SOURCE: The St. Petersburg Times
DATE: Issue #679 (46), Tuesday, June 19, 2001
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TITLE: Putin, Bush Open Security Dialogue
AUTHOR: By Ana Uzelac 
 STAFF WRITER
TEXT: BRDO PRI KRANJU, Slovenia - They talked about their daughters and mothers-in-law. They cracked jokes and took a stroll, laughing and gesticulating, along a tree-lined path at a picturesque Slovenian castle. They even exchanged invitations to visit each other's homes.
 But, more importantly, President Vladimir Putin and U.S. President George W. Bush agreed at their first meeting Saturday to start a difficult dialogue on building a new framework for global security. The framework could change the system that avoided direct superpower conflict for more than 50 years by maintaining a balance of fear and military might between the United States and Russia.
 Putin and Bush agreed to ask their top security officials to start immediate consultations to try to bridge differences Russia and the United States have on missile defense. They also agreed to hold two more summits - one in Washington this fall, with a stopover at Bush's ranch in Texas, and another in Moscow at a yet to be determined date.
 Friendly and chatty, the presidents showered each other with compliments during an hour-long news conference on the green gardens of the 16th-century Brdo Castle, where the two men met face-to-face for the first time Saturday afternoon.
 Bush called Putin "a remarkable leader" whom the United States could trust, while Putin praised Bush's "large-scale approach" to world problems and said Russia and the United States could be "partners and allies."
 The summit in Slovenia was the final stop of a week-long tour of Europe by the U.S. president. Bush took the trip in a bid to gain support from European leaders for his ambitious plan to build a strategic missile shield over the United States that, he says, would protect the United States from attacks by so-called rogue nations like North Korea and Iran.
 The plan has failed to win much enthusiasm from many of the United States' European allies and has met staunch opposition from the Russians. 
 Putin on Saturday reiterated that the 1972 Anti-Ballistic Missile Treaty, which prohibits the building of such a shield, is "a cornerstone of the modern architecture of international security."
 The ABM Treaty prohibited the United States and the Soviet Union from deploying a missile defense system that would cover the whole territory of the two countries. The idea was that if one of the countries would deploy such a system, the other would try to build weapons to break through it and, thus, spark a fierce arms race.
 Bush, however, argued Saturday that the ABM Treaty is a relic of the past and that the two countries should move beyond the Cold War mentality to face the new threat of rogue nations that are "developing the capacities to hold each of us hostage."
 In a sign of Russia's willingness to talk, Putin agreed that the two countries should "sit down and have a good think" about the "threats from the future." But the threats, he said "have to be defined" first. 
 "We feel that we can do it best together," Putin said in a diplomatic warning against Washington taking a unilateral approach.
 But for the time being the agenda is talks. Putin said he and Bush agreed to have their foreign and defense ministries to start consultations "without delay" to bridge the gap between the countries.
 Also, Bush reiterated that the United States favored the further enlargement of NATO - another sore point in relations with Russia. Moscow is displeased with the alliance's plans to stretch ever closer to Russia's borders and accept the former Soviet republics of Lithuania, Latvia and Estonia as members.
 In somewhat of a theatrical move, Putin came up with a 1954 document in which the Soviet Union requested to join NATO and was flatly refused.
 Putin pulled out the document when Bush invited him to answer a reporter's question about NATO expansion.
 The Soviet Union proposed joining NATO in March 1954 in order to halt the West from forming a European Defense Community. The Soviets said that joining NATO would end the Cold War by reuniting the allied forces of World War II. 
 Putin reminded Bush that last year then-U.S. Secretary of State Madeleine Albright rejected a similar proposal made by the Russians.
 "We ask ourselves a question: Look, this is a military organization, isn't it? Yes, it's military. They don't want us there? They don't want us there. It's moving toward our border? Yes, it's moving toward our border. Why?" Putin said.
 Although divided on policy issues, the two leaders seemed very much at ease with each other.
 Bush praised Putin for his trustworthiness and sincerity. "I looked the man in the eye," he said. "I was able to get a sense of his soul."
 "I found him to be - a man deeply committed to his country."
 In a slightly less outspoken manner, Putin returned the compliments, saying that in reality the meeting "had surpassed expectations" of an "open, frank and confidential dialogue."
 He also complimented Bush on his "very global and large-scale approach" as befitting for a history major. Bush has a degree in history.
 Trying to return the compliment, Bush praised Putin's historical knowledge, saying they both are history majors.
 Putin actually received a degree in law. 
 But the gaffe was ignored, and both presidents praised each others' diplomatic skills. 
 At the end of the conference, Bush said the United States supports Russia's entry into the World Trade Organization.
 He also complimented Putin for introducing a flat income tax of 13 percent. "I'm not so sure I'll have the same success with our Congress," he said.
 Putin acknowledged that the investment climate in Russia is still far from what it should be and pledged to improve it. He invited a top-level American business delegation to visit Russia.

TITLE: U.S. Ambassador Says Next Months 'Critical'
AUTHOR: By Igor Semenenko 
 STAFF WRITER
TEXT: After a number of stops and starts, Russia appears to be at a decisive moment for reforms and the next few months will "map out Russia's fortunes for several years to come," outgoing U.S. Ambassador James Collins said Friday in his farewell address to U.S. business leaders after four years in Moscow.
 But no matter what happens, Collins told the American Chamber of Commerce in Moscow, the agenda on the tables of policy-makers in both countries is never going to be the same as it used to be because the era of Boris Yeltsin is over.
 "This is a decade of economic dimensions in U.S.-Russia relations," Collins said, mapping out his vision of Russia-U.S. relations for the next decade and demarcating the turbulent 1990s, which saw the collapse of the Soviet Union, Russia's transition from a command to market economy and the rise of a new generation of politicians led by President Vladimir Putin.
 "The 1990s was a period in which macroeconomic stability was a core issue," Collins said. "That period is now over."
 At stake now is Russia's integration into the global economy and strengthening of bilateral economic ties.
 Mutual trade turnover between the two countries hovers at a meager $7 billion a year and is comparable in size to the U.S. trade with the Dominican Republic, while in terms of direct investments from the United States, Russia lags behind Costa Rica.
 One litmus test to watch in the coming months, according to Collins, is the AvtoVAZ-General Motors deal worth $300 million, which will be the second-largest private U.S. investment after the consortium constructing the Caspian pipeline, a project expected to top $4 billion by 2015.
 Collins said the AvtoVAZ-GM joint venture, which envisages production of 75,000 Niva cars and 25,000 Opel Astra sedans, would be "a setback" for the investment climate if it doesn't succeed.
 Collins arrived in Moscow in 1997, Russia's first year of economic growth since 1990, and witnessed the carnage that followed the August 1998 meltdown and the recovery that shortly followed.
 He also watched the demise of Yeltsin's charisma and the resurgence of Russia's pride under Putin.
 "The Russian government has set an ambitious agenda," Collins said, adding, "We have been at this point before."
 "What has been missing is the will to transmit plans into reality," he said, adding that "poor law enforcement, inadequate defense of property rights, lack of transparency, excessive bureaucracy and corruption combine to destroy trust in economic institutions. From our standpoint, the next months are going to be critical," Collins said.
 One of the key issues for the United States is Russia's accession to the World Trade Organization, a move that should guarantee that Putin's administration does not backpedal on a number of key issues in its game plan of liberal economic reforms.
 "This step will solidify the reforms on which Russia is embarking," he said.
 Collins was on watch when Russian authorities drifted away from the United States as Russia's main economic partners in favor of Europe, particularly the European Union.
 "This has been seen [by many people] as a direct slap at the U.S.," Collins said. "[But] it reflects realities of trade and natural geography."
 Collins, who is scheduled to leave Russia next month, will be succeeded by Alexander Vershbow, formerly the U.S. ambassador to NATO's headquarters.

TITLE: Friendliness Prevails in Slovenia
PUBLISHER: The Associated Press
TEXT: BRDO PRI KRANJU, Slovenia - They weren't just pretending. 
 During an outdoor stroll in the middle of Saturday's summit talks, President Vladimir Putin and U.S. President George W. Bush shed their respective translators, giving photographers a clean picture of just the two of them. 
 As the pair continued chatting, some wondered if it was all show. A skeptical Russian journalist asked Putin in what language he and Bush had conversed. 
 "In English," Putin beamed. 
 Putin speaks fluent German from his days as a KGB agent in East Germany, but only recently began English lessons. 
 Putin, who has likened his English studies to "intellectual gymnastics," had also tried out a few phrases on former U.S. President Bill Clinton when he visited Moscow in June 2000. 
 There was no indication Bush spoke any Russian.

TITLE: Reviews of Summit Stress the Positive
AUTHOR: By Andrei Zolotov Jr.
 STAFF WRITER
TEXT: The lower the expectations, the easier it is to produce a good impression.
 With that in mind, Russia's media, politicians and analysts on Monday were quick to praise the first summit between President Vladimir Putin and U.S. President George W. Bush near, Ljubljana, Slovenia on Saturday.
 The presidents met after months of terse relations between Russia and the United States. The new Republican administration had downgraded Russia in its list of foreign policy priorities, and U.S. and Russian officials publicly exchanged barbs about each other's policies. Putin was widely criticized for taking authoritarian measures, and spy scandals sparked fears of a new Cold War.
 Against this backdrop, the Ljubljana meeting was seen as a major success though it produced no results other than a decision to continue dialogue, invitations to visit each other's homes, and a few good laughs and assurances of mutual trust.
 "Despite my perennial desire to look for the worst, I will say that the meeting was a success, first of all for Russia but also for Bush," said Viktor Kremenyuk, deputy director of the Institute of USA and Canada Studies. 
 The summit, he said, ends a period of nervousness in relations between Russia and the United States and produced a personal chemistry between the two presidents. 
 Likening the summit to the first Geneva summit between Mikhail Gorbachev and Ronald Reagan in 1985, Kremenyuk said the key to success was the decision to compare the countries' agendas and concentrate on areas of possible dialogue rather than on gaping differences.
 "There was a danger that Bush would start to talk about the most difficult issues: anti-missile defense, NATO expansion and our internal issues such as Chechnya," Kremenyuk said. "That did not happen."
 Viktor Kuvaldin, a political analyst with the Gorbachev Foundation, also compared the Ljubljana summit to the Geneva meeting 16 years ago, but used it as a warning of looming difficulties.
 "As a get-to-know-each-other meeting, Ljubljana is a 100 percent success and maybe more," Kuvaldin said. "But it is just the beginning of the road and there are many pitfalls on the way. 
 "All is in the future and the devil is, as always, in the details," he added, pointing, as examples, to the Anti-Ballistic Missile Treaty, which Washington wants to scrap for a missile-defense system, and NATO expansion to the Baltics.
 In a front-page article titled "We Have Contact," the Vremya Novostei newspaper said that the presidents' widely expected decision to order their foreign and defense ministries to discuss the anti-missile-defense issue was more than an ordinary diplomatic gesture to bury a problem. 
 Citing an informed Kremlin source, the newspaper said that during the talks Putin was better equipped to discuss security issues than Bush and managed to convince the U.S. leader about the necessity of carrying out a joint inventory of "new threats" in order to find those where the two countries can cooperate.
 Washington has repeatedly said that the United States needs a missile-defense shield to protect the country from new threats, specifically what it calls rogue states like North Korea and Iran.
 Several newspapers attempted to cast the summit in an ironic light by playing with the Soviet-era cliches that were used to cover foreign policy events.
 But all of the newspapers focused on the personal rapport that emerged between the two presidents. The jokes about both presidents having named their daughters after their respective grandmothers and thus demonstrating their "diplomatic" aptness did not go unnoticed. 
 Analysts said that the positive spirit produced by the meeting is important both for the future of bilateral relations and for Russia's internal politics. Kremenyuk said that anti-American sentiments that began to spread during the final Yeltsin years and continued under Putin encouraged the hawks in the Russian elite. "Military people began to raise their heads and special services began to look for spies ardently," he said. 
 The Ljubljana summit will now encourage liberal reformists and the business lobby in the Russian government and improve the government's position in talks with the International Monetary Fund and Western governments, Kreme nyuk said.
 Putin met Monday with an IMF delegation led by outgoing first deputy managing director Stanley Fischer.
 Yevgeny Volk, director of the U.S. Heritage Foundation's Moscow office, said that Putin appeared better prepared to deal with delicate foreign policy issues than Bush. 
 "So far, Bush is not in full command of the foreign policy depths," Volk said. 
 Analysts said that both presidents can look back at their meeting as a victory in foreign relations, but the meeting is more important for Russia than for the United States simply because Moscow has more at stake.
 "Both presidents have won," Kuvaldin said. "But objectively, it means more for Russia and for Putin because Russia cannot afford the luxury of worsening relations with the U.S."
 Meanwhile, the meeting is appearing to be bearing its first fruits, however humble. Reports emerged Monday that U.S. officials decided at the weekend summit to lift the rule requiring Russians to obtain transit visas. The rule was imposed in April.
 Foreign Ministry spokesperson Alexan der Yakovenko welcomed the decision Monday and said that his ministry is considering scrapping a similar requirement for U.S. citizens.
 "We hail this step by the U.S. administration, which is further evidence of the improvement in Russian-American relations," Yakovenko said.

TITLE: Putin Makes Visit to Kosovo To Assert Interests in Region
AUTHOR: By Fisnik Abrashi 
 THE ASSOCIATED PRESS
TEXT: PRISTINA, Yugoslavia - Reasserting Russia's interests in the Balkans, President Vladimir Putin made an unscheduled stop in Kosovo on Sunday after blaming ethnic-Albanian "terrorists" there for most of the region's instability. 
 His flight from Belgrade was announced at the last minute because of security concerns in the province, where the majority ethnic Albanians view Russia as pro-Serb because of historic ties between the two Slav nations. 
 Putin is the first Russian president to visit Yugoslavia since the breakup of the Soviet Union in 1991. Former Soviet president Mikhail Gorbachev toured the old Yugoslav federation in 1988. 
 Since taking office, Putin has sought to strengthen Russia's role, especially in areas of former influence like the Balkans, where the West increasingly calls the shots through the presence of NATO troops. 
 A string of world leaders have visited Kosovo's provincial capital since the end of the NATO bombing in 1999, but Putin was the first to travel straight from meetings in Belgrade - emphasizing that UN-administered Kosovo remains part of Yugoslavia despite ethnic-Albanian wishes for independence. 
 Putin was greeted by a white-gloved Russian military honor guard and the Russian national anthem as he disembarked at Pristina airport, where the 3,000-strong Russian contingent to the NATO-led force is based. 
 Accompanied by Foreign Minister Igor Ivanov and General Anatoly Kvashnin, chief of the armed forces' General Staff, Putin shook hands with several soldiers before getting into a motorcade taking them from the tarmac to the Russian command center. 
 After a military parade, where Putin handed out 11 medals to soldiers serving in Kosovo, he went into a meeting with the commander of the NATO-led force, Danish Lieutenant General Thorstein Skiaker, and UN officials. 
 Russia has been pushing for the 45,000-strong peacekeeping force to do more to disarm ethnic-Albanian extremists in Kosovo, which is a province of Serbia, the main Yugoslav republic. The extremists have been attacking minority Serbs in Kosovo and contributing to clashes with government troops in neighboring Macedonia. 
 In Belgrade, the Russian and Yugoslav presidents blamed ethnic-Albanian "terrorists" for the instability in Macedonia and Kosovo and called for a regional agreement on borders and minority rights to end the violence. 
 Fresh from his summit with U.S. President George Bush, Putin said he told Yugoslav officials that he and Bush had discussed the crises and pledged to do "everything possible to achieve a fair solution" for the region.
 "The stability of the region is seriously endangered by national and religious intolerance and extremism, and the main source of the problem is in Kosovo," Putin said, referring to ethnic-Albanian extremists. "We must do all to disarm the terrorists."
 Yugoslav President Vojislav Kostunica said Putin presented a plan calling for a regional conference to reaffirm the inviolability of borders and the territorial integrity of the countries in the area as well as minority rights. 
 "This conference would once and for all put an end to the practice of attempts at redrawing state borders and the wars in the Balkans," Kostunica said.

TITLE: Land Code Passes After Fractious Session
AUTHOR: By Yevgenia Borisova 

PUBLISHER: Staff Writer
TEXT: The State Duma passed the Land Code on Friday in an emotionally charged first reading that saw lawmakers chant, come to blows, and whole factions march out in masses.
 The Duma voted 251-22 with three abstentions in favor of the Kremlin-backed code, which would allow the sale of commercial land and plots in cities and villages to Russians and foreigners. 
 The sale of agricultural land is not provided for in the code and will be dealt with in a separate law.
 The legislation must pass two more readings in the Duma and then be approved by the Federation Council before it can be sent to President Vladimir Putin to be signed into law.
 Economic Development and Trade Minister German Gref, whose ministry drafted the legislation, said the code would allow the sale of 2 percent of the country's land.
 "This draft is the basis for investment activities in Russia," Gref said before the vote was held. "It gives citizens the rights to use their property."
 Communist Party leader Gennady Zyuganov said last week that 98 percent of the country's land could be sold under the legislation, and his party and its supporters put up a fierce fight to prevent the Duma from passing the Land Code.
 Lawmakers were greeted at the Duma on Friday by about 500 protesters blocking the street and carrying posters slamming the legislation as an attempt to sell off the "Fatherland."
 After some debate, the Duma agreed to consider the version of the Land Code drafted by the government and another more radical version drawn up by the Union of Right Forces (SPS). The SPS version, which allowed the sale of farmland, was nixed.
 Communist and Agrarian lawmakers, chanting "Shame, shame, shame," flocked the podium to prevent Gref from taking the floor to discuss the bill.
 Duma Speaker Gennady Seleznyov was eventually forced to call for a time-out. Later, as a result of the heightened tension throughout the day, Seleznyov was hospitalized in the Central Clinic Hospital with high blood pressure. 
 The Communists and Agrarians were invited to meet with Gref in a separate hall, but they refused and stayed in the main hall singing a rousing World War II favorite. "Stand up, enormous country, stand up and fight to the death with the fascist dark forces, with the cursed hordes," they sang.
 During the break, Viktor Anpilov, head of the ultranationalist Working Russia movement, said in an interview: "I haven't read this draft, but it is bad. The worst is that the land will be sold to foreigners and that the regions will be allowed too much independence in dealing with land."
 A main objection put forward by opponents was that the regions have not had enough time to comment on the draft Land Code. Zyuganov said that only 21 regions had responded by Friday morning and called for the hearing to be postponed for public discussion. 
 Some deputies accused the Communists of trying to manipulate people who are poorly informed. 
 "We have confused people [about land legislation] to such an extent that even the most educated person does not know what his rights to land are," said Gennady Kulik, a deputy with Fatherland and former deputy prime minister in charge of agriculture.
 A number of deputies said that Communists are supporting a land mafia in the shadow land market. "We have seen how strong the positions of the land mafia are in the country," said Sergei Mitrokhin of the Yabloko party. "The mafia does not want to give land to peasants - it only wants to keep on robbing and exploiting the land."
 SPS leader Boris Nemtsov said later that land is being sold in Moscow suburbs for $4,000 to $15,000 per 100 square meters but the city is earning pennies in land taxes. "We clearly understand that in the absence of real land ownership, the country has a black market for land and those who are using the shortcomings of our legislation are thriving on it," Nemtsov said.
 Seeing that Gref was preparing to make his presentation, Zyuganov asked that the speech be delayed by 30 minutes so that he could talk with Putin, who was boarding a plane to fly from China to Slovenia. 
 But Seleznyov refused to wait, and he told Gref to present the draft.
 The opposition, however, blocked the podium cutting off access to the government box. 
 Gref, sheltered by the shoulders of deputies from pro-government factions, gamely spoke from a microphone in the hall while the chanting Communists and Agrarians tried to drown out his words. 
 "Today, 25 percent of all land in cities is already in private ownership and not passing this legislation would mean confiscation of those land plots," Gref said.
 "In accordance with an agreement between the Communist and the Agrarian factions and the president, all controversial parts that concern the turnover of agricultural land have been taken out of this draft," he said.
 Gref added that the government will "take into consideration all amendments concerning the ownership of land by foreigners, especially of agricultural land."
 After his speech, tension remained high. Communist deputy and actress Yelena Drapeko shouted "Shame, shame" into the ear and microphone of Duma property committee head Viktor Pleskachevsky when he started a report supporting the government's draft.
 During the speech, deputy and pharmaceutical tycoon Vladimir Bryntsalov head-butted and kicked hard-line Communist Georgy Tikhonov, one of the people orchestrating the Duma protest. 
 Shortly after Gref's and Pleskachevsky's speeches, Zyuganov announced that the Communists would not participate in "this farce" and the Communists and Agrarians left the hall.
 By that point it was clear that the draft would be passed no matter what the opposition said - at least 230 deputies supported it, more than the 226 required to pass it.
 In the silence that settled over the hall after opposition left, the remaining lawmakers pledged to support the draft but insisted that significant amendments be made, including on the participation of foreigners in purchasing land.
 Another serious objection was that the draft was too much of a framework law and left too much to be regulated by regional laws.
 Amendments to the Land Code will be accepted over the next three weeks, and the second hearing - which may be immediately followed by a third hearing - is scheduled to take place in four weeks.

TITLE: Ex-Officials: Lukashenko Aids Killed Opponents
AUTHOR: By Oksana Yablokova 

PUBLISHER: Staff Writer
TEXT: As Belarus gears up for an autumn presidential election, two former employees of the Belarussian Prosecutor General's Office are accusing officials close to President Alexander Lukashenko of using a special squad to kidnap and kill opposition politicians and critics.
 Former Prosecutor General's Office investigator Oleg Sluchek and former assistant investigator Dmitry Petrushkevich say that then-Security Council head Viktor Sheiman ordered the formation of the squad in 1996. They say that the squad has killed 30 prominent Lukashenko opponents, including ORT cameraman Dmitry Zavadsky.
 The two former investigators, who recently fled Belarus and, according to some local news reports, are hiding in Poland, made the allegations in a statement released late last week, shortly after Lukashenko filed his candidacy to run for a second term in the presidential election in September. 
 Belarussian authorities denied Friday the existence of such a squad and called the allegations a provocation.
 "The pre-election battle has started and many want to try to blacken the president's name and the law enforcement agencies," Alexei Taranov, a spokesperson for the Prosecutor General's Office, said by telephone from Minsk.
 Sluchek and Petrushkevich said that the squad was put together by Yury Sivakov, commander of the Interior Ministry troops, and headed by special unit officer Dmitry Pavlyuchenko.
 Sluchek, who resigned last year, wrote that Sheiman had called for a squad that "could carry out any missions including murder." He said the squad consisted of at least a dozen officers including Valery Ignatovich, who is being held in custody by Belarussian prosecutors on charges of kidnapping Zavadsky.
 Sluchek said the squad initially aimed to stamp out criminal ganglords but later moved to kidnap and kill Lukashenko's opponents.
 A number of leading Lukashenko opponents have disappeared in Belarus in recent years. Viktor Gonchar, deputy speaker of the Belarussian parliament disbanded by Lukashenko in 1996, and businessman Anatoly Kra sovsky both disappeared in September 1999 after visiting a bathhouse. Former Interior Minister Yury Zakharenko, who was sacked after falling out with Lukashenko, vanished in May 1999. 
 Zavadsky, who was Lukashenko's personal cameraman before joining ORT, has not been seen since he disappeared at Minsk airport in July. ORT colleagues say his abduction was politically motivated.
 Taranov of the prosecutor's office said that prosecutors have completed an investigation into a gang suspected of abducting Zavadsky and that the case would soon go to court. He said Ignatovich is a member of the gang.
 Taranov said Zavadsky's body has not been found.
 However, Petrushkevich wrote in his statement that the bodies of Zavadsky, Gonchar, Krasovsky, Zavadsky and others have been buried at the Severnoye cemetery in Minsk.

TITLE: 2 Ministers Replaced In Cabinet Reshuffle
AUTHOR: By Valeria Korchagina 

PUBLISHER: Staff Writer
TEXT: Amid growing expectations of a government reshuffle, President Vladimir Putin on Saturday appointed Igor Yusufov to head the Energy Ministry and Vitaly Artyukhov to lead the Natural Resources Ministry. 
 Prime Minister Mikhail Kasyanov said the appointments were part of a fine-tuning of the cabinet. Both ministries are "key players that are important in preparations for the winter," when fuel shortages can lead to power outages, so the reshuffle was needed, Kasyanov said in televised remarks on Saturday.
 Kasyanov said further changes in the government could be expected shortly, the Kremlin-linked Web site Strana.ru reported. The report did not give further details.
 However, Kasyanov said last week that upcoming changes in the cabinet would not be major and that he would likely keep the post of prime minister. He said the changes are aimed at increasing the cabinet's efficiency and giving the ministries more power.
 A much-awaited cabinet shuffle had been expected to take place around June 7 but was delayed for two weeks at Kasyanov's request. Kasyanov asked Putin to give the government time to finish up work on the draft 2001 budget, which the cabinet approved last week.
 The weekend shakeup comes three months after Putin made sweeping cabinet changes, appointing new heads to the defense, interior and nuclear power ministries and naming a new chief to the Tax Police. However, the reshuffle in March placed officials linked to Putin's team in the top posts, and the newcomers named Saturday are politically unknown. Yusufov is a native of Dagestan and Artyukhov was born in the southern region of Krasnodar.
 The energy minister post had been vacant since early February when Putin sacked Energy Minister Alexander Gavrin during an energy crisis in the Far East. 
 At the Natural Resources Ministry, Artyukhov replaces Boris Yatskevich, who was transferred to an unspecified position, the presidential press service said.
 Yevgeny Volk, a political analyst with the Heritage Fund, said the weekend shuffle could be viewed as a minor adjustment because the energy and natural resources ministries are hollow shells of the powerful ministries they once were.
 "I don't think that these particular appointments are of any serious political significance. This is probably why the appointees are rather unknown," Volk said. 
 Volk added, however, that the appointments signal further and more significant upcoming changes in the cabinet.
 "Kasyanov was given a deadline to reform the cabinet that expired by early June. It's time to fulfill the order," Volk said.
 According to Volk, some more prominent figures could be on their way out of the government due to a heated dispute over the restructuring of Unified Energy Systems, the national power grid. The cabinet earlier this month tentatively approved a revamp plan drawn up by Economic Development and Trade Minister German Gref's team in favor of a proposal crafted by presidential economic adviser Andrei Illarionov.
 New Energy Minister Yusufov, 45, takes up the vacant office at a ministry that over the past year lost control of production-sharing agreements and no longer has a say in the handout of oil export quotas. Since February, the ministry has been run by Deputy Prime Minister Viktor Khristenko.
 Yusufov started his career as a Soviet trade representative to Cuba. Yusufov entered the government in 1992 when he was named deputy chairman of a government committee to protect Russia's economic interests. In 1993, Yusufov became deputy minister of the Foreign Economic Relations Ministry, and later served as deputy head of the now defunct Industry Ministry. 
 From May 1999 until Saturday's appointment as energy minister, Yusufov worked as general director of the Russia State Reserves agency, a highly secretive organization responsible for controlling various state assets such as rare metals and emergency supplies. 
 New Natural Resources Minister Artyukhov, 57, built his career in the car transportation industry. After the collapse of the Soviet Union, he has held various government positions, including the post of first deputy finance minister. Artyukhov headed the State Tax Service in 1996 and 1997, and was then transferred to run the Federal Road Service. For the past year Artyukhov has held the post of first deputy transport minister.

TITLE: Primorye Vote Goes To Darkin
AUTHOR: By Nonna Chernyakova 

PUBLISHER: Special to The St. Petersburg Times
TEXT: VLADIVOSTOK, Far East - With 98 percent of votes tallied Sunday in the Primorye region's scandal-plagued election, businessman Sergei Darkin has been declared the next governor, narrowly defeating his most dangerous rival - "none of the above."
 Darkin garnered 40.3 percent of the vote, while his opponent in the run-off, Gennady Apanasenko, collected 24.3 percent, according to regional election officials. About one-third of registered voters participated and, of those, 33.5 percent cast their votes for "none of the above" - presumably a sign of protest against the dirty tactics and eleventh-hour court rulings that marked the race.
 Three days before the runoff, former Vladivostok mayor Viktor Cherepkov, who came in second in the first round of voting last month, was struck from the ballot for campaign violations. On Saturday, the same court rejected a complaint against Apanasenko, a deputy to the presidential envoy in the Far East Federal District, and postponed consideration of Cherepkov's complaint against Darkin until Tuesday.
 Darkin, head of the Roliz fishing company, is believed to be backed by Primorye's former governor, Yevgeny Nazdratenko, who stepped down under pressure from the Kremlin in February amid allegations of corruption. Nazdratenko, now head of the State Fisheries Committee, appeared on local television Saturday urging Primorye residents not to vote for "none of the above."
 "If this election is deemed invalid and postponed again, the acting governor won't be able to get the region ready for next winter," said Nazdratenko, playing on voters' fears of finding themselves stuck in freezing apartments with no heat or water, as they were last winter.
 Cherepkov said at a press conference in Moscow on Friday he would fight to have the second-round results annulled. He blamed the Kremlin for orchestrating his ouster - specifically deputy chief of staff Vladislav Surkov and a public-relations guru whom he identified only as "some Koshmarov."
 But head of the Central Elections Commission, Alexander Vishnyakov, said he doubted the election results could be challenged.

TITLE: Aid: No Nuclear Help for Iran
PUBLISHER: The Associated Press
TEXT: WASHINGTON - A top aid to Russian President Vladimir Putin denied that Russia was helping Iran's nuclear weapons program. He called on the United States Monday to respond to Russia's proposal for negotiations to reduce U.S. and Russian nuclear arsenals.
 Igor Sergeyev, who advises Putin on strategic issues, said the technology Russia provides to Iran is for use in a light water reactor, much like technology the United States is giving to North Korea under an agreement to freeze that country's nuclear weapons program.
 "To obtain weapons from the light water reactor in Iran is impossible," he said at a conference on proliferation problems held by the Carnegie Endowment for International Peace. Sergeyev acknowledged that controls on technology exports beyond the range of the Russian government had been a "headache" in the early 1990s.
 He said the list of prohibited materials for export has grown over the years.
 At the same time, Sergeyev said the United States had failed to respond to proposals by Putin to place a ceiling of 1,500 on U.S. and Russian long-range nuclear warheads.
 "It's paramount to start negotiations immediately," he said.
 The Russian official said he found hope in a general willingness of the Bush administration to reduce stockpiles.
 The spread of sophisticated technology has become more dangerous, he said.
 "The world may be entering a phase in which the use of nuclear weapons is more likely than before," the former Russian defense minister said.

TITLE: IN BRIEF
TEXT: EU Information Center
 

KALININGRAD (SPT) - The European Union opened a new informational center at Kaliningrad State University, the academic center of this Russian enclave in the Baltics, Interfax reported on Friday. 
 The center will provide the region's scholars and students access to documents and information about EU programs and in so doing increase the momentum to integrate the region into the EU, a plan that has been recently bantered about both by Russian President Vladimir Putin and his European colleagues.
 According to the university's rector, Andrei Klemeshyov, the development of the center will become a priority of Kaliningrad's international relations.
 
 
Russian Mission Begins
 

LINGSHUI, China (AP) - A huge Russian cargo plane on a mission to carry home a grounded U.S. Navy spy plane arrived Saturday on the Chinese island of Hainan. 
 The Antonov 124 landed at the Lingshui air base, where the EP-3E Aries II has been parked since making an emergency landing April 1 after a midair collision with a Chinese fighter jet. 
 Plans call for the EP-3E to be dismantled and loaded in pieces on two Antonovs. The U.S. military has refused to say when the second plane is to arrive. 
 The Navy went ahead with the flight Saturday despite reports that the Russian air cargo company is suspected of helping to evade a ban on weapons sales to Yugoslavia in 1999. 
 An official said Thursday that the Navy knew of reports that Polyot Air Cargo Ltd. had broken a UN embargo to carry fighter jet parts to Yugoslavia. 
 A Navy spokesperson said Polyot was picked by the company hired to dismantle the EP-3E, Lockheed Martin, and is not on a list of firms barred from receiving U.S. government business.
 
 
Hard To Hear
 

ST. PETERSBURG (Reuters) - Poor acoustics, diesel generators and chanting soccer fans helped drown out Spanish tenor Placido Domingo on Saturday at an open-air gala concert outside the famous Winter Palace. 
 Some 12,000 spectators gathered in Palace Square for the free concert, but many found it was impossible to hear Domingo, one of the famed "Three Tenors" who have helped bring opera to a wider audience. 
 The singer was barely audible more than 50 meters from the stage. "I thought that it would be difficult to hear, but I didn't expect it to be this bad," said Andrei Yershov, a St. Petersburg resident who attended the concert. 
 Noisy diesel generators powering beer tents that ringed the historic square were the main villains, but fans of local soccer club Zenit did little to help matters by chanting "Zenit champions!" as they went by.
 
 
Health-Spending Hike
 

ST. PETERSBURG (SPT) - The 2001 fiscal year will witness a 50 percent increase in spending on public health in the Leningrad Oblast, Interfax reported on Friday.
 The total health care allotment from the oblast's budget will be approximately 690 million rubles (over $23 million). 
 Of that amount, 144.9 million will be spent on securing medicine, 81 million for the insurance of the unemployed, 1 million on emergency services, and 6.2 million to bring down Tuberculosis infection levels, among other expenditures.
 
 
Press-Freedom Threat
 

MOSCOW (SPT) - The Paris-based Reporters Sans Frontieres (Reporters Without Borders) noted a serious and growing threat to freedom of the press in Russia, Interfax reported on Friday.
 "The state of mass media in Russia hasn't been as severe as it is now since the end of the 80's. Since 1997, 65 journalists have been killed and 300 assaulted," said Rober Menuor, the director of the human rights group. According to Menuor, 15 of Russia's 89 regions are particularly dangerous for journalists, and in 4 of these the local authorities represent a "physical threat" to reporters. 
 Upping the pressure on Putin, he declared, "We are now taking our case to European groups that sanctions should be imposed on Russia for its threats to freedom of the press and violations of human rights. In September, we plan to bring the issue of freedom of the press in Russia to the attention of the Council of Europe." 



TITLE: Norway PM Holds Local Talks
AUTHOR: By Vladimir Kovalyev

PUBLISHER: Staff Writer
TEXT: Norwegian Prime Minister Jens Stoltenberg made an introductory visit to St. Petersburg on his way to meet President Vladimir Putin in Moscow on Tuesday. While he was here, Stolten berg held meetings with Northwest District Governor General Viktor Cher kesov and Governor Vladimir Yakovlev.
 At a press conference Monday, Yakov lev said that the leaders discussed primarily health issues and environmental questions, but St. Petersburg City Hall sources said the meeting was not entirely successful.
 "It was usual for this kind of meeting. The prime minister was saying how bad the environment of the Baltic Sea is and the governor, for his part, asked the prime minister to participate in the celebration of St. Petersburg's tricentennial," the source said.
 According to Interfax, the main topic that Stoltenberg intends to discuss in Moscow will be a new Norwegian law on protecting the environment of Spitsbergen Island.
 The island, Norwegian territory located in the Barents Sea, is in commercial use by both Norway and Russia under the terms of an agreement signed by 40 nations in Paris in 1920. That agreement created a special administrative regime for the island, which remained under Norwegian sovereignty but was opened up to commercial exploitation by all signatory countries.
 Norway recently adopted a new law intended to protect the fragile environment of the region, but it claims that teh law does not violate the 1920 agreement.
 "According to the agreement, this is the territory of Norway and all countries can do their business there on equal conditions ... There are going to be rules introduced in relation to a vulnerable environment, and we are going to treat Norwegian companies as strictly as Russian ones," Stoltenberg said Monday.
 "We have some disagreements [with Russia] and these are questions of sovereignty," Stoltenberg admitted.
 The Russian government is worried that the new law could change the operating conditions for Russian companies, which would have to seek permission and pay a fee to get access to work on the island, according to Interfax.
 "[The law's] real goal is to force Russians off the island," a source in Moscow told Interfax Monday.
 According to various media reports, Russian companies are involved in coal mining, fishing and scientific research on the territory. Arktikugol, a state-owned company, is one of the biggest Russian companies working there, owning 251 square kilometers of land and leasing 23 coal mines.
 Stoltenberg met on Monday with Cherkesov, one of Putin's closest allies. Cherkesov's spokesperson, Alexei Gutsailo, would neither confirm nor deny that the two had discussed the Spitsbergen Island issue.
 "I would not say that topics were linked to the upcoming meeting, but they were more introductory. They discussed questions of coordination between the Northwestern district and Norway," Alexei Gutsailo said in a telephone interview on Monday.
 Interfax sources also said that the Kremlin will ask Stoltenberg about the U.S. intention to use a radar station in the town of Varde for its proposed anti-missile defense program.
 Trade volume between Norway and Russia for the first quarter of this year was estimated at $242 million, which is a 9 percent increase over the same period last year, according to statistics presented by the Ministry of Trade and Economic Development.
 Over the last year, trade between the two countries totaled about $1 billion, mainly trade in fish, ferrous and non-ferrous metals, oil and machinery.

TITLE: Security Group Returns To Chechen War Zone
AUTHOR: By Alexander Merkushev 

PUBLISHER: The Associated Press
TEXT: ZNAMENSKOYE, Chechnya - The Organization for Security and Cooperation in Europe returned Friday to Chechnya, and its leader urged other groups to overcome security worries and join humanitarian work in the region. 
 OSCE chairman Mircea Geoana, who is also Romania's foreign minister, opened an OSCE office in Znamenskoye, a town in northern Chechnya where the Council of Europe already has stationed three human rights monitors. 
 Some humanitarian organizations remain leery of the rebel region, where as recently as January an American worker with the medical aid group Medecins sans Frontieres was abducted by unidentified gunmen and held for 25 days. 
 "This is going to be the most complex operation by the OSCE in the world," Geoana said at the opening ceremony, adding that the resumption of work "sets an example for other international organizations." 
 The OSCE played a prominent role in bringing Russian commanders and Chechen rebels to the negotiating table in the 1994-96 war, which ended with a Russian withdrawal. But the OSCE pulled out of Chechnya in early 1999 after kidnappings and other violence became rampant. 
 The Russian military returned to Chechnya in fall 1999. 
 Moscow is sensitive about what it sees as interference in its internal affairs and has rejected calls for talks with rebel leaders. But earlier this year, the government said there was no political obstacle to the OSCE's return. 
 Akhmad Kadyrov, head of the Kremlin-appointed civilian administration in Chechnya, said authorities would try to ensure the safety of the OSCE mission, but "there is no country in the world that would guarantee 100 percent security." 
 Russian forces overran Chechnya's northern plains, where Znamenskoye is located, early in the conflict. Federal forces' hold in that region is the firmest. 
 OSCE workers have already been aiding refugees living in a tent camp in Znamenskoye, 60 kilometers northwest of Grozny. The organization has also been distributing water filters in Grozny and providing medical and other humanitarian aid to refugees. 
 Meanwhile, the wreckage of one of two Russian attack jets that went missing over Chechnya was found Friday in the mountainous south, the military said, according to Itar-Tass. 
 Two Su-25 planes were announced missing Thursday over the southern town of Shatoi, where rebel concentrations are high. 
 Air Force Deputy Commander Vladimir Mikhailov said the aircraft probably crashed into a mountain because of low visibility, Itar-Tass reported.
 Russian authorities Monday announced the detention of 19 servicemen on suspicion of killing civilians in Chechnya - a move that comes amid international accusations that Russia is unwilling to prosecute military abuses. The servicemen are suspected of killing civilians in the Grozny region last Thursday, according to a statement by Chechnya's pro-Russian administration, carried by Interfax. 
 The detentions were connected with the killing of seven people near the village of Pobedenskoye. Interfax said Chechen prosecutors had opened a criminal investigation into the killings, which it said occurred after servicemen opened fire on civilians allegedly trying to steal oil from a well. 
 The report said 19 servicemen had been questioned in the case and released. 
 
 ****************************
 A charity concert and ball will be held Tuesday evening at the Rossiya Concert Hall in Moscow to raise funds to treat Chechen children maimed in the ongoing conflict in Chechnya.
 The highlight of the evening will be the Lovzar (Joy) dancing ensemble, consisting of 45 youths aged 12 to 17, who used to dance in the Chechen State Children's Ensemble. That ensemble had 200 members when it was formed in 1983 and has won several international awards.
 But only 60 children were left in the group after the 1994-96 Chechen war, according to ball organizers. More members have disappeared in the current military campaign, including a girl who was kidnapped for ransom and never returned.

TITLE: Hanssen Confessed To Spying 20 Years Ago
AUTHOR: By Pete Yost

PUBLISHER: The Associated Press
TEXT: WASHINGTON - Back in 1979, ex-FBI agent Robert P. Hanssen told his wife and a Catholic priest he had given information to the Soviets in exchange for money, people familiar with the case said Saturday.
 Bonnie Hanssen told the FBI that her husband confessed to giving the Soviets non-vital information more than 20 years ago after she caught him doing something suspicious, said the sources, and that Hanssen then went to a priest who urged him to turn himself in.
 When the priest changed his mind and told Hanssen to donate the $20,000 he had received to charity, Hanssen gave the money in small amounts over time in cash to the cause of Mother Teresa and promised his wife that he would cut off further contact with Moscow, said the sources, speaking on condition of anonymity.
 The sources declined to describe the information they said Hanssen provided in his first round of spying, except to say it was "something substantial."
 Mrs. Hanssen said her husband told her he was tricking the Russians, not giving them anything important in exchange for the money, the sources said.
 Mrs. Hanssen has told investigators that the discussions with the first priest took place in about 1980, when the couple lived in Scarsdale, N.Y. At the time, Hanssen was working in counterintelligence in the FBI's New York office.
 Until now, the U.S. government has alleged publicly that Hanssen began spying for Moscow in 1985. Hanssen pleaded innocent to all charges last month.
 The new disclosures come as sources close to the case say prosecutors and attorneys for Hanssen are nearing a deal in which Hanssen will reveal his secrets and the Justice Department will not seek to put him to death. Fourteen of the charges against Hanssen are punishable by death.
 Under the informal agreement, a term of life imprisonment for Hanssen would depend on the government being satisfied that he is cooperating with its inquiries, two people familiar with the negotiations said Friday.

TITLE: Sides Disagree Over Size of Profit Tax Cut
AUTHOR: By Torrey Clark

PUBLISHER: Staff Writer
TEXT: MOSCOW - The president, the government and the State Duma's influential budget committee all agree that the 35 percent corporate profit tax will be slashed - the only question now is by how much. 
 President Vladimir Putin on Monday threw his weight behind the government's proposal to cut the rate to 25 percent from 35 percent, Economic Development and Trade Minister German Gref said after meeting with the president. 
 With the crucial second reading of the profit chapter of the Tax Code slated for this Friday, the budget committee has agreed to cut the rate and cancel all tax incentives and holidays. The committee, however, is also pushing for a deeper cut, to 23 percent, a rate that the government says it cannot afford.
 "The government is not prepared to agree to a 23 percent profits tax rate and will insist on 25 percent," Deputy Finance Minister Sergei Shatalov told an investment conference Monday. The government estimates that for each 1 percent the tax rate drops below 25 percent, the budget will lose 25 billion rubles ($830 million). Shatalov told reporters Friday evening that the president may veto the law if the Duma choses to pass the 23 percent rate, Interfax reported. 
 "The government is counting kopeks right now. The major impact for companies will be the overall reduction, and the lower, the better," said Steve Henderson, a tax partner at Deloitte & Touche.
 Lawmakers hope that lowering the profit tax will widen the tax base and increase overall collections. After the 13 percent personal income tax rate was introduced at the beginning of the year, income tax collections in the first five months jumped 60 percent year on year.
 "We hope that the exact same thing will happen with the profits tax," Interfax reported budget committee head Alexander Zhukov as saying Monday.
 The reduced tax rate is likely to prove beneficial to a greater number of companies than the tax holidays or incentives did, said Henderson. But Alfa Bank's Natalia Orlova said that the proposal might meet some resistance from the regions and companies, such as exporters, that are the major beneficiaries. 
 It may also close a number of loopholes. "The various exemptions ... inevitably gave rise to corruption and fraud, resulting in nearly half of the nominally assessed tax liabilities not being collected," United Financial Group wrote in a morning comment Monday.
 In addressing this part of the tax code Russia is following a global trend in looking to decrease corporate profit tax rates. "From an economic perspective, it is a very good idea and matches what a number of other countries have done," said Henderson.
 "There seems to be a race on to see how much the economy will move when the profit tax rate is lowered. Globally, there is a tendency toward more consumer-based tax regimes. ... Companies will have more of their money available to invest and optimize operations," he said.
 A lower tax on profits has helped a number of countries in their quest for increased levels of economic growth and higher revenues. Ireland, which has a 10 percent corporate profit tax for manufacturing and for companies in some additional sectors, has seen its revenues increase from about 600 million Irish punts ($655 million) in 1991 to about 3.1 billion Irish punts ($3.7 billion) in 2000. As a share of total tax revenues, the profit tax increased from 8 percent of total tax revenues to 15 percent in that period.
 "[A low profit tax rate] is not a be-all-end-all solution, but if it's part of a package, then it's a formidable instrument that governments can use to attract investment," said a spokesman for the Irish Embassy. 
 The government has proposed that the proposed 25 percent rate be split so that 8 percent is targeted for the federal budget and the remaining 17 percent going to the regions. The committee will recommend the 23 percent profits tax rate with a split of 7 percent earmarked for the federal budget and the other 16 percent to the budgets of the regions to the State Duma on Friday, said a committee spokesman on Monday.

TITLE: Decision in Samson Case Put on Hold
AUTHOR: By Simon Ostrovsky

PUBLISHER: Staff Writer
TEXT: The St. Petersburg Arbitration Court just wants to see a piece of paper.
 St. Petersburg food-processing giant Samson says that it should have legal control over the assets it placed with seven daughter companies that it created in the fall of 2000. The daughter companies say that the property is rightfully theirs. On Thursday, the court said that it wouldn't rule on the question until either side is able to produce an original document explaining the financial terms of the reorganization.
 The Federal Service for Financial Restructuring and Bankruptcy, or FSFO, filed the action in the St. Petersburg Arbitration Court, arguing that some aspects of the division of the firm were improper. Alexander Utevsky, St. Petersburg FSFO head, said that the suit was filed due to the fact that, while the assets of the enterprise were transferred to its affiliates, the rights of creditors were being contravened, as the majority of Samson's debts remained with the parent firm.
 "We conducted an investigation into the company last summer, and suspect that the split may have been part of a plan by the parent company to itself declare bankrupt," Utevsky said.
 The FSFO is arguing that the assets presently in the hands of the seven daughter firms should be returned to the parent in order to cover some of the claims filed by creditors.
 Samson owes a total of $15.5 million to about 600 creditors, including the State Customs Committee ($6 million), International Moscow Bank ($4 million) and Gausepohe Fleisch GmbH, a meat importer ($2.6 million).
 For their part, the daughter companies say that they gave Samson a promissory note worth 4,235,000 rubles ($145,500) in exchange for 82.3 percent of the company.
 The daughter companies' argument rests largely on the issue of the promissory note, and the judge in the case, Natalia Anosova, postponed a decision until June 29, saying that "neither side can present the necessary documentation."
 Representatives of the daughter firms say that this is not their fault, alleging that Samson stormed their offices with armed men in masks who emptied the contents of their safes.
 The FSFO and Samson maintain that the note is void either way, as the deal was struck by the company's general director at the time, Yury Savelyev, who they say was acting outside the boundaries of his authority
 "If Samson believes that the general director was acting outside of proper limits, then you should have taken him to court in accordance with federal law," Dmitry Dobrin, head of investment at Moskovsky Industrialny Bank (MIB), which owns 12 percent of Samson, told Valentina Talimonchik, one of the lawyers representing Samson in court on Thursday. "But you didn't, so Samson has to take full responsibility for his decisions,"
 MIB itself played a significant role in engineering Samson's split up.
 Savelyev induced the bank to invest in the company early last year, and MIB was apparently in favor of the company's restructuring.
 The FSFO, however, was not so impressed with the idea, and stepped in to appoint an outside manager for the firm, Andrei Gulyayev, charging him with returning the firms assets.
 Lev Savulkin, an analyst at the Leontiev Center, believes that there are now two roads the once mighty meat producer could follow.
 "If Gulyayev is able to convince the company's creditors that he will get the assets back from the affiliates and attain financial stability, then, with some more investment, the company will be handed over to the creditors," he said. "But if Gulyayev is not able to do this, then what's left of Samson will have to be sold off."
 MIB's Dobrin says that it could be a while yet before this question is answered, because a resolution is still a long way off, and the FSFO's Utevsky agrees.
 "If this court rejects our case, we'll just go up another level," he said.

TITLE: Duma Dilutes Anti-Tobacco Law
AUTHOR: By Roman Kutuzov, Sergei Rybak and Natalia Neimysheva

PUBLISHER: Vedomosti
TEXT: MOSCOW - The State Duma last week approved the second reading of the bill on reducing tobacco smoking - but a more apt title might have been on the absence of any limitations whatsoever.
 The changes made to the draft between the first and second readings over the past year are a textbook demonstration of the lobbyist's art, a display of prowess rarely seen in Russia but commonplace in the West.
 The second reading is the moment of truth in the life of any draft law. It is at this stage that the essence of the law-to-be is determined.
 The third reading is purely technical.
 But after Thursday's vote, tobacco companies have nothing to fear. Nor does the majority of the country's population.
 According to Health Ministry calculations, 80 percent of Russian citizens smoke. As European Commission spokesman Torsten Myunch said, this isn't Europe or America, where the smoking rate is roughly 40 percent and 30 percent, respectively.
 The authors of the original bill intended to limit smoking along the same lines as Canada and the European Union, with some clauses actually more severe.
 It was proposed, for example, to ban tobacco advertising altogether. In Europe there is no equivalent - according to Myunch, advertising limitations do not affect professional publications and outdoor advertising. In 1998, for example, the German government came out on the side of tobacco companies and permitted advertising on billboards.
 Now there is no such ban in the draft. Tobacco companies persuaded the deputies that any such limitations must be written into the law on advertising. It is interesting to note that the alcohol lobby couldn't defend this point. Their advertising possibilities were undermined by the law on the turnover of alcohol products.
 Developers of the anti-tobacco bill proposed a ban on showing smoking in movies. Now this clause has been adjusted with the addition of the short but far-reaching phrase: "unless such activities shall be deemed an integral element of the artistic design." It is not clear from the draft who would be responsible for determining what is "integral" and what is not.
 It is no surprise that tobacco companies are happy with the new version of the law.
 "The law needed to be adopted a long time ago, and the less time that passes between the second and third reading the better," said Sergei Shelekhov, president of the Grandtabak company, which unites 30 major distributors.
 Nikolai Gerasimenko, one of the authors of the bill and chairman of the Duma's healthcare committee, said that despite the setback, some success had been achieved.
 The bill reduces the levels of tar and nicotine, he said. But the international tobacco companies don't mind this: The move will first and foremost hit their Russian competitors that produce cheaper cigarettes.

TITLE: Talosto Fights For Right To Use Maslenitsa Name
AUTHOR: By Dina Vishnya 

PUBLISHER: Vedomosti
TEXT: Frozen-food maker Talosto took a gamble by launching the Maslenitsa brand before official registration - and lost. 
 The company is now fighting in the St. Petersburg and Leningrad region arbitration court with the FSZ company for the right to use the Maslenitsa name.
 Talosto has made Maslenitsa <i>blini</i>, which account for 20 percent of the company's goods, since 1998. An application to register the company's mark with Rospatent under category 30 was submitted at the same time production was launched. 
 One and a half years later, Ros pa tent informed the company that the Agrolider company had already registered the Maslenitsa trademark under that category. 
 Talosto's lawyers tried to come to an agreement with Agrolider, but they were beaten to the punch by their competitors - FZP. 
 &quot;We were two weeks late,&quot; said Vadim Uskov, head of the law firm Uskov & Partners, which represents Talosto. 
 According to FZP lawyer Viktor Kotlyarov, his company had been hunting for the Maslenitsa trademark since 1998, and in April 2001 concluded an agreement with Agrolider for the rights. Under the agreement, FZP received the right to sell blini, <i>pelmeni</i>, pizza and baked goods under the Maslenitsa brand. 
 In April, Talosto received a letter from FZP requesting it terminate production of Maslenitsa blini before May 1. Talosto requested the date be put back by three months, but their request was rejected - FZP had already established production of its version of Maslenitsa. 
 Impatient to get their new goods on the market, FZP filed a claim with the St. Petersburg and Leningrad region arbitration court, and the hearing began last week. Talosto lawyers filed a counter claim, saying that the rights to the trademark were not transferred correctly.
 Their claim was based on the fact that before selling the trademark, Agrolider chan ged its registration to specify that it did not only cover category 30 - but specified blini, pelmeni and a few other foods. 
 FZP lawyers claim that changing the registration from category 30 to a few specific foods is a minor issue. 
 &quot;If the amendments made it through Rospatent and have been registered, then FZP legally owns the mark,&quot; said Viktor Stankovsky, general director of the Gorodissky & Partners law firm in St. Petersburg. 
 As the case continues, the Maslenitsa products of both companies can be found in stores now, as FZP has launched its new brand and Talosto is selling off its remaining goods. 
 Whatever the court's final decision, FZP is already feeling the benefits of its competitor's efforts. Talosto says that this year alone they have invested $70,000 into advertising their Maslenitsa blini, while FZP have no advertising expenses planned for their brand.

TITLE: Perle Suggests Total Write-Off Of Soviet-Era Russian Debt
AUTHOR: By Yulia Ulyanova,
 Maxim Trudolyubov 
 and Alexei Germanovich

PUBLISHER: Vedomosti
TEXT: MOSCOW - One of Washington's most influential security experts has said that the United States could call for a total write-off of Russia's Soviet-era debt, even if the move stirs the ire of Western allies such as Germany.
 Richard Perle, who served as Assistant Secretary of Defense under former U.S. President Ronald Reagan and is regarded by some observers as an unofficial advisor to the current administration of U.S. President George W. Bush, told Vedomosti on Thursday that &quot;under certain circumstances&quot; it would be possible to consider writing off Russia's Soviet debt.
 Debts inherited from the communist era should not burden a country trying to build a new society, he said.
 Perle - now a resident fellow at the influential American Enterprise Institute, a conservative public policy research institute in Washington - first suggested the write-off earlier this month at a round table in Lisbon, shortly before Bush's debut European tour.
 The issue of Russia's debt did not come up during Bush's one-day summit with President Vladimir Putin on Saturday. But some observers speculated that Perle's write-off idea was floated as a potential bargaining chip in Washington's debate with Moscow over the 1972 Anti-Ballistic Missile Treaty, or ABM - which Bush wants to scrap as a &quot;relic of the past,&quot; while Moscow clings on, insisting the treaty is the cornerstone of international security.
 One well-known political analyst, who asked that his name not be used, said different groups in the Bush administration were debating various ways of pressuring Russia on the ABM treaty, with one faction pushing for debt relief as the main bargaining chip, while another group is calling for military aid and arms deals - such as the purchase of S-300 missile systems - as the best means of softening Moscow's stance on the treaty.
 The analyst added that defense experts, especially &quot;Cold Warriors&quot; like Perle and Pentagon chief Donald Rumsfeld, seem to be supporting the debt relief approach to ABM talks - which suggests that the U.S. Defense Department is wary of cooperating with Russia on security issues.
 Perle's position on U.S.-Russia relations - at least in public statements - seems to have softened under Bush. Last year, when the White House was controlled by Democrat Bill Clinton, Perle said in an interview with Radio Liberty that he was wary of Putin, a former KGB spy who seems quite proud of his former profession and place of employment.
 But last week, Perle spoke with the same cautious optimism prevalent at Saturday's Bush-Putin summit.
 U.S. attempts to build a new &quot;constructive relationship&quot; with Russia are long overdue, he said.

TITLE: Planes a Hit, but Radar Misses at Air Show
AUTHOR: By Simon Saradzhyan

PUBLISHER: Staff Writer
TEXT: MOSCOW - Russian companies clinched one deal and agreed on another Sunday, the first day of the weeklong Paris Air Show in Le Bourget, France.
 But they failed to match several offers made by foreign companies selling &quot;unauthorized&quot; upgrade programs for Russian-designed aircraft.
 Moscow-based NII-Phazatron announced Sunday a $5 million contract with China to deliver 100 recently developed Zhuk radar devices for China's F-8 fighters, according to RIA-Novosti. Phazatron has no arms export license so the deal would have to be mediated by Rosoboronexport of Moscow.
 Rosoboronexport and Russia's Ilyushin Aviation Complex also agreed Sunday with Israel's IAI on the integration of the Lod-based company's Phalcon early-warning radar into Russian-made Il-76TD planes, according to Itar-Tass. 
 Three such planes will be delivered to the Indian armed forces, which have also tested the Russian A-50 aircraft equipped with Russian-made radar, but opted for $250 million Phalcon.
 And India's decision to procure Phalcon, even though it costs $50 million more than its Russian rival, is not the first time a customer chose to have an Israeli company install its equipment into a Russian-designed airframe. Russian Aircraft Corp. MiG, for example, which designed and manufactured MiG-21 fighters, has already seen Romania and Ethiopia choose IAI to upgrade these Soviet-ear warplanes over the Russian designers' protests. 
 And MiG's main rival in Russia - AVPK Sukhoi - may also soon lose contracts to upgrade Sukhoi's Su-25 attack planes to another Israeli company, Elbit Systems. Elbit and Georgia's Tbilisi Aviation Production Association, which manufactured Su-25s in Soviet days, rolled out an upgraded version of the plane, dubbed the Scorpion, at the Paris show Sunday.
 Both MiG and Sukhoi have designed their own upgrade programs for the aircraft they designed in Soviet days. So far, however, they have only won deals to modernize India's MiG-21's and Algeria's Su-24 bombers.
 In addition to Scorpion, Israeli companies, which often offer more sophisticated avionics and control systems upgrades than their Russian rivals, also showed off an upgraded version of the Mi-8 helicopters that were designed by Moscow's Mil design bureau. 
 Also, France's Sagem presented its own overhauled Mi-8 at the show.
 While there are no Russian-designed variants of upgraded Soviet-made warplanes and helicopters anywhere in sight, the Russian aerospace display in Paris did include the Su-30MK fighter, the Russian-French MiG/AT trainer and the Tu-214 airliner.
 But both the MiG/AT and the Su-30MK have been displayed before, and it was the re-usable space booster Baikal that stole the weeklong show, which drew 1,800 exhibitors from 43 countries, including 90 from Russia, according to reports in the Russian press. 
 The 28.5-meter-long cruise-missile-shaped booster is designed to fly back to Earth after taking the light-weight Angara 1.2 and its payload to an altitude of 70-80 kilometers, said chief designer and deputy director general of Moscow-based Scientific Production Association Molnia Yury Trufanov.
 A Baikal-powered Angara 1.2 will be able to launch 1.9 metric tons into low-level orbits, according to Trufanov and deputy general designer of Khrunichev's Salyut design bureau Vladimir Karrask, who jointly supervise the project.
 In comparison, a regular Angara 1.2 would be able to launch up to 3.4 tons into an orbit with an inclination of 63 degrees and an altitude of 200 kilometers, thanks to the fact that a regular Angara 1.2 can take more fuel than the Baikal-powered variant, according to Baikal's technical specifications list. 
 However, the booster is designed to survive between 50 launches and 100 launches, for considerable cost savings.

TITLE: Sukhoi Flies On Profits From Sales Of Fighters
AUTHOR: By Simon Saradzhyan

PUBLISHER: Staff Writer
TEXT: MOSCOW - The Sukhoi Design Bureau doubled its net profit and revenue last year mainly on the back of several deals to export the latest modifications to its Su-27 fighter, the company said Friday.
 The Moscow-based bureau's net profits soared 109 percent last year to 445 million rubles ($15.29 million), compared with 213 million rubles in 1999 and just 22.4 million in 1998, according to the company's 2000 financial report, released at a recent shareholders meeting.
 The report said the company's taxable profits totaled 570 million rubles, compared with 314 million in 1999 and just 46.8 million in 1998.
 It was mostly export deals that fueled the growth of Sukhoi's profits, with 2000 sales exceeding the previous year's by 20 percent, Yury Chervakov, spokesperson for AVPK Sukhoi, which incorporates the bureau, said in a phone interview.
 The bureau made most of its cash tailoring and testing basic modifications of its best-selling Su-27 to the requirements of foreign customers such as India and China, said Konstantin Makiyenko, deputy head of the Moscow-based Center for Analysis of Strategies and Technologies. These two countries have ordered dozens of multifunctional Su-30MKs in the past few years, while India also signed a deal last December with the Rosoboronexport arms exporter to assemble Su-MKI fighters.
 The Defense Ministry only accounted for 18 percent of Sukhoi's business last year, according to the report. Most of the ministry's contracts were for upgrading the Su-27UB and Su-30 two-seaters to warplanes capable of attacking both air and surface targets at night and under extreme weather conditions, Makiyenko said.
 The design bureau also continued tests of the advanced Su-27I/B fighter-bomber for the air force last year, Makiyenko said. Both upgrades of Su-27UBM and Su-20, as well as tests of Su-27I/B, have continued this year , he said.
 The influx of orders allowed the design bureau to spend more on research and development of new aircraft that could be offered to both foreign customers and the national air force once demand for modifications of the fourth-generation Su-27 starts to decline about 10 years from now, Chervakov said.
 The bureau spent 121 million rubles last year on &quot;promising&quot; research and development projects for new aircraft that would be in demand both at home and abroad, the report said. Included in this line item was the development of a multi-purpose S-80 transport aircraft, medium-range airliner and a supersonic passenger plane, Chervakov said.
 The Sukhoi bureau may encounter difficulties in having its fighters sold some 10 years from now if it doesn't develop a fifth-generation fighter to compete with the U.S. Joint Strike Fighter once the latter is developed and cleared for exports, Makiyenko said.
 Sukhoi has been selected to lead the development of a fifth-generation fighter for the Russian air force, and India is already considering investing in the project. The fighter will take off in 2006, but serial production of the aircraft will not begin until 2010, Yury Koptev, director general of the Russian Aviation and Space Agency, or Rosaviakosmos, told reporters earlier this year.

TITLE: Transneft Plan Ponders Shift To Production
PUBLISHER: Combined Reports
TEXT: Oil pipeline monopoly Transneft plans to expand into crude production, possibly starting with a project in the oil-rich Timan-Pechora region of the Far North, the company's head was quoted as saying on Monday.
 Transneft President Semyon Vainshtok told the daily Kommersant newspaper that a June 29 shareholders' meeting would consider changes to the firm's charter that would allow it to pursue oil production.
 &quot;We are setting up a separate group within the company to work on oil production - one completely unconnected with oil transport - and we have already hired experts for such work.&quot;
 The government holds a 75 percent stake in Transneft, while 25 percent is owned by private shareholders.
 Vainshtok said that one of the possible projects being considered was development of the Kharyaginsk field in Timan-Pechora with France's TotalFinaElf.
 TotalFinaElf holds a 50 percent stake in the project.
 But under a production sharing agreement signed in 1995, it and Norway's Norsk Hydro - which has a 40 percent stake - must each give up 10 percent to a Russian partner.
 &quot;I see nothing wrong with our participation in the project as a representative for the Russian Federation. We have worked out our proposals for Total and are carrying out talks with the company,&quot; he said.
 &quot;But in the end, the final decision will be with the government. It will decide which Russian company to delegate this project to.&quot;
 <i>- Reuters, SPT </i>

TITLE: State, Investors Dialing 7 for Telecoms Reform
TEXT: The government split its unwieldy telecoms monopoly into dozens of companies during the course of privatization. Now it wants to pull them back into seven super-regional holdings by 2003. Staff writer <strong>Elizabeth Wolfe</strong><i> reports on the progress. </i>ARKHANGELSK, Far North - If the telephone cable to Naryan-Mar in the Komi republic breaks, no one is going to fix it. Local telephone provider Artelecom has the money to do it, but the tariffs it is allowed to charge for local calls don't cover the costs. As a result, the regional operator can't get the investment it needs for upgrades. It is a problem faced by scores of companies like Artelecom all over the country.
 Artelecom managers think that merging with the other nine operators in the Northwest into St. Petersburg Telephone might help alleviate the problem. They support the government's plan - already jump-started and humming along - to turn 76 regional operators into seven super-regional operators whose coverage area roughly corresponds with the federal districts set up by President Vladimir Putin last year.
 The consolidation of operators controlled by state telecoms holding Svyazinvest is slated to be finished anywhere from 2002 to 2003, followed by listings on the New York Stock Exchange. Svyazinvest says that its market capitalization will rise from $1.3 billion to $1.7 billion (its pessimistic forecast) or $2.3 billion (its optimistic forecast) as a result. Even the &quot;optimistic&quot; forecast is low compared with 1997, when the government sold a 25 percent stake for $1.9 billion, implying the price tag of $7.6 billion.
 With just 17 percent phone penetration (compared with up to 40 percent in the Czech Republic, Hungary and Poland) and 6.5 million people waiting for lines, supporters say consolidation is the only way to foster growth in the industry, create economies of scale, bring liquidity to stocks hardly traded and make the sector more manageable. Others say it's the only way these companies will ever see more investment.
 Not everyone, however, sees the plan as a sure-fire winner: Seeds of discontent are sprouting up among company managers unwilling to cede control; local officials fear budget shortfalls from missed tax revenues, and minority investors say they are being short-changed by the merger terms.
 On the other side, some sector experts think the reform should have gone even further, such as creating a single monopoly rather than seven.
 &quot;As long as this monopoly could be regulated in an effective way, then it could be positive. ... They need to create a national champion in telecommunications,&quot; said Anton Inshutin, a telecoms analyst at Morgan Stanley in London.
 A huge question mark looms over the fate of Rostelecom, the Svyazinvest-controlled long-distance monopoly that has seen its fortunes and share price plunge in the last year.
 Most agree that without regulatory reform, which includes raising local tariffs, any benefits of structural reform will be nil.
 But Svyazinvest has no intention of putting on the brakes. Representatives are making numerous calls and trips around the country to try to win over doubters. The contacts, made also by the four financial advisers hired to oversee the mergers - Alfa Bank, Gamma Group, LV Finance and Renaissance Capital - are aimed at governors, management and minority shareholders whose stakes are large enough to initially block the process.
 When shareholders meet at each regional operator this year and next it will not be so much a battleground as a hurdle the government, Svyazinvest and the advisers are intent on gliding over.
 &quot;I wouldn't even begin to talk about opposition,&quot; said Svyazinvest general director Valery Yashin by fax last month while on a U.S.-Europe roadshow to sell the plan to potential investors. &quot;You can't say that anyone is against reform of the telecoms sector.&quot;
 Despite Yashin's confidence, there are many deep concerns.
 
 Dialing for Solutions
 Making the industry more manageable has been a concern since it became clear that the way telecoms were privatized starting in 1992 wasn't efficient. Instead of restructuring and then privatizing, the government sold off stakes in more than 70 companies to investors. The fragmentation of the sector was fixed, and several years down the road, merging those assets into seven large operators is a lot more difficult.
 In that selling spurt, the government usually retained 51 percent of voting shares - 38 percent of the total - gave stakes to management and employees and auctioned off the rest to investors. The regional telecoms all went their own way, and even after Svyazinvest was created in 1995 as a privatization vehicle, the state had little control over its fractured subsidiaries.
 &quot;It's like an investment fund that was entrusted to run a portfolio of controlling stakes in companies elsewhere,&quot; said Deutsche Bank analyst Iouli Matevossov.
 Operators say Svyazinvest's hands-off managing style has done little for them.
 &quot;They try to help us by restructuring debts, but to do that in the right way, you need to at least go to Arkhangelsk for one day to look at what's happening here,&quot; said Artelecom financial analyst Alexei Subbotin. &quot;You can't manage such things by phone.&quot;
 But like so much of the economy, many of the problems have Soviet roots. In a planned economy, with no business sector and no room for competition, there was little stimulus to develop telecommunications. People rarely made long-distance calls and when they did it was with difficulty, often waiting up to an hour for a connection.
 In 1985, just 9.3 million households had phones, though by 1999 that number had more than doubled to 23.8 million, according to the State Statistics Committee. But quantity didn't mean quality. Even today, even calling within St. Petersburg or Moscow can take more than one try, and it's common to inadvertently eavesdrop on other conversations when lines are crossed.
 
 Playing Hard To Get
 The cash-strapped government's first attempt to auction off a part of Svyazinvest in 1995 failed, amid accusations that the terms were too murky. In 1997 the state finally sold a 25 percent plus one share for a privatization record $1.875 billion to Mustcom, a consortium led by international financier George Soros and Uneximbank's Vladimir Potanin that included Renaissance Capital, Deutsche Morgan Grenfell and Morgan Stanley Asset Management.
 Though relatively transparent compared with earlier privatizations, the deal struck a nerve with the losing sides - Boris Berezovsky and Vla di mir Gusinsky - who separately touched off a media war against Po ta nin and then-Privatization Minister Alfred Kokh.
 Soros still calls it the worst investment he ever made - the reported value of his $980 million investment has plummeted 80 percent - and he's keen to recoup his losses. &quot;The value of that investment has precipitously fallen since August 1997 and continues to erode,&quot; Soros wrote in a letter to Prime Minister Mikhail Kasyanov in December 2000.
 Soros has lobbied the government to transfer Mustcom's stake into shares in the merged companies, an idea that got its first public nod from the Communications Ministry during Soros' visit to Russia earlier this month. It would mean the state would let its share in the merged companies slip to 38 percent of voting shares, or 29 percent of total shares, while Mustcom would have 12.5 percent and 9.5 percent, respectively. Soros and the Communications Ministry have also floated the idea of issuing golden shares, which would allow the state to retain specific rights while giving up equity control. &quot;A golden share is one of the effective methods of achieving the government's interests in managing large enterprises, and if we're talking about Svyazinvest, then this form is entirely acceptable,&quot; said ministry spokesperson Sergei Grigorenko.
 Soros also intends to prolong Mustcom for four more years beyond the August deadline, when Mustcom investors would see their notes turn into Svyazinvest shares. That proposal is still awaiting shareholder approval, according to LV Finance, Soros' local adviser on Svyazinvest.
 Two other attempts were made to sell a 25 percent minus 2 share stake in Svyazinvest, but were spoiled first by the 1998 crisis and then by potential investors realizing that the holding had dismal payback potential and several unwieldy subsidiaries.
 
 Ready To Go
 When the government realized that no one wanted its goods, things really swung into motion. Mustcom kicked off its own lobbying campaign, and a new telecoms team from St. Petersburg was brought down to Moscow in 1999. Putin had just become prime minister, Yashin was brought from his post as general director of St. Petersburg Telephone (PTS), to become chief of Svyazinvest, while his right-hand man at PTS, Leonid Reiman, was appointed communications minister.
 &quot;They had fresh energy and views, and that coincided with the World Bank program to hire an adviser,&quot; said Mark Sanor, who heads the Arthur Andersen team that the government, with a World Bank loan, hired last year to come up with restructuring recommendations. The recommendations it presented in July were along the lines the government already had in mind.
 &quot;This consolidation feeds into the general policy of consolidation of central power,&quot; driven by Putin, said Aton telecoms analyst Nadezhda Golubeva.
 &quot;Not only do most people involved think that these mergers are a good idea, but they have strong support from the Communications Ministry, which in turn, seems to be well supported by the government and the Kremlin,&quot; Troika Dialog said in an April report.
 Soros Fund Management, speaking on behalf of Mustcom, was also instrumental in launching the restructuring of Svyazinvest and several points in Arthur Andersen's final report were based on Mustcom advice.
 The wheels first started turning visibly in the Northwest at the end of 1999, when Svyazinvest announced a merger of 12 regional operators into a single company, headed by PTS.
 Analysts suggested at the time that St. Petersburg was chosen as a starting point for consolidations so that the state's new telecoms managers - Yashin and Reiman - might have a better company to go back to if Putin lost the presidential election in March 2000.
 
 Busy Signals
 Compared with the effort under way to restructure the national power grid, the telecoms overhaul is moving along briskly, which isn't to say there hasn't been opposition to the scheme. The earliest and most vocal critics of consolidation were regional governors and administrators, who complained that their budgets would lose tax revenues, consumers would be stuck with higher tariffs, and larger companies would attract more oligarchs, not more investment.
 When details of the plan emerged last fall, a group of Siberian governors raised their concerns. Krasnoyarsk Governor Alexander Lebed, who generally supports consolidation, questions why the new company should be centered around Novosibirsk, rather than Krasnoyarsk. &quot;I'm entirely unhappy about the fact that a significant amount of investment, credit resources and tax payments will leave the region,&quot; Lebed said by fax. &quot;The proposed redistribution of resources throughout the regions ... will be just one more unfulfilled promise.&quot;
 That officials in Primorye have been wrapped up in elections contributed to the relative ease that Alfa Bank had in getting consensus from Far East companies, said Vladimir Tatarchuk, project manager for Alfa's advisory team. &quot;If the governors agree with the process, then there is no political pressure on the managers to block it,&quot; he said.
 One of the latest problems to pop up is in the Urals, where a shareholder in Khanty-Mansiisk Okrtelecom - either the local administration or management, according to Moscow brokerages - is trying to buy up a blocking stake to thwart consolidation. The local administration has a card to play: It leases equipment to the operator and has threatened to take it back and create a new company if the operator participates in the merger.
 &quot;We're just at the beginning. Before parents marry their daughter off, they will judge the fiance ... and discuss all the pluses and minuses. But today, we don't see any fiance, so we aren't even planning on getting married,&quot; said an official at Khanty-Mansiisk Okrtelecom who declined to give his name.
 Yevgeny Markov, an official in the Khanty-Mansiisk government, said his district wasn't interested in consolidation because it wants its own company to develop.
 For consolidation to go through, 75 percent of both preferred and common shareholders must approve it. Since preferred shares have voting rights, Svyazinvest has only 38 percent of voting shares. Thus minority shareholders with significant stakes will have plenty of say over the terms of the merger.
 &quot;Obviously, if something is clearly unfair ... then we would vote against it, but we don't see any tendency toward that yet,&quot; said Matteus Westman of Prosperity Capital Management, which has investments in several operators.
 &quot;We're paying attention to it, and if the proposals for consolidation don't seem very fair, then we will block them,&quot; said David Herne, a portfolio manager at Brunswick Capital Management, which has $300 million under management in some 30 operators.
 Herne said Brunswick, which began talks with Svyazinvest and the financial consultants last fall, has joined with other investors to make sure they have a blocking minority stake in at least one company in each region.
 Svyazinvest's primary task for well over a year has been to make sure these powerful minorities support consolidation - a job that has fallen on the shoulders of the four financial advisers chosen last year to oversee consolidation in the seven regions.
 Analysts say individual shareholders with miniscule stakes and virtually no bargaining power should be more protected in companies with powerful minorities. These include investment funds such as New Century Holdings, Prosperity, AIG Brunswick and Brunswick Capital Management.
 
 The Pensioner vs. PTS
 One high-profile impediment came in July 2000, when a suit brought by a shareholder in the long-distance provider St. Petersburg National and International Telephone, or SPMMT, threatened to halt the $450 million merger of SPMMT and St. Petersburg Telegraph into PTS.
 Viewed as an important first step toward consolidating the whole region, the merger was slowed by a pensioner who said he didn't get a fair value for his shares in the new PTS.
 The case was eventually dismissed, and the merger went ahead. Charges followed that Svyazinvest exerted pressure on the court and, from the other side, that the shareholder was a puppet for SPMMT management unsatisfied with the final deal. In late May, two other minority shareholders challenged the merger and lost, using almost the same argument.
 Minority shareholders are looking after different interests. Institutional investors are more concerned with their swap ratios, or whether they will receive a fair value for their shares when they are swapped into another company. Pensioners are concentrating on their dividends, while current employees are waiting for changes in their salaries, social benefits, position and dividends. Managers are wary of losing their influence and positions.
 &quot;All the managers are hired hands. And they must do what they're told by the owners,&quot; said Gennady Melnikov, general director of Primorye Elektrosvyaz, the hub company in the Far East. &quot;They're nervous, worried. But they will do their work.&quot;
 Artelecom's Subbotin predicted there would be no management changes in the near future. &quot;The guys from PTS do not know the people here. It will take time to figure out who is good and who is bad.&quot;
 &quot;Svyazinvest doesn't have an interest in violating minority shareholders rights&quot; because it has equal stakes in all companies, Yashin said.
 &quot;This is a rare occasion in the new economic reality in post-Soviet Russia when reforms initiated by top government officials may bring positive changes not only for the industry, but also for shareholders,&quot; Troika said in an April report.
 
 Call Back Later
 Another sticking point is how to consolidate the three companies in which Svyazinvest does not have majority stakes.
 The most desirable nonparticipant is Moscow City Telephone Network, or MGTS, majority owned by Sistema Telecom. Negotiations between Svyazinvest are ongoing and, judging by guarded comments from both sides, MGTS will somehow be consolidated with the other 18 companies in the central region.
 There is also Komisvyaz, whose press service directs questions to the local administration, which has a share equal to Svyazinvest's.
 &quot;We have shareholders. One has 19 percent, and another has 19 percent. One is for [consolidating], the other is against it,&quot; quipped a spokesperson.
 Sakhalinsvyaz, in which Svyazinvest has 49 percent, looks set to join the merger, as long as Cable and Wireless - with 49 percent - is won over.
 Then there's Rostelecom, which is controlled by Svyazinvest but whose role in consolidation is still unclear. It was one of the worst performing stocks on the Russian market in 2000, with its share price falling from $4.47 in March to $0.86 by year-end.
 Analysts say the fog still surrounding Rostelecom's future role in consolidation was a big reason for investors selling. There was also talk about merging with Svyazinvest, but the idea was scratched. Yashin now says Rostelecom will remain a monopoly for the next three to four years and counters the notion that the super-regional operators could be a threat in the near future.
 &quot;You can hardly say that in the next two to three years any functions of Rostelecom will be transferred to the merged companies,&quot; Yashin said.
 But that is no guarantee of success. Neither Svyazinvest nor the Communications Ministry has offered a clear strategy for building revenue streams. They have mentioned building a nation-wide Internet provider and, for several years already, grabbing Europe-Asia transit traffic.
 Alternative operators are quickly gobbling up the market, and there are increasing challenges coming from ventures formed by Gazprom, the Railways Ministry and Unified Energy Systems.
 The super-regional operators could prove competitors also, although Yashin disagrees. If they receive licenses to provide long-distance services, it could weaken Rostelecom's core revenue source.
 &quot;Imagine that MGTS receives an international license. It would be a disaster for Rostelecom because close to 50 percent of international traffic comes from Moscow,&quot; Inshutin said.
 While Rostelecom handles 85 percent of domestic long-distance traffic, it has only 35 percent of revenues because local telephone operators have negotiated better revenue sharing terms from Svyazinvest to compensate for loss-making local services. &quot;What's been done so far is positive for regional telephone operators, but negative for Rostelecom,&quot; said Inshutin of Morgan Stanley. &quot;Regional operators have a lot more bargaining power over Rostelecom now, given that its position has been weakened.&quot;
 The Anti-Monopoly Ministry last week agreed to raise by 25 percent the rates that operators pay Rostelecom for routing domestic long-distance traffic. The rates had not changed since 1996.
 Currently, the market seems to be waiting to see what emerges from recent management changes. Acting general director Sergei Kuznetsov, appointed in February, was a colleague of Reiman and Yashin's in St. Petersburg, evoking concerns that he would abide by their wishes, even if it were negative for Rostelecom.
 
 Paying Up
 Many say the main benefit of consolidating the sector is attracting investors.
 &quot;Investors have a lot of trouble investing in a sector where they can choose from 85 different smallish companies,&quot; Herne said. &quot;It will be much more interesting for them to choose from seven biggish companies.&quot;
 &quot;Investors are more interested in big, powerful firms,&quot; said Primorye Elektrosvyaz's Melnikov.
 Until the 1998 crisis, and even until the NASDAQ bubble pop in spring 2000, luring investment into the sector was much easier. Telecoms were the hot item and Eastern Europe had growth potential. &quot;It was easy money, very easy money. Now markets are not that bullish,&quot; said Deutsche Bank's Matevossov.
 Strategic foreign investors like France Telecom in Poland or Swisscom and KPN in the Czech Republic are less likely to come calling again. But there is a general consensus among analysts, investors and operators that without at least tariff reform, the operators, pock-marked by crumbling infrastructure and poor management, will not reap the rewards of any sort of restructuring. The only possible effect that consolidation could have on changing tariffs, some hopefuls say, is that the super-regional operators will have more lobbying power with the ministry to push for tariff hikes.
 Currently, regional operators have little incentive to expand their capacity or upgrade their system: It costs an average of $100 to install a new line, while residents only pay an average of 70 rubles ($2.40) a month for local calls. The average Russian telephone line generates just 11 percent of the revenues lines in other emerging markets do, Troika's report said.
 Local tariffs are approaching levels that would cover operators' costs, with half of all operators breaking even or turning a profit, according to Anatoly Golomozin, deputy minister at the Anti-Monopoly Ministry. But the Communications Ministry says average local tariffs cover just 77 percent of costs.
 Golomozin said rates are raised every six months and network capacity has grown by 30 percent in five years. &quot;That means there have been investment sources,&quot; he said.
 He said there is a steady traffic increase of 15 percent to 20 percent a year for individuals and businesses, with a 3 percent to 4 percent rise in new telephone numbers. &quot;It's evidence that operators have opportunities to develop and attract investment and shows that services are in demand.&quot;
 Changing tariffs can be both a political and economical matter, with street protests forming around the introduction of per-minute billing for local calls, and politicians usually answering their voters' fears of paying more to talk on the phone.
 The general director of Primorye Elektrosvyaz had a cynical solution, saying the tariff problem will be solved when the Anti-Monopoly Ministry ceases to exist.
 
 Speed-Dial
 Soros complained recently that consolidation was going too slow.
 &quot;We think everything should be on an accelerated pace,&quot; Arthur Andersen's Sanor said.
 It's still a guessing game what the market will look like in five or 10 years.
 &quot;Eventually, these seven regional holdings will be bigger and stronger and will be able to expand into new markets internationally and, depending on the regulatory regime, within Russia,&quot; Sa nor said.
 Others disagree that the super-regional companies will ever have the opportunity of competing outside the country, or that, as Arthur Andersen contends, they could ever compete among themselves.
 &quot;I don't see super-regional operators expanding into neighboring regions other than through mergers with each other,&quot; said Andrei Braginsky, telecoms analyst at Renaissance Capital.
 &quot;Expanding into the Eastern European market sounds unrealistic. On the other hand, super-regional operators themselves may become acquisition targets for Eastern or Western European telcos,&quot; he said.
 For now, people are concentrating on short-term advantages.
 &quot;The [super regional companies] will be more powerful, with more resources and access to financial markets,&quot; said Alfa's Tatarchuk.
 Before that happens, though, there are risks and uncertainties - especially in the interim, between the shareholder vote and the actual merger when people will be &quot;not quite ex-managers,&quot; as one investor put it.
 When will strategic investors come? When will companies make a profit off of offering local services? When will the residents of Naryan-Mar be assured they will still have a connection, even if the cable breaks? Some forecasters say end of 2003. Others say anywhere from 2005 to 2010.
 &quot;Another question is whether money will flow to Arkhangelsk or stay in St. Pete,&quot; Artelecom's Subbotin said. &quot;I hope it will flow to Arkhangelsk, and we will be able to replace the equipment here.&quot;

TITLE: Harvard Gets Its Very Own Crony Capitalist
AUTHOR: By Matt Bivens 

TEXT: ON July 1, Larry Summers - who ran the Treasury Department under U.S. President Bill Clinton - takes over as president of Harvard University. &quot;A fitting choice,&quot; editorialized The New York Times. But fitting in what way?
 So far, Summers has been silent on the activists who seized his future office for three weeks to demand a living wage for Harvard service personnel. Harvard has an endowment of billions at its disposal, but Summers, who did not respond to my requests for an interview, is unlikely to embrace the activists' cause.
 After all, if everyone were paid a living wage, where would we store hazardous waste? A decade ago, while chief economist of the World Bank, Summers argued for a &quot;world-welfare enhancing trade in air pollution and waste&quot; in an internal bank memo that expressed the value of a human life as the sum of its future earnings. &quot;The costs of health-impairing pollution depend on the foregone earnings from increased morbidity and mortality,&quot; Summers wrote. So if pollution shortens by five years the life of the average, well-paid American, that is worse than the same pollution prematurely killing off the average someone in Mexico or some other lower-wage country. Wrote Summers, &quot;The economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable, and we should face up to it.&quot;
 Yes, it's a 10-year-old memo, and Summers has apologized for his suggestions, saying they were ironic and intended to push colleagues to think outside the box. But don't feel bad about asking him whether &quot;impeccable logic&quot; dictates that the death of a Harvard janitor paid $6 an hour matters less on some level than if the janitor is making $10.25. That's just one of the harsh questions Harvard's braver souls ought to be asking.
 Here's another: Why did Summers, while a top official at Treasury, so ardently embrace the corrupt sell-off of Soviet industries? Russia's privatization tsar, Anatoly Chubais, oversaw openly rigged &quot;auctions&quot; of oil companies, nickel mines and other crown jewels of Soviet industry. How openly? The privatizers invited some of Russia's newly minted tycoons to organize the auctions, then let those tycoons reject high bids and crown themselves the winners.
 Long after those rigged auctions were over, Summers praised their organizers as an &quot;economic dream team&quot; and was on a friendly first-name basis with them in official letters. That was consistent with the Clinton administration's see-no-evil approach to Boris Yeltsin's boys.
 Summers' critics may find new ammunition in a Justice Department lawsuit brought against Harvard over its work on Russian privatizations. In United States of America vs. the President and Fellows of Harvard College, Andrei Shleifer, Jonathan Hay, Nancy Zimmerman and Elizabeth Hebert, the Justice Department accuses a team from Harvard of having &quot;defrauded the United States out of $40 million&quot; - the amount paid to Harvard's Institute for International Development to work on Russian economic policy in tandem with reformers like Chubais. 
 The Justice Department says that Shleifer and Hay, who ran Harvard's Russia project, secretly bought large personal stakes in Russian oil companies and in GKOs, wildly high-interest Russian treasury bills. Harvard University's endowment, by the way, was also heavy in GKOs. In other words, Harvard and its representatives were investing in areas they were being paid to help design and regulate.
 Justice's 98-page civil complaint also says the Harvard team arranged for USAID to pay hefty salaries to people who worked on Hay's or Shleifer's private business projects (or those of their wives, Zimmerman and Hebert). Some of those people rarely showed up for work &quot;other than to collect their pay or for the free lunches.&quot; And the complaint says that &quot;numerous&quot; Harvard officials knew of these and other abuses, but those who complained were either ignored or, if they worked under Shleifer and Hay, bullied into silence.
 Summers does not figure in the Justice Department's complaint, but he has for decades been a mentor to Shleifer. As an MIT professor, he hired Shleifer, then a Harvard undergraduate, as a research assistant, beginning what the Journal of Economic Perspectives described as &quot;a long period of close friendship and mutual education.&quot; Even after Shleifer's work in Russia had come under investigation, Summers continued to embrace it. 
 For example, he wrote in a blurb for a book Shleifer co-wrote on privatization that the authors had done &quot;remarkable things in Russia.&quot; Now, as Harvard president, Summers will have to deal with the fallout from the legal case involving Shleifer, who still holds tenure at Harvard, and whatever further embarrassing details it may reveal.
 Even then, the lawsuit involves only part of the Harvard-Russia relationship. Of equal interest is how the Harvard project and the Russian reformers cooperated to win control of U.S. government aid money. And this is a story Summers should know intimately - the ins and outs of Russian economic policy-making were a major part of his brief at Treasury, while the Harvard-reformer nexus involving his friends Shleifer and Chubais has been chewed over by investigators from Congress and the General Accounting Office (the budgetary watchdog of the Congress).
 Government money is usually awarded on a bid basis, but according to a GAO investigation, aid money to Russia broke that model. The GAO says Harvard received tens of millions without any bidding and also won &quot;substantial control over the U.S. assistance program [for Russian economic policy-making].&quot;
 Here's how it worked: The Harvard team befriended &quot;reformers&quot; like Chubais. (Friendship in action: When Yeltsin briefly fired Chubais over the rigged oil company auctions, the Harvard team used USAID money to hire Chubais at $10,000 a month to be a &quot;consultant.&quot;) USAID approvingly noted the &quot;deep relationship of trust&quot; between Harvard and the reformers and cited it as a reason to give Harvard more aid money, while sidelining projects run by other institutions.
 On the rare occasions when USAID did award money to a non-Harvard-approved organization, the reformers would nix it. For example, when a team from Stanford won a USAID competition to work with Russia's Federal Securities Commission - a commission designed by Shleifer and Hay - the &quot;reformer&quot; heading that commission balked. Stanford lost that contract, and later Harvard was given money to do much the same work.
 Rigging the game so that only Harvard could win sounds like the sort of crony capitalism associated with - well, with Russian privatization. But the Justice Department is going after only the personal behavior of Shleifer, Hay & Co., not the larger issue of why their superiors winked so long at cronyism in Moscow and Washington. Why were the Russian reformers allowed to play Harvard, and Harvard to play Washington, like a yo-yo? 
 That is another question no one should feel bad about asking Summers - who, in one of those quirky ironies of fate, will also technically be on trial if United States vs. the President and Fellows of Harvard goes forward.
 
 <i>Matt Bivens is a former editor of The St. Petersburg Times. He contributed this comment to The Nation. </i>

TITLE: Putin Comes Out on Top at First Summit
TEXT: MOST observers probably expected the wily former KGB agent to outsmart the Yale fraternity boy at this weekend's long-awaited summit in Slovenia. But few thought the victory of appearances would be so complete. President Vladimir Putin is, after all, still something of a newcomer to global politics, although he has gotten a lot of practice over the last year. And U.S. President George Bush is supposed to have a much-vaunted team of advisors writing his crib notes.
 But there can be little doubt that Russia's president emerged by far the more statesmanly, despite the poor hand that global political and economic circumstances have dealt him. And since the brief meeting was always intended to be more symbolic than substantive, such things seem all the more important.
 Putin arrived in Ljubljana straight from a successful, orderly and businesslike Central-Asian summit in Shanghai, while Bush was no doubt still shaking from the difficult reception he received in Gotenborg. 
 During the summit meeting, Putin's most memorable moment came when he produced a 1954 document in which the Soviet Union had requested permission to join NATO and was roundly rejected. With that gesture and by reminding the world that the United States rejected a similar request from Russia just last year, Putin seemed to expose those who claim that NATO is not oriented against Russia and that Moscow has nothing to fear by its expansion right up to Russia's borders. It certainly seemed to be more convincing than Bush's oft-repeated, but ultimately lame assertion that &quot;Russia is no longer America's enemy.&quot;
 By contrast, Bush's most memorable moment came when he claimed improbably that this brief meeting was sufficient for him to &quot;get a sense of [Putin's] soul.&quot; Obviously, this came as quite a surprise to those of us who have been trying to figure Putin out ever since he emerged on the national stage.
 Then, after holding Bush's hand through some more awkward gaffes in the concluding press conference, Putin jetted off to Belgrade and even put in a surprise visit to Kosovo. When Putin joined Yugoslav President Vojislav Kostunica in calling for a regional security conference, he seemed to be taking a hands-on and inclusive approach to an intractable problem that contrasted favorably with Bush's dismal record of endlessly studying issues and then deciding to act unilaterally.
 A summit, of course, is not a debate or a boxing match and the re is no need to declare a winner. Which is just as well, since it would not be very diplomatic to point out that Putin won by knockout.

TITLE: Looking East To Find the West
TEXT: OF course it was no coincidence that President Vladimir Putin stopped off first in China before his meeting with the U.S. President George Bush in Ljubljana. The message was perfectly clear, and it is obvious that those to whom it was directed got the point.
 But after reading the endless reports on Saturday's summit, as well as a transcript of the press conference given by the two presidents afterward, it has become evident that there was more to Putin's visit to China than just a simple &quot;I've-got-alternatives&quot; kind of gesture.
 Instead, the trip was an acknowledgment of the path that Russia is taking on its way to the West - via China. Or, to be more precise, Russia will &quot;pass through China&quot; on its way to the key values of the Western civilization such as civil liberties, human rights, freedom of speech, government accountability and the like. For now, though, these things are on the back burner.
 At the top of the agenda is the building of a strong, bureaucratic state - such as China's - that will (who will dare to doubt?), in the best interests of its citizens, try to modernize itself and carry out economic reforms. The week preceding the Bush-Putin summit was full of telling gestures along these lines.
 First, Putin met with representatives of what was supposed to pass for civil society - beekeepers, Slavic nationalists, hockey fans... No representatives of our genuine civil society (as opposed to Kremlin-developed organizations like the one called &quot;We are citizens!&quot;) who are working on vital issues such as human rights in Chechnya were invited. Even a leading organization that defends the rights of consumers - the Confederation of Consumers led by Alexander Auzan - was dropped from the list after Auzan publicly expressed his concern over the Kremlin's striving to put civil society firmly under state control.
 The failure of that meeting with the &quot;ordinary people&quot; in the luxury of the imperial entourage was so obvious, and the message it conveyed was so telling that even the pro-Kremlin Web site Strana.ru - the modern equivalent of the old Central Committee's propaganda department - did not bother promoting it much.
 The second and the third gestures were, in fact, successes both domestically and internationally. Alexei Miller, newly appointed by Putin as CEO of Gazprom, disclosed to the press some of the monopoly's financial dirty tricks, and by doing so seemed to give the promise that the country's major source of income may become more transparent in the future. Whether or not Gazprom will actually become more transparent to minority shareholders or merely to the state and major Western investors will only become clear in the coming months. But in the light of the summit and Russia's desire that Bush promote Russia's entry into the WTO, the gesture was perfect.
 The same was true of Putin's third move. On Friday, just one day before the summit, the government parachuted its long-awaiting Land Code into the State Duma and pushed the first reading through. It is hardly possible to overestimate the importance of that event. Or its timing. The state showed that it is capable of implement major economic reforms via bureaucratic means.
 Therefore, it comes as no surprise that Bush responded accordingly during the summit. He did not raise the question of human rights violations in Chechnya. He said nothing about freedom of the press in Russia. He basically eliminated old-fashioned words like &quot;democracy&quot; from the vocabulary of the summit, as if acknowledging that he does not see these things as realistic when it comes to Russia. 
 But he did promise the WTO and offered encouragement to American investors - exactly in the same fashion that the United States acted a decade ago regarding China. Throughout the summit, I was trying to figure out what all this reminded me of. Then, finally, it hit me. Brezhnev and Nixon in the early 1970s, Bush the Elder and Gorbachev in the 1980s. D&eacute;tente, proliferation, arms-control treaties... Did the 1990s even happen at all?
 What surprised me though is that Bush seems to have forgotten that a decade of pragmatism regarding China - including closing one's eyes to everything besides the economy - ended up by positioning this one-time business partner as a major threat to the West and to the United States in particular. I know that people tend to forget about the mistakes of their past. But so quickly?
 
 <i>Yevgenia Albats is an independent journalist based in Moscow. </i>

TITLE: It's a Little Soon for Bush To Say 'I Like Ol' Vovka'
AUTHOR: By William Safire

TEXT: &quot;I LIKE old Joe,&quot; said F.D.R. about Joseph Stalin. Carrying on that self-deluding tradition of snap judgments, George W. Bush looked into the eyes of Vladimir Putin, announced, &quot;I was able to get a sense of his soul,&quot; and after two heady hours concluded he was &quot;straightforward&quot; and &quot;trustworthy.&quot;
 Ever since the KGB man emerged as the Russian oligarchs' choice, Putin has shown himself to be duplicitous (ask the Chechens), anti-democratic (ask the remains of Russia's free press), and untrustworthy (ask the exiled oligarchs). We can hope that the Bush gush was flattery intended to show the U.S. president to be nonthreatening as his administration presses ahead with a missile defense.
 The American gave the Russian what he most needs: public deference that saves Russia's wounded pride, and respect to its leader abroad as Putin chokes off opposition at home. Bush topped this off with a pre-emptive concession: agreement to exchange warm ranch-and-home visits, for which Putin was eager, even before any progress was shown in agreement to scrap the old ABM treaty.
 The Russian partly reciprocated, as Bush hoped, by accepting the American formulation of &quot;a new architecture of security in the world&quot; and by hinting that &quot;we might have a very constructive development here in this area.&quot; That public optimism from Russia takes a little of the steam out of alarmist Franco-German protests that America, in defending its cities from rogue missiles, was starting &quot;a new arms race.&quot;
 Well aware of the weakness of his hand, Putin is emulating Nixon strategy by playing the China card. Pointedly, just before meeting with Bush, Putin traveled to Shanghai to set up a regional cooperation semi-alliance with Jiang Zemin and some of his Asian fellow travelers.
 That deft maneuver puts European leaders on notice that Russia - despite all the talk of becoming a &quot;partner&quot; in Europe - knows that the center of America's strategic concern in the coming generation will be Asia.
 Putin is telling Bush: European leaders may resent your economic competition and appeal to their voters by complaining about pollution, but that's merely bickering within the Western alliance. A recombination of China and Russia would challenge America's status as the world's sole superpower. Therefore, you'd better prop up our Russian economy lest we undermine your hegemony with a Beijing-Moscow axis.
 With the strongest hand any American ever held, Bush comported himself well. But he should remember Reagan's &quot;trust but verify.&quot; When the manipulative Russian comes to visit at the Texas ranch this fall, I would hate to hear &quot;I like ol' Vovka.&quot; 
 
 <i>William Safire is a columnist for the New York Times, to which he contributed this comment. </i>

TITLE: Rioters and Police Clash at EU Summit
AUTHOR: By Paul Ames
 THE ASSOCIATED PRESS
TEXT: GOTEBORG, Sweden - As rioters battled police in clashes that left 43 people injured, European Union leaders struggled Friday to keep plans for expansion on track despite Irish opposition.
 The injuries came during sporadic clashes throughout the day as protesters threw rocks and debris at the helmeted troops with shields holding them at bay.
 At least 43 protesters and police were hospitalized, including three with gunshot wounds, Goteborg medical officer Per Ortenwall said. Justice Minister Thomas Bodstroem confirmed two people were shot.
 Details of the shootings remained sketchy, but some reports said police opened fire to defend themselves from rioters. The gunfire occurred around Goteborg University, about a kilometer from the summit site.
 The rioting was sparked by a small minority of the estimated 25,000 protesters who gathered in Goteborg, 420 kilometers southwest of the capital, Stockholm, to demonstrate during the EU summit. The protesters included environmentalists and anti-globalization and anti-EU activists.
 A series of clashes began Thursday during a visit by U.S. President George Bush, who left Friday for Poland.
 The mayhem Friday forced the EU leaders to change their dinner plans from a posh parkland restaurant to the conference center, where the summit was held behind police barricades. They condemned the rioters for attacking elected governments and undermining the rights of peaceful protesters.
 &quot;We have to pursue these rioters with all the might of the law,&quot; German Chancellor Gerhard Schroeder said at a news conference. &quot;No country should tolerate these criminals.&quot;
 Closeted in the conference center, the EU leaders reassured rattled eastern neighbors that a referendum last week in which Irish voters had rejected the EU expansion treaty had not shut the door on their hopes of joining the trading bloc.
 On June 7, the Irish voted 54 percent to 46 percent to reject the Treaty of Nice, a complex document to overhaul the EU's rule book and open the door for a dozen new members, most of them former Soviet republics or satellite states.
 &quot;The 'no' vote should not be interpreted as a vote against enlargement,&quot; Irish Prime Minister Bertie Ahern insisted. &quot;I do not see any reason why any of this should change the timetable.&quot;
 The Nice treaty was adopted last December after months of tough negotiations, but must be ratified by all 15 EU members. Ireland is the only one that allows its citizens to decide directly.
 Since barely a third of voters turned out for the referendum, officials are confident the result can be turned around. Ahern said he would launch a &quot;national period of reflection&quot; on the issue, but set no date for a new vote.
 In the face of the setback, the EU's commitment to press ahead in nearly doubling its membership received the backing of Bush, on a European tour that took him Friday to Poland - one of the front-runners for EU membership.
 &quot;I believe we have an opportunity to form an alliance of peace, that Europe ought to include nations beyond the current scope of the European Union and NATO,&quot; Bush told EU leaders Thursday. &quot;I strongly believe in NATO expansion, and I believe the EU ought to expand as well.&quot;
 Poland, Hungary, Slovenia, the Czech Republic, Estonia, Malta, Slovakia, Cyprus, Latvia, Lithuania, Bulgaria and Romania are all negotiating for membership. Turkey also has applied, but has not yet started membership talks.

TITLE: WORLD WATCH
TEXT: Car Bombs 
 

BOGOTA, Colombia (Reuters) - Two powerful car bombs exploded in rural Colombia on Friday, with the biggest blast -- blamed on leftist rebels -- wounding 16 people but causing no fatalities, police said.
 The attacks are the most recent in a renewed car-bombing campaign rippling across this war-torn Andean nation. The blasts, some in major cities, including the capital Bogota, have killed 12 people and wounded more than 250 so far this year.
 At dawn on Friday, a car packed with almost 50 kilograms of explosives exploded in the town of San Martin, a prosperous farming and ranching community about 90 kilometers southeast of Bogota.
 While only one police officer and 15 civilians were wounded by the shards of glass and rubble sprayed by the blast, the bomb laid waste to two high schools, a police station and other buildings. Nearby homes were reduced to rubble.
 "Why do they have to attack public institutions?" one schoolgirl, trembling, asked local television.
 Police blamed the blast on the country's largest rebel force, the 17,000-member Revolutionary Armed Forces of Colombia, known by its Spanish initials, FARC.
 The other bomb exploded early Friday in the municipality of Barrancas, along Colombia's northern border with Venezuela, knocking roofs off homes but causing no injuries.
 
 
Concorde To Fly Again
 

PARIS (AP) - The company that makes the Concorde jet said Sunday that the plane could resume flights as early as September.
 Rainer Ohler, spokesperson for the European aeronautics consortium EADS, said it is discussing technical problems that came to light after an Air France Concorde crashed outside Paris on July 25, killing 113 people. The airline's remaining Concordes have been grounded ever since, as have those operated by British Airways.
 "We see our role as being to get the plane back in the sky," Ohler said.
 Ohler confirmed a report that quoted EADS president Philippe Camus as saying the supersonic jet could take to the skies by September if authorities restore the plane's airworthiness certificate.
 French Transportation Minister Jean-Claude Gayssot said Friday that tests on the luxury jet were running smoothly and the grounded aircraft would likely return to the skies this autumn. A British Airways official gave a similar timetable.
 
 
Bin Laden Ally Arrested
 

NEW DELHI, India (Reuters) - Indian police said Sunday they had arrested another member of a group linked to Saudi fugitive Osama bin Laden, which they suspect of planning to bomb the U.S. embassies in India and Bangladesh.
 A police officer said the man, identified as Abbas Sheikh, was picked up in the western city of Udaipur.
 A State Department spokesperson said the United States was looking into the arrests.
 Security has been tightened around the U.S. embassy in the Indian capital.
 But the U.S. State Department has not issued any additional advisories to U.S. citizens in India, referring further inquiries to the Indian government, the spokesperson said.
 The two men detained Friday, Sudanese citizen Abdel Raouf Hawas and an Indian associate Shamim Sarwar, said they were with bin Laden and planned to attack U.S. missions in New Delhi and Dhaka, a police official said.
 Bin Laden has been indicted in New York for allegedly masterminding the bombings of U.S. embassies in Nairobi and Dar es Salaam in 1998, killing more than 200 people.
 
 
Air Force Scrapped
 

WELLINGTON, New Zealand (AP) - When it comes to military matters, New Zealanders are more likely to hear from the minister of disarmament than the minister of defense these days.
 Having angered the United States and other allies in the 1980s by banning visits by nuclear-powered or armed warships, New Zealand now has opted to be the first advanced country virtually to scrap its air defenses.
 The left-of-center government announced last month that it is junking the air force's combat jets, turning it into a transport service. The small army, meanwhile, is being remade into a peacekeeping force and the navy cut to just two oceangoing warships.
 The army also has been instructed to do a feasibility study on setting up a peace school at which soldiers would sit in on seminars with aid workers and peace campaigners to discuss methodology and share experiences.
 Opponents of the cutbacks contend the government is really pursuing total disarmament by stealth, cloaking its true aim with talk about peacekeeping because most New Zealanders want a strong defense.
 
 
Hostage Executed
 

ZAMBOANGA, Philippines (AP) - A top Philippine military spokesperson said Monday that officials believe an American hostage seized by Muslim rebels is dead, as the rebels claimed last week.
 The rebels said last Tuesday that they had beheaded Guillermo Sobero, a 40-year-old from Corona, California. His remains have not been found.
 Brig. Gen. Edilberto Adan told a news conference that Sobero may have died of infection instead of beheading. Adan told a news conference that the conclusion was based in part on information provided by Francis Ganzon, one of three other hostages held by Abu Sayyaf guerrillas who were reunited with their families on Saturday.
 The rebels still hold about two dozen other captives, including Kansas missionaries Martin and Gracia Burnham. They were captured three weeks ago in a raid on an island resort across the Sulu Sea.
 
 
Pisa Straightens Up
 

PISA, Italy (AP) - Engineers toasted the end of a bold project to straighten the Leaning Tower of Pisa and declared the renovated monument safe for at least a few more centuries.
 This Tuscan town began a weekend of celebration coinciding with the feast day of their patron saint, Ranieri, to mark the end of the bulk of the work.
 Still, tourists will have to wait a bit longer before making the climb to the top, since experts are studying how many visitors the tower can handle at once.
 For most of the past decade, the 55-meter-high marble monument was wrapped in a kind of steel corset and anchored by a pair of slender steel "suspenders" running across the surrounding piazza. The steel supports are now gone.
 Completion of work will give Pisans back the ringing of the tower's bronze bells, which were ordered stilled in 1990 for fears vibrations would threaten stability.
 There had been hopes that this week's celebrations would also include the resumption of tourist visits, but authorities said that would likely happen in November. 



TITLE: A Tumultuous Century Through One Man's Eyes
TEXT: With the death of 115-year-old Marie Bremont in France last week, Gayirkhan Iriskhanov, a grizzled cattle herder from the mountains of Dagestan, may very well have become the oldest person in the world. </i><strong>Alice Lagnado </strong><i>reports from Ki zil yurt, where she met the man who claims to be much older than his 112 years.
 </i>
 It was 1871, and Imam Shamil, the legendary Dagestani warrior, had died after conducting one of the longest guerrilla campaigns in history against Tsarist Russia. But Gayirkhan Iriskhanov, a cattle herder from Kizilyurt, swears he remembers the scene as if it were yesterday.
 &quot;I was very small, hanging on to my mother's skirts. It was as if my father had died,&quot; Iriskhanov recalls of Dagestan's capitulation to Russian forces after a 25-year war. &quot;Imam Shamil was the tsar of Dagestan: He had no fear. I remember everyone crying and I was full of sorrow too,&quot; said the bent, white-bearded figure sitting on a lumpy bed, dozens of nephews and nieces crowded round him.
 According to Iriskhanov's calculations, he was 3 years old when Imam Shamil died, making him 134 years old today - nearly 20 older than Marie Bremont, the 115-year-old French woman who was believed to be the world's oldest person until her death last week.
 But Iriskhanov's actual age cannot be confirmed. He lost his birth certificate when his first wife died 50 years ago. Others rely not on the old man's memory, but on the year of birth written in his passport -1888. That would make the Dagestani farmer a spry 112. Even shaving these 22 years off of his age, however, would earn Iriskhanov the title of the oldest man in the world.
 And along with that title comes more than a century of living history. He has lived through the fall of Imam Shamil, the reign of Tsar Nicholas II, the 1917 Revolution, Stalin's purges, three wars, and the transition to democracy a decade ago. He has had three wives and today boasts of 40 grandchildren and 50 great-grandchildren.
 Iriskhanov has lived all his life in the mountains of Dagestan, where he still eats with gusto, kneels to pray to Allah five times a day and walks to the outhouse. Having spent most of his life farming, Iriskhanov, who speaks only Avar, a local Dagestani dialect, can neither read nor write. And aside from one mild respiratory infection five years ago, Iriskhanov - who lives in a run-down hut with no running water or central heating - has never been ill. He suffers only from the cloudy vision caused by cataracts.
 &quot;I feel like I am 18. If I had my eyesight I would go right up to the top of these hills,&quot; said Iriskhanov.
 On a recent visit to Kizilyurt, Irisk hanov and his family were celebrating. In recognition of his advanced years the local authorities had granted him a two-room apartment in the center of town, certainly an improvement from the cockroach-infested hut he calls home.
 Speaking in halting sentences, he was eager to tell the story of his long life, while his apple-cheeked granddaughter Siyadat, 48, patiently translated from Avar as Iriskhanov constantly pulled on her arm.
 Iriskhanov's life began in the mountain village of Almak, where his mother laid him in a hollow next to her as she worked in the fields. He was soon put to work on the family farm himself, getting up as the sun was peeking into view. The eldest of nine children, he worked every day without holidays; as he got older he spent the evenings working too, pulling the ears off corncobs to be made into maize flour.
 Moments of rest were rare and therefore treasured. &quot;I would lie back in the field and dream, listening to the nightingale singing,&quot; he said. Sometimes the village held horse races - which he often won - followed by village dances.
 He wanted to study, but his father insisted he work in the field. &quot;It was my duty to help my parents. We had to do what they said, that was the law,&quot; said Iriskhanov. He may not complain about fulfilling his filial obligations, but he does regret not being able to read or write.
 If he had to do it all over again, he says, &quot;I would study so that I could teach other people how to live properly. We say in our language that living for ten years with education is worth centuries of living without.&quot;
 While most of his childhood was spent working, he still had time for childhood dreams. His biggest dream was to grow a moustache like that of his hero, Imam Shamil, said Iriskhanov, repeatedly tracing the curly outline of the mustache in the air with his finger. &quot;My cousin had such a moustache and so I wanted one too. I didn't have any hair, but I started to shave anyway and massaged my face with oil. Then my moustache grew, and I learned to curl it and went to a wedding where I danced. That was the best time of my life.&quot;
 It was at one of these dances that the Iriskhanov met his first wife, Aktotai. The first time he saw her she was 9. He waited three years to marry her.
 &quot;She danced very beautifully at weddings. She was tall and slim, with very long hair, &quot;said Iriskhanov. Clapping his hands at the memory of the dancing, he cannot resist showing off: &quot;I was a brilliant dancer! The girls all asked me to dance before I asked them.&quot;
 Once married, Iriskhanov wasted no time in putting his new wife to work. &quot;Hard or not, we had work to do. I didn't marry her so that she could lie around,&quot; he said. Indeed, the most difficult period of his life was not during the Revolution, World War II or the Stalinist Terror, but when his beloved first wife died.
 She left him with two baby daughters and a 7-year-old son. He had to leave the children at home while he worked in the fields all day, worrying that some harm would come to them during his absence. &quot;To feed them I needed to work, and to work I had to leave them. I made them food in the morning and left it with them, checking on them at lunch,&quot; he said.
 Indeed, that change of life was considerably harder than the one that was to follow in the 1920s, when the civil war finally reached his village. But, as Iriskhanov recalls, no blood was spilt during the Bolshevik Revolution. As far as he and his fellow cattle herders were concerned, the tsar's powers had merely been transferred to a new ruler.
 It was in the 1930s that Iriskhanov and his compatriots started noticing changes as Stalin singled out the better-off peasants, or <i>kulaks, </i>for execution.
 &quot;When collective farms started to appear we knew there had been a revolution,&quot; says Iriskhanov, recalling the early days of Stalin's purges. &quot;The poor received the rich people's cattle and the rich were sent to Siberia. This was not right, because [some of] the rich people had not earned their money by sitting on their hands. Their wealth had not fallen from the sky.&quot;
 Yet, in spite of this obvious injustice, Iriskhanov said the Russian newcomers were welcomed. &quot;They came here to civilize us,&quot; he says. &quot;They opened schools and hospitals. We respected the Russians because they taught our children.&quot;
 This respect for the Bolsheviks did not wane even after Stalin targeted half a million of Iriskhanov's neighboring Chechens and Ingush for exile in 1944. Thousands died during the journey to Kazakhstan and many more thousands perished from hunger and cold.
 But Iriskhanov believes the move was justified, following Stalin's spurious line that the Chechens had been collaborated with the Nazis - a myth still widely believed in Dagestan.
 &quot;They betrayed their homeland to Hitler,&quot; Iriskhanov says. &quot;They sent a white horse with a gold saddle to welcome him while the Dagestanis were all fighting [against him]. The Chechens formed bandit units and attacked women and children.&quot;
 Indeed, Iriskhanov is still full of praise for Stalin's dictatorial regime - his admiration for the Soviet leader may be second only to his hero, Imam Shamil, whose black and white photographs grace the walls of Iriskhanov's home.
 &quot;Stalin did the right thing by deporting the Chechens. There may have been some good ones, but there was no time to find out,&quot; he said. &quot;If Stalin were here today all the world would be paradise. He was our bravest leader. There was no crime, robbery or murder.&quot;
 And as for the ruthless gulag system created by his Soviet hero, Iriskhanov says: &quot;The camps were the only way to calm people down.&quot;
 Iriskhanov is less admiring of more recent Kremlin leaders. Indeed, after he slipped on the ice and hit his head last year, he even has trouble remembering President Vladimir Putin's name. &quot;What's the latest one called?&quot; he asks his grandchildren.
 But he does remember Mikhail Gorbachev - the man, he believes, who was fated to bring about the collapse of the Soviet Union. &quot;Everything changed according to God's will. It was predicted that a man with the form of a map on his head would mean the disintegration of things. Perhaps he wanted to do something good, but he was young and inexperienced. It is hard for me to judge.&quot;
 As for his secret of longevity, Iriskhanov's advice is simple. &quot;Don't work until you sweat. Be careful with your nerves. Keep healthy, eat good food,&quot; says Iriskhanov, who eats sheep fat as one of his favorite snacks. He also eats fresh fruit, vegetables and meat.
 Iriskhanov is, for the time being, eager to follow his own advice. Indeed, he has no immediate plans to leave this earth. &quot;I don't want to die yet,&quot; he said. &quot;I have my children and grandchildren surrounding me, and that is heavenly.&quot;

TITLE: Recreating Dostoevsky's World
AUTHOR: By Galina Stolyarova
 STAFF WRITER
TEXT: Moskatelny Pereulok is far from being a busy street, but recently it became one of most crowded places in the city. The traffic, however, was quite unusual, with pedestrians dressed in 19th-century costumes, along with horses, geese, pigs and dogs causing most of the congestion.
 Locals witnessing the process might well have assumed that a Russian classic was being filmed.
 Responsible for the traffic problems on Moskatelny Pereulok - as well as on Tuchkov Pereulok on Vasilievsky Island and Dneprovsky Pereulok - is the BBC, which is currently working on an English-language television film of Fyodor Dostoevsky's &quot;Crime and Punishment,&quot; with assistance from local company Globus Film Productions.
 Almost half of the film will take place outdoors, and is being shot in St. Petersburg until June 22. All the main roles are played by British actors, with John Simm as Raskolnikov, Lara Belmont as Sonya Marmeladova, Ian McDiarmid (famous for his role as the evil emperor in the &quot;Star Wars&quot; trilogy) as Porfiry and Nigel Terry as Svidrigailov. Most of the indoor shooting will be done in the U.K., on the Elstree sound stage.
 The film is directed by Julian Jarrold, who is responsible for a number of British mini-series adaptions of classic novels, including Charles Dickens' &quot;Great Expectations,&quot; and is scheduled to be shot over a period of nine weeks.
 &quot;He is not Napoleon&quot; - this is how Simm sums up his character Rodion Raskolnikov.
 The main feature which attracts the actor to Raskolnikov is his complexity.
 &quot;It is such a huge challenge for me as an actor to take on such a part,&quot; Simm said in an interview with The St. Petersburg Times. &quot;Raskolnikov is the closest I can ever get to Hamlet.&quot;
 For Simm - like many Russian actors - playing Raskolnikov is a dream come true. While Simm, who is perhaps best known for his role in &quot;Human Traffic,&quot; a comedy about clubbing which has been showing at Dom Kino recently, may seem an unlikely choice to play Raskolnikov, he feels a great deal of reverence for the novel, which may come from his training at a theatrical school in London where the students studied a great deal of Dostoyevsky.
 Since shooting began on June 3, Simm has been able to explore St. Petersburg for himself, and compare it to the way it is described in Dostoevsky's novel.
 He found that the St. Petersburg of 2001 has much in common with the impressions of the city he had from reading the novel. 
 &quot;I am happy that we began the filming here, so I could see St. Petersburg,&quot; he said. &quot;I went to see Raskolnikov's flat, and the pawnbroker's flat, and then of course I went to Dostoyevsky's apartment museum, which inspired me immensely.&quot;
 But while St. Petersburg has been a great source of inspiration, Simm's own view of the novel has not changed significantly. 
 &quot;The book has been with me for a very long time,&quot; he said. &quot;I have always had it in my head.&quot;
 Simm first came across &quot;Crime And Punishment&quot; about 15 years ago, while he was at drama school, and still remembers being completely overwhelmed. The thought of being able to perform the role has been with the actor ever since. 
 &quot;I was absolutely blown away by this book,&quot; he said. &quot;I read it again before we started filming, and the essence of it was the same in my mind.&quot;
 According to Valery Yermolayev, general director for Globus Film Productions, the pre-production research period for &quot;Crime And Punishment&quot; began in the middle of March. &quot;The interest in Dostoevsky in Britain, and at the BBC in particular, has always been great,&quot; Yermolayev said. 
 &quot;But local historians and directors are much more familiar with the city, and the BBC asked us for advice and cooperation. For instance, I took photos of potential areas for shooting outdoor scenes.&quot;
 Russian intervention in the British rendition of &quot;Crime And Punishment&quot; is fairly modest. Experienced set designer Vera Zelinskaya consults film producers on historical accuracy, while most actors in the crowd scenes come from local theaters.
 Lenfilm's finest trained dogs, best known for their sterling performances in the local cop show &quot;Streets of Broken Streetlights,&quot; also make a brief appearance.
 The props - umbrellas, carriages and so on - and most of the costumes come from England. Remarkably enough, the costumes which the script requires to be grubby and soiled arrived from England already dirty.
 Real soil doesn't quite give the necessary dirty effect, and when there is not enough filth on the cast's clothes, assistants are sent to the nearest drug store to get some clay, at only eight rubles per pack.
 Despite these attempts at verisimilitude, the BBC is not trying to film a meticulous scene-by-scene re-creation of the novel. 
 Although the film is visually set in the era the novel was written, the filmmakers want to create the atmosphere of a timeless world - and much of it will be shown through Raskolnikov's eyes by Danish cameraman Eigil Brild.
 Simm has his own take on the character.
 &quot;I don't think Raskolnikov is evil. I think he has a good heart, and shows kindness and friendship throughout the novel,&quot; Simm said. 
 &quot;I have to give Raskolnikov some sympathy. My job is to put him across in a way that I see him in my head. The audiences have to share my sympathy for him, and that is the greatest task that I've got.&quot;

TITLE: Alcoholism and Debts Plagued Opera Genius
AUTHOR: By Simon Patterson
PUBLISHER: Staff Writer
TEXT: This monument to Mussorgsky marks the house at 8 Shpalernaya Ulitsa where he lived for three years. Previously, he had shared an apartment with fellow composer Nikolai Rimsky-Korsakov, but this arrangement came to an end when the latter got married.
 Along with Mily Balakirev, Cesar Cui and Alexander Borodin, Mussorgsky and Rimsky-Korsakov formed the group of composers known as the <i>moguchaya kuchka</i>, or &quot;mighty handful,&quot; who aimed to revitalize Russian music through nationalism. There can be little doubt that Mussorgsky was the most original of the five, and was enormously influential, even though his output was comparatively small.
 Born in the village of Karevo in the Pskov region in 1839, Mussorgsky first came to St. Petersburg at the age of 10 to enrol in military school. He abandoned an army career in 1858 to concentrate on music, though he never had any systematic musical education.
 He began by writing songs, but soon turned to the genre of opera, with his first attempt a version of Gustave Flaubert's novel &quot;Salammbo,&quot; on which he worked from 1863 to 1866, but did not finish. His first major finished work, the opera &quot;Boris Godunov,&quot; based on the play by Alexander Pushkin, was completed in 1869, and is widely acknowledged as his masterpiece. However, the Imperial Opera rejected it, and he was forced to rewrite it, with the first performance staged in 1874.
 Mussorgsky was prone to bouts of alcoholism throughout his life, but in his last decade his drinking binges became increasingly protracted as he sank deeper into debt. Remarkably, he still found time to write the bulk of the opera &quot;Khovanshchina,&quot; which he began in 1872 at his Shpalernaya Ulitsa residence, before his early death in 1881.
 Like Boris Godunov, Khovanshchina has traditionally been performed in the revised version written by Rimsky-Korsakov, but Mussorgsky's own original version is now becoming more accepted. This is perhaps as Rimsky-Korsakov would have wanted it, as his revisions were made because he felt audiences would be puzzled by Mussorgsky's originality.

TITLE: Goosen Wins U.S. Open in 18-Hole Playoff
AUTHOR: By Doug Ferguson
 THE ASSOCIATED PRESS
TEXT: TULSA, Oklahoma - Retief Goosen can now laugh about one of the greatest gaffes in golf history. He is the U.S. Open champion.
 The soft-spoken South African redeemed himself with rock-solid play to take a lead so commanding that he could afford another three-putt on the 18th green to win the 18-hole playoff against Mark Brooks.
 But Goosen eliminated any suspense by rolling in a 6-footer for bogey that gave him an even-par 70 and a two-stroke victory at Southern Hills.
 Haunted by a three-putt from 12 feet that cost him the championship in regulation, a determined Goosen was golden to the end.
 The fictionlike finish Sunday gave way to a rout in the playoff, with two-shot swings on Nos. 9 and 10 that gave Goosen a five-stroke lead throughout much of the back nine.
 Of all things, it was his putting - where was that on the 18th hole Sunday? - that made him the U.S. Open champion.
 He took only 12 putts on his first 10 holes, and when faced with a tough chip on the slope to the 18th green, Goosen removed any risk by blasting his putter about 100 feet up the hill and onto the green, about 25 feet away.
 The par putt was well short. Still, he needed only two putts from 6 feet to win.
 Sound familiar?
 Goosen wanted to avoid a repeat of Sunday's performance. His bogey putt was pure and dropped in the heart of the cup. Brooks then made his 4-footer for par.
 &quot;I wasn't going to run it by again,&quot; Goosen said. &quot;I knew Mark was going to make 4 from where he was. I just wanted to make 5 and get out of here.&quot;
 He leaves as the U.S. Open champion that no one could have expected. This was supposed to be about Tiger Woods going for a fifth-straight major tournament.
 Instead it was Goosen, whose career almost ended 15 years ago when he was struck by lightning. He went from a journeyman to a champion over five days that felt much longer.
 &quot;I had to work hard for this one,&quot; he said. &quot;It's been a long week. It seems like a year. I was very solid all week, except yesterday afternoon. It's just amazing.&quot;
 Goosen earned $900,000, nearly as much as his best season on the European tour, and became only the second international player in the past 20 years to win the U.S. Open. The other was fellow South African and good friend Ernie Els, who won in 1994 and 1997.
 It was the second playoff in a major for Brooks.
 He won the PGA Championship five years ago when Kenny Perry butchered the 18th hole so badly in a sudden-death playoff that Perry never finished the hole.
 Brooks got another gift Sunday in a shocking finish.
 While packing his bags after a three-putt bogey from 40 feet, Brooks watched as Goosen three-putted from 12 feet for a collapse that ranks among the most spectacular the golfing world has ever seen. Adding to the circus was Stewart Cink, who missed an 18-inch bogey putt that would have put him in the playoff.
 There was no such charity on Monday.
 Brooks made too many mistakes, and Southern Hills made him pay dearly. Five times that he missed the fairway, he had no chance of reaching the green.
 His only consolation? He shouldn't have been in a playoff in the first place.
 &quot;He hit two great shots yesterday on 18 and should have won,&quot; Brooks said. &quot;It was just one of those weird days. I got punished severely in the rough today. That was the difference.&quot;
 Brooks led only once after a 5-foot birdie putt on No. 3, and was spurred on by a large gallery, some of them waving American flags. Goosen had to make great par saves on the first three holes, and then settled into a rhythm as Brooks' swing began to break down.
 He tied Brooks with a 6-foot birdie putt on No. 6, then took the lead on the next hole when Brooks hit into the right rough with an iron off the tee.
 The first U.S. Open playoff in seven years ended quickly.
 Brooks' tee shot on No. 9 stopped about a foot away from the base of an oak tree. Hearing the gallery roar for Goosen's approach to 15 feet, Brooks planted his right foot against the tree and tried to punch the ball out. His club just barely caught the top of the ball, and it dribbled into the heavy rough.
 Goosen made his birdie and Brooks two-putted for bogey, a two-stroke swing that gave Goosen command going into the back nine.
 Then came the final blow.
 Goosen hit his iron into the left rough, and Brooks tried to cut off too much of the left-to-right dogleg and was blocked by trees, forcing him to lay up short of the green. He two-putted from 20 feet for another bogey, while Goosen's 12-footer down the slope trickled into the cup for another birdie, and yet another two-stroke swing.
 &quot;Knockout!&quot; someone cried out from the gallery.
 Indeed, it was.
 All that was lacking was any drama, although that was just fine with Goosen. He had enough Sunday to last a lifetime, a blunder that will never be forgotten.
 Unlike players like Jean Van de Velde, Scott Hoch and Doug Sanders, at least Goosen got to hoist the trophy when the championship was over.
 Goosen, a four-time winner in Europe, had been considered an underachiever in South Africa because his credential lacked the kind of championships won by Els, Gary Player and Bobby Locke.
 &quot;He's just coming into his own,&quot; Els had said Sunday. &quot;Maybe this is his time.&quot;
 Els wished him well in a note written in Afrikaans on a pink piece of paper, and offered three reasons why Goosen would win the U.S. Open.
 &quot;His mind, his ability to hang in there, and he's not afraid,&quot; Els said. &quot;Those are the main things you need to win this.&quot;
 He left out one thing.
 Goosen needed a second chance, and he made the most of it.

TITLE: Talk Turns to Dynasty as Lakers Win Another Title
AUTHOR: By Chris Sheridan
 THE ASSOCIATED PRESS
TEXT: PHILADELPHIA, Pennsylvania - Leave it to Shaquille O'Neal to boil it down to another nickname.
 &quot;Somebody told me tonight that we made history,&quot; O'Neal said after the Los Angeles Lakers won their second-straight NBA title. &quot;We have the best record in winning a championship. So that's another thing I can tell my sons: The Big Historian.&quot;
 O'Neal has taken great delight in finding an endless variety of monikers beginning with the words &quot;The Big.&quot; If the Lakers keep playing as well as they did in this year's playoffs, he'll be calling himself The Big Dynastician.
 Talk quickly turned to the possibility of a dynasty-in-the-making after the Lakers beat the Philadelphia 76ers 108-96 Friday night in game 5 of the NBA Finals.
 Los Angeles finished with a record of 15-1 in the playoffs, the best postseason winning percentage in league history.
 With two perennial All-Stars in O'Neal and Kobe Bryant and a coach, Phil Jackson, who has won eight titles in 10 years, the Lakers have a foundation that could lead to many more titles over the next several seasons.
 &quot;The first championship was just to get the monkey off my back,&quot; O'Neal said. &quot;The ones I get from now on will be to try to stamp my name in history.&quot;
 O'Neal, a nine-year veteran, three-time finalist and two-time champion, is cementing his spot as one of the most dominant big men in the history of the game, along with Wilt Chamberlain, Bill Russell, Kareem Abdul-Jabbar and George Mikan.
 Jackson credited O'Neal with becoming more of a team leader this season, which was no small feat considering how fractured the team was during most of the regular season.
 The relationships between O'Neal and Bryant and Jackson and Bryant had deteriorated to the point where both players approached management and discussed the possibility of being traded.
 Bryant eventually went to former Lakers president Jerry West's house for a spaghetti dinner that turned into a long, involved discussion about basketball, relationships and winning championships. Bryant left vowing to do his part to repair the discordant dynamic that had infected the team.
 &quot;Right now, it's a thing of the past,&quot; Bryant said. &quot;Next year, when people see us talking aggressively it's not going to be a thing of the past. Someone's going to blow it out of proportion until we win another championship, and it's going to happen again. It's a cycle. But hopefully we won't have to go through what we went through this year.&quot;
 The Lakers' season took a sharp turn for the better after they lost to the New York Knicks April 1.
 They finished the season with eight-straight victories, then rolled through the Western Conference playoffs with sweeps of the Portland Trail Blazers, Sacramento Kings and San Antonio Spurs.
 The Lakers lost game 1 of the finals to the 76ers before winning the final four games - the final two decisively - to make history.
 &quot;Shaq came out with a lot of energy after the All-Star break and said, 'Now it's time to start going,&quot;' Jackson said. &quot;He kept motivating the team, he kept conditioning and reconditioning himself, taking a lot of time with free-throw shots and all the things that are the weak points of his game that he wanted to improve. He truly was a great leader.&quot;
 O'Neal's free-throw shooting improved over the latter half of the season, although he remains as likely to miss any given foul shot as he is to make it.
 Case in point: His final free throw of the postseason was an airball with 3:41 left in game 5.
 Any other player would have been mortified by such a miss in such a game, but O'Neal has learned how to take every moment in stride and enjoy himself. His reaction to the airball was a smile.
 O'Neal provided a daily dose of comic relief as the finals unfolded, calling himself &quot;quotacious&quot; and relishing his role as The Big Jokester.
 His first words upon entering the post-game interview room Friday night were: &quot;I'm drunk.&quot;
 After giving his thanks to his teammates and his family and discussing the way the Lakers soap opera unfolded through the season, he explained why he appeared stoic and emotionless when the buzzer sounded and the title was secured.
 &quot;I think I'm happy,&quot; O'Neal said. &quot;It may not seem like I'm happy on my face, but I'm also greedy.
 &quot;And I'm not done.&quot;