of a third full-day strike hung over Germany's leading airline.
 A spokesman for the pilots' union, Georg Fongern, urged Lufthansa to improve its offer. But he also said, &quot;I have the impression it could work out this time.&quot;
 Fongern said the talks, which were broken off Wednesday, were being held at a secret location. Pilots have pledged to strike every Thursday until their demands are met, and Fongern said they may also resort to unannounced strikes.
 Last Thursday, striking pilots forced Lufthansa to scrub some 800 of 1,100 flights, affecting thousands of passengers. Lufthansa canceled more than 900 flights the previous Thursday, when pilots staged their first 24-hour walkout.
 Lufthansa said the first full-day stoppage by Vereinigung Cockpit, which represents 80 percent of its 4,200 pilots, cost the company at least $23 million. It has declined to say how much last Thursday's strike cost the company.
 Pilots are demanding a 24 percent wage increase to achieve parity with competitors.
 The airline said its latest offer amounted to a 30.3 percent raise - including performance-based pay - in the first year of a four-year contract for the pilots. Further increases would be tied to those in other German industries.
 Excluding performance-based pay, the latest offer would boost pilots pay 13.6 percent, below the union's current demand, which was scaled back from its initial demand of 30 to 35 percent.

TITLE: WORLD WATCH
TEXT: Vivendi Eyes MP3
 

NEW YORK (Reuters) - French media giant Vivendi Universal said Sunday it will buy its one-time foe MP3.com Inc. for about $372 million in hopes of bolstering its online music business.
 MP3.com, which operates a music-download Web site and a series of other music services, represents one possible springboard for the distribution of music over the Internet for Vivendi Universal, which owns the world's largest record company, Universal Music Group.
 Major record companies have been looking for a way to replace the embattled Napster song-swapping service, with services of their own. 
 The deal, which has been approved by MP3.com's board and has the support of the holders of more that 50 percent of the outstanding shares, calls for MP3.com's holders to get $5 per share in cash or stock.
 
 
Reputation at Risk
 

BERLIN (AP) - Finance experts told the German government Monday that it risks damaging the country's reputation and blossoming investor culture if it gives managers too much leeway to fend off hostile takeovers under a new law to go before parliament next month.
 A bill replacing Germany's voluntary takeover code and supposed mesh with planned European Union legislation will be presented to the Cabinet May 30 and reach parliament in June, a Finance Ministry spokesman said.
 The German daily Die Welt reported that the government is considering allowing managers to ask shareholders to authorize defensive measures for a period of up to five years. Each individual step would still have to be approved by the supervisory board, once a hostile offer was made. 
 
 
Smoking Targeted
 

BERLIN (AP) - The European Union wants to step up its anti-smoking campaign by banning tobacco advertisements from newspapers, magazines and the Internet, a German newspaper reported Sunday, just months after Europe's supreme court threw out earlier planned restrictions.
 The latest proposal should be finalized by early next month, despite the opposition of Germany and Austria, EU Health Commissioner David Byrne told Die Welt. 



TITLE: Risky Unilateralism
AUTHOR: By Walter Clemens Jr.
TEXT: THE United States at the end of 2000 was an unrivaled superpower presiding over a Pax Americana. But the new White House team seems determined to alienate and possibly lose America's friends abroad, while antagonizing other nations (notably China and Russia) so they turn into foes rather than partners.
 During last year's campaign, candidate George W. Bush admonished the United States to practice humility. Now, as president, he insists others bow to whatever new rules are devised by his administration. He ignores understandings and consensus built up among many parties over many years.
 Bush's brand of rugged individualism is spawning wide opposition to America's leadership. Thus, Europeans joined Third World countries and China earlier this month to exclude the United States from the UN Human Rights Commission. This rebuff is probably just one of many snubs to come.
 American unilateralism makes the worst of possible worlds a more likely scenario. A true conservative would prolong and enhance the unipolar stability that took shape in the 1990s. If only to minimize costs, a conservative statesman would rely on persuasion and example to influence other countries and avoid needless offense to their sensitivities. Only when necessary would he go his own way or use brute strength to shape others' behavior.
 The Bush commitment to a Fortress America exemplifies his unilateralism.
 The White House spits on the 1972 ABM Treaty - a cornerstone of strategic stability - in favor of an unproven defense system that's likely to inspire more and smarter weapons. Instead of consulting NATO partners and others on life-and-death issues, Washington informs them to expect changes in U.S. policy. In its first 100 days, the Bush team treated the world's other nuclear giants as nonentities though Russia can destroy much of the United States in just over 30 minutes, or sell its nuclear assets to others who might pose a threat to U.S. security.
 The president has jolted the U.S.'s two most important Asian allies, Japan and South Korea, by asserting that talks with North Korea aren't worthwhile. He jeopardizes one of the great arms-control achievements of the last decade: the mid-1990s arrangement to defang North Korea's nuclear capability in exchange for fuel oil and nuclear power equipment provided by three rich countries.
 The Bush team seems to lack any sense of how words can shape relationships. China and the United States can cooperate in many domains to mutual advantage - or they can become bitter rivals. Bush refers to the Chinese as &quot;strategic competitors&quot; - not &quot;strategic partners,&quot; as the Clinton administration called them. Such formulations can be self-fulfilling: Bush's words bolster the chance that an incident (such as the downing of the U.S. surveillance plane) might turn a troubled relationship into an all-out confrontation.
 Then, soon after the plane's crew was released, Bush chose a morning talk show (is that how a true conservative prefers to announce a change in foreign policy?) as the venue for saying that the United States would &quot;do whatever it takes&quot; to defend Taiwan from an attack by mainland China. The administration's subsequent attempts to back away from the president's words only served to raise additional questions about his intentions and leadership.
 Is there a rationale for these actions? Does the president seek to restore the Cold War alliance between China, Russia and a rogue North Korea? Perhaps he does. If Bush manages to reunite America's erstwhile communist foes, he would then have a stronger case for building a national missile defense!
 Bush keeps NATO partners on edge by saying the United States intends to withdraw from Balkan peacekeeping operations. Even as Bush casts doubt on America's dependability as an ally, his secretary of defense warns Europeans not to build a military force autonomous from NATO.
 In March, Bush offended an even larger range of countries by abruptly withdrawing from the Kyoto protocol painstakingly negotiated by rich and poor nations to control global warming. Adding fuel to this fire, the president seeks more carbon-based energy for American motorists, factories and homes. The White House is calling for 1,300 to 1,900 power plants to be built during the next two decades - more than one a week - while ignoring energy efficiency measures that government scientists say could cut demand by 20 to 47 percent.
 Bush has sought to help Azerbaijan and Armenia resolve their long dispute, perhaps because their quarrels complicate U.S. efforts to pump and sell Caspian oil. Otherwise, he disdains the mediating role used by many presidents. Bush shows so little interest in international cooperation that he still hasn't asked the Senate to confirm his nominee for United Nations ambassador.
 Treasury Secretary Paul O'Neill pulled back from a multinational initiative to clamp down on tax havens, saying he is troubled by &quot;the notion that any country, or group of countries, should interfere with any other country's decision about how to structure its own tax system.&quot;
 Donors to Republican causes applaud. And Washington joined Tokyo in undermining a pact endorsed by some 150 countries to ban cigarette advertising, because, says the U.S. delegation, it violates free-speech guarantees sacred to Americans.
 The Bush approach has been efficient and systematic. In 100 days, the MBA president and his managers have succeeded in antagonizing old friends and pushing potential partners into the role of adversaries. Given this accomplishment, Bush may want to defer a chunk of his trillion-dollar tax-cut plan: He'll need the money to pay for the clashes his policies will undoubtedly foster.
 
 <i>Walter Clemens Jr., a professor of political science at Boston University and an associate at Harvard University's Belfer Center for Science and International Affairs, is the author of &quot;America and the World, 1898-2025: Achievements, Failures, Alternative Futures.&quot; He contributed this comment to The Washington Post. </i>

TITLE: Where Has All of The Money Gone?
TEXT: GAZPROM'S board of directors will vote by the end of the month on whether to offer Rem Vyakhirev another term as the company's CEO.
 Vyak hi rev has directed Gazprom since its creation in 1992, but his tenure has been dogged by credible and unanswered accusations of mismanagement and asset-stripping. Board member Boris Fyodorov has said that he believes &quot;$2 billion to $3 billion disappears from Gazprom each year through corruption, nepotism and simple theft.&quot; <i>Each year.</i>
 In today's edition (<i>see page 2</i>), we have published the results of a five-week investigation into asset-stripping at Gazprom that uncovered considerable evidence that assets have been systematically handed over to relatives of company managers - including Vyak hirev, his deputy Vyacheslav Sheremet and former prime minister Viktor Cherno myrdin - throughout Vyakhirev's tenure.
 This sordid story is too complex to be summarized here. Suffice it to say that the daughters of Vyakhirev and Sheremet, as well as Chernomyrdin's son and other insiders, were able to buy stakes in companies controlling former Gazprom assets for pennies.
 The article also tells how major stakes in other companies that once belonged to Gaz prom had been systematically transferred to a network of nebulous off-shore holding companies. One of them, Dublin-registered Milford Holdings, declared a pre-tax profit of 33 million Irish pounds and had $184 million in the bank in 1999, according to newspaper reports. Milford, in turn, is owned by another holding company registered in Cyprus.
 All of this comes on top of years of scandal surrounding Itera, a mysterious company that has become the world's seventh-largest gas company in just nine years on the strength of numerous questionable concessions from Gazprom. Gazprom shareholders naturally are curious why Itera's output has increased in recent years just as Gaz prom's own output has declined.
 Even in its present condition, Gazprom accounts for about 8 percent of Russia's economy and holds roughly one-quarter of the planet's natural gas reserves. The questions of who manages the company and how are important - not least to the Russian state, which owns 38 percent of Gazprom.
 How the state's representatives on Gaz prom's board - including the deputy head of President Putin's administration - react to the latest reports and how they vote on Vyak hirev will tell us much about the new administration's commitment to fighting corruption. Not only should they send Vyak hi rev packing as soon as possible, they should be demanding a complete independent audit.
 There is no question that Vyakhirev should be dismissed. The real question is whether he should be in prison.

TITLE: A Do-Nothing Leader Who's One of Us
TEXT: THE other day, an elderly woman who lives in my apartment building stopped me to ask a couple of questions. She was on her way to the pharmacy to buy medicine for her sick husband who has Parkinson's disease.
 By law, my neighbor is entitled to receive all the necessary medicine for her husband for free. However, the director of the public hospital refused to give her the necessary prescriptions. He said something like: &quot;There are too many of you wanting to get something for free from the state.&quot; Thus, at the age of 65, my neighbor had to take a cleaning job in order to buy the medicine that her husband needs to stay alive.
 However, she told me all this just in passing. What she wanted to ask me was why I had been critical of President Vladimir Putin in my comments on Ekho Moskvy. She mentioned that Ekho Moskvy is the only radio station that she really trusts. She also said that she voted not for Putin, but for Grigory Yavlinsky in the last presidential election.
 Instead of answering, I asked a question instead. I wanted to find out why her political inclinations had turned to support Putin even as the politician for whom she voted has moved increasingly into the opposition. She answered bluntly: &quot;Putin raised our pensions.&quot; Yes, she admitted that prices had gone up much more quickly than her pension and, yes, her life hasn't gotten any better over the last year. Still, though, she praises Putin.
 Why? &quot;He is thinking about us,&quot; she said, meaning &quot;the elderly.&quot; &quot;Yeltsin never did. Retired people didn't even exist for him and he never raised our pensions. But Putin did. That means that he is thinking about us.&quot;
 I replied that Putin has been lucky. His presidency happened to coincide with high world energy prices, prices that have not been so high since Leonid Brezhnev's day. It wasn't too hard for him to raise pensions at a time when the Russian Central Bank is packed with hard currency. I also mentioned the on-going war in Chechnya and how much it was costing the state to continue waging it.
 My neighbor agreed. She is appalled by the war and the killing of a generation of young Russians. Being half-Chinese, she has also noticed an increase in the nationalistic moods around her. Previously, the people in the grocery or the pharmacy never paid attention to her oriental looks. Now they do. &quot;You foreigners are taking away what belongs to us,&quot; they say with increasing frequency.
 Naturally, this makes her feel bad. She has lived in Moscow her entire life. Her father, a Chinese communist, was repressed toward the end of Stalin's life. She refuses to see herself as &quot;a foreigner.&quot; She is a Russian, she says, both by faith and by geography. Nonetheless, after this digression, she returned to her original point - that I should not be critical of Putin. 
 Later I discussed this theme with Alexander Oslon, director of the Public Opinion Foundation. His regular polls show the same thing. People across Russia are critical about specific issues and they do not expect much to change. But those who have a hard time surviving - and who account for the majority - still praise Putin for &quot;caring about them.&quot;
 &quot;There is no mystery in Putin's popularity ratings. People see him as a guy from their neighborhood,&quot; Oslon says. &quot;He can do good things or bad things - it doesn't matter. He is young and strong, and he is one of them. He is like a big brother.&quot;
 If there is anything positive to say about the state of politics, it is that our liberals might learn some useful lessons. During the nine years of reforms, the liberals have failed to recognize one crucial fact: You shouldn't treat ordinary people like dirt. You should at least pretend that you care about them.
 When they held power, the liberals could have raised pensions by 20 percent, as Putin did, even if it meant printing more money and fueling inflation, as it is now. But they didn't think about their fellow citizens. They were obsessed by their vision and their mission of carrying out liberal reforms. And because they didn't bother paying attention to average Russians like my neighbor, they lost out in the end.
 
 <i>Yevgenia Albats is an independent, Moscow-based journalist. </i>

TITLE: Bush Is Hurting Arms Control
AUTHOR: By Pavel Felgenhauer
TEXT: LAST week, a high-level American delegation came to Moscow to discuss national missile defense as part of a global charm offensive. Even before the U.S. team arrived, high-ranking Russian and American diplomats were predicting that the talks will fail. Of course, they were right: The Americans &quot;explained&quot; their position on NMD, and the Russian side was &quot;not convinced.&quot;
 U.S. President George W. Bush has virtually announced that he will abandon the 1972 Anti-Ballistic Missile Treaty because promising new anti-missile technologies have been developed, because &quot;rogue&quot; states such as North Korea may threaten the United States with ballistic missiles and because Russia is no longer a enemy, meaning that ABM is irrelevant and outdated. However, these arguments just are not true.
 No reliable technologies of ballistic-missile interception have emerged in the last 30 years and an effective NMD is as unachievable today as in 1972. &quot;Rogue&quot; states do not yet have any intercontinental missile capabilities and may not for years to come. In the mid-1990s, the CIA predicted that no rogue state would manage to produce ICBMs before 2010 and that there would be sufficient time to take countermeasures before one did, since usable ICBMs cannot be developed without easily detectable tests.
 Bush may be correct in assuming that Russia is no longer America's enemy, but it's also surely neither a friend nor ally. Russia is still in transition from communist totalitarianism, but it is still uncertain whether the new Russia may turn out to be an authoritarian police state ruled by a nationalistic elite bent on &quot;restoring&quot; Great Russia.
 The current No. 2 in Russia's military hierarchy - the chief of the General Staff, Anatoly Kvashnin, who commands Russia's nuclear deterrent - once told me: &quot;We will take Westerners to visit Grozny to see how we have wiped out our own city for them to see what may happen to them.&quot;
 Maybe someday Russia will join the community of peaceful democracies and then all U.S.-Soviet arms control mechanisms can be safely scrapped. But today, while Russia is fighting a barbaric war in Chechnya and as long as its nuclear deterrent - which can still wipe out the United States and Western Europe in one fell swoop - remains under the control of generals who are, to be blunt, war-crimes suspects, Cold War-style arms control is still essential.
 Authoritarian regimes are unpredictable and can become suddenly, unreasonably aggressive. The decision-making process in an authoritarian state is opaque and happens without serious public discussion (or such discussions have little effect, as is the case in Russia today). Therefore, arms control can provide a safety net that may prevent an irresponsible bureaucracy from overreacting in a crisis. But now the Bush administration seems prepared to tear this net into shreds for nothing.
 The present U.S. charm offensive has fallen on deaf ears in Moscow, Beijing and many other capitals. It is hard to run an effective diplomatic offensive if most of your arguments are just wrong. Still, Bush administration officials insist there is no problem. They claim they have been deliberately &quot;stiffing&quot; President Vladimir Putin for some time but will now &quot;engage&quot; him, and Russia will cave in on NMD, tacitly agreeing to everything.
 That's another totally wrong assumption. Since Putin took over in Moscow at the end of 1999, Russian policy has been set: Speak soft with Washington on ABM, but stand firm. The battle plan is to force Washington to abrogate ABM and expose the evil Americans, which will help create a multipolar world.
 Now Moscow sees its plan succeeding. Anti-Americanism is on the rise, especially in Western Europe. The United States has been excluded from several influential UN commissions. Putin, for personal political reasons, wants a speedy summit with Bush and one is being organized for next month.
 But no NMD compromises are in the offing. Moscow sees no need to compromise, and if Putin even wanted to cave in, he would immediately run into grave political trouble with his true powerbase - the anti-American, militaristic, jingoistic Russian elite that put him in the Kremlin.
 Arms control seems doomed to collapse. Of course, impoverished Russia cannot compete in an arms race against the United States. But the temptation to proliferate military technology will grow and with it - Russian arms exports. Instead of deterring a rogue missile threat, Bush may well be bringing one on.
 
 <i>Pavel Felgenhauer is an independent, Moscow-based defense analyst. </i>

TITLE: War Correspondents: Helping To Make Sense of Chaos
AUTHOR: By Dasha Barinova
TEXT: YELENA Masyuk. Roman Ba ba yan. Arkady Mamontov ... The conflict zones - <i>goryachiye tochki </i>- war correspondents. These names and these words have become fused in our minds. Somehow they have become integral parts of our lives. And how many others are there, under fire, in the trenches? How many are there whose names we don't know?
 I imagine that there are a lot of war correspondents out there who aren't interested in fame and accolades. They don't care whether we know their names or not. They seek only one thing: to bear witness, to make us understand what they have seen. But what price must they pay to do this? What is it really like there, in the gorya chiye tochki?<i>
 </i>These thoughts involuntarily entered my mind as I looked at a display of pictures by photojournalist Yury Rost recently. About 20 photographs were hanging there, but one particularly burned itself into my mind. It showed a child's face, bound up in some sort of kerchief. But the girl's expression was anything but childlike: Serious, gloomy eyes looked out at me from the stark, black-and-white photo. She just stood there, her hands at her sides and her legs spread slightly apart. Next to the photo was a brief text describing the fates of children in the Caucasus.
 Childhood has passed them by. They haven't gone to the circus or the zoo. They didn't spend their mornings in nursery school or play endless games with their friends in the yards near their homes like I did. Life greeted them with teeth bared. Their first impressions were how to get enough bread to eat each day, how to survive in the harsh conditions of war. Who worries about these children of war?
 I have a hard time grasping what is going on in the conflict zones. In Chechnya, in the Balkans, in the Middle East. I don't want to try to understand (I just don't have the strength!) why the United States is controlling the situation in the Balkans or why America feels obligated to interfere in national conflicts, to demand the arrest of Slobodan Milosevic, to bomb Kosovo, to defend Albanian extremists. I don't understand why America's zone of interest extends to the Middle East and why the United States continues to pursue policies there that simply pour fuel on the fires of conflict.
 I refuse to understand Europe's position. Why are they being so passive in the face of the lawlessness going on in the Balkans?
 And I am appalled by the so-called Arab-Israeli conflict: People must be mad to murder one another over bits of land. They say that religious views and holy sites have been objects of contention there for centuries. But if even the most enlightened specialists cannot come to grips with these issues, then what hope is there for someone like me?
 And I am absolutely incapable of comprehending that thing that is covered up by the name &quot;the Chechen question.&quot; How can rage be so blind, a government so helpless, money so damned all-powerful? I can't understand why the United States feels the need to interfere in our &quot;family affairs.&quot; I don't understand why Europe is kept up at night by the deaths of Chechen civilians, but doesn't seem in the least moved by the cries of innocent Macedonians.
 And what right does the Taleban have to destroy the ancient monuments of world culture? And why is the world practically silent as they do so? How did it happen that religious extremism spread across the world like the plague, turning people into animals? Where did this global madness begin? Can anyone end this long nightmare or is the world condemned to sink into primitive oblivion? Can it be that we no longer even desire peace? Have the profits of war really destroyed our sense of the value of human life?
 And what about the children of war? How can these creatures cope alone with burdens that are too much even for adults to bear? Why must they pay the price for the mistakes of world leaders who place principles and national interests above compromises (I still believe that there are always compromises) that could change their lives?
 The truth about war can only be known by those who really see it, who hear for themselves the sound of bullets in the air and of bombs the moment before they explode. The moans of the wounded. Only those who have seen the dust of pockmarked fields hanging in the air and have smelled the mixture of smoke and gunpowder and decay. ... What prompts some journalists to leave the comforts of a normal life and sacrifice themselves for the sake of truths such as these?
 My mind keeps returning to Rost's photograph. The girl just stands there, somehow strongly and defiantly. The more I look, the stronger and more determined she becomes. I even sense optimism.
 I hate talking about war. It just seems wrong to discuss death and misery in warm, bright television studios or in a cozy living room with the family gathered around the television set. It isn't right to gloss over war-torn fates while sipping tea or driving through town with the radio playing loud music. Here there is peace, food, laughter and there - the unspeakable. Nonetheless, suddenly, unexpectedly, while chewing on some cake, wrapped in a warm blanket, stroking my cat, I find myself talking about the horrors of war.
 Why do we criticize war reporters for over-dramatizing war? Do we prefer to live in a fog of ignorance?
 I hate to read about war or to see it on television. But that photograph of the little girl changed the way I think about the world. Rost speaks of war, but he moves beyond the usual hopeless pessimism. He and I together are urging her on: Stand fast! Don't give up! You are not to blame! Stand firm, and we will, too!
 And her eyes seem to say to me, &quot;Of course. How could it be otherwise?&quot; I don't remember the exact words, but their sense was clear, simple and something inside me was stirred. It wasn't that she said anything that I hadn't heard before, but she said it with a penetrating human voice.
 How many international human rights commissions have come and gone from one or another war zone? How many solemn agreements have been signed by neatly dressed ministers? How much has U.S. President George W. Bush's administration pressured Yugoslavia to surrender Milosevic to the Hague tribunal? And on and on. None of this has the power to change things that such photographs and such front-line war reporting has. These things speak directly to our hearts. And our hearts speak back.
 We will dig in and stand firm. And we will overcome, as long as there are some people who are willing to go down into hell and to find there - in hell itself - some bit of life and hope. And to bring that hope back to us and make us see it.
 
 <i>Dasha Barinova is an 11th-grade student in Moscow. She contributed this essay to The St. Petersburg Times. </i>

TITLE: Finding Peace of Mind: Where To Get Help
AUTHOR: By Lena Ruthner
PUBLISHER: Special to The St. Petersburg Times
TEXT: Psychoanalysis and psychological diagnosis have become a part of everyday life in North America and Western Europe. Our language is full of psychological terms - schizophrenia and complex, paranoia and psychosis - and psychotherapy has become a common means of overcoming fears, depression and stress as well as deeper psychological illnesses. Additionally, over the past decades the spread of psychoanalytical and psychological treatment in the West has lead to a new degree of tolerance and acceptance in dealing with those who suffer from psychological problems.
 In Russia, however, psychology and psychoanalysis still remain a matter for specialists, and the professional treatment of psychological suffering has not yet found its way to a general level of social consciousness and acceptance. Public perception and categorization of psychologically 'normal' and 'sick' people is blurred, often leading to the exclusion and stigmatization of those not behaving in a socially acceptable manner. Additionally, professional treatment and regular therapy is out of the question for most people - not only for financial reasons, but also for fear of social judgment and condemnation.
 One consequence of such public denial is a lack of information on existing institutions to which those in need can turn for professional help and advice. The St. Petersburg Times has collected information on the state of psychoanalysis and psychological help in the city, the legal questions concerning payment and hospitalization, and the existing private and public institutes and civil initiatives to which the suffering person or his relatives can turn. 
 
 <strong>THE STATE OF THE FIELD
 </strong>After the breakdown of Soviet rule, the three fields of psychology have remained the poor cousins of medicine in Russia, according to Konstantin Vaksov, a doctor at the American Medical Center. &quot;One has to distinguish between three different types of psychological treatment,&quot; he says. &quot;Psychiatry, which is more concerned with the medical aspects of psychological disorders; psychoanalysis, which deals with the deeper psychological roots of psychological disorders in childhood and the general socialization of the person, and psychology, which is a general term for the investigation and treatment of psychological problems.&quot;
 However, Vaksov stressed that numerous problems surround the local mental-health system. &quot;There are not enough institutions in town to accommodate the patients, the psychiatric hospitals and sanitariums are in terrible conditions, and there is no common standard of treatment in Russia available on which patients can base their trust,&quot; he said.
 According to Lyudmila Rubina, a leading St. Petersburg psychiatrist, much can be explained by a few financial statistics: A nurse's monthly salary amounts to between 380 and 430 rubles, a doctor generally earns about 480 rubles, and even a senior doctor should be happy with a monthly salary of 800 rubles. 
 <strong>SAMPLE SCENARIOS
 </strong>Generally, if a person is suffering from an acute psychological disorder in Russia, the steps taken - from contacting local medical help to hospitalization and treatment - look something like this: The person himself, or more commonly relatives or friends, contacts the emergency ambulance service by calling the standard medical emergency number, 03. The exact problem should be explained to medical staff on the other end of the line, and an ambulance will be dispatched to collect the person and take him to one of the city's psychiatric hospitals for medical treatment. Generally, after the most urgent treatment is taken care of, the patient will be transferred to one of the town's non-psychiatric out-patient treatment centers or clinics for further observation and treatment. 
 One question that often arises for close relatives or friends of a psychologically sick person is what to do if the sick person is not willing to go to the hospital voluntarily for medical treatment. According to existing legislation, nobody can be forced - by either the state or by relatives - to seek psychological advice or hospitalization, as long as he does not present an immediate danger to himself or to those around him. Even in emergency cases, medical treatment can only be given with the patient's permission. 
 In practice, though, the situation may look somewhat different. Unlike in the U.S., for example, where civil legislation makes involuntary hospitalization almost impossible, the legal basis for coercive hospitalization in Russia does allow for a rather liberal interpretation. Hence, Dr. Vaksov explains that &quot;in practice, any person suffering from an acute psychological disorder can be brought to the hospital without his or her permission.&quot; Additionally, very often hospitalization is carried out and medical treatment is given without much regard to legal grounds as the situation is often too urgent for the long and often ineffective legal procedures to be undertaken.
 &quot;Even though most doctors do not perceive patients with psychological disorders as criminal and try their best to treat them humanely and with respect,&quot; explained Vaksov, &quot;the system and methods of coercive hospitalization resemble the ones of imprisonment.&quot; 
 
 <strong>WHERE TO TURN
 </strong>However, due to the opening up of Russia and some alterations in the legislation on psychological help, some positive changes concerning practical treatment have been introduced during the last decade. &quot;Ten years ago, it was not possible to find a specialist in any psychological field in St. Petersburg offering his services to a wider public on a legal basis. Now there are more facilities and professionals, although it is still difficult enough to find specialists in these fields,&quot; explained Vaksov.
 For long-term treatment of psychiatric and psychological disorders, one may turn directly to any number of state-sponsored psychiatric dispensaries, which are located in every district, or to some of the newer psychoanalytical or psychological institutions that have grown up in the city over the last few years. 
 And if a patient is foreign there is, in fact, a surprising availability of local psychological specialists who are capable of advising and helping patients in English. The Institute of Psychoanalysis, located on the Petrograd Side, boasts several English-speaking psychiatric specialists among its staff. Furthermore, the Vasilievsky Center for Psychological Health also offers a variety of medical services for relatively low prices, including consultation concerning non-medical psychological and psychiatric treatment as well as legal advice concerning hospitalization and payment. 
 Additionally, for foreigners and especially exclusively English-speaking city residents, Dr. Vaksov recommends calling the AMC or any other foreigner-oriented medical center to ask for advice. The staff there can, for a fee, help set in motion the patient's hospitalization and can assist with local long-term psychiatric treatment.
 Finally, St. Petersburg has numerous hotlines, based on the Western model, which can offer help and advice by telephone. The hotline for psychological help for children and young people can be reached by dialing 164-00-05, while the hotline for psychological help for young and old is 108-40-41. There are also several hotlines set up as charities: Trust, a hotline for adults (Tel: 323-43-43) from 9 a.m. to 9 p.m., and the separate Trust hotline for women (Tel: 293-06-73); as well as Crisis, another hotline for women (Tel: 327-30-00).
 
 <strong>American Medical Center, </strong>10 Serpukhovskaya Ulitsa, Metro Tekhnologichesky Institut, Tel.: 326-17-30.
 <strong>Institute of Psychoanalysis, </strong>18 Bolshoi Prospect, Petrograd Side, Metro Petrogradskaya; Tel.: 235-11-39.
 <strong>Vasilievsky Center for Psychological Health, </strong>39 12th Line, Metro Vasileostrovskaya. Tel./Fax: 328-81-25.

TITLE: Happy Birthday to Brodsky and Sholokhov
AUTHOR: By Tom Masters
PUBLISHER: Staff Writer
TEXT: May 24 is the anniversary of the birth of two Russian Nobel Prize literature laureates of strikingly different ilks. <strong>May 24, 1905, </strong>was the date of birth of Mikhail Sholokhov, perhaps the greatest of all the writers who wrote with official sanction in the Soviet Union. Indeed, Sho lok hov's de facto position as the Soviet writing establishment's mouthpiece and most prolific author is surprising given his personal history, political views and above all, the content of his novels.
 Born the son of an illiterate Uk rai nian maid and an unemployed Russian, Sholokhov grew up in the Don region against a background of revolution and civil war. He worked under the Bolshevik regime as a teacher and clerk before moving to Moscow in 1922 to become part of the revolutionary literary movement &quot;The Young Guard.&quot;
 Despite writing for various Soviet periodicals and publishing collections of short stories in the early twenties, it was not until the publication of the first volume of &quot;The Quiet Don&quot; in 1928 that Sho lokhov broke through to Soviet readers en masse. As literary groupings under Stalin were brutally abolished and straight jacketed into state-approved organizations, Sholokhov was among the few authors who managed to successfully tread the delicate line between political correctness and readability. Indeed, by the standards of the day, &quot;The Quiet Don&quot; was a challenging read, facing serious censorship: Its protagonist, Grigory Melekhov, wavers between the Reds and the Whites and decides his loyalties by determining where personal benefit lies, something that was scandalous during Stalinism.
 By the time the final volume of &quot;The Quiet Don&quot; was published in 1940, Sholokhov was arguably one of the few non-propagandist writers left in the Soviet Union whose writing was permitted by Zhdanov's intolerant literary police. 
 When he received the Nobel Prize in 1965, rumors resurfaced that Sholokhov could not have written &quot;The Quiet Don&quot; at such a young age, given credence by Solzhenitsyn and an anonymous Soviet critic. These accusations have never been backed up by any hard evidence, however, and although long out of fashion, Sholokhov will likely endure far better than his Soviet contemporaries.
 A pariah who was serving part of a five-year sentence for &quot;social parasitism&quot; on a state farm near Ark han gelsk when Sholokhov was receiving his Nobel Prize, Josef Brodsky was also born on <strong>May 24 in 1940.</strong> A Lenin grad native who owed much to the city's rich poetic past - particularly influenced by Anna Akhmatova and Osip Mandelshtam - he never stood a chance at state acceptance even in the more liberal climate of post-Stalinism. Despite writing apolitical poetry, it was the style of Brodsky's works as much as their content that spelled trouble, shunning socialist realism and embracing the silver age and modern classicism. Brodsky was eventually forced to emigrate, and became the greatest Russian poet in exile during the 1970s, when teaching in the United States. He was finally awarded the Nobel Prize - the fifth and final Russian writer of the twentieth century to have been honored - in 1987.

TITLE: RUBLE AROUND TOWN
TEXT: Monday's ruble/dollar rates in St. Petersburg:
 
 Address Buy Sell
 </strong>Avto Bank 119 Moskovsky Prospect 28.60 29.20
 Alfa Bank 6 Kanal Griboyedova 28.60 29.30
 Baltiisky Bank 34 Sadovaya Ulitsa 28.70 29.49
 Bank Sankt Peterburg 108 Ligovsky Prospect 28.50 29.40
 Impexbank 58 Nevsky Prospect 28.50 29.20
 PetroAero Bank 54 Nevsky Prospect 28.30 29.30
 Petrovsky Narodny Bank 7 Naberezhnaya Reki Moiki 28.60 29.20
 Promstroi Bank 4 Mikhailovskaya Ulitsa 28.50 29.20
 RusRegion Bank 54 Nevsky Prospect 28.95 29.30
 Sberbank 4 Dumskaya Ulitsa 28.00 29.20 
 <strong>Average 28.53 29.28
 </strong><i>Change from last week +0.20 +0.19 </i>

TITLE: Nagorny Karabakh Reaching for Compromise
TEXT: A freelance writer based in New Jersey, </i><strong>Antranig Kasbarian </strong><i>has made several trips to Nagorny Karabakh since the region's territorial dispute erupted in violence in the early 1990s. During his most recent visit this spring, he found the enclave struggling to create something more lasting than military victory.
 </i>
 HADRUT, Nagorny Karabakh - It was 11 p.m., and my arm had begun to tire. Toast after lengthy toast had taken their toll in this remote, mountainous enclave, where native Armenians routinely raise their glasses in tribute to friends, family members and comrades who have fallen in the region's ongoing separatist struggle with Azerbaijan. They also drink to the self-declared Nagorny Karabakh Republic, which they seek to rebuild from its war-torn state into a prosperous, sovereign entity.
 During the course of that evening and throughout my ensuing stay in Karabakh, I learned yet again that nearly no one here has remained untouched by this war. Perhaps this is one reason why Karabakhtsis, in contrast to their compatriots in Armenia, have clung steadfastly to their land over the past decade, feeling a unity of purpose and strong sense of investment in a struggle that has encompassed every aspect of their lives. My host that evening, Emil Abrahamyan - artist, architect and long-time political organizer - aptly summed up the mood on the occasion: &quot;Certainly we face many hardships associated with a postwar environment: the lack of basic services and facilities, dire economic conditions, social dislocations. But it's hard even to consider leaving after all we have sacrificed to reach this point.&quot;
 Abrahamyan should know. Thirteen years after the initial spasms of 1988, his family remains representative of the Ka ra bakhtsis' predicament. Indeed, the Ab ra hamyans are a microcosm of a struggle that once seemed fiercely insular, but has in fact drawn diverse people together into a swirling vortex encompassing Ba ku, Yerevan, Moscow, Mol do va and more.
 Microcosm of Struggle
 Now 44, Abrahamyan was among a handful of young activists who, beginning in 1987, sought to test the limits of glasnost and perestroika by organizing rallies and petitions addressing the longstanding grievances of Karabakh's Armenian majority. Specifically, Karabakh Armenians cited ongoing ethnic prejudice, cultural repression and discriminatory economic policies under Soviet Azerbaijan's jurisdiction, and accordingly sought to secede and unite with neighboring Soviet Armenia, citing the Soviet Constitution's Article 70, which affirmed the right to self-determination. 
 What Abrahamyan could not have guessed, however, was the chain reaction that followed during the winter of 1988. Moscow, wary of similar separatist movements sprouting in Chechnya, Abkhazia, and elsewhere, showed every interest in protecting the status quo. Meanwhile, events on the ground moved toward escalation. In Armenia, hundreds of thousands took to the streets for mass rallies in support of Karabakh's demands. Following these rallies, Armenians living in Azerbaijan were faced with violent repression: Unrestrained mobs killed hundreds and drove out thousands more. Shortly thereafter, thousands of Azeris were forced to flee Armenia's border regions, under imminent threat of retaliation. By mid-1988, the battle for possession of Karabakh was on.
 Within Karabakh itself, Azeri authorities sought to repress the nascent Armenian resistance by imposing curfews, seizures and random arrests. For Abrahamyan and his comrades, this meant a swift transformation from public activism to life as fugitives. They evaded their pursuers by taking refuge in Karabakh's mountains and forests. From there they would mount a guerrilla struggle that swiftly spread throughout the countryside, lasting for several years until the Soviet Union's dissolution ushered in more conventional, state-to-state hostilities.
 As we unwind in his tiny living room, Abrahamyan speaks of those years in terms of metamorphosis. Obviously, his own world changed dramatically, as his artistic and professional lives became subordinate to political struggle. But at the same time, each of his family members was affected in far-reaching ways. He shows me photos he has taken over the years, and each one tells a story: There is his father, arrested in 1988 by KGB agents seeking to flush Abrahamyan out of hiding; he was then taken to a tsarist-era prison in the mountain fortress of Shushi, where he was tortured and eventually died of stomach lacerations. And there is his brother Erig, who returned from the Azeri capital Baku with his wife Larissa to join in the struggle. Erig eventually distinguished himself as a military commander along Ka ra bakh's southern front and died during the last round of fighting there in 1994, leaving his wife with two infant children. Abrahamyan's sister Erza, also a war widow, is raising her two children in their native village while working as an military attache for the Karabakh Republic.
 Looking back, Abrahamyan notes the many changes since 1988. He acknowledges that while the struggle originally concerned Karabakh's drive to secede from Azerbaijan, it has since grown into a regional conflict, embroiling neighboring states as well as superpowers. The principals include Armenia, upon which Karabakh has increasingly relied for military and economic support; Turkey, which has consistently backed Azerbaijan in an attempt to shift the region's geopolitical balance; and Russia, which as the reigning regional power has generally sought to stem such a shift.
 The scope of the struggle has also changed in other ways, says Abrahamyan. &quot;For us, this has become not simply a struggle over territory, but a struggle over national identity - over who we are and what we stand for. For years, others had known us - and we had known ourselves - as perennial losers, victims, a defeated people. The Karabakh war has reshaped our national consciousness, including our self-image, because we proved to ourselves that we can, in fact, struggle for something better; not through mere words or promises, but by changing the facts on the ground.&quot;
 Indeed, the facts on the ground would seem to bear out Abrahamyan's testimony. There are no longer any Azeris to speak of. Only some deserted villages and battle-ruins - gutted homes, cemeteries, a few stray mosques - provide some trace of their former inhabitants. Meanwhile, Karabakh's growing integration with Armenia is everywhere in evidence: Large, well-paved roadways now connect the two, facilitating transport and communications; cultural and educational exchanges bolster Karabakh authorities's efforts to &quot;re-Armenianize&quot; their population; and coordination of military resources and personnel has already become quite commonplace. It would seem then that Karabakh's de facto unification with Armenia is proceeding apace, even while international de jure recognition remains outstanding.
 Indeed, the Karabakh struggle, which began as a local self-determination movement, has emerged for Armenians as a larger symbol of national unity. Ab ra hamyan claims that Karabakh is among the few issues that have galvanized Armenians worldwide. &quot;This struggle has turned out to be not just about a small parcel of land in some corner of the Caucasus, but a pan-national struggle that has mobilized all of our resources - not only in Karabakh, but also in Armenia, and just as importantly, throughout our worldwide diaspora.&quot;
 The Revival of Culture
 In Karabakh, after an initial wave of emigration during the war and its immediate aftermath, the population has now stabilized at roughly 100,000, representing 80 percent of Armenians' prewar total. Some carry on in hopes of better days to come. Others are driven by a sense of loyalty and commitment toward rebuilding a fledgling, sovereign entity. Still others simply persist through a stubborn refusal to vacate when customary logic might dictate otherwise. But alongside these factors, another powerful reason for staying can be found in Karabakh's countryside where more than half the population still lives: longstanding ties to the land.
 &quot;When I moved from my village to Stepanakert 12 years ago, I encouraged my parents to come with me,&quot; recalls Vladik Hakobyan, a charge d'affairs in Karabakh's Culture Ministry. &quot;They were already in their mid-70s, and the daily toil of village life had already begun to wear them down. But my father refused, saying 'My ancestors have lived off this plot of land for over 150 years; I was born here and I'm going to die here.'&quot;
 Such refrains are still commonly heard among the region's peasantry, who reverentially view their villages as the heartland and repository of Ka ra bakh's identity. Even those who have since moved on, like Vladik, maintain special ties to their ancestral villages. Perhaps this is one reason why Karabakhtsis - like the Chechens - have been difficult to defeat. Historic, ongoing ties have translated into a tenacious willingness to fight - and to die - for one's land.
 But there is yet another factor, equally decisive, in the Karabakhtsis' drive to retain these lands - culture. Having been cut off from Armenia for decades, Karabakhtsis now eagerly embrace their newly rediscovered national idioms - in art, literature, folklore and daily practices. Stoking up the fire, meanwhile, is Armen Sargsyan, Ka ra bakh's culture minister, who has rapidly generated a wide array of activities involving hundreds of people, both professional and amateur. The aim, he says, is to promote culture not simply for culture's sake, but as a tool to instill popular morale: &quot;The economic conditions here are still quite poor; we all know that,&quot; he notes. &quot;But the objective rules don't always apply; people still want to have a reason to hope, and our culture provides that for them. Culture is not an escape, but a means of saying, 'Look, what we've got here is worth struggling for, worth improving even more.'&quot;
 The Front and Beyond
 During a visit to the front in March, the climate turned fickle on the southern border. Balmy temperatures suddenly turned cold, and a blinding snowstorm was underway as I reached a military outpost near Fizuli, a former Azeri city overrun in 1993.
 The storm has raised Armenian concerns about reduced visibility, which often provides suitable cover for Azeri border raids. However, in the past six years of cease-fire, less than 200 people have been killed on either side, as the conflict increasingly becomes a war of words and postures. Consequently, life at the front can be sometimes routine, precautions notwithstanding.
 Upon arrival, I am greeted by Kho ren, the outpost's boisterous subcommander, who proudly shows me around the border areas he supervises. These are manned by young recruits, many still in their teens, who are grateful for our company after many cold and lonely hours.
 Upon returning to the outpost, we huddle around a small furnace, where we soon engage in ceremonial toasts. As our subject turns to the possible renewal of hostilities, Khoren gives vent to some mild bravado: &quot;Yes, many Azeris are still calling for war, and we must be prepared for that possibility,&quot; he says. &quot;But in his heart, Aliyev knows this is not a winnable war, and so do many of his people. They have suffered too many losses, too many internal problems, to risk creating even more. He's more concerned about holding on to power; war could easily weaken his position.&quot;
 Indeed, of late Aliyev has struck a more conciliatory note. In recent addresses before parliament, he expressed serious reservations about resuming hostilities, and criticized opposition figures for warmongering without soberly assessing their chances. He also surprised many by stating that retaking Ka rabakh is an extremely ambitious goal and that Azerbaijan's more realistic option would be to reclaim the surrounding occupied territories.
 Meanwhile, Armenia has also begun to speak of compromise. President Ro bert Kocharyan, himself a Ka ra bakhtsi and former president of the Ka ra bakh Republic, assumed Armenia's presidency based largely on his pro-Karabakh record. But with Armenia in dire economic straits and under diplomatic pressure, Kocharyan has moved away from unequivocal statements and toward more elastic positions, calling for a negotiated solution whereby Azerbaijan &quot;at least receives something.&quot; Of course, he still lays out clear conditions, including Karabakh's &quot;non-subordination&quot; to Ba ku, overland links with Armenia, firm security guarantees and eventual Ka ra bakh involvement in any final negotiations.
 Both Aliyev and Kocharyan have committed to a series of talks sponsored by the OSCE, which has put forth an unusual &quot;common state&quot; proposal that would place Karabakh in a loose confederation with Azerbaijan, but with de facto independence, internationally recognized status, its own constitution and armed forces and power to veto any legislation passed in Baku. After much initial reluctance, the plan now appears to be gaining serious consideration, as both presidents last month flew to Key West, Florida, where they held several days of intensive talks overseen by U.S. Secretary of State Colin Powell. So far, all parties report considerable progress and an upbeat atmosphere, and yet are extremely tight-lipped about specifics, saying only that a &quot;win-win&quot; situation has been devised and that a revamped proposal will be crafted in time for a June follow-up summit scheduled for Geneva.
 Meanwhile, the smell of compromise is in the air, and here at the front, there is considerable trepidation. &quot;After all this bloodshed, I'm not prepared to give up these lands,&quot; Khoren says flatly. &quot;Compromise is a pretty concept. But what about acceptable compromise, one that provides firm guarantees of sovereignty that can never be broken? Without guarantees, we're better off relying on our own strength and determination.&quot;

TITLE: Italian Film Wins as Cannes Wraps Up
PUBLISHER: The Associated Press
TEXT: CANNES, France - Nicole Kidman shook hands as though she were running for office. Jean-Luc Godard took potshots at Hollywood. Francis Ford Coppola made an encore bow with a new rendition of &quot;Apocalypse Now.&quot;
 Twelve days of glitz, glamour and star-gazing at the 54th Cannes Film Festival ended Sunday. Regulars griped that fewer celebrities showed up this year, while critics groused a bit about the quality of the films, finding few that evoked a passionate response.
 &quot;The Son's Room,&quot; a tale of family tragedy from Italian director Nanni Moretti, won the Palme d'Or, the festival's top award. Moretti also stars as a father whose teenage son dies in a diving accident.
 &quot;The Piano Teacher,&quot; Austrian filmmaker Michael Haneke's story of a sexually repressed music instructor seduced by a student, took the grand prize, the second-highest award, plus honors for best actress and actor for Isabelle Huppert and Benoit Magimel.
 But there was nothing this year as provocative as last year's top-prize winner, &quot;Dancer in the Dark,&quot; Lars von Trier's gloomy musical that drew both raves and catcalls.
 Another musical, opening-night film &quot;Moulin Rouge,&quot; provoked perhaps the broadest reaction. Starring Kidman and Ewan McGregor, &quot;Moulin Rouge&quot; features dazzling sets, costumes and special effects, and an eclectic jumble of pop tunes. It received some heavenly reviews - and some that characterized it as an overblown mess.
 Kidman, dealing with a storm of media attention surrounding her breakup with Tom Cruise, strolled off the red carpet at the film's premiere to shake hands with fans gaping from behind barriers.
 Godard was less politically correct. The Swiss director came to Cannes with &quot;Eloge de L'Amour,&quot; which mocks representatives from Hollywood trying to acquire the rights to a love story between two French Resistance fighters in World War II.
 &quot;Americans have no past, so they buy the pasts of others,&quot; one of the film's characters says.
 At a news conference, Godard was critical of no less a Hollywood name than Steven Spielberg, specifically lashing out at &quot;Schindler's List.&quot;
 &quot;To reconstruct Auschwitz the way he did, as an artist, an author - he did not have the right to do that, and it's my duty to point a finger at him,&quot; Godard said.
 Despite the presence of Kidman and such actors as Frances McDormand, Billy Bob Thornton, Sean Penn and Tim Robbins, celebrity watchers complained that Cannes was thin on stars.
 The co-stars of David Lynch's cryptic &quot;Mulholland Drive&quot; - Naomi Watts and Laura Elena Harring - are hardly household names. 
 But, said the American director, &quot;There's something so beautiful about a cast that's not known. It makes going into a new world all the easier. You bring a star along, they carry so much baggage.&quot;
 Among stars who did come to Cannes, enthusiasm ran high. &quot;I love Cannes,&quot; said Jennifer Jason Leigh, who came to the festival with &quot;The Anniversary Party,&quot; which she co-wrote, co-directed and stars in with Alan Cumming.
 &quot;It's the only time I think as actors today you get a sense of what it would have been like to have been a movie star back in the '30s and '40s, when the premieres were really big, and you walk up that red carpet or that blue carpet, and it's just incredible.&quot;

TITLE: WORLD WATCH
TEXT: Israeli Attacks by Air
 

GAZA (Reuters) - Israeli helicopter gunships unleashed a missile strike on Palestinian targets in the Gaza Strip Monday, prompting new Palestinian appeals for international intervention that Israel quickly dismissed.
 No one died in the air attack, which Israel said hit a makeshift mortar bomb factory. But witnesses said Israeli forces later killed two members of Palestinian President Yasser Arafat's Fatah faction suspected of planting a bomb in Gaza.
 A surge in violence since Friday, when a Palestinian suicide bomber killed five Israelis and Israeli air strikes involving F-16 jets killed 12 Palestinians, has heightened international concern that fighting is rapidly spinning out of control.
 The New York Times said U.S. Secretary of State Colin Powell was planning to present a U.S. proposal for ending the violence, offering the two sides "lifelines" that could lead to further public and personal diplomacy.
 
 
Congo Peace Mission
 

KINSHASA, Congo (Reuters) - A dozen UN Security Council ambassadors wound up a peace mission to the Democratic Republic of Congo on Monday, confident that they had advanced the cause of peace in Africa's third-largest country.
 But Congo President Laurent Kabila expressed disappointment with the UN peace effort in the former Zaire and said the world body should send 20,000 peacekeepers.
 The visit by 12 of the council's 15 members was a stop on an eight-nation African tour to bolster the peace process in a country torn by a brutal, many-sided war for three years.
 The council has deployed a small 1,300-member UN force to monitor a pullback of armies in a conflict dubbed "Africa's World War I," and is awaiting firm decisions among the combatants on a timetable for the withdrawal of all foreign forces and an internal dialogue to chart Congo's future.
 
 
Yemen Market Blast 
 

SAN'A, Yemen (AP) - An explosion in a rural weapons market in Yemen killed at least 14 people and injured at least 15 on Saturday, reporters on the scene said. Hospital officials said the death toll could be as high as 32. 
 The explosion occurred about 2 p.m. in the village of al-Suwaida, about 190 kilometers southeast of the capital. A security official quoted by the Saba news agency said the explosion occurred in a building where dynamite was stored. 
 Guns, gunpowder and other explosives are sold freely at markets in Yemen, a largely tribal society where weapons are carried openly. 
 Authorities were investigating the explosion as an accident, but a truck parked nearby had been gutted, leading to suspicion that it carried explosives. 
 
 
Chirac Impeachment?
 

PARIS (Reuters) - Thirty French deputies, most from the governing Socialist Party, have signed a petition to impeach President Jacques Chirac over graft charges dating back to his time as Paris mayor, the daily Le Monde reported Monday.
 Prime Minister Lionel Jospin's party promptly disowned the effort, saying Socialist deputy Arnaud Montebourg was acting on his own and his unprecedented initiative was bound to be defeated in parliament and misunderstood by voters.
 But Montebourg, comparing the graft charges to the Watergate scandal in the United States, vowed to push with his bid to have Chirac tried on charges of taking bribes and providing bogus jobs to allies while Paris mayor from 1977 to 1995.
 Chirac has repeatedly denied any wrongdoing and magistrates investigating the charges have balked at launching an official probe, arguing that he enjoys immunity from prosecution as long as he is head of state.
 
 
Jet Has Rough Ride
 

TOKYO (AP) - An All Nippon Airways jumbo jet hit strong turbulence near Guam early Monday, injuring 19 people, an official said.
 Transport Ministry spokesperson Ka zu mi Kawaguchi said 12 passengers and seven crew members were injured as the Boeing 747-400D was preparing to descend for a scheduled landing. Most of the injuries were minor, though one passenger fractured his leg, he said.
 ANA Flight 173 began its flight from Kansai International Airport in western Japan, and landed safely at Guam's international airport at 1:49 a.m. on Monday, 25 minutes after being hit by turbulence, he said. The plane was carrying 286 passengers and a crew of 14.
 Kawaguchi said details of the accident remained sketchy, but seat-belt signs may not have been turned on because the plane was still at cruising altitude when it hit turbulence above the Pacific Ocean. 
 
 
Berlusconi Investigated
 

MADRID, Spain (AP) - Prosecutors in Sicily are gathering testimony from Mafia turncoats to show that Italian Prime Minister-designate Silvio Berlusconi had ties to the mob, a leading Spanish newspaper said Sunday. 
 The center-left daily El Pais said it had access to documents showing that former Mafia members gave prosecutors detailed descriptions of meetings between underworld leaders and Berlusconi or his associates. 
 One person named by the newspaper was Marcello Dell'Utri, Berlusconi's right-hand man at his Fininvest holding company and the Forza Italia party. The Sicilian-born Dell'Utri is facing trial in Palermo on charges of alleged association with the Mafia. 
 Berlusconi, whose conservative coalition won last Sunday's general elections, has denied having had anything to do with the Mafia. A woman at Berlusconi's Rome headquarters said Sunday she couldn't comment on the El Pais report. Calls to other Forza Italia and Fininvest offices went unanswered. 
 
 
Mongolia Goes to Polls
 

ULAN BATOR, Mongolia (AP) - President Natsagiin Bagabandi was re-elected in a vote that gave his former communist party almost total control of the Mongolian government, according to election results announced Monday.
 Bagabandi received 57.95 percent of votes cast Sunday at polling stations that included tents set up in remote spots on the Mongolian steppe for thousands of nomadic herders, the General Election Committee announced. 
 The victory sealed the political comeback of the party that ran this vast, sparsely populated country as a Soviet ally for 70 years until embracing democracy in 1990. Bagabandi's party, which today calls itself democratic socialist, was voted out of power in 1996 but won 72 of 76 seats in Parliament last year after a tumultuous period of rule by a coalition of former dissidents. 



TITLE: Bonds Has Big Series in Atlanta
PUBLISHER: The Associated Press
TEXT: ATLANTA - A record home-run barrage by Barry Bonds didn't help the San Francisco Giants beat the Braves.
 Bonds homered twice Sunday, becoming the 23rd player to hit five in two games, but Atlanta hit five of its own in an 11-6 victory.
 &quot;We held Bonds to two home runs,&quot; Braves manager Bobby Cox quipped. &quot;That's pretty good.&quot;
 Bonds has six homers in three games, seven in four games and 21 in 33 games. With 516 homers, he is five behind Willie McCovey and Ted Williams, tied for 11th on the career list.
 Bonds also tied a record, held by many, by homering in four straight official at-bats.
 &quot;It's awesome,&quot; said Giants manager Dusty Baker, whose team has lost three of four. &quot;He's hitting right-handers, left-handers, everybody. I just wish we had gotten another victory out of his hot bat.&quot;
 
 <strong>Atlanta 11, San Francisco 6. </strong>At Atlanta, Wes Helms homered twice - a three-run drive in the sixth and a solo shot in the seventh - when Giants reliever Alan Embree gave up four homers, tying a major-league record. Andruw Jones, Brian Jordan and Javy Lopez also connected.
 Kerry Ligtenberg (1-2) pitched a scoreless sixth. Livan Hernandez (3-6) gave up seven runs - six earned - and nine hits in six innings.
 
 <strong>Pittsburgh 8, Milwaukee 7. </strong>Emil Brown's RBI single off David Weathers (1-2) finished a five-run eighth at Pittsburgh, which overcame a 7-0 deficit.
 Pittsburgh hadn't rallied from seven runs down since doing so against the same team by the same score, beating the Brewers 8-7 on Sept. 8, 1998.
 Milwaukee's Devon White hit his record-tying third grand slam of the month.
 Josias Manzanillo (1-1) pitched a scoreless eighth, and Mike Williams finished for his seventh save.
 
 <strong>Colorado 7, Florida 2. </strong>Mike Hampton (6-1) allowed both runs and nine hits en route to his fourth straight victory over Florida and also hit his second career homer.
 Visiting Colorado won for just the second time in eight games, stopping Florida's four-game winning streak.
 Ryan Dempster (3-6) lost for the sixth time in his last seven starts, allowing six runs and nine hits in five-plus innings.
 
 <strong>New York Mets 6, Los Angeles 5. </strong>After New York wasted a 3-0 lead in the eighth, pinch-hitter Lenny Harris hit a two-run single off Mike Fetters in the bottom half and Tsuyoshi Shinjo had an RBI single against Terry Adams (2-2) in the ninth.
 Armando Benitez (3-1) pitched a perfect ninth in the Mets' second win in three games against the visiting Dodgers. Los Angeles lost for the third time in four games.
 Los Angeles tied it on pinch-hitter Marquis Grissom's two-run double on John Franco's first pitch after pinch-hitter Dave Hansen's RBI double off Rick Reed .
 
 <strong>San Diego 5, Montreal 3. </strong>Ryan Klesko hit a three-run double off Ugueth Urbina in the eighth as visiting San Diego rallied. Phil Nevin's seventh-inning homer off Javier Vazquez (4-5) had pulled the Padres to 3-2.
 Bobby Jones (2-5) allowed three runs and six hits in seven innings to win for the just the second time in nine starts since signing with the Padres.
 
 <strong>St. Louis 3, Philadelphia 1. </strong>Fernando Vina broke a 1-1 tie with his first home run of the season, a two-run drive off Amaury Telemaco (4-1) in the seventh at Philadelphia.
 Dustin Hermanson (5-1) gave up one run and five hits in seven innings as St. Louis stopped Philadelphia's three-game winning streak.
 <i>(For more results see Scorecard.) </i>

TITLE: Wizards Win Lottery For First Pick in NBA
AUTHOR: Tom Canavan
PUBLISHER: The Associated Press
TEXT: SECAUCUS, New Jersey - The job of rebuilding the Washington Wizards just got easier for Michael Jordan.
 The Wizards beat the odds on Sunday by winning the NBA Draft Lottery and earning the right to make the first pick in next month's draft in New York City.
 &quot;When you're trying to build a team, you need some wild cards,&quot; said Jordan, the Wizards' part-owner and president of basketball operations.
 &quot;Having the No. 1 pick is a wild card,&quot; Jordan added. &quot;You're going to have some options thrown at you. We have an opportunity to rebuild this franchise a lot quicker.&quot;
 The job will be done even faster if Jordan comes out of retirement.
 &quot;Right now I've been focusing on my job,'' said Jordan, who didn't watch the nationally televised lottery because he didn't want to get excited about it.
 Jordan has been working out with Charles Barkley in recent months, and there have been rumors both would play with the Wizards next season.
 The Wizards had the third-best chance (15.7 percent) of winning the lottery, and the fact they won wasn't surprising. The team with the best chance has not won since 1990.
 The Chicago Bulls, who Jordan led to six championships, had the best odds with 250 of 1,000 chances.
 However, they slipped to fourth in a lottery in which the Los Angeles Clippers and Atlanta Hawks joined the Wizards in beating the odds.
 The Clippers, who had only 44 chances in the lottery, jumped from eighth to second, while the Hawks (89 chances) moved from fifth to third.
 Chicago will have the fourth pick in the draft on June 27. Golden State, which had the second most chances with 200, slipped to fifth and was followed by Vancouver, New Jersey, Cleveland, Detroit, Boston, Denver, Seattle and Houston.
 The problem for the Wizards is there isn't a consensus No. l pick in this draft.
 Assistant general manager Rod Higgins, who represented the Wizards at the lottery at the headquarters of NBA Entertainment, indicated Washington might deal the pick.
 &quot;Now we have an opportunity to exercise some trades, obviously,'' Higgins said. &quot;There's not a Patrick Ewing; there's not a Shaquille O'Neal.&quot;
 Jordan wasn't so sure. &quot;This pick sets the tone for our rebuilding,&quot; said Jordan, who has not played since retiring after the 1997-98 season. &quot;We really have to be careful with this.&quot;

TITLE: SPORTS WATCH
TEXT: New Regulations
 

SALT LAKE CITY (AP) - Athletes with intellectual disabilities will not be allowed to compete in the 2002 Paralympics.
 An International Paralympic Committee investigation concluded that two-thirds of the Paralympians with intellectual disabilities at the 2000 Sydney Paralympic Games did not have proper certification.
 At the Sydney Games, 10 of the 12 members of the Spanish intellectually disabled basketball team were not genuinely disabled and team members had to return their gold medals.
 
 
Control Problems
 

MEMPHIS, Tennessee (AP) - Rick Ankiel can't find the strike zone in the minors, either.
 Ankiel endured another awful start Sunday for Triple-A Memphis, walking five and throwing three wild pitches before getting pulled in the first inning of a 10-7 loss to New Orleans.
 Ankiel made his first home appearance for Memphis since being demoted by the St. Louis Cardinals on May 12 because of control problems. Last Tuesday in his first game for Memphis, he walked six and threw eight pitches to the backstop against Oklahoma.
 The 21-year-old left-hander faced nine New Orleans batters, throwing 24 balls and 13 strikes, before manager Gaylen Pitts sent him to the dressing room amid polite applause.
 All three of Ankiel's wild pitches came with the bases loaded. He was charged with four runs, giving up one hit and striking out one.
 
 
Woods Wins Again
 

HEIDELBERG, Germany (AP) - Maybe breaking his favorite driver is lucky for Tiger Woods.
 Woods captured the Deutsche Bank-SAP Open by four strokes Sunday, using a dramatic 13th-hole eagle to shake off New Zealand's Michael Campbell.
 He borrowed a driver from Australian Adam Scott after breaking his club in practice following his blistering third-round, 9-under 63. That also happened to him on the seventh hole of the AT&T Pro-Am at Poppy Hills.
 "I was definitely concerned - the driver's been awfully good to me," said Woods. "But I went on to win at Poppy Hills and this week I went on to win again."
 Winds finished at 22-under 266 for the $2.36 million event, with a final 66, capturing the event for the second time in three appearances. Campbell settled for a 70 and 270.

TITLE: Brodeur Shuts Out Pens, Devils Open Up 3-1 Lead
AUTHOR: By Alan Robinson
PUBLISHER: The Associated Press
TEXT: PITTSBURGH, Pennsylvania - Zero. That's the Pittsburgh Penguins' goal total for their two home playoff games against New Jersey. It's also probably the chance they have of coming back.
 Martin Brodeur shut out the Penguins in their own arena for the second consecutive game and New Jersey's top line again outshined Pittsburgh's superstars in a 5-0 victory Saturday, giving the Devils a commanding 3-1 lead in the Eastern Conference finals.
 Petr Sykora scored his fourth goal of the series - four more than Mario Lemieux and Jaromir Jagr combined - and linemates Patrik Elias and Jason Arnott also scored as the defending-champion Devils closed within a victory of returning to the Stanley Cup finals.
 Brian Rafalski also scored twice and has three goals in two games as the Devils put the Penguins on the brink of elimination.
 Game 5 will be Tuesday night in New Jersey, with a Colorado-New Jersey final possibly to follow. The Avalanche also have a 3-1 edge in the Western Conference finals, against St. Louis.
 Only one team, the Devils last year against Philadelphia, has rallied from a 3-1 deficit in a conference final, and even Lemieux conceded before game 4 that Pittsburgh had little chance of recovering if the Devils won. The Penguins probably have even less of a chance now after one of the most one-sided playoff losses in their history.
 The Penguins hadn't been shut out in consecutive home games - even in the regular season - in their 34-year history until the last two games.
 If it was the last home game in Pittsburgh for Jagr, who likely will be traded so the Penguins can afford to sign some of their 19 unsigned players, it wasn't much of a sendoff.
 Lemieux and Jagr, who have 11 NHL scoring championships between them, were reunited again on Pittsburgh's top line as the Penguins tried to find a semblance of offense to get back in a series that has been dominated for all but 6 1/2 minutes by the Devils.
 But nothing worked as Brodeur, busier than he was in a 3-0 Devils victory in game 3 Thursday, turned aside a brief but frantic flurry of Penguins shots early in the second period with the Devils up 1-0. The Devils, buffered by holding off one of the Penguins' rare bursts, went on to take a 3-0 lead later in the period.
 The Devils' top line of Elias, Arnott and Sykora was on the ice for every goal in a dominating effort that might have been expected of Lemieux and Jagr. Getting better the longer the playoffs go on, the Elias-Arnott-Sykora line has 14 goals and 17 assists in the last seven games. By contrast, Lemieux and Jagr have two goals and six assists in the same span.
 New Jersey dominated from the start, putting nine shots on goalie Johan Hedberg before Pittsburgh got its first shot, but still had to weather three Penguins power plays before scoring.
 Elias finally got that goal, going to the net to screen out Hedberg and get his stick on Scott Niedermayer's shot from the top of the slot at 18:11 of the first. Rafalski made it 2-0 at 7:58 of the second, and Sykora scored his eighth of the playoffs about 7 1/2 minutes later.
 As fans left in the final period, some booing, Arnott and Rafalski added insurance goals, with Rafalski credited with a goal that Jan Hrdina accidentally steered into his own net.
 <i>(For more results see Scorecard.) </i>

TITLE: Dokic Cools Off Mauresmo To Win First Title
AUTHOR: By Jeff Israely
PUBLISHER: The Associated Press
TEXT: ROME - With only her tennis commanding attention, Jelena Dokic won her first title by beating Amelie Mauresmo at the Italian Open and defeating the most formidable player on tour this year.
 The 18-year-old Yugoslav kept her composure and delivered punishing shots in winning 7-6, 6-1 Sunday and establishing herself as a threat for the French Open crown.
 &quot;It's really nice to win that first title,&quot; said Dokic, a Wimbledon semifinalist last year. &quot;This isn't a small one, either. And, hopefully, it won't be the last.&quot;
 Dokic's tennis has been overshadowed for much of her young career by her father's conduct.
 Damir Dokic recently returned to coach his daughter after being banned from the tour following confrontations at last year's Wimbledon and U.S. Open.
 In accepting the winner's silver trophy, Dokic thanked her family, who followed her throughout the week.
 Mauresmo has won four titles this year. But the fourth-seeded Frenchwoman crumbled in the second set, repeatedly netting shots as a light drizzle fell on the red clay at Foro Italico.
 The loss ends a nine-match winning streak for Mauresmo, whose record this year remains a tour-best 31-3. A week ago, she won the German Open.
 &quot;Beating Amelie, who is playing so well, is very satisfying,&quot; Dokic said.
 Mauresmo said a tough two-set semifinal win over Martina Hingis on Saturday may have drained her. Dokic topped doubles partner Conchita Martinez, a four-time champion in Rome, in the semis.
 &quot;I was tired,&quot; Mauresmo said. &quot;Losing that first set was really tough. ... I just didn't feel I could come back from that.&quot;
 Both players held serve through the first 10 games. Dokic then broke Mauresmo at love to go up 6-5. The Frenchwoman broke right back, only to have Dokic prevail in the tiebreaker.
 Dokic, seeded 14th, earned $178,000 and moved into the top 20 in the WTA rankings for the first time. Still, she shrugs off suggestions she is a leading challenger at this year's Grand Slams.
 Mauresmo had won the only other meeting with Dokic, beating her in Moscow last year.
 In Paris, Mauresmo will try to follow the path of Mary Pierce. Last year, Pierce became the first Frenchwoman since 1967 to win the French Open.
 Dokic said earlier in the week that clay was her least favorite surface, but she is growing more comfortable as the May 28 start to the French Open nears.
 She is to play a small tournament in Strasbourg, France, this week before heading to Roland Garros.
 &quot;I just needed to get more patient,&quot; she said. &quot;I felt more and more confident all week.&quot;

TITLE: Carter and Raptors Fail Test on Graduation Day
AUTHOR: By Chris Sheridan
PUBLISHER: The Associated Press
TEXT: PHILADELPHIA - As the final shot of the game floated through the air, the perfect ending to Vince Carter's day was riding along with it.
 Had it gone in, Carter would have accomplished two things: making it to his college graduation and advancing to the Eastern Conference finals, all in a space of 12 hours.
 Instead, it clanged hard off the rim as the final buzzer sounded, ending the Toronto Raptors' season. They lost to the Philadelphia 76ers 88-87 Sunday in game 7 of their semifinal.
 &quot;My heart was beating real fast and I knew my feet were on the floor, but it felt like I was in the air,&quot; Philadelphia's Allen Iverson said. &quot;I was just hoping that the shot wouldn't go in.&quot;
 It was a great ending to a great game and a superb series between two teams - and two superstars - who put on a show for two weeks. In seven games that were marked by spectacular 50-point scoring performances by Iverson (twice) and Carter (once), the last game came down to the last shot.
 &quot;It could've been a great day or a terrible day,&quot; was the way Carter summed it up.
 The Raptors were in position to go for the win after Dell Curry hit a three-pointer to pull them within 88-87 with 54 seconds left. Iverson missed at the other end, but Tyrone Hill grabbed the offensive rebound and the Sixers ran the clock down to 10 seconds before Iverson passed to Eric Snow for a jumper that missed.
 The Raptors rebounded, but didn't call timeout until 3.6 seconds remained. The Sixers had a foul to give and used it, running the clock down to 2.0 seconds, Carter got free for the inbounds pass and faked Hill off his feet.
 Carter's feet were slightly askew as he went aloft, but the ball was on target. It sailed a couple of inches too far.
 &quot;All I can think about is that shot. It's something you live for,&quot; Carter said. &quot;Maybe next year.&quot;
 Carter graduated from North Carolina earlier Sunday and then traveled on a private plane to Philadelphia, arriving about five hours before tipoff. He finished with 20 points on six-for-18 shooting and said his busy day had little effect on the way he played.
 Iverson had 21 points and a career-high 16 assists for the Sixers, who will begin the conference finals at home against Milwaukee on Tuesday night.
 Aaron McKie shot eight-for-16 for 22 points and scored Philadelphia's final four. Jumaine Jones shot six-for-nine and added 16, Eric Snow contributed 13 points and five assists and Dikembe Mutombo grabbed 17 rebounds and scored 10 points.
 Iverson, the league MVP, didn't score a point over the final 6 1/2 minutes, but had assists on two of the Sixers' final three baskets. His passing made all the difference as he continually found the open man and the Sixers held the lead for almost the entire game.
 &quot;I wanted to do something special, but the way you draw it up - if you're a scorer - is having a great scoring night. In a million years I'd never believe I'd come out and have a career high in assists,&quot; Iverson said.
 Although he wasn't shooting well right from the start, Iverson was doing all the little things. He had a dunk and a layup off his first two steals, and his fifth assist came on a give-and-go layup by McKie that put the Sixers ahead 29-16.
 Toronto began the second quarter with an 8-0 run, but Philadelphia came right back with a 10-3 spurt that included two putbacks by Jones. After one of them, two of the Raptors pointed fingers of blame at Jerome Williams, a clear sign they weren't all working together.
 Iverson had one of his best plays in the third, Racing downcourt and leaping above the rim to get a finger on Alvin Williams' fast-break layup, causing him to miss.
 Carter finally gave the Sixers their first lead since the first quarter, converting a three-point play with 2:30 left in the third. Philadelphia quickly regained it and held it the rest of the way - barely.
 <i>(For more results see Scorecard.) </i>