SOURCE: The St. Petersburg Times
DATE: Issue #702 (69), Friday, September 7, 2001
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TITLE: Ministry Firm on Dec. 1 Tax Plan
AUTHOR: By Andrey Musatov
PUBLISHER: Staff Writer
TEXT: In an effort to encourage delinquent companies to make good on their tax arrears, the St. Petersburg department of the federal Tax Ministry is adopting a carrot-and-stick approach.
According to Maxim Prokhorov, head of the debt-restructuring department of the St. Petersburg branch of the Tax Ministry, nearly 30,000 local companies have not paid taxes for one or more years since 1998, with the total owed to the federal budget in unpaid taxes and fines totalling about 7 billion rubles (about $238 million).
At the federal level, the Tax Ministry has set a national deadline of Dec. 1 for firms to submit plans for repaying their debts. Those that do not submit plans will be automatically forced into bankruptcy proceedings and shut down. The original deadline, as announced by the ministry in September 2000, was to be April 1, but a subsequent announcement in May extended the term to Dec. 1.
According to the ministry's plan, companies owing back taxes will be given six years to pay any taxes due and then another four years to pay penalties accrued during the period of nonpayment. The companies will also be required to pay their current taxes.
Fines on outstanding tax debts are calculated at the rate of 1/300 of the Central Bank prime rate per day. The rate has been 25 percent since December 2000.
But the ministry is offering to wipe out some or all of the accrued penalties if the companies submit plans on time and then stick to them. If a firm meets all payment deadlines for the first two years, half of their fine load will be erased under the ministry plan. Those doing the same for four years will have 100 percent of their fines forgiven.
Prokhorov says that the response to the original announcement was less than resounding. Only 280 St. Petersburg firms have submitted their plans so far. And his prognosis for the rest of the year isn't much more positive.
"Over the last month, eight companies have confirmed their readiness to pay these debts," he said. "It is difficult to estimate how many more companies will still do so, but 1,000 such companies would be a big response."
Though the number of businesses submitting plans may be small, Igor Gorchakov, an associate with the Baker & McKenzie law firm, says the Tax Ministry's program makes sense.
"I think that the approach is very interesting. It's a positive step," Gorchakov said. "There has been a fair bit of talk in the past about tax amnesties, and I think it would be good to apply [such a plan] to individual taxpayers as well."
"It's a good way to encourage people to start paying their taxes," he added. "The only problem is getting it in line with the Tax Code."
According to Tax Ministry statistics, taxes collected from businesses nationally in the first half of this year totalled 917.5 billion rubles ($31 billion), a figure 40 percent higher than for the same period last year.
One of the problems with getting delinquent firms to pay is that many of the 30,000 companies are already essentially de facto bankrupt and don't have the funds to pay. Many have ceased to exist altogether.
According to Alexander Utevsky, the head of the Federal Bankruptcy Administration for the Northwest Region, there are 280,000 registered firms in St. Petersburg. But he says that as many as 4.5 percent of these are already de facto bankrupt. This represents more than 12, 000 companies, which would be more than one-third of the 30,000 listed as owing back taxes. Add to this the number that are registered but have simply stopped doing business, and the number of firms that can respond to the program drops substantially.
Those companies that do not submit payment agreements "will face serious measures," according to comments made by Alexander Smirnov, the first deputy head of the Tax Ministry, at the end of August. He said that according to a ministry order these firms will be closed down beginning Dec. 31 under the authority of a newly organized commission consisting of representatives of the Tax Ministry, the federal Tax Police and the Federal Bankruptcy Administration.
"The collective efforts of officials responsible for tax collection will make companies care about their debts to the federal budget," Smirnov was quoted as saying by RosBusinessConsulting information agency.
The Tax Ministry's Web page (www.nalog.ru) even has a special pop-up window that is counting down the days to the deadline. As of Friday, the number was 84.
And the window clears up one little problem, while giving some support for the adage that it's never good to wait until the last minute. The page lists Nov. 30 as the last day to pay, unlike the Dec. 1 date given by the ministry in the announcement. Dec. 1 falls on a Saturday.
TITLE: Finding Documents Made Easy
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Losing one's documents in St. Petersburg can bring on a whole world of problems. You may have difficulty leaving the city by train or airplane. You may not be able to drive your car, pick up your mail or receive your pension. And then there is the time, expense and aggravation of trying to get your precious documents replaced.
So if you are among the few whose lost documents are turned in, you are lucky indeed.
"I found a briefcase on Sunday morning while walking through Alexandrovsky Park near Gor kov skaya metro station," said Sergei, who asked that his last name not be used, while turning in his find at the City Lost Documents Center at 16 Bolshaya Mo net naya Ulitsa on Monday.
"Last year someone broke my car window and took my bag with my precious notebook in it. I never got it back. So I couldn't just turn my back on someone else's misfortune," Sergei said.
The briefcase contained a stack of papers, a passport and a set of keys. An employee at the center carefully went through the papers and turned up a mobile-phone bill. A quick phone call, and the owner of the briefcase was found. Not all cases, however, are resolved so easily.
The City Lost Documents Center is a private commercial organization that has operated for nearly two years. According to employees, it receives about 150 lost-and-found inquiries every day.
"Over the last two years, we've helped about 1,500 people find their documents," said Ilya Bernshtein, an assistant at the center. He pointed to the filing cabinets behind him, which contain information on about 5,000 currently active cases.
People who find documents or other valuables come to the center and fill out a report. They then take the documents home with them for safekeeping, while center employees try to locate the owner of the documents. If an owner is located and is willing to pay a fee to recover the documents, that fee is split between the center and the finder. As a rule, the person who lost the document and the person who found it never meet. The center acts as the mediator.
The fee for personal documents such as domestic passports or birth certificates is 200 rubles ($7). Russian passports for travel abroad go for 300 rubles ($11). Passports of foreign citizens cost 600 rubles ($21). Car documents and driver's licenses cost 400 rubles ($14). Personal papers, notebooks and the like can be redeemed for 400 rubles ($14).
Although the center generally does not accept objects, it does accept mobile phones, which can be redeemed for 600 rubles ($21).
Bernshtein said that the center often receives calls from people looking for lost objects.
"Just today an old man called looking for his false teeth," Bernshtein said. "We get quite a lot of calls like that."
"There are certain categories of people who most often turn in documents," Bernshtein said. "Taxi drivers, people who work on trains or in the metro, scavengers and the homeless, for example."
People scavenging in trash bins often come across documents that have been stolen and discarded by pickpockets and thieves. As a rule, these people take the cash from the wallets they steal and throw the rest away in order to avoid being caught with incriminating evidence.
In addition to the City Lost Documents Center, St. Petersburg has a number of state-run lost-and-found services, called stol nakhodok. The police run one, as do the main railway stations and the airport.
An employee at the police lost-and-found, who asked not to be identified, said that her center works for free, but that very few people turn in documents.
"People rarely bring us anything," she said. She added that her office generally turns documents over immediately to the issuing authority, rather than trying to locate the owner.
As for objects, she said that they are generally stored in her office for six months and then turned over to the State Property Committee.
"We are currently storing a flute, but its time has nearly expired," she said. "I'm very sorry that no one has come to claim it."
Employees as the lost-and-found at Pulkovo 1 airport said that they deal only with lost luggage and send documents on to the police.
The search for lost documents is complicated by the fact that there is no coordination among any of these lost-and-founds. If you have lost something, you must call each one of them separately to try to locate it.
That is why the City Lost Documents Center is currently collecting a general database of all this information from all the city's lost-and-founds. They have already made contact with the city metro, the railway stations and Noch lezh ka, a center that provides services to the homeless.
Unfortunately, not all lost documents are turned in. There is a thriving black market in documents, which are often used illegally to pawn stolen goods, to register commercial organizations or to open bank accounts. Passports can be purchased illegally at local markets for about 400 rubles each.
Bernshtein said that not everyone is happy when the center calls to report that a document has been found.
"Surprisingly, sometimes when people do the right thing and return something, they are not always well-received," Bernshtein said. "Usually when people find a purse, the money is gone and only the documents remain. People say things like, 'First you stole my money and now you want me to pay for my documents.'"
The center also has a file of documents lost by foreigners, including some American, Australian, Afghan, Dutch, Danish, Finnish and other citizens.
"We may be the best hope for foreigners to find something, because we at least speak English, and language is often a problem at lost-and-founds," Bernshtein said.
Bernshtein's favorite story is the one about a man who came to the center looking for a lost document. After filling out the necessary forms, he left - leaving his passport on the table. The next day, he came back to fill out a form for his passport.
"We gave it back to him, of course," Bernshtein said with a smile.
Some local Lost-and-Founds:
Police lost-and-found: 278-3690
Moscow Railway Station: 168-4003
Pulkovo 1 airport: 123-8361
Pulkovo 2 airport: 122-9552
City Lost Documents Center: 238-7325
TITLE: U.S. Embassy Introduces Express Visas
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW - In an initiative that is sure to delight many Russians who are hoping to visit the United States but dreading the visa application process, the U.S. consular service in Moscow has introduced an express visa service.
The service, introduced Tuesday, simplifies the application process for Russians who have already been to the United States and is expected to cut lines, said Consul General James Warlick at a news conference. The scheme is limited to the Moscow consulate so far, but Warlick said he hopes it will be extended to the other U.S. consulates in Russia.
Applicants who have already visited the United States now only need to deliver their passport, proof of a previous visit and an application form to the embassy in order to receive their visa - with no need to attend an interview at the consulate.
Warlick said no one would be refused outright. An applicant will be called in for an interview only if there are queries and will be given a reason for refusal if turned down, he said.
Express visa applications can be made through tour agencies or handed in at the embassy.
Although the applicant need not go to the embassy, the application must be handed in, not posted. No new invitation is needed. Visa prices are unchanged.
"I hope that you will see an improvement in the lines," Warlick said.
If the visa is granted, the consular section will send it out by courier at no extra charge, he said.
The consulate has often been fiercely criticized for its long lines and the number of visa refusals. In a survey of the clarity of visa guidelines at 31 foreign consulates in Moscow by the Russian Association of Travel Agencies last year, the United States came in second to last, just ahead of Italy.
"The rules do not change every day," said Warlick after repeated questions about the unpredictability of the consular section's decisions on visas. "We want to give visas, not deny them."
Warlick also denied there was a quota system in which a certain number of applicants had to be turned away.
Three-quarters of all applicants are given visas, said Warlick, with more than 100,000 visas given out last year and that number expected to increase this year.
"I would like to look at other ways we could modernize," he said.
TITLE: FSB: Book's Charges On Murder Are False
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: Latvian police and the St. Petersburg office of the Federal Security Service, or FSB, have denied accusations made by former FSB lieutenant colonel Alexander Litvinenko, who wrote in a recent book that the FSB was involved in the 1998 assassination of State Duma Deputy Galina Starovoitova.
In his book "The FSB Blows Up Russia," co-written by historian Yury Fel shtin sky, who emigrated to the United States in 1978, Litvinenko claimed that the FSB had ignored evidence in the case. He charged that the gun that was used to wound Starovoitova's assistant, Ruslan Linkov, during the attack, had been confiscated in November 1999 by Latvian police when they arrested a former paratrooper named Konstantin Ni kulin in Riga.
"The search revealed that [Nikulin] was in possession of the 9-millimeter pistol that, according to ballistics experts, was used to wound Linkov," the book alleged.
But Chris Leiskalns, a Latvian police spokesperson, said that it would be impossible for the police in Riga to conduct ballistics tests on a gun without having the actual bullet used during the crime for comparison.
The Latvian police said that neither Nikulin nor his gun was involved in the assassination. "The [ballistics] tests provided by St. Petersburg [FSB] investigators proved that [Nikulin] had nothing to do with this," Leiskalns said in a telephone interview on Wednesday.
"We passed everything that was needed to St. Petersburg and received their answer. As a representative of law enforcement agencies, I can speak only about facts. And these are the facts we have," Leiskalns said.
Leiskalns said that Nikulin is currently awaiting trial "somewhere in Riga."
St. Petersburg FSB representatives said that they have no doubt that the gun used to injure Linkov was the one left at the scene, which is still in the possession of the investigators. "According to our analysis, Linkov was injured by a [Beretta] pistol left at the scene," Igor Losev, a St. Petersburg FSB spokesperson, said on Tuesday.
Starovoitova was killed on the night of Nov. 20, 1998, on the staircase of her apartment building on Kanal Griboyedova. Linkov suffered serious bullet wounds to the head during the attack. Although the St. Petersburg FSB has investigated myriad possible motives, including economic and political ones, they have not arrested any suspects in the three years since the murder.
"As for motives, none of the possibilities have yet been eliminated," Losev said.
"I have mixed feelings about all this," said Yury Vdovin, deputy head of St. Petersburg-based human-rights organization Citizens' Watch.
"On the one hand, I am strongly opposed to the FSB's activity, which is mainly illegal. But on the other hand, all this talk is just speculation without any proof," Vdovin said.
Yury Felshtinsky said in an interview this week that the book was an analytical work and that most of the information in it came from open publications. "Classified information was not a must for writing [the book]," he said.
Felshtinsky also said that he deliberately did not make clear which information came from Litvinenko, but would reveal his sources if an independent investigation were opened.
Staff writer Yevgenia Borisova also contributed to this story.
TITLE: Primakov Leaves Post in Duma
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: Former prime minister Yevgeny Primakov unexpectedly stepped down from his post as a faction leader in the State Duma earlier this week, drawing extensive speculation about the veteran politician's next move.
Announcing his resignation from the chairmanship of the Fatherland-All Russia faction on Monday, the 71-year-old Primakov did not elaborate on his long-term plans, but he declared that he would not be quitting major-league politics.
"I am going to continue my work in the faction's Political Council, and I plan to spend more time at Duma hearings," Primakov said at a news conference after his resignation was formally accepted by the faction's leadership.
Clad in his standard double-breasted suit and carrying a huge bouquet presented by fellow Fatherland members, Primakov looked very satisfied.
"I led the faction for two years," he said. "I am very proud of this time." Primakov added that he had discussed his plans to resign last week with President Vla dimir Putin and Moscow Mayor Yury Luzhkov, who heads the Fatherland movement. Primakov said both had objected to the move, but ultimately accepted his decision.
Luzhkov said Monday he "sincerely regrets" Primakov's decision, but regards it with "understanding," Interfax said.
The primary reason Primakov cited for his resignation was his unwillingness to head up Fatherland's transformation from a movement into a political party, which is expected in mid-October.
"I will not join any party," he snapped at the news conference when asked about his plans.
A number of political analysts linked Pri makov's resignation as much to his personality as to possible political ambitions.
"Primakov doesn't want to be a puppet for the Kremlin administration," said Vladimir Pribylovsky, head of the Panorama think tank.
He said Primakov's resignation from his Fatherland post would allow him to remain an independent political player, which is important for Primakov. Recalling the April deal to form a coalition between Fatherland and the Kremlin-backed Unity party, Pribylovsky suggested Primakov could have perceived that move by Luzhkov as undermining his independence.
"Luzhkov surrendered him [Primakov] to the Kremlin, signing up for the alliance with the pro-Kremlin Unity party," Pribylovsky said.
Unity and Fatherland both emerged in late 1999 as reform-minded parties of power, each with its own presidential candidate. Fatherland stood behind Primakov, while Unity was formed with the purpose of ensuring Putin's election.
Nikolai Petrov, head of the Center for Political-Geographic Research, agreed that Primakov's recent political career "was heavily dependent on a personality component."
Petrov said there are two options now for Primakov, who served as Moscow's foreign intelligence chief and its foreign minister before heading up the government from September 1998 to May 1999: either de facto retirement, or a post in the federal government.
Analysts and politicians speculated on the issue Monday, although Primakov said he had received no offers.
Vladimir Pekhtin, head of the Duma's Unity faction, was quoted by Interfax as saying that Primakov must have received an "interesting offer to suit his expertise and experience."
Some observers said that Primakov - an expert in Arab affairs who has been acting in recent months as an informal Kremlin adviser and envoy to the Middle East - may be officially appointed to boost Russia's role as a mediator in the troubled region.
"I believe Moscow must broaden its mission as mediator in the region," he said. "Current events show that the role of the United States as sole mediator is not an optimal variant."
TITLE: IN BRIEF
TEXT: WWII Wreckage Found
VLADIVOSKTOK, Far East (AP) - U.S. experts have found the remains of at least two Americans who died when their navy bomber crashed into a volcano in Russia's far eastern Kamchatka Peninsula during World War II.
Fending off fierce winds and roaming bears at the remote site, the experts sawed through the mangled mass of the plane's wreckage during a month-long expedition. They announced their findings Wednesday.
The remains will be sent to the United States for identification - a process that could take up to a year, said Ann Bunch, an anthropologist for the U.S. Army's Central Identification Laboratory in Hawaii, which led the excavations.
The PV-1 Ventura bomber took off from Attu Island in Alaska's Aleutian chain on March 25, 1944, flying west through darkness to drop bombs on the Japanese Kuril island chain. It was apparently hit by Japanese antiaircraft guns, and the crippled aircraft crashed on the southern side of Mutnovsky volcano on the sparsely populated peninsula.
A Russian geologist found the wreckage in 1962, but it wasn't until 1999 that a local historian reported it to the U.S. government. U.S. officials traveled to the site a year ago and confirmed that it was the missing plane.
A 10-person team that included forensics specialists arrived at the site on Aug. 6 to search for remains. Helped by Russians, they recovered from the wreckage and dirt a number of bone fragments apparently belonging to two individuals, Bunch said.
American Convicted
MINSK, Belarus (Reuters) - A Belarussian court convicted a U.S. citizen on drug charges on Monday and sentenced him to five years of hard labor in a prison camp.
Charles Perriello, who worked on U.S. government-funded projects to promote freedom to schoolchildren and students, had pleaded guilty to charges of possessing and smoking marijuana.
But he denied charges of selling drugs to others.
The court in Minsk found him guilty of all charges, but Judge Pyotr Ki r kovsky said he chose not to enforce the maximum sentence of 10 years' imprisonment.
"The court took account of positive statements from his place of work, his previous clean record, and the fact that he openly repented," Kirkovsky said in his judgment.
Perriello, 39, looked pale and nervous as he stood behind metal bars in the dock.
Italian Charged
MINSK, Belarus (SPT) - The Belarussian KGB has charged the Italian director of a foreign company operating in Belarus with espionage, and charged a Belarussian colleague of his with treason, officials said Wednesday.
Angelo Antonio Piu and Irina Ushak were arrested in April during a transfer of documents containing Belarussian defense data, said Fyodor Kotov, chief KGB spokesman.
The investigation has been completed and the materials sent to the Minsk City Court, and Piu has been charged with espionage and Ushak charged with treason Kotov said. He said that the trial could begin within days.
Piu headed the Anirsavida enterprise in Minsk. Kotov gave no other details of the case or about the company.
Flood Controversy
MOSCOW (SPT) - A disputed investigation into the causes of this spring's devastating flooding on the Lena River in eastern Siberia has fueled mutual recriminations between local authorities and the Emergency Situations Ministry.
A group of scientists commissioned to probe the causes of the disaster by Mikhail Nikolayev, president of the Sakha Republic, where Lensk is located, submitted its report Tuesday, accusing the Emergency Situations Ministry of exacerbating the flood damage through the poor planning of ice-bombing operations.
Ministry officials, who have repeatedly lambasted the governments of Lensk and Sakha for lagging behind on reconstruction work and preparations for winter, denied the allegations, which press reports called politically motivated.
In a telephone interview Wednesday from Sakha, Viktor Shepelyov, a member of the Yakutsk Scientific Center's investigating group, said chunks of ice floes upriver, broken to bits by the ministry's use of Su-24 bombers, piled on top of each other and blocked the river farther down.
"The bombings moved three smaller jams downstream from Lensk, and there they merged into a bigger one," Shepelyov said. "Because of the new jam, the water level climbed from 17 meters to 20, and Lensk found itself totally under water."
Shepelyov admitted that even with the water level at 17 meters, 90 percent of Lensk, which has a population of 26,000, would have been flooded.
Vladislav Polov, head of the Emergency Situations Ministry's center for monitoring and prognosis, rejected the findings of the Sakha group, and said that the severity of the damage was heightened because of inaction by local authorities.
Estonia Church Deal
TALLINN (Reuters) - Estonian Prime Minister Mart Laar said Wednesday that the country had moved a step closer to resolving a long-standing row with the Russian Orthodox Church over its registration.
Over half a decade ago, the church wanted to register as the Estonian Orthodox Church, a name rejected by authorities as too similar to that of another religion registered in the early 1990s.
A statement from Laar's office said he agreed with an offer from Russian Orthodox Patriarch Alexy II that the registration should go ahead as the Estonian Orthodox Church of the Mos cow Patriarchy.
TITLE: Kremlin Is Caught in Lukashenko's Trap
AUTHOR: By Ana Uzelac
PUBLISHER: Staff Writer
TEXT: MINSK, Belarus - If it weren't for the clean streets and the road signs in Belarussian, Minsk could easily pass for a well-off provincial town in Russia.
The books and newspapers sold in the newsstands all come in Russian. Most of the radio stations broadcast in Russian and play Russian pop songs. People mainly watch Russian television channels. When asked, they say Russian President Vladimir Putin is their favorite politician.
And it is thanks in part to Russia's policies that Belarussian President Alexan der Lukashenko has nothing to fear from Sunday's election. Despite growing allegations that he has had political opponents killed, Lukashenko is certain to trounce Vladimir Goncharik, the opposition candidate running against him.
Russia wants to keep Belarus as its main political and military ally in Europe, and as the last remaining buffer between its western border and NATO. But some observers warn that Belarus has become a trap for the Kremlin, which, to protect its stategic interests, finds itself backing an increasingly totalitarian president who has become an outcast in Europe.
Dmitry Trenin, a foreign policy expert at the Moscow-based Carnegie Endowment for International Peace, said Lukashenko is "a walking embarrassment" for his Russian partners. "It's difficult for a decent person even to sit down with him at the same table, let alone run a union," he said in a recent telephone interview.
And yet, Russian politicians do more than share a table with their Belarussian colleague. For years they have been hammering out a customs union, discussing a common currency and planning joint military forces, with the goal of making the Russia-Belarus Union a reality.
But more important, Russia is effectively keeping its tiny neighbor's comatose economy alive, said Alexander Sosnov, an economist and the deputy director of the Independent Institute for Social, Economical and Political Studies in Minsk.
"The Belarussian economy would have long ago fallen apart if it weren't for Russian help," Sosnov said in an interview. "The only things that keep it alive are cheap Russian energy and the regular debt relief Minsk gets from Moscow."
Russia, he said, is also the main market for many Belarussian products, from its relatively good-quality tractors - which have one-third of the world marktet - to Gorizont television sets, which would have trouble finding buyers anywhere else. Another source of help is the customs union, which gives Belarus access to taxes on products heading for Russia. "All in all, Russian financial help to Belarus varies between $1 billion and $2 billion a year," Sosnov said.
Russia has a good reason for keeping Belarus' economy afloat. With Poland having joined NATO and the Baltic states heading the same way, Belarus seems to be the only country to Russia's west that it can count on.
"It never plays any tricks on Russia in international forums and, on top of that, so far it has kept Russian oil and gas flowing to the west without any major problems - no stealing, as in Ukraine," Sosnov said. Belarus also houses the westernmost early-warning radar, and its military factories produce key elements for Russian strategic rockets.
But financing an ally whose economy looks very much like it did in Soviet times is becoming harder and harder, according to Sosnov. "The Russians have started counting their money. And they don't like to see it wasted."
The cracks are showing on other fronts as well. The days of boozy backslapping with Boris Yeltsin are long gone and the new Russian president has kept cordial but cold personal relations with Lukashenko and has never publicly supported him.
"The Russian leadership doesn't like him at all," said Sergei Markov, a political analyst with the pro-Kremlin Strana.ru Web site.
"Putin openly dislikes Lukashenko," said Alexander Feduta, an independent political analyst in Minsk and a former Lukashenko insider. "And Lukashenko simply dreads him. Next to Yeltsin he looked and felt like a statesman. Next to Putin he feels like a suspect being questioned by an investigator."
Officially, at least, Russia has chosen a hands-off policy in the election.
But the Belarussian opposition still accuses Moscow of helping Luka shen ko. Their anger is directed mostly at the politicians who have visited Belarus in the run-up to the election and praised the president on state-controlled television. St. Petersburg Governor Vladimir Yakovlev, Kemerovo Region Governor Aman Tuleyev, populist State Duma Deputy Vladimir Zhirinovsky and Communist leader Gennady Zyuganov have made trips to Minsk, and Moscow Mayor Yury Luzhkov is scheduled to arrive Wednesday.
Vasily Leonov, the former agriculture minister now heading Goncharik's campaign staff, said in an interview that the visiting Russian politicians were "cynically and openly messing with Belarussian politics."
But what seems to upset the opposition the most is the behavior of the Russian television channels, whose influence is deemed greater than that of local TV.
Until recently, all main Russian channels were, to one degree or another, critical of Lukashenko and at times have been taken off the air. In recent months, however, this has changed, and the only channel to attempt any criticism of Lukashenko lately is NTV. Others are either skipping Belarus altogether or airing pro-Lukashenko programs.
Michel Rivollier, deputy head of the Organization for Security and Cooperation in Europe mission in Minsk, said Russia feels that it has no alternative to Lu ka shen ko. "Russia is going to support Lu ka shenko even if it dislikes him," he said. "They need stability at the moment."
Feduta agreed, saying Lukashenko is the only politician who Moscow thinks can guarantee that Belarus will not become another former Soviet state turning its back on Russia. "Russia has only bad choices here: It's either pro-Russia Lukashenko with his erratic behavior and embarrassing heavy-handed tactics or a pro-Western opposition president."
Any candidate that Moscow could have seen as a potentially reliable ally and an alternative to Lukashenko one way or the other was taken off the ballot.
The Belarussian opposition - a medley of civic and nationalistic parties and pro-independence trade unions - understands that most of the population feels a deep connection with Russia. And although the opposition formally pledges allegiance to the Russia-Belarus Union, Moscow sees this as no more than a electoral trick, Markov said.
"They might be democratic, but they are certainly not pro-Russian," he said. "They are strongly supported by the United States and once they are in power, they might start loosening up ties with Moscow and turning their faces across the Atlantic. This, Russia cannot afford."
"Russia is trapped in Belarus," Markov said. "More than anything Mos cow would like to see a democratic and democratically elected pro-Russian president in Belarus. And that, unfortunately is not possible at the moment."
TITLE: Opening Of Missile Center Delayed
AUTHOR: By Pauline Jelinek
PUBLISHER: The Associated Press
TEXT: WASHINGTON - Already three years on the drawing board, a U.S.-Russian center aimed at avoiding accidental missile launches won't open for at least another year, a Pentagon official said Wednesday.
Plans to convert a building on the outskirts of Moscow into a joint early-warning center are hung up on Russia's insistence the United States pay taxes on the equipment it takes into the country and accept liability for the construction, said Philip Jamison, deputy director of the Defense Department office on international security.
"It essentially boils down to diplomatic issues,'' he told a seminar at the Cato Institute. Jamison said the center could be open for testing at the end of 2002 if those matters can be resolved within the next two months.
Though the issues seem small in relation to the hoped-for benefits of the center - to prevent accidental nuclear catastrophe - U.S. officials have said they don't want to set a precedent on taxes and other matters that could create problems elsewhere.
When plans for the center were announced in September 1998, then-President Bill Clinton said it was aimed at averting "nuclear war by mistake.'' Officials said that because Russia doesn't have money to maintain its warning system properly, it could mistakenly think the United States had launched a nuclear missile - and retaliate.
In 1995, Russia's military briefly mistook a scientific rocket from Norway for a U.S. intercontinental ballistic missile.
Officials say Moscow's warning satellites have seriously decayed since then, with some out of orbit and believed not functioning.
The new center is to be staffed jointly by three dozen U.S. and Russian officers. The system planned at the center would collect information from the warning systems of each country and share it, reporting such things as time and location of any missile launches, the missile type, direction it was heading and place it would hit.
The center was to open months ago. Besides the tax and liability problems, the project lost momentum late last year as Clinton was leaving office and early this year as President George W. Bush was just coming in and reviewing U.S. policy toward Moscow.
Another panelist, Geoffrey E. Forden of the Massachusetts Institute of Technology, argued the center won't work anyway because Russian officers won't have confidence in it. In times of tensions between the two countries, Forden said, Moscow will not rely on information received from the United States.
Washington should help Russia repair its own warning system instead, he said.
The United States and Russia have been holding talks focused on the Bush administration's intention to build a missile-defense system.
The third panelist, Hank Cooper of the private missile-defense research group High Frontier, suggested Washington could win Russian concessions on the missile-defense system it wants by helping Russian with its warning system.
"I wouldn't just go off and buy them a warning system,'' Cooper said. "Our demand ought to be that we do it in the context of a global defense ... in the context of building a system that we want.''
TITLE: Ivanov Holds Second Meeting With Sharon
AUTHOR: By Yoav Appel
PUBLISHER: The Associated Press
TEXT: MOSCOW - Foreign Minister Igor Ivanov met Israeli Prime Minister Ariel Sharon behind closed doors Wednesday for unscheduled talks, while President Vladimir Putin consulted by phone with Palestinian leader Yasser Arafat in a day of busy talks on the Middle East crisis.
Putin ordered the Foreign Ministry's envoy to the Middle East, Andrei Vdovin, "to leave urgently for the region to continue contacts," Russian news agencies quoted Ivanov as saying.
Ivanov's meeting with Sharon was the second since the Israeli leader's arrival in Moscow late Monday night.
Later Wednesday, Sharon met with several hundred people at a Jewish community center in Moscow. He did not divulge details of his talks with Ivanov, saying only, "We are united in our concern over the spread of Islamic terrorism."
Regarding negotiations, he said, "We are ready for painful compromises," but added: "We will never agree to any concessions to the Palestinians until terror and incitement of terror stops."
No breakthroughs have been announced in Sharon's meetings with Russian officials. Putin told him Tuesday that Moscow's traditionally strong relations with the Arab world, together with its burgeoning ties with Israel, put it in a good position to help hammer out a Middle East peace settlement.
On Wednesday, Putin spoke by telephone with Arafat and Egyptian President Hosni Mubarak, the Kremlin press service said.
With Arafat, Putin "discussed possible steps for unblocking the Palestinian-Israeli crisis," the terse Kremlin statement said.
Arafat praised Russian efforts toward settling the conflict and urged continued cooperation, it said, without elaborating.
With Mubarak, the main topic of the conversation was "international cooperation in defusing the Israeli-Palestinian crisis," the Kremlin said.
Moscow has long played second fiddle to the United States in Middle East peace making, though Russia has dispatched envoys to the region and frequently received regional leaders seeking support. Palestinian representative Mahmoud Abbas, seen as Arafat's deputy, is scheduled to arrive in Moscow on Friday.
Ivanov admitted after talks with Sharon that so far international mediation on the Middle East had produced little result, but added: "This doesn't mean we should give up our efforts. On the contrary, we must further intensify our actions."
Visiting Italian Foreign Minister Renato Ruggiero spoke with Ivanov about the Middle East situation and called for a wide array of countries to get involved in the search for a settlement.
At the packed and tightly guarded community center, Sharon praised Putin for allowing for improvements in Jewish life in Russia, but told the crowd, "You should not get used to it, because we want all of you to come over to live in Israel."
Russian media reported that Sharon called off his meetings Wednesday with State Duma Speaker Gen nady Selez nyov and Patriarch Alexy II, and some said the Israeli leader was not feeling well.
However, Sharon aide Raanan Gis sin said that meetings had been taken off the agenda before Sharon left Israel, and said the changes were due to "logistical and security reasons."
TITLE: DeltaCredit Beefs Up With Bank Purchase
AUTHOR: By Robin Munro
PUBLISHER: Staff Writer
TEXT: MOSCOW - The U.S.-Russia Investment Fund said Wednesday that it has reached an agreement to buy J.P. Morgan & Co.'s Russian subsidiary for an undisclosed sum.
The acquisition of the closed joint-stock company J.P. Morgan Bank will enable the fund's mortgage-lending arm, DeltaCredit, to raise more financing, lower mortgage rates and issue its own mortgage bonds and ruble-denominated mortgages, said James Cook, senior vice president of the fund and president of DeltaCredit, at a news conference Wednesday.
"[The bank purchase] is really the key to issue mortgage-backed bonds and securities," he said. "Russia doesn't have to depend on foreign investors to build a mortgage market."
The new entity is to be known as CB DeltaCredit and is to continue specializing in mortgage lending.
No details of the value of the purchase were revealed, but Alexei Rod zyan ko, president of J.P. Morgan Bank, said the deal involved the bank's license and some capital.
The sale is subject to regulatory approval from the Central Bank and the Anti monopoly Ministry and should be completed by the end of the year, he said, adding that initial indications were that approval would be largely a formality.
Cook said DeltaCredit had been intending to acquire the status of a commercial bank for some time and the opportunity to buy J.P. Morgan Bank had been timely. After J.P. Morgan & Co. merged with Chase Manhattan Corp. this year, the merged group, which operates in Russia as J.P. Morgan Bank International, was left with two Russian licenses when it needed only one.
The U.S.-Russia Investment Fund, which was set up with capital of $440 million from the U.S. Congress in 1995 to promote the development of a free-market economy in Russia, began offering mortgages in 1998. DeltaBank, which lends to small businesses, and DeltaLeasing, which lends to small and medium-sized firms needing finance to lease equipment, also belong to the fund.
David Jones, the fund's president, said the purchase would not end U.S. government support for DeltaCredit.
"Mortgages are very popular with the U.S. government. They have given us all the money to date and will continue to fund us," he said. "But the demand for mortgages in Russia will grow and grow very fast, and it will be completely impossible for one source, even the U.S. government, to fund it entirely."
DeltaCredit, which has been pioneering mortgage products in Russia, issues mortgages in dollars, and the average interest rate is 15 percent per annum. The program has approved $24 million in loans for about 1,000 borrowers and is processing applications for another $43 million for about 1,400 borrowers.
Richard Hainsworth, chief executive of bank-rating agency RusRating, said in Russia's bank license market, buyers are not always aware of what assets and liabilities come with a purchased bank.
"DeltaCredit will be happy because it is obtaining an entity from a known source and therefore can be fairly sure that it's not getting an entity with anything under the carpet," said Hainsworth.
Kim Iskyan, banking analyst with the Renaissance Capital brokerage, said that buying another bank's license was a sensible move and saved DeltaCredit having to go through a protracted and bureaucratic licensing process.
There was a lot of liquidity around with consumer retail spending with consumer retail growing 30 percent per year, and this was a sign that the mortgage market could also be growing, he said.
However, investing in mortgages was risky because of the sector's dependence on the economic environment. "The first thing that goes when the market turns down is the ability of consumers to make good on their bills," said Iskyan.
TITLE: FEC Chief Calls for Hike in Gas Prices
AUTHOR: By Kirill Koriukin and Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - A day after his agency was given vast new tariff-setting powers, the head of the the Federal Energy Commission (FEC) said Wednesday that he was ready to start raising energy prices - a move that will have wide-ranging ramifications for the whole economy.
FEC Chairperson Georgy Kutovoi told reporters that, to begin with, gas tariffs should be raised by 15 to 18 percent as soon as possible.
A decree signed by President Vla di mir Putin Tuesday makes the FEC a unified agency for setting tariffs on natural monopolies. The agency's brief, which already included setting tariffs for Gaz prom, Unified Energy Systems and Trans neft, was expanded to include other natural monopolies - most importantly the railways, but also sea ports, telecoms and postal services.
Analysts said Wednesday that the creation of a one-stop window for tariff setting was a long-awaited step toward resolving the problem of subsidized energy prices, which have discouraged efficiency and have been a drag on the economy.
"Without raising tariffs, first of all on gas, no reform is possible," said NIKoil analyst Andrei Ab ra mov. "As long as gas prices are artificially low, power companies have no incentive to invest in modern technologies."
Until now, each of the natural monopolies, all of which use one another's services, would lobby the government to raise its own tariffs before raising the tariffs of the other monopolies. When one natural monopoly was allowed to raise its prices, the other monopolies' operating costs immediately increased as a result, thereby sparking even more intensive lobbying. This cycle created tensions throughout various sectors of the economy and discouraged corporate strategies based on sound economic judgement.
But the creation of a unified tariff agency has raised hopes that the government will be able to synchronize tariff hikes.
Another major breakthrough that the new tariff policy could bring about is the weakening of local authorities' grip on regional energy producers.
Abramov says this is likely to be more visible in the case of UES, whose local subsidiaries are less dependent on the holding company than, for example, Gazprom's units.
"The main task of the new agency is to eliminate tariff discrepancies between different groups of customers, as there is currently little coordination among agencies when setting tariffs on services of various natural monopolies, most importantly on energy and railroad services. Tariff hikes, particularly those for railroad services and electricity, need to be better coordinated," Renaissance Capital wrote in a research note.
Some analysts, however, are taking a wait-and-see approach in deciding whether the creation of the new agency will produce any dramatic changes.
Interfax analyst Mikhail Matovnikov says he is not quite sure the recent government moves already indicate a major change. "Lobbying will now be centralized, but this does not mean that a struggle between natural monopolies won't continue," he said.
"The outrageous lags in tariff changes between branches of industry may disappear, but we have to see what methodology [the FEC] will use before we can talk of real change," he added.
TITLE: Chamber Counters Forex-Rule Rumor
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW - The State Audit Chamber on Tuesday denied reports that a presidential decree had been drafted on the mandatory exchange of foreign-currency notes for new types of checks.
Eduard Krustkaln, the budgetary watchdog's spokesperson, told Interfax on Tuesday that the Audit Chamber board had never seen such a draft.
Noviye Izvestia ran a story on its front page on Tuesday saying that a draft had been prepared for the president's signature that called for "bringing universal international freely convertible debit checks into circulation in the Russian Federation with the aim of bringing the foreign-currency savings of the public into useful turnover, expanding the sphere of non-cash settlements, eliminating the shadow turnover of foreign currency and repatriating Russian capital held abroad."
"I can state officially: No draft presidential decree on banning the circulation of foreign currency in Russia has been prepared in the depths of the Audit Chamber," Interfax quoted Krust kaln as saying.
TITLE: Industry Joins in UES Debate
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - More than 150 of the country's biggest producers and consumers of electricity packed Moscow's World Trade Center on Wednesday to hammer out a plan to create Russia's first independently regulated wholesale electricity market.
As part of the sweeping overhaul of the national power grid that President Vla dimir Putin signedin July, the government has until the end of September to come up with a way to introduce competition into the industry and to break Unified Energy Systems' distribution monopoly.
Deputy Prime Minister Viktor Khris tenko, the government representative on the project, has turned over that task to industry players themselves, giving them until Sept. 15 to put a blueprint on his desk.
Faced with the task of forging a consensus across the industrial spectrum in such a short time frame, top executives of the companies - after six hours of highly charged negotiations - decided to elect an 11-person working group to come up with a single concept and charter for a nonprofit partnership to be called the Administrator of Trade System.
The ATS, which is modeled on the country's main stock market, the Russian Trading System, will be in charge of regulating the electricity market and mediating conflicts and payment disputes.
Of the 11 members of the working group, five represent the country's largest electricity consumers, five represent the country's largest producers, and one Arkady Volsky represents the powerful Russian Union of Industrialists and Entrepreneurs, which he heads.
The consumer faction includes executives from Russian Aluminum, or RusAl, the petrochemical giant Sibur, which is controlled by Gazprom, oil- pipeline monopoly Transneft, the Mikhailovsky and Lebedinsky ore-mining complexes and the Urals Mining and Metals Co., or UGMK.
The producer faction includes UES, state-owned nuclear-power monopoly Rosenergoatom, and regional utilities Irkutskenergo, Tatenergo and Bashenergo.
All federal ministries involved with the electricity market - Economic Development and Trade, Energy, Antimonopoly, Nuclear Power and the Federal Energy Commission - are prohibited from participating directly in the working group, but have appointed officials to advise it. Deputy Economic Development and Trade Minister Andrei Sharonov said "the government doesn't have to participate directly in the creation of ATS, since it is not a direct producer or consumer of energy."
But while no top government official was allowed in the working group, a former government official was: Alexander Livshits, former deputy prime minister and finance minister. Livshits, who is now deputy CEO of RusAl, the world's second-largest aluminum producer, was elected to head the group.
Livshits called the gathering of so many companies from such a wide scope an "unusual spectacle" and a "first," but said the work ahead would not be easy.
"Everyone has their own interests and vision on how the ATS should be created and, I think, we have a lot of work to do," said Livshits. In addition to the Khristenko deadline, the plan has to be feasible enough to be up and running by next summer, he said.
Deputy Nuclear Power Minister Bulat Nigmatulin called for an emphasis on transparency mechanisms so "there won't be any price collusion."
Most participants agreed that the main task would be to guarantee ATS' independence from the natural monopolies and other industry participants by limiting their participation in the ownership and management of ATS.
The existing wholesale regulator, the Federal Wholesale Market of Electricity and Power, or FOREM, was established by presidential decree in 1996 at a time when the problem of creating an open energy market was high on the government's agenda. UES was given an 80 percent stake, with the other 20 percent going to Rosenergoatom.
Instead of developing it into an open market, as was intended, UES turned FOREM into a clearing mechanism for power transactions carried out according to a generation schedule set by UES.
"The creation of the system will eliminate the conflict of interest existing now, with UES being the parent company of FOREM," said Ilya Marshak, NIKoil analyst.
Analysts, including Marshak, were at a loss to explain why UES would go along with a plan that will weaken its influence, if not its bottom line.
UES board member Vladimir Dorofeyev said Wednesday that his company "is not going to pretend to try to claim a dominant role in ATS," and insisted that all players would be represented equally. "If we create a new open market, FOREM must delegate all its power to ATS," he said.
"In order to defuse the situation, UES will have to share," said Livshits.
TITLE: Gazprom Plan Criticized For Lack of Liberalization
AUTHOR: By Kirill Koriukin
PUBLISHER: Staff Writer
TEXT: MOSCOW - A top aide to President Vla dimir Putin on Thursday presented the government's long-awaited plan to liberalize the way Gazprom shares are traded, but market players and analysts were unimpressed, saying it left too many questions unanswered.
"The government and the presidential administration advocate a cautious approach," AP quoted the plan's architect, Dmitry Medvedev, Putin's first deputy chief of staff, as saying.
Under the plan there is no clear timetable for abolishing the most controversial restriction on trading - the so-called ring fence that limits and penalizes non-Russian shareholders.
Stock in Gazprom, Russia's largest company and taxpayer is divided into locally traded shares and American Depository Receipts, which are traded overseas at a sizeable premium.
The first stage of the reform plan is to liberalize the local market by lifting a rule restricting nominal holding of Gaz prom shares to a handful of depositories.
Furthermore, Gazprom shares will be allowed to expand to several exchanges - the most important of which is the Moscow Interbank Currency Exchange. Currently, trading is handled primarily by the Moscow Stock Exchange, which trades in little else, as well as the St. Petersburg Stock Exchange.
The second stage of the reform plan raises the amount of shares foreigners can buy from 14 percent to 20 percent. But the government is not sure which method of buying shares to adopt.
The working group set up by the governmment "simply lists four options for partial liberalization" prepared by individual state agencies and Gaz prom, the United Financial Group brokerage said in a research note Thursday. However, it "fails to agree on a commonly acceptable solution," it said.
"The government and the presidential administration advocate a cautious approach and believe that reasonable conservatism is necessary to carry out the reform in a reasonable time and with the best economic result," news agencies quoted Medvedev as saying.
"We want Gazprom's capitalization to increase, and, as it grows, we will open the door wider for foreign investors," he said.
Furthermore, analysts aren't sure whether the newly approved 20 percent quota for foreign holdings hasn't been filled already. Some shares were bought by foreigners before quotas were introduced in 1997, and few know how many.
The government puts the share of Gazprom stock still available to foreigners at 8.5 percent, with current foreign ownership at 11.5 percent.
Analysts at UFG, which trades actively in Gazprom, say the 20 percent quota will allow only 38 percent of Gazprom shareholders to convert ordinary stock into ADRs.
The replacement of former chairperson Rem Vyakirev withAlexei Miller in May had raised hopes among analysts that practices at the gas monopoly, including those relating to foreign ownership, would become freer, but the first few months of his stewardship have revealed a relatively conservative approach.
TITLE: Mosenergo Saga Stranger Yet
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - The boardroom scuffle at Mosenergo keeps getting weirder.
Officers from the Interior Ministry's economic-crime department said Thursday that they had located the head of the Moscow utility's securities department, Natalia Khokholova, who had been reported missing since Wednesday.
But Khokholova had not, as Mosenergo CEO Alexander Remezov feared, been kidnapped by Mosenergo parent company Unified Energry Systems. Rather, she had taken sick leave and was resting comfortably at a relatives' apartment, according to Alexei Kutilin, a spokesperson for the economic crime department.
Remezov, who has successfully foiled attempts by UES to replace him since mid-June, called the ministry Wednesday because, he said, he suspected that UES was limiting Khok hol ova's movements and phone conversations and was putting her under extreme pressure.
"UES [will], at any cost - even up to physically isolating the chief of the counting board - force Khokholkova to sign the minutes of the meeting in spite of all the bans from different courts," Remezov said Wednesday.
Khokholova, who is also the head of Mosenergo's counting board, is a central figure in Remezov's battle to hold on to his job. UES, which owns controlling 51 percent stake in Mosenergo, called an extraordinary shareholders meeting last Friday to elect his successor. And although Remezov and several court decisions have said that that meeting was illegal, UES claims it was legal and intends to unveilthe final results of the vote from that meeting on Monday.
But Khokholova, as head of the company's counting board, must certify the vote tally.
In a telephone interview Thursday, Remezov said he was worried because "Khokholova had not come to work for two days."
Remezov himself took the precaution of going on sick leave ahead of last Friday's meeting. Russian labor laws protect employees from being dismissed while they are either on vacation or sick leave. On Monday, he all but admitted that he was never really ill.
Khokholova could not be reached for comment Thursday, but Mosenergo spokesperson Vera Vinogradova said she would be on sick leave until Tuesday - one day after the votes of last Friday's meeting are to be tallied and certified.
"[Khokholova] gets sick from time to time," Vinogradova said.
Analysts said that while UES chief Anatoly Chubais would probably prevail in his quest to remove Remezov eventually, the conflict has taken a toll on Mosenergo's share price.
Mosenergo's stock is off as much as 30 percent from what it was before Chubais called for Remezov's removal in June, said NIKoil analyst Ilya Marshak.
Before the conflict, Mosenergo shares cost 4.2 cents. The stock hit a low of 2.9 cents at the beginning of August, and closed Thursday at 3.4 cents, Marshak said.
"What is happening around Mosenergo is negatively influencing the company's market valuation. Remezov's position is uncertain, but even more uncertain is who will replace him," said Dmitry Vinogradov, an analyst at Brunswick Warburg.
"What is really depressing is that neither Remezov nor UES, regardless of who is right, thinks about what's happening to the company's share price," he said.
TITLE: Tech-Sector Woes Spawn Computer Giant
AUTHOR: By Alan Clendenning
PUBLISHER: The Associated Press
TEXT: NEW YORK - Hewlett-Packard Co. and Compaq Computer Corp.'s $20.3 billion merger would make sense even if the computer industry hadn't taken such a beating over the last year, company executives say. But sheer survival is a big motivating factor.
Both companies have lost ground in PC sales, there is a big overlap in their product lines that will translate into consolidation and thousands of job cuts, and a combined company would still lag far behind IBM Corp. in the lucrative outsourcing and services market.
And while the merger carries risks ranging from antitrust concerns to difficulty in pulling off a massive integration, Compaq Chairperson and Chief Executive Michael Capellas said the lousy business climate gives the combination better odds of succeeding.
"It is easier to do when times are tough because you have impetus and drive to get you there," Capellas told reporters in a joint news conference with Hewlett-Packard Chairperson and Chief Executive Carly Fiorina.
The stock-swap deal would create a giant manufacturer of personal computers, computer servers, printers and high-tech services with $87 billion in revenue.
Investors and analysts, however, had their doubts about the combination.
Investors pounded the stocks of the two companies to 52-week lows Wednesday, showing that Wall Street has yet to be convinced that HP's acquisition of Compaq is a good idea.
HP shares lost 4 percent, or $0.79, to $18.21 on the New York Stock Exchange. The price had fallen 22 percent in the two days since the stock swap was announced late Monday, dropping the value of the deal from $25 billion to $19.5 billion.
Compaq's stock, down 16 percent since the deal was announced, fell $0.67 Wednesday to $10.41.
The acquisition still must be approved by regulators and shareholders of both companies.
But analysts said Wall Street's initial reaction to the deal in no way means that shareholders are likely to shoot it down.
"I would say the chance of Compaq shareholders vetoing this is low," said Andrew Neff of Bear Stearns. "They needed to do something." But he added that HP and Compaq still need to "go out and try to sell this."
Some analysts have suggested Compaq shareholders aren't getting a great deal - since HP is not paying a premium for Compaq, and their agreement does not contain a "collar" that would set a minimum price.
"We consider it unfortunate that at the end of the day Compaq shareholders effectively are getting a bigger, but less well-managed version of the original company, while at the same time having to deal with all of the execution issues around the proposed integration," Merrill Lynch analyst Steve Fortuna wrote in a research report.
Some analysts questioned whether the two companies can achieve the huge cost savings they anticipate and maintain market share, while being forced to cut overlapping products amid a slump in technology sales.
"The combined company isn't going to address a larger market than they have today," said Martin Reynolds, research fellow at Gartner Dataquest.
Fiorina and Capellas first met in 2000 and had spoken informally several times until their talks escalated into merger negotiations earlier this year.
"For me it wasn't a 'eureka' moment," Fiorina said. "It was gathering momentum."
The two executives then engaged in merger discussions so secretive they didn't bring in investment bankers to help until a business plan for the new company was in place.
For good reason.
After Fiorina tried to stitch together a deal last year to buy the consulting arm of PricewaterhouseCoopers for as much as $18 billion, negotiations fell apart after word of the talks was leaked to the press. On Tuesday, Fiorina smiled as she told analysts there were no leaks to the media about the Compaq deal.
If the HP-Compaq merger succeeds, Fiorina will lead the combined company, and Capellas will be her second-in-command. About 15,000 overlapping jobs will be eliminated, leaving the combined company with about 135,000 workers worldwide.
Both Palo Alto, California-based HP and Houston-based Compaq have been hard hit by technology-sector downturns in the past year. Each had already imposed layoffs to deal with shrinking profits.
Compaq and HP are Nos. 2 and 4 in worldwide PC sales, but their combined total sales would surpass leader Dell Computer Corp., according to Gartner Dataquest. Compaq ranks first in worldwide server sales, while HP is fourth, behind Dell and IBM.
Dell spokesperson T.R. Reid said his company, which has increased its PC market share this year through deep price cuts and direct sales to businesses and consumers, wasn't worried about facing a new competitive threat.
The new company will be called Hewlett-Packard and will keep its headquarters in Palo Alto, though it will maintain a substantial presence in Houston, where Compaq is based. The Compaq name will still be used for some products after the merger, but Fiorina declined to give details.
The companies are willing to make divestitures to see the deal through, she said, but did not elaborate.
Fiorina said she plans to visit Europe within several weeks to meet with Mario Monti, Europe's top business regulator, to ease any concerns.
The European Commission rejected General Electric Co.'s proposed $41 billion merger with Honeywell International two months ago, claiming the combination would hurt competitors. It was the first time Europe had rejected a combination of American companies that had already been approved by U.S. regulators.
The various antitrust reviews are expected to take six to nine months, and the merger is expected to close in the first half of 2002.
The new HP would be 64 percent-owned by HP shareholders and 36 percent-owned by Compaq shareholders. Capellas and four other Compaq directors would join HP's board.
HP and Compaq said the deal would save them $2.4 billion a year by 2003, but Reynolds, of Gartner Dataquest, said that won't be easy. Both companies, he said, have long product lines that customers will not want to see phased out.
Compaq lost $279 million in the most recent quarter; HP posted a net profit of $111 million in its last quarter, but that marked an 89 percent decline from the previous year.
TITLE: Mexico VW Plant Strike Ends
PUBLISHER: The Associated Press
TEXT: MEXICO CITY - An 18-day strike at Mexico's Volkswagen plant ended early Wednesday, with workers accepting a 10.2 percent salary raise.
Production at the plant in central Mexico - which builds the New Beetle model for export and is the only plant still producing the old Bug - resumed production late Wednesday.
"We are satisfied with the results because we made our best effort," said Miguel Galan, a spokesperson for the union representing the more than 12,000 workers who had been on strike since Aug. 18.
Galan said the union, which initially demanded a 21 percent salary increase, had to face the reality of a weakening economy and declining sales in accepting the offer.
Union leaders took down strike banners at the plant in central Puebla state shortly after the agreement was reached, and employees were eager to get back to work, Galan said.
More than 12,000 striking workers - about 80 percent of the plant's 16,000-member work force - initially demanded a salary increase of 21 percent.
They later lowered the request to 19 percent, while rejecting the company's 7 percent and 10.2 percent offers.
Wednesday's agreement also provides for an increase of about $25 per month, or 3.5 percent, in employees' grocery allowances, and gives a one-time payment of about $85 for their children's school supplies, an increase of 1 percent. All together, the increases total 14.7 percent.
The company has refused to comment on losses it incurred during the strike, but the government news agency Notimex reported that Volkswagen lost $510 million and failed to produce 25,500 cars, 17,000 engines and 17,000 axles.
Despite the strike's end, company officials said Volkswagen would reassess its future investments in Mexico because of union workers' hostile stance.
The company said in early May that it was planning to invest more than $1 billion over the next five years in its Mexican facility, the largest in North America.
The work stoppage is the second in two years at the factory. After a five-day strike at the site last year, workers were ordered back to work by the labor secretary.
TITLE: The Threat to Religion
AUTHOR: By Lawrence Uzzell
TEXT: THE recent expulsion of an American Protestant from the Russian province of Udmurtia - 1,100 kilometers east of Moscow - dramatized a trend that the Keston Institute had been observing for some time. Russian officials have been growing more and more likely to treat Western missionaries just as harshly as they treat indigenous Russian Protestants. If the current trend continues, eventually both foreign and indigenous Protestants will in practice have the same levels of religious freedom - ending de facto discrimination against Russia's own citizens. Unfortunately, this result will be reached not by giving more rights to Russians but by taking rights away from foreigners.
The new trend, which started becoming noticeable about two years ago, is strikingly in harmony with the cultural and geopolitical theories of a Russian academic recently elevated by President Vladimir Putin. Nikolai Trofimchuk, head of the Religious Studies Faculty at the influential Russian Academy of State Service, was appointed by Putin earlier this year to the Kremlin's Council for Co-operation with Religious Organizations. Trofimchuk's recent book "Expansiya" (Expansion) provides an erudite geopolitical rationale for state repression of Protestantism, Roman Catholicism, and other Western religious confessions.
Trofimchuk wants Russian state policy to put "spiritual security on the same plain as national security." In deterministic fashion, he sees effective missionary activity as almost always serving the political interests of the states from which the missionaries come - no matter what the missionaries' own intentions. He echoes the accusation that the activities of American Protestant missionaries in Russia's Far East are part of a Washington-inspired plan to seize control of that area for the U.S. government.
Ironically, the new anti-foreigner trend in a perverse sense reflects a victory for the rule of law. Russia's 1997 law on religion is an anti-foreign document both in letter and in spirit, manifestly intended to make life more difficult for foreign missionaries than for indigenous religious minorities. In practice, however, Keston found just the opposite during the first few years after the law was enacted. More important than the text of the law was the age-old Russian habit of welcoming foreigners while trampling on the country's own citizens. That habit was reinforced by pressure from Western government leaders, whom Moscow perceived (sometimes correctly) as being more interested in lobbying for their own citizens than in promoting equal rights for everyone in Russia.
On the other hand, the 1997 law flagrantly contradicts Russia's own constitution, which ostensibly guarantees freedom of conscience for all persons legally present on Russian soil, be they native citizens or temporary visitors from abroad. By making actual practice more consistent with the 1997 legislation but less consistent with the 1993 constitution, the current anti-foreigner trend makes the establishment of a truly law-governed state more remote than ever.
The recent expulsion of American Protestant Craig Rucin from Udmurtia provided a striking example. Rucin was summoned by Russian officials and informed that he was about to be deported as "a danger to the Russian Federation." No specific evidence was provided for this accusation in that it was allegedly a matter of "national security." In interviews with the Keston News Service, Rucin and local Protestant leader Galina Aminova cited articles in the Udmurt press that they said were inspired by the Federal Security Service, or FSB, and that called Rucin's work a front for the U.S. government. "They think my real aim is to change the hearts and minds of Russians so that they become more obedient to the United States," he told Keston.
To anyone familiar either with the evangelical Protestant subculture from which most American missionaries come or with the Beltway subculture of official Washington, such accusations will seem more than strange. Neither of these subcultures is monolithic. Thus somewhere in the U.S. State Department there probably are some officials who are vitally interested in the global spread of evangelical Protestantism. Somewhere in the evangelical subculture there undoubtedly are some people who think that Washington officialdom has too little power and should be given more.
But to suppose that lovers of the Beltway dominate the Bible Belt, or vice versa, is to be deaf and blind to the political culture of 21st-century America. In education, rhetoric, style, tacit assumptions, tribal loyalties and ultimate commitments, U.S. Protestant missionaries in Russia typically have about as much in common with U.S. diplomats as Russian Old Believers have with Kremlin officials. One value that many in both of these American subcultures do share is an instinctive belief in religious freedom, which of course is more than enough to earn them the FSB's hatred.
Russia is also less monolithic than the FSB would like. In the Internet forum of the daily Nezavisimaya Gazeta, one Russian reader aptly complained that Putin's new appointee Trofimchuk "is not concerned that foreign missionaries distort the truth about God or lead people astray from the path to salvation, but with how their activity is not in the interests of our state." This reader argued that "we must hold to the divinely revealed truth independently of whether or not the state approves it." That, of course, is the essence of the issue: whether Russians should place Caesar above God. An increasingly powerful faction within Putin's Kremlin says, "Yes, they should."
Lawrence Uzzell is director of the Keston Institute, a charity that researches religious freedom (www.keston.org). He contributed this comment to The St. Petersburg Times.
TITLE: Some Things Change and Others Don't
TEXT: SINCE this is my last-but-one column for The St. Petersburg Times - "End of an Error" has probably been one of the most drawn-out farewells in history, but rest assured that it's coming to an end - I'm going to indulge in a quick trip down memory lane, back to the 300th issue of this paper, the first one in which I made an appearance, offering a review of "A Play Without a Name" at the Maly Drama Theater.
That was almost four years ago. The top stories of the day included former navy captain Alexander Nikitin being accused of spying for the fifth time by Federal Security Service investigators. As faithful readers will know (this newspaper pursued that story relentlessly), Nikitin went on practically to double that figure before getting himself acquitted.
The issue also noted that a man running for a local council seat in Kolpino was on the wrong end of what was a fairly typical political happening at the time - being beaten with a crowbar. (This was one of those stories containing information we would reproduce almost verbatim for several years, involving the 111 municipal councils that always have to rehold elections because nobody has the faintest idea who's running, when to vote or even what they are voting for.)
Sheraton had just been signed up to manage the Nevskij Palace Hotel. Grigory Yavlinsky was being touted as a frontrunner for the 2000 presidential elections. Svyazinvest and Norilsk Nickel had been "auctioned" off the previous month. Charles Digges had almost been taken in by the Spicey Girls, billed in minute print on the posters as "the ultimate Spice Girls tribute band" - not the last time this kind of scam was tried (remember the Prodigy episode?). And there was a clutch of impressively prescient opinion pieces, one predicting that Grigory Yavlinksy would fail in his presidential bid for more or less the reasons that he did, and another saying that Governor Vladimir Yakovlev's road-repair policies would overcome his weak-kneed public image and secure him re-election in three years' time.
Go back another month, and August 1997 was - as August tends to be - momentous. Vice Governor Mikhail Manevich was assassinated by a sniper who fired eight bullets from an AK-47 into his car. The Church of the Savior on the Spilled Blood was reopened after 27 years of restoration. St. Petersburg Police Chief Anatoly Ponidelko said that he had given Yakovlev a list of city officials with ties to the Tambovskaya organized-crime ring. And a group of NTV reporters was released from captivity in Chechnya.
One financial meltdown and a new president later - plus a host of incidents that have left their mark on the public psyche - and it's amazing how the city's spirit has changed. It's also amazing how sentimental you can get for the good ol' days of bloodshed, political and economic crisis and the intrigue of yesteryear (corruption just ain't what it used to be). Which is probably about the most cynical thing a journalist could say.
The problem with nostalgia is that it can lead to spouting all sorts of truisms of the aren't-we-all-older-and-wiser variety. So I'll resist the temptation, and stick to the ineffably smug but neutral statement, "I was there." For most of it, at least.
Barnaby Thompson is a former editor of The St. Petersburg Times.
TITLE: This Deal on Taxes Looks Pretty Good
TEXT: NOBODY likes talking about taxes. Nobody likes paying them. Everybody does their best to minimize their tax bill and, the unfortunate truth is, many are willing to stoop to illegal means.
It is certainly no secret that many businesses and individuals have taken advantage of the confusion of Russia's transition since 1991 to opt out of their obligation to pay taxes. Of course, there have been many reasons and justifications for this. Why, people have reasonably argued, should we pay taxes when such vast sums are frittered away through government malfeasance, cronyism and incompetence? Why, they say, should we pay taxes when the state has thrown away billions destroying, rebuilding and again destroying Chechnya? Why, they say, should we pay taxes when the state cannot provide even basic services like police protection and fair courts?
It is an intriguing paradox. On the one hand, the state clearly is under-collecting taxes, and this is part - but only part - of the reason why it comes up short on so many of its obligations. On the other hand, business is already paying too much in terms of taxes, fees and the inevitable "transaction costs," a polite term that covers bribes, protection money and other payments - essentially for services that should normally be provided by the tax-funded state.
Now that - as we fervently want to believe - a period of stabilization has emerged, the government and the business community are faced with the problem of bringing these tax debtors back into the fold without undermining the economy or jailing everyone who has shown any initiative over the last decade.
Obviously, any effort to increase present tax collection and to go after arrears should be accompanied by credible efforts to eliminate and punish state corruption at all levels and to break the grip that organized crime wields over business and politics. At the federal level, at least, the government has made some moves along these lines, although they are insufficient and far from wholehearted. We can't help but think that business would be responding more energetically to the Tax Ministry's collection plan - described on Page 1 - if it had seen more earnest efforts in these directions.
That having been said, however, the Tax Ministry's plan seems to us fair and reasonable. Six years to pay off back taxes with the promise of complete forgiveness on all penalties is nothing less than a huge and well-targeted subsidy to business, especially small business. Short of total amnesty for all debts, it is hard to imagine a program that would be more attractive to business.
The effective deadline for signing up is Nov. 30 - 84 days from today. Businesspeople should grab this chance while they can.
TITLE: Is It Terrorism or Provocation?
TEXT: IN Russia, terrorism does not conform to the norms that exist around the world. Here, acts of terrorism occur as and when it suits the interests of the powers-that-be. The blowing up of apartment blocks in 1999 marked the start of Vladimir Putin's election campaign. The bus hijacking in Mineralny Vody by a Chechen occurred on exactly the same day that refugees in Ingushetia were organizing a peace march. The explosion in a marketplace in Astrakhan happened just as anti-war sentiments were strengthening in society, moreover in a city where such sentiments are pretty strong.
Until now, Chechens have been blamed for all the explosions. In Astrakhan, the police didn't do that. The entire city knew that local gangs were in a fierce battle for control over the market. This did not, however, deter the FSB from immediately sniffing out the "Chechen trail." In the rest of the world, terrorist organizations openly acknowledge responsibility for their actions. In Russia, not a single well-known Chechen organization has taken responsibility for these terrorist acts. On the contrary, Chechen leaders have condemned them. Of course, the rebels' words should be given no greater weight than those of Kremlin propagandists. However, the question still remains: Why do terrorists in Northern Ireland, Spain, or the Palestinian Authority openly acknowledge their involvement, while in Russia they do not?
For terrorists, the only way of accounting before their sponsors is to take responsibility for an explosion or killing. How else can it be done? By writing detailed reports? By notifying the relevant people beforehand where the explosion will take place? Such information will be intercepted sooner or later, to the considerable detriment of the sponsors as well as the terrorists. Naturally enough, this leads people to suspect that we are not dealing with terrorism here, but with a special-services operation. The special services never publicly acknowledge their responsibility: They have their own ways of accounting for their actions.
By organizing explosions, terrorists not only raise their "standing" among political investors - more importantly, support for the organization rises among the part of the population from which terrorist groups recruit most of their activists. It is for exactly this reason that in the Palestinian Authority, the Hamas and Islamic Jihad argue over the "glory" accorded to the organizers of explosions in Jerusalem. In Northern Ireland, many approve of terror as an entirely legitimate means of fighting. Such sentiments are not without foundation. Hatred and the desire for revenge have been cultivated by long years of humiliation and exploitation. To give the Chechens their due, even after everything that has happened in the last few years, terrorist slogans have not taken root among the masses. If the explosions do not evoke mass support from the rebels' social base and don't make them any more popular, these actions are worse than useless. They are counterproductive. So, who gains from it all?
The simple answer is that these explosions benefit those - on both sides, of course - who wish to prolong the war. However, there are more of these people in Moscow than in Chechnya, since the end of the war will spell political catastrophe for those who initiated it. At least, for the so-called hard liners.
This means that the war must continue at all costs. The Astrakhan explosion coincided strikingly with the military failures at Vedeno. The television silence only served to confirm that things are not going well. And then there appeared the broadcasts about the Astrakhan explosion, as if by way of response.
However, it is no longer 1999. The trial in Pyatigorsk took place immediately after the Astrakhan explosion, and for the first time it was decided to put a terrorism case before a jury. The result was that the case just fell apart, and the jury pronounced the accused not guilty. In putting this case to a jury trial, the authorities were convinced that the people supported the war, that they were against "blacks," and that therefore any accusations would find support, especially after the latest terrorist act.
Jury trials provide a kind of snapshot of public opinion. It turned out that our leaders seriously misjudged the public mood in this instance. The conclusion regarding these provocations is self-evident. Provocations come in different forms. It is possible to organize a training exercise by placing bags of "sugar" under an apartment building in Ryazan and to get caught red-handed. Alternatively, any fight between criminal gangs can be declared the actions of Chechen terrorists. As long as investigations continue to be conducted along the "Chechen trail," any criminal group of non-Caucasian origins can sleep peacefully at night.
Boris Kagarlitsky is a Moscow-based sociologist.
TITLE: In Post-Soviet Business, Loyalty Is Always First
TEXT: WE are tempted to laugh at the increasingly farcical battle between Anatoly Chubais and Alexander Remezov for control of Moscow's heat and power supplies.
But there is too much at stake in the struggle for Mosenergo, which entered a critical phase Friday, exploding into the kind of high political drama that provides valuable insight into the complexity and ambiguity of post-Soviet Russia.
As the largest and most important subsidiary of Chubais-run Unified Energy Systems, Mosenergo, with annual revenues of more than a billion dollars and 16 million dedicated customers, is a potentially explosive political weapon.
This helps explain why some of the most powerful men in Russia - Chubais, his old foe and sparring partner Moscow Mayor Yury Luzh kov and Kremlin fixer and UES board chairperson Alexander Voloshin - all want a piece of the action.
Given the magnitude of the drama, the rather unfounded allegations that ignited the whole conflict are risible. An internal UES audit of Mosenergo uncovered what it called "missing profits" to the tune of $9 million - although two subsequent external audits found no such irregularities. Indeed, Chubais' allegations are more than a little rich, given his track record as deputy prime minister in 1995.
That Remezov is widely considered to be a highly competent and effective manager doesn't seem to count for much at UES. In fact, even UES officials privately acknowledge that mismanagement is merely a pretext for removing a talented manager, who from time to time has displayed excessive independence (bordering on insubordination).
Legally, however, UES can install whomever it pleases to run a company of which it owns more than 50 percent. But this has not deterred Luzhkov, Remezov's most powerful ally in the conflict, from fighting tooth and nail to keep him in place. That Luzhkov, whose political capital has been severely depleted since being "destroyed" in the 1999 parliamentary elections, has chosen to fight this battle to the end suggests what's at stake.
Moscow's power switch wields enormous clout: We've already seen one energy scandal bring down a regional leader. But the long and the short of it is that this is about control, and control is achieved by placing loyal lieutenants in all key positions.
President Vladimir Putin, who has given mixed signals on the issue, understands this game perfectly well. His own personnel appointments to key positions in government and industry (such as Gazprom) show one guiding principle: Absolute loyalty comes before all else, including competence and ability to do the job.
This comment originally appeared as an editorial in The Moscow Times on Sept. 4.
TITLE: the best accordian player in punk
AUTHOR: by Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Figa, whose best-known band Nordfolks split up early last year, recently resumed his erratic punk career. He will release Nordfolks' self-produced full-length concert video later this month and will celebrate his 28th birthday with an all-night concert at Front that will highlight his various projects.
Figa, whose real name is Andrei Kondratiev, prefers to go by his nickname. "I left my name back at school," he says. "[No one knows] who Kondratiev is, but when you say 'Figa,' everybody knows."
Figa's background includes studying piano at a music school for five years. "Honestly, I hardly even studied, but I graduated and have a diploma," he says.
Figa got seriously involved in music while in high school, where he formed his first band in 1988 under the influence of thrash metal bands.
"I started to dig music for real when thrash arrived - Metallica, Megadeth," says Figa. "I was 15 or so then."
His first school band was called Infection Scout and played hard rock, while Figa wore a denim jacket with a Metallica logo on the back .
But rock and roll history really started for Figa with the Sex Pistols. "We didn't study or work anywhere. We just had fun."
Figa's first real punk band, the Hooligans, made its debut at a concert to celebrate Elvis Presley's birthday in January 1992. Promoted by the city's best-known Beatles fan, Kolya Vasin, as part of a series of rock idols' birthday concerts, the show was ruined by Figa's band, whose style was not unlike that of the Pistols.
"'Idiots like this always ruin everything,'" Figa quotes Vasin as saying from the stage after the Hooligans turned over the piano and knocked over both the Christmas tree and the King of Rock's massive portrait in the course of their performance.
"There was a criminal lawsuit against us. There was a fight with a razor blade. Somebody got his jacket stolen. It was fun," says Figa. "But at TaMtAm we were allowed to do anything, Seva [Gakkel, founder of the TaMtAm club] was curious about punk then."
In Figa's opinion, the Hooligans were incomparable on the local music scene. "It was real punk. Nobody but us ever played real punk [in Russia] in the Sex Pistols style with such drive," says Figa.
Thoughout the 1980s, punks gathered around the late Andrei "Svinya" Panov, described as "Russian Punk's Godfather," but the Hooligans did not belong to that circle.
"We played with him at one concert in 1997, but we had a conflict at TaMtAm. We caught him, had a fight - I didn't really know him well," says Figa.
"We liked everything in life," says Figa. "We were young, we were a new wave of revolutionaries, and 1992 was the breakthrough year - new trends and crazy ideas appeared."
In the early 1990s, several elements combined to ignite St. Petersburg's alternative-rock explosion, according to Figa.
The openness of the TaMtAm Club was one of them. "They let everybody on stage who could play even a little. You only had to have some idea," he says. "You could experiment there. Now you can't come to a club with unknown musicians and just play an experiment. You have to have a name, status, authority. This is all that audiences want."
Those were also the years when the drug revolution arrived in Russia. "Everybody had started to smoke, shoot drugs, eat mushrooms. It all got mass distribution," says Figa. "Stimulants are important for music. Also we were young then and were interested in experimenting."
"You live on the edge constantly, in various states. You want to live in a different state from how people normally do," says Figa, some of whose band members and friends have died of drug-related causes.
Bands split and reappeared under different names and with changed lineups. The Hooligans became Bar ra basy to be followed by Mra ko be sy. At one point, every member had a project of his own.
The folk-punk Nordfolks stemmed from a period of listening to The Pogues.
"We were simply drinking and listening to The Pogues. It was a great time," says Figa. "Then we read some Finnish and Scandinavian epics while we were on acid and came up with the idea of Nordfolks."
Nordfolks, which combines punk with Scandinavian and Irish folk, used to perform on a regular basis at the Irish pub Shamrock, back in the days when the pub was still under Irish management.
"It is real St. Petersburg-style folk-punk with no frills," says Figa, who admits that Nordfolks are disliked by their local Irish-tinged counterparts, who are mostly hippies.
"Actually, all folk is the same: You just have to drink while you're listening to it," says Figa. "Sometimes I invite friends to a concert. They say, 'No, we have no money, and listening to you when sober is torture.'"
"They just don't have what we had," he says. "They have a different lifestyle, a different language, full of words from America and MTV. MTV spoils youngsters: I feel that everybody watches it."
"In our day, music wasn't forced on you in this way. Under the Communists, people sought it out because they wanted to hear it, not because it was available. Now you are welcome. Information is given, but only of a definite character, and there's no real choice. People used to choose music themselves."
"We lived more honestly. We used to riot like hell. We were the perestroika generation. Everything was broken then. Reality suddenly changed, and we were just making a reality of our own that was conditioned by nobody."
Nordfolks will be in concert at Manhattan on Friday. Figa's birthday party with Nordfolks, Skazy Lesa and more will be at Front on Sunday.
TITLE: belgian brings bells back
AUTHOR: by Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The term malinovy zvon, which Russians use to describe beautiful bell ringing, is unlikely to evoke any associations with a small town in Flanders. But it should. Malin is the French name for the ancient town of Mechelen, home to musician Jo Haazen, whom St. Petersburgers can thank for having the only functioning carillon in Russia.
The new 51-bell carillon will ring for the public for the first time on Sept. 16 at the cathedral of the Peter and Paul Fortress, where it has already been installed. The first performance will be a revival of the centuries-old musical traditions of the cathedral, which was once famous for its carillon concerts.
In a carillon, bells are played through a keyboard and pedals, with musicians using both their hands and feet. The new carillon at the cathedral covers four octaves.
The cathedral's first carillon was purchased by Peter the Great on a trip to the Netherlands, but was destroyed by fire in 1756. Peter's daughter Empress Yelizaveta Petrovna ordered a replacement, also from the Netherlands, but most of the bells from this set have long since fallen into disrepair. Experts believe that there are no other working carillons in Russia.
Haazen, who is the director of the Royal Carillon School in Mechelen and cultural ambassador of Flanders, said he fell in love with Russia and the Russians, and the idea of bringing the carillon back to the top of the cathedral completely engrossed him.
"When Jo Haazen first came up with this idea six years ago, it seemed unthinkable to many people here. It looked like a beautiful but rather vague project," says Boris Arakcheyev, director of the Museum of the History of St. Petersburg, which includes the Peter and Paul Fortress. "But his enthusiam has inspired all of Belgium to donate money for this carillon - from Queen Fabiola to ordinary people."
"This project occupied my mind literally day and night," said Haazen. "But this is really the kind of thing that you do only once in your life. I am happy to see the dream is coming true."
The dream cost nearly $350,000. The money came from 353 sponsors from Belgium, the Netherlands, England, Germany and other countries. According to Haazen, there were four Russian donors.
"What makes me particularly happy is that so many people responded to my invitation to donate money for the carillon," Haazen added. "There were cultural foundations, companies and even very poor people who made their contributions. Some donations were just the equivalent of several dollars. All in all, it was a very democratic project."
Though some people associate carillons with Catholicism, Haazen insists that they have nothing to do with religion. "When we brought the first carillon to Japan in 1986, some members of the Buddhist community opposed the idea, saying we were trying to bring in Catholicism," Haazen said. "But the truth is that we perform all kinds of music: classical, folk and religious."
During the first public concert, Haazen himself will perform pieces of various styles, including excerpts from his favorite opera, Alexander Borodin's "Prince Igor." Joining Haazen will be the Russian students of his Carillon School in Mechelen. One of them, Marina Nevskaya, who graduates next year, will become the first professionally trained carilloneur in Russia.
"I realize that there have to be musicians to play the carillon," Haazen said. "I will continue collecting donations so I can help bring musicians to St. Petersburg."
In addition to the new carillon, the cathedral at the Peter and Paul Fortress boasts a set of 22 Russian bells that ring during major Orthodox holidays or other special events. Arakcheyev has promised to organize more public concerts using both the Russian bells and the carillon.
"We understand that we shouldn't become overly commercialized, and of course, all public concerts will be free of charge," he said.
"It was a pity that Russia didn't have a single carillon for such a long time," Haazen said. "There are 120 of them in Belgium. France has 80 and Germany has 50. I hope that by bringing the carillon to St. Petersburg, we can restore the cultural links between Russia and Flanders."
TITLE: chernov's choice
TEXT: The Moscow street-musicians' festival, which is said to have discovered some new talent, arrives in St. Petersburg on Sunday. Called Sounds of the City, the festival is trying to attract audiences by billing Leningrad, Markscheider Kunst and Selyodka as "guests" on its promotional posters. In fact, it is a competition of lesser-known bands. The contestants, who must have no official releases and must have been together as an act for no more than two years, include Snezhki, Nameless, Speed Marie, Ansam-blaminor, De Gamma and Johnny-Irlandets, among others. The jury includes writer/promoter Artyom Troitsky and the co-owner of the Moscow club Chinese Pilot Dzhao Da, Alexei Paperny, as well as Lenin grad's Sergei Shnurov and Kunst's Sergei Yefremenko.
The winner will get the chance to have a track recorded at Dobrolyot and a video shot at the Khomyak i Suslik studio.
Since the event is sponsored by a cigarette brand, there is an age limit: Only those over 18 will be admitted. It's free, but you should have either a flyer or a certain brand of cigarettes.
Sounds of the City will take place at the unlikely location of the Warsaw Station at 5 p.m. on Sunday.
Meanwhile, the organizers of another street musicians' festival complained that "Sounds of the City" had stolen their idea. The Singing Nevsky festival will take place for the eighth year in a row on four stages along Nevsky Prospect on Sept. 16.
Due to a technical error, Moscow concert dates were incorrect in last week's column. The Residents will perform at 16 Tons on Sept. 8, while Coil will play Tochka on Sept. 15. Robert Plant, though, is not coming at all, at least not in September as previously announced. Kremlin Enterprises, the promoters for Plant's Russian tour, which was originally set for July, refer to "changes in his schedule" and promise to provide additional information "in a couple of weeks."
Other shows ahead include Marc Almond, who will play St. Petersburg again in October. Almond, whose local concert was confirmed this week, will play at the Music Hall on Oct. 6, the day after his Moscow show. Tickets will cost from 300 to 1,000 rubles.
According to Almond's official Web site, The Theatre of Marc Almond, the singer's Russian visit will include recording "an 'Absinthe'-style album of traditional and modern Russian torch songs with Russian musicians."
"The album is mainly aimed as something special for the Russian market, as Marc has gained a lot of fans in Russia since his first visit nearly 10 years ago. The album will be available through limited channels elsewhere, especially The Theatre. Marc will sing in English and Russian, and it is hoped the album will feature a 40-member choir of Russian sailors as well as duets with some of Russia's more eccentric singers."
The big autumn concerts by foreign acts start with Tom Jones, who plays the Ice Palace this Thursday.
Jones, who made his comeback with the million-selling "Reload," an album of collaborations with currently popular acts, was officially permitted under the Communists, mostly because of his manly voice, suits and short hair.
This led to an unlikely twist in the perception of rock-and-roll history in Russia. Many heard Jones' big-voice cover of "Yesterday" before they could get access to the original. Tickets cost from 350 (standing-room tickets) to1,200 rubles.
- by Sergey Chernov
TITLE: mediocre meals at circus
AUTHOR: by Simon Patterson
PUBLISHER: Staff Writer
TEXT: I dread it when visiting friends ask me to recommend a good Russian restaurant. The problem is that such restaurants are hard to find in this city, strange as that may sound, and I usually send them somewhere Georgian instead, hoping that for the casual visitor, "ex-Soviet" and "Russian" are essentially the same concept.
Thus it was a pleasant surprise to see a new restaurant on Malaya Sa dovaya Ulitsa advertising itself as "Rus sian," and with prices that didn't seem too exorbitant. The interior of Tsir kus, as it is called, is also promising. Essentially a small basement, the walls are painted with Chagallesque acrobats in subtle shades of green and orange, while a large samovar and tea-related equipment dominate one end of the room.
We set about perusing the bilingual menu, which seemed to be reasonably priced. As starters are an essential feature of any Russian meal (at restaurants at least) we ordered the salo, or lard, (29 rubles) a traditional dish that you hardly ever see on menus anywhere, and the solenya (91 rubles), an assortment of marinated vegetables. The salo was described as being particularly good with vodka, but as there was no vodka present on the menu, we decided against it, opting for beer (41 rubles) instead. It was described simply as "Russian beer," with no indication of its make or origin. It seemed to have a lot in common with the beer you used to be able to buy on tap from kiosks: warm, watery and foul-tasting.
The zakuski were also not particularly inspiring. The four slim pieces of salo disappeared immediately, with or without the vodka, while the solenya selection was miserably small, a few slices of cucumber, a few cloves of marinated garlic and a few pieces of tomato.
We quickly moved on to the soups (at least the service was very prompt, although there was only one other couple in the restaurant). I ordered the shchi (95 rubles), while my dining companion took the cold borshch (98 rubles). Nothing special here, and nothing to distinguish these soups from their cheaper relations that can be found in bistros throughout the land. In general, if you are going to charge 100 rubles for a soup, it's worth making some more effort to justify the price.
For our mains, I choose the maso v goroshke (113 rubles), which was indeed a meat-and-potato stew in a pot, covered by a fresh bread crust. This was the highlight of the meal, but again, not a particularly imaginative dish. My dining companion's kotleta derevanskaya (129 rubles) with a side order of potatoes with garlic (38 rubles) was also pronounced perfectly tasty, but unexceptional.
We declined our waiter's offer of coffee or dessert, not seeing any reason to stay any longer. The food at Tsirkus is mediocrity incarnate, and there are hundreds of inexpensive cafes around the city that can provide the same fare for a third of the price. In short, don't go there, and send your friends somewhere else.
Tsirkus, 4 Malaya Sadovaya Ulitsa, 310-1077. Dinner for two, 675 rubles ($23). Open daily, 11 a.m. to 1 a.m. Credit cards accepted.
TITLE: russia's answer to oprah
AUTHOR: by Yulia Savelyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: For the past several years, millions of Russians have woken up with Andrei Malakhov, host of the "Dobroye Utro" (Good Morning) talk show on ORT, which airs from 6 a.m. to 9 a.m. Many have also spent their afternoons with Malakhov, who hosts a second talk show, "Dobry Den" (Good Day), each Friday on ORT. As of July 23 Malakhov has had a new talk show, called "Bolshaya Stirka" (The Big Laundering), which airs (at least for now) each weekday from 4 p.m. to 5 p.m. According to its host, the new show will be Russia's answer to Oprah Winfrey and Jerry Springer. Malakhov recently stepped off the set to talk with The St. Petersburg Times about his career, his new project, and the highlights of his years on "Dobroye Utro" and "Dobry Den."
Q:How did you manage not only to break into television, but to become the host of two of the most popular daytime shows around?
A:I followed a well-worn path. I graduated from Moscow State University with a degree in broadcast journalism, then went to study in the United States. While there, I interned at "The Today Show" on NBC, one of the "big three" networks. Back in Russia, when I was already working at ORT, "W" magazine ran a piece about Russian broadcasters who got their start abroad. I was described as "the Russian answer to Matt Lauer," co-anchor of "The Today Show."
I had worked as a news editor on "Dobroye Utro" before I went to the United States, and I resumed my post upon my return. My big break came one summer when most of the anchors were on vacation and I stepped in as a substitute. Later, ORT made me the principal host of the show.
I loved the 6:00-to-9:00 slot, and it's surprisingly popular with viewers as well. I remember that Tatyana Mik hal ko va - filmmaker Nikita Mikhalkov's wife - refused to come on the show for a long time. She thought no one would be watching. The day after she finally consented to appear on the show she called me to say how astonished she was at the response. One of her friends had seen her on a digest of Russian TV in Europe; another watched the show in an airport waiting lounge; a third watched while she exercised in a fitness center; and another turned it on when her baby woke up.
Q:You left "Dobroye Utro" in June. Do you also plan to give up "Dobry Den?"
A:I hope that I won't have to sever my ties with "Dobry Den." As long as the producers are willing to have me come on as a guest host, I'll be happy to do so.
Q:Tell us a little about the new show.
A:At present it will be the only live daily talkshow. Our idea is that housewives (and househusbands) can start a load of laundry, then sit down, relax and watch our show. Hence the name "Bolshaya Stirka." This time slot, from 4 p.m. to 5 p.m., was filled with Brazilian soap operas, so the new show will have to satisfy viewers' interest in the intrigue and drama of other people's lives.
The themes of the shows will vary, but they will always contain some drama, some conflict. I have watched a lot of foreign talk shows: Oprah Winfrey, David Letterman and Jerry Springer in the United States and loads of European equivalents. Our show will take a little something from each of them.
Q:As you know, the Jerry Springer show often ends in violent confrontations on stage. Is ORT ready for this kind of live television?
A:In preliminary discussions about the show, Konstantin Ernst, ORT's general producer, said that "Bolshaya Stirka" would let people see that the network isn't entirely conservative. We don't know exactly how far things will go on the set. But we took a page from Jerry Springer's book and hired guards to restore order, just in case.
Q:What guests do you find the most interesting?
A:I find celebrities most interesting, regardless of whether they are particularly nice guests. For instance, when everyone was talking about Anna Kournikova's engagement to Pavel Bure, then about their split, I invited Bure's mother to the studio, and she brought out a copy of the ring. It was great.
Q:What was your worst show in the past six years?
A:It was on "Dobry Den." The show was called "People and Animals," and our topic was the secret KGB experiments at the Sukhumi, Abkhazia, nature reserve. According to declassified documents, the KGB tried - unsuccessfully - to fertilize human eggs with monkey sperm. Our guests that day included science-fiction writers, actors, an artist (who painted me as a centaur), a sexologist and others.
The discussion had been planned in advance for the most part. But at one point, the sexologist asked why we were dwelling on the past, and brought up recent statistics showing that every 40th single woman in Russia has a sexual encounter with a dog during menopause. I was floored.
Then the director of the Moscow Zoo chimed in to say that the statistics could be true! Our editor was bawling into his microphone, and I had no choice but to cut to advertisements. But it didn't end there. After the break a new guest came on with her favorite chimp and announced that it was not just a pet, but the love of her life. Then she kissed the chimp. This would have been fine, of course, if not for the preceding discussion, which she hadn't heard. As it was, everyone in the studio burst out laughing - everyone but me, that is. I was reprimanded and threatened with a salary cut.
Q:Who was your favorite guest?
A:All of my guests have made an impression on me, some more pleasant than others. Pop star Laima Vaikule, for instance, was so late that I had to open the show without her. Another pop star, Filipp Kirkorov, was my guest for the 1998 New Year's show. We taped the show in advance, at 12:30 in the morning. He came in tipsy after a party, and played the role of Ded Moroz [Grandfather Frost]. Kirkorov liked the spot so much that he later included it on his first DVD album. I have so many similar stories that some day I'll have to write my memoirs.
Q:Have you ever had to make any sacrifices to produce a good show?
A:When I was doing an interview in Rome with people involved with Fellini's film "La Dolce Vita," I re-enacted the famous scene where actress Anita Ekberg bathes in the Trevi Fountain. This is illegal in real life, but we decided it would make the piece something special. I wasn't in the water more than 30 seconds when the police came and hauled me away. I tried to explain about the film, about Ekberg. But they replied that I wasn't a donna, a blonde or Anita Ekberg and made me pay a $500 fine.
TITLE: for whom the belly tolls
AUTHOR: by Vladimir Paperny
PUBLISHER: Special to The St. Petersburg Times
TEXT: The true artist, as the Russian "imaginist" poet Vadim Shershenevich observed in the 1920s, is the one who, when confronting a burning house, grabs his colored pencils instead of the fire extinguisher and sketches the burning house rather than put out the fire. In this sense, Zinovy Zinik is a true artist. No matter what might happen in real life, you can count on him to weave events, people, relationships, utterances, pain and bliss into an elaborate verbal fabric.
When life does not provide enough material for prose, literary devices kick in and start forming and reforming life. The vibrating, ever-changing border between life and literature, between the author and his characters, is the essence of Zinik's most recent book: "Mind the Doors: Long Short Stories." The stories are about assumed identities and the search for acceptance. Both themes are linked to the process of emigration. Zinik himself is a Russian émigré who lives in Britain and works under a pen name that combines his real first name and his childhood nickname.
Like Zinik, his characters are constantly trying on different identities. "I've always felt an unhealthy curiosity about other people's lives and an almost contemptuous indifference for my own," says an old writer in "The Notification," one of the stories in this volume. "It was precisely my shapeless, chaotic character that constantly drove me to try on other people's lives as if they were clothes I might need to wear sometime in the future. Perhaps it was this constant desire to change my own fate, to trap it, this desire to escape from my skin. I think that's why I left Russia."
The narrator of the title story, "Mind the Doors," is a Russian émigré who goes to Moscow wearing an expensive Irish raincoat. The tails of the raincoat get caught in the closing doors of a Moscow subway car, and the hero is trapped. This scene reveals a series of fake identities. A Russian writer has acquired a British passport, a British accent, the status of a British writer and an Irish raincoat. He returns to his hometown and tries to pass for a local. His clothes betray him as a foreigner, but his accentless Russian suggests that he emigrated quite recently, that he is perhaps a Jew. "They make me sick," screams one of the passengers. "I spit on these dirty traitors. Stinking Yids." Two friendly passengers come to his rescue and force the doors open. Their friendliness proves false; they merely want to steal his raincoat.
The scene in "A Pickled Nose" is London's Colony Room, and the characters of the story resemble the club's real patrons: "all kinds of shipwrecked refugees and undesirables - French Huguenots and Spanish Jews, Italian anarchists and Marxist philosophers."
A complete transition from the old to the new identity is never achieved in Zinik's stories. The old brand is permanent. "As far as I can judge by your accent, sir ... ," a taxi driver says to Victor, who is shocked because he had not uttered a word since entering the taxi. At one point in the story, all the drunks in the pub, the whole newly acquired family, chase the frightened Victor after discovering that his stomach is responsible for setting off car alarms.
What is this musical belly, this talking gut? Indigestion caused by a foreign culture? The mother tongue straining to be heard? The scream of Miss Russia's insatiable womb?
There is a recurring metaphor in Zinik's stories: Transition from one identity to another is likened to death. And death is understood here as a rather sophisticated magic trick. We can never be sure if characters are really dead or just feigning. "I am going to cry until I die," threatens the wife in "The Notification." The hero is about to leave Russia forever, but the wife has to stay. In the morning he finds her dead. Or is she really? At the end, the hero is back in Moscow and is talking to his wife again. Or is he just daydreaming? "I'll die in a few hours," he says. Later, the motherly wicked witch shakes him by the shoulder and his head slumps to his chest. Is he dead? Or just dead drunk?
Some identities in Zinik's stories are best understood in the context of the Russian literature. The cold depiction of the absurdities of the "Colony Room" reminds the careful reader of Mikhail Bulgakov's "Theatrical Novel." The narrator of "A Pickled Nose" calls himself a Russian alcoholic, possibly a hidden reference to Venedikt Yerofeyev's "Moscow to the End of the Line," while the title itself hearkens back to Nikolai Gogol's "The Nose."
Life as Zinik presents it in his stories is absurd and farcical. The wit and craftsmanship of the author turns reading them into a dizzying intellectual roller coaster.
"Mind the Doors: Long Short Stories," by Zinovy Zinik. 288 pages. Context Books, $21.95.
Vladimir Paperny is a designer and a freelance writer living in California.
TITLE: burton give 'apes' grim remake
AUTHOR: by Kenneth Turan
PUBLISHER: The Los Angeles Times
TEXT: "Planet of the Apes" is the least surprising movie of the summer. It's not only that after the original 1968 film, four sequels plus two television series, everyone who cares knows the underlying material, it's also that the sensibility of its director is equally well-known and twice as predictable. They haven't called this "Tim Burton's Planet of the Apes," but they might as well have.
Grimmer than the Brothers Grimm put together, Burton is the creator of increasingly bleak and unhappy fairy tales like "Batman," "Batman Returns" and "Sleepy Hollow." His thrust is dark, morose and deeply interior, so much so that it's one of the paradoxes of today's Hollywood that his hermetic tendencies have made him the director of choice for multimillion-dollar mass entertainments.
The key reason for Burton's preeminence is very much on display in "Planet of the Apes," and that is his exceptional visual gift. The film's look is always the first thing on this director's mind, and he is quite good at making believable the strange worlds he and his frequent collaborator, production designer Rick Heinrichs, dream up, in this case that familiar planet where apes rule and humans are considered soulless slaves.
Making even more of an impression this time is the physical presence of the apes themselves. With complex makeup created by six-time Oscar winner Rick Baker that took more than three hours to apply, and with Colleen Atwood's vivid costumes, including nifty conical military headgear, these apes are, as might be expected, considerably more plausible than those of three decades past.
What Burton is not so good at is investing his strange universes with a convincing interior life. The film's script, credited to William Broyles Jr. and Lawrence Kon ner and Mark Rosenthal, is overplotted and underdramatized, and its sporadic attempts at comic relief end up being neither comic nor a relief. Outside of a hyper-energetic, irresistibly evil portrayal by Tim Roth as General Thade, the baddest ape in town, the sad truth about "Planet of the Apes" is that, disappointingly, it's just not very much fun to watch.
The original 1968 film and its topsy-turvy social order, coming out as it did at a particularly volatile time in American history, was not intended solely as fun either, and the author of the underlying novel, Frenchman Pierre Boulle (who also wrote "The Bridge Over the River Kwai") apparently wanted his book considered "a social fantasy."
That sense of through-the-looking-glass reverse racism remains at the heart of the new project. "Take your stinking hands off me, you damn dirty human," is the first sentence downed American Leo Davidson (Mark Wahlberg) hears from a dominant ape on his new planet. As the film progresses, apes wonder if humans have souls or are capable of real culture and are cautioned always to use gloves when handling this violent, sub-simian species.
Although racial problems obviously persist today, those kinds of lines play as more quaint than provocative in the new film. Out-and-out silly are the attempts to give apes more clearly human characteristics by having them wear frilly nightgowns, use deodorants and complain about bad hair days. Worse still is the idea of giving orangutan slave trader Limbo (Paul Giamatti) the kind of you- are-giving-me-such-a-headache dialogue usually associated with Jackie Mason.
What plays best, frankly, are apes on the attack. Riding horses or hanging from branches, leaping high off walls or loping along on all fours, these armored, uniformed apes in action convey the sense of another world better than anything else.
As fearless as their apes, Burton and his screenwriters have not hesitated to depart in ways large and small from the first film. This new planet is not Earth, humans on it can talk and the inevitable twist at the film's conclusion goes all the way back to the one featured in Boulle's novel.
Also new is what gets Leo Davidson onto the planet in the first place. He and his fellow astronauts are on a huge space station doing, of all things, research on ape intelligence, seeing if they can get chimpanzees to pilot small spacecraft in dangerous situations.
A series of things going wrong lands Davidson in ape territory, where he is captured along with renegade humans Karubi (Kris Kristofferson) and his fetching blond daughter Daena (Estella Warren). Even worse is no doubt in store for him, but he attracts the attention of the politically well-connected ape Ari (Helena Bonham Carter), a human-rights activist who believes "it's disgusting the way we treat humans. It demeans us as much as it does them."
Taking the opposite point of view is the human-hating General Thade, likely the most terrifying chimpanzee in movie history, who can be taken at his word when he says, "Extremism in defense of apes is no vice." Few actors can be as forceful as Roth, a quality that is an advantage when playing a role inside an ape suit. The ferocious Roth, who shares a strong scene with unbilled "Planet" veteran Charlton Heston as his dying father, knew what he was doing when he reportedly turned down the role of Professor Snape in the new Harry Potter film in favor of this juicy, galvanic performance.
On the other side of the species gap, Wahlberg displays welcome presence and a natural gravity, but he doesn't get much help from "Driven" veteran Warren or the rest of the human race. With their simian characteristics amplified by time in "Ape School," the actors in the nonhuman roles are mostly too buried by makeup to make strong impressions.
Unfortunately, none of the good work counts as much as you'd think it would. Filled with ponderous musings about the dangers of technology and the way history rewards cruelty with power, "Planet of the Apes" shows that taking material too seriously can be as much of a handicap as not taking it seriously at all.
"Planet of the Apes" opens Thursday at Barrikada, Crystal Palace and Mirazh.
TITLE: Coalition Government for Fiji?
AUTHOR: By Ray Lilley
PUBLISHER: The Associated Press
TEXT: SUVA, Fiji - Indigenous Fijian parties looked set to form a government as vote counting concluded Thursday in an election aimed at restoring democracy to this Pacific island country.
Interim Prime Minister Laisenia Qarase, who heads the Fijian United Party, or SDL, said he expected to cobble together a coalition government by early next week.
He spoke as the combined tally of seats won by the SDL and the nationalist Conservative Alliance edged ahead of the ethnic Indian-dominated Fiji Labor Party, headed by former prime minister Mahendra Chaudhry.
By early afternoon Thursday, the SDL had won 23 seats and the Conservative Alliance six in the 71-seat legislature. Labor had captured 27. Three minor parties had one seat each and two independent lawmakers had been elected, officials said. The remaining 10 seats were expected to be determined later.
Chaudhry charged Qarase's SDL party with committing widespread fraud in vote counting.
"The Fiji Labor Party suspects a massive electoral fraud has been perpetrated on the voters of Fiji," Chaudhry told a press conference Thursday.
International observer teams from the United Nations, the British Commonwealth and the European Union all said voting was free and fair. Qarase did not immediately comment on the charge.
Qarase said in an interview prior to Chaudhry's accusation that he was confident of entering a coalition with the Conservative Alliance, whose legislators include George Speight, the leader of a coup that unseated Chaudhry 16 months ago.
Speight won his seat from a prison cell, where he awaits trial for treason. Under Fijian law, candidates can seek election as long as they have not been convicted.
The coup sent Fiji into an economic tailspin with foreign investment drying up, tourists staying away from its many resorts and donors such as Australia and New Zealand cutting back on foreign aid.
Stability has gradually begun to return in recent months following Qarase's announcement that he would hold democratic elections but tensions remain high between the ethnic Indian and indigenous Fijian communities.
Qarase said negotiations on a coalition agreement with other indigenous Fijian parties were well advanced and will be resolved by the weekend.
While Labor analysts said the election remained a cliffhanger, with either main racial bloc still able to win, other Indian politicians conceded that Chaudhry's bid to win back the prime minister's post had foundered.
Under Fiji's Constitution, any party with eight or more seats in Parliament must be invited to join the cabinet, but Qarase is not expecting Labor's Chaudhry to take up the invitation.
TITLE: No Agreement Reached at World Racism Conference
AUTHOR: By Dina Kraft
PUBLISHER: The Associated Press
TEXT: DURBAN, South Africa - South Africa once again took over efforts to break an impasse at the world conference against racism Thursday, working to devise a compromise text on the Middle East that could be included in a final declaration for the UN meeting.
Disagreement over how to refer to the Israel-Palestinian conflict in conference documents threatened to derail efforts to come to a global agreement on how to fight racism. The European Union has rejected attempts by the Arab League to characterize Israeli practices in the Palestinian territories as racist.
The United States and Israel withdrew their delegations from the conference on Monday after attempts to reach a compromise failed.
Koen Vervaeke, spokesperson for Belgian Foreign Minister Louis Michel, said a special drafting committee, which included the Europeans and the Palestinians, finished work on Wednesday night without reaching a compromise. He said the EU had given South African mediators its position and was now waiting to see what kind of text they could come up with.
"We are waiting on their initiative now," Vervaeke said.
Arab leaders have said a declaration that does not criticize Israel would be meaningless.
"We still have hope, but unfortunately our partners from the EU group are not flexible," said Salman el-Herfi, Palestinian ambassador to South Africa.
In an effort to save the conference, Norwegian Foreign Minister Thorbjoern Jagland on Wednesday sent his deputy, Raymond Johansen, to Durban to take over leadership of the Norwegian delegation.
"The racism conference is in danger of completely breaking down. I am going to Durban to try to contribute to it reaching a result that does not damage the international battle against racism," Johansen said.
Norway had earlier tried unsuccessfully to broker a deal between the United States, Israel and the Arab states.
A spokesperson for the French government said Wednesday that Prime Minister Lionel Jospin told his cabinet the EU would walk out of the conference if its final declaration singled out Israel.
"If comparisons between Zionism and racism remain, the question of France's, and the European Union delegation's, departure would be posed immediately," Jospin told a cabinet meeting, according to spokesman Jean-Jack Queyranne. "France and the European Union would seek a departure from this conference, which would mark a failure."
Delegates from the 15 EU countries said they would act as a bloc with 13 eastern European countries that are candidates for EU membership.
A second sticking point for the conference was whether former colonial powers and countries involved in the slave trade would apologize and pay reparations to African countries and people of African descent.
African-American groups have lobbied hard for reparations to be included in conference documents. The EU has offered a limited apology, but does not want reparations mentioned.
TITLE: WORLD WATCH
TEXT: Fujimori Charges
LIMA, Peru (Reuters) - Peru's attorney general has filed murder charges against exiled ex-president Alberto Fujimori, a move seen helping the country in its bid to bring the former leader back from Japan for trial.
Japanese Prime Minister Junichiro Koizumi said he hadn't heard "about specifics" of Wednesday's charges, but that Tokyo would respond to any extradition request in accordance with Japanese law.
"We will make decisions while watching specific developments," Koi zumi told reporters in Tokyo on Thursday.
Tokyo has repeatedly said it can not extradite Fujimori, because he is protected by his dual Japanese and Peruvian nationality.
Iraq Spy Claims
BAGHDAD (Reuters) - Iraq on Wednesday accused five UN aid officials it expelled from Baghdad of being involved in acts that infringed on its national security.
"Iraqi authorities have evidence that the five UN staffers have carried out acts that violate their assignment in a way that infringes on Iraq's national security, so they were expelled," Foreign Minister Dr. Naji Sabri told al-Shabab television.
"We have proof of their involvement in acts that infringe on the security of the country ... and this means that they had offered services to countries hostile to Iraq," Sabri said.
The five staff members, four Nigerians and a Bosnian, were in the headquarters of a large observation unit in the UN "oil-for-food" humanitarian program that monitors distribution of supplies. Iraq has long opposed the program as a prolonging of sanctions, imposed in August 1990, when it invaded Kuwait.
Coma Baby
BEIJING (AP) - A Chinese woman who has been in a coma since being hit by a car three months ago gave birth to a healthy baby boy, the official Xinhua News Agency said Thursday.
Song Yingqiong, 36, was nearly five-months pregnant when she was struck May 22 in the southwestern city of Chongqing. She was hospitalized with brain damage and has not awakened since then, Xinhua said.
On Tuesday, a nurse at the hospital in Chongqing found blood on the sheets of Song's bed. Doctors determined she was ready to give birth but were unable to deliver the baby through Caesarean section because Song is physically too weak, Xinhua said.
Instead, they pushed on her stomach, the report said. The healthy 2.2-kilogram boy was born within 30 minutes, it said.
Peace Vote
SKOPJE, Macedonia (AP) - The speaker of Macedonia's parliament urged lawmakers to end a marathon debate on a Western-engineered peace accord and move quickly to a vote Thursday on changing the country's constitution to grant ethnic Albanians more rights.
Speaker Stojan Andov adjourned the session just an hour short of midnight Wednesday, and called for a quick vote when the assembly reconvenes Thursday.
If parliament backs the plan, NATO would be able to move onto the next phase in collecting weapons voluntarily surrendered by rebels of the National Liberation Army.
Vietnam Floods
HANOI, Vietnam (Reuters) - Rescuers in Vietnam have recovered the bodies of seven people, five of them children, pushing the death toll in floods in the south of the country since late last month to 56, officials said on Thursday.
Most of the deaths have been in five flood-hit provinces in the low-lying Mekong Delta region, where 44 people have drowned, nearly all children. Ten people died last month in the provinces of Daklak and Lam Dong.
Disaster-management officials said 55,000 people have been evacuated from flood-hit homes and 138,000 still needed to be moved.
TITLE: SPORTS WATCH
TEXT: A Long Paddle
LONDON (Reuters) - A former British soldier has become the first person to paddle across the Atlantic in a kayak, landing in Ireland after a marathon 75-day crossing.
Peter Bray, 40, from south Wales, landed his 7-meter sea canoe in County Mayo late on Wednesday and promptly celebrated his record achievement with a pint of Guinness at the nearest pub.
Exhausted but grinning, Bray told a welcoming party that he was "elated" to have succeeded in the 4,800-kilometer transatlantic challenge.
Bray, a former member of Britain's elite SAS unit and now a lecturer in outdoor pursuits, put his life savings into the challenge and elected to undertake the voyage entirely alone, without the backup of a support vessel.
He set off from Newfoundland, Cana da, in June and battled storms, dodged supertankers and icebergs and lost his anchor before making landfall near Porturlin.
Wilting Leaf
IRVING, Texas (Reuters) - Embattled quarterback Ryan Leaf was dealt a fresh setback Wednesday when his expected move to the Dallas Cowboys was held up when he failed a physical due to a wrist injury.
Released by the Tampa Bay Buccaneers Monday, the 24-year-old Leaf cleared waivers Tuesday.
Cowboys Vice President Stephen Jones said it was a "pretty good possibility" that the team would sign Leaf Wednesday as a third-string quarterback behind new starter Quincy Carter and Anthony Wright.
But Dallas doctors were concerned with the condition of Leaf's wrist.
A major disappointment in his brief NFL career, Leaf has been hampered by wrist and shoulder problems. After playing just one series and attempting only one pass in the Buccaneers' final preseason game, Leaf was waived.
Rodriguez Sidelined
ARLINGTON, Texas (AP) - Ivan Rodriguez, who was among the most durable backstops ever over his first nine years, will have his season ended prematurely by injury for the second straight year.
The 10-time American League All-Star catcher announced Wednesday he will undergo surgery on the patella tendon in his left knee sometime next week. The procedure, which will be performed by Rangers orthopedist Dr. John Conway, will take place in Fort Worth, Texas.
How long Rodriguez will be sidelined cannot be determined until surgery is performed.
The 1999 American League Most Valuable Player, Rodriguez has not played since Aug. 30. The nine-time Gold Glove Award winner batted .308 with 25 homers and 65 RBI in 111 games this season and is a career .304 hitter with 196 homers and 769 RBI in 1,371 games.
After catching more than 85 percent of his team's games over his first nine years, Rodriguez saw his 2000 season ended by a fractured right thumb.
New World Record
BRISBANE, Australia (AP) - World champion Olimpiada Ivanova of Russia broke the world record in the women's 20-kilometer race walk at the Goodwill Games on Thursday night.
Her time of 1 hour, 26 minutes, 52.3 seconds beat the previous mark of 1:29.36.4 set by Susanne Feltor of Portugal at Lisbon on July 21.
The record was the first at the Goodwill track-and-field competition and was worth a $100,000 bonus for Ivanova.
Ivanova, 31, finished second at the 1997 World Championship, but was stripped of her silver medal and banned for two years after testing positive for the illegal drug stanozolol.
TITLE: Isles Sign Yashin to Record NHL Contract
PUBLISHER: The Associated Press
TEXT: EAST MEADOW, New York - Alexei Yashin sat out an entire season in a contract dispute just two years ago. Now the high-scoring center has agreed to the longest deal in the history of the National Hockey League.
The New York Islanders and the 27-year-old Russian star came to terms on Wednesday on a 10-year contract worth $87.5 million.
The ctual terms of the deal were not disclosed, but the contract is for $6.4 million in the first and the final season. It reaches its payout peak in the middle of the contract, and except for incentives for finishing first, second or third in the voting for the league's major awards at the end of each season, there are no other bonuses - personal or team-related - in the contract.
"The contract broke no new barriers in terms of salary," Islanders general manager Mike Milbury said. "It's the length of the deal that will open some eyes."
One of the biggest barriers regarded insurance. Any contract up to five years in length is easily insured, but anything past that has to be worked on creatively.
"There was some funky stuff that had to be done, but we were able to secure insurance for the length of the contract," Milbury said.
"We had to do a few things and Alexei and [agent] Mark [Gandler] had to do a few things, and we all agreed to do so."
Yashin, who spent eight seasons with Ottawa, was happy to become part of the Islanders organization.
"It feels great, but at the same time, there is a lot of responsibility," Yashin said. "I'm comfortable [with the contract]."
Yashin sat out the the 1999-00 season over a contract dispute with the Senators, and an arbitrator ruled he had to play out the final year of his deal in order to become a restricted free agent. Last season, he had 40 goals and 44 assists with Ottawa, but only had one assist as Toronto swept the Senators in the first round of the playoffs.
"I spoke to [Toronto coach] Pat Quinn a few weeks ago and asked about his playoff performance," Milbury said."He told me if the wind blew a little differently, it could have been another story completely."
Milbury had some reservations about the length of the Islanders' commitment, but he grew to appreciate the contract nonetheless. He claims that he's not worried that Yashin might take issues as he did with the Senators.
"If you are comfortable with a guy's character and ability, this might be one way to go," Milbury said."But this is a 10-year deal, and the deal goes for what the contract says it goes for. They're happy with it and expressed happiness with it."
Yashin played in 504 regular-season games for the Senators, and along the way he picked up 218 goals and 273 assists. And in 26 playoff games, he added another six goals and nine assists.