SOURCE: The St. Petersburg Times
DATE: Issue #778 (44), Tuesday, June 18, 2002
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TITLE: Putin Slams Belarussian Union Plan
AUTHOR: By Natalia Yefimova
PUBLISHER: Staff Writer
TEXT: MOSCOW - Two days after meeting with Belarussian leader Alexander Lukashenko, President Vladimir Putin came crashing down on his plan for a Soviet-style union between the two countries, making it clear that Lukashenko would have to curb his political ambitions, and that cooperation would hinge on Russia's economic interests.
"Trying to restore the Soviet Union at any cost, including at the expense of Russia's economic interests, would only ... weaken Russia," Putin said Thursday. "And who wants to be friends and live together with someone weak?"
The presidents had met two days earlier in St. Petersburg where Lukashenko presented his plan for a unified Russian-Belarussian parliament, whose laws would take precedence over the legislation of both countries. Many have compared the proposed body to the Supreme Soviet of the U.S.S.R., with its extensive powers, and Lukashenko's general plan of governance to a mini Soviet Union.
The main thrust of Moscow's plan, however, is economic. In this sense, Putin has come full circle from the time when former President Boris Yeltsin signed the first union documents in 1996 for purely political reasons - as a populist ploy to boost his chances in the presidential face-off with Communist Gennady Zyuganov, whose battle cry called for a return to the Soviet Union, which so many Russians were longing for at the time. Now, Lukashenko's appeal as a symbol for Soviet nostalgia and Slavic unity has faded; on the contrary, he is a political liability, long viewed in the West as Europe's last dictator and a dangerous friend - and alleged arms supplier - to unsavory countries such as Iran, Iraq and Syria.
The loose Russia-Belarus Union that exists today has also compromised itself. Last spring, Russia's Audit Chamber released a report outlining the misuse of some $6 million of the union's budget, most of which comes from Moscow. The union's chief executive, former Kremlin property manager and Putin's old friend, Pavel Borodin, was convicted this year in Switzerland on charges of money-laundering that have been ignored at home.
Under Yeltsin, the prospect of economic integration with Belarus made liberal economists shudder. Belarus has kept many communist-era economic practices, such as centralized price-setting and artificial currency-exchange rates. Lukashenko has also resisted large-scale privatization of promising state-owned enterprises, and Minsk is notoriously unable or unwilling to pay for Russian gas supplies. Nonetheless, Putin's aim is to transform the limping union into a viable vehicle for economic cooperation that could benefit Russian business.
A customs treaty and a number of other agreements are already in place, and the groundwork is being laid to introduce the Russian ruble as the two nations' single currency - with the printing presses controlled from Moscow. The Central Bank on Thursday released the second of three tranches of a 4.5-billion-ruble loan to the Belarussian National Bank to meet the demand for rubles among Belarussian companies doing business with Russia, Interfax reported.
In rejecting Lukashenko's plan for political unification, Putin said Russia would be better served by strengthening its own economy and that, in turn, would help effect change in Belarus and other former Soviet republics.
"If we choose a different philosophy and focus all our efforts on our own development and developing our economy, we will be a powerful attractive force, a powerful magnet for this integration," he said. "Let's not forget that Belarus' economy equals 3 percent of Russia's."
After his meeting with Lukashenko, Putin said the economic aspects of unification were "progressing positively." But he made it clear Thursday that, in terms of political ambitions, the Belarussian leader was getting too big for his britches and that Russia's power to set its own policies could not be subordinated to a non-Russian institution, especially one with an amorphous legal status.
"We cannot allow the creation of a supranational body with unclear functions," Putin told reporters during a visit to the Bakulev Center for Cardiovascular Surgery in Moscow.
"Putin has clearly given priority to economic integration, while Lukashenko ... was hoping for some political dividends. But now those hopes have been dashed," Valery Dashkevich, an expert with the Independent Institute for Sociopolitical Research, said Saturday in an interview from Minsk.
Vladimir Frolov, deputy director of the Moscow-based Institute of Applied International Research, agreed. "This is a colossal blow to Lukashenko," Frolov said. "The idea of a unified Russian-Belarussian state is dead."
Some observers even saw Putin's talk of Russia's self-reliance and its role as an economic magnet as a cue for Belarus or separate regions to consider coming under Moscow's wing, virtually as new constituent territories of the Russian Federation. Frolov said Lukashenko's proposal for a supranational parliament would have caused "a new crisis and paralysis of power" in Russia.
"Putin fought so hard to build his vertical structure of power, to prevent the country from falling apart, to improve its managability and, as he saw it, to make it more attractive for investors," Frolov said. "Why would he abandon all that to create some new, empty body that would only introduce confusion and disorder, all for the sake of some mythical Slavic brotherhood?"
Minsk was quick to deflect Putin's jab.
"I am well aware of Belarussian President Alexander Lukashenko's clear and distinct position: There was no talk in St. Petersburg of using the Belarus-Russia Union to revive the Soviet Union or any analogous formation," Leonid Kozik, Lukashenko's deputy chief of staff, was quoted by Interfax as saying.
While the Russian president has long bristled at the prospect of getting too cozy with Lukashenko, last week's comments were the harshest he has made yet. In part, the change is owed to Putin's pro-Western stance since Sept. 11 and his growing international standing, and in part to the marginalization of those domestic political forces that have traditionally supported a tight-knit union with Belarus, primarily the Communists and nationalist groups.
TITLE: Experts Say Moscow To Assume Key Role
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russia could assume a key role under U.S. President George W. Bush's planned "strike first" defense doctrine, providing crucial intelligence information and acting as a go-between with so-called rogue states to deter conflict, experts said Monday.
However, they said, Moscow must also pragmatically strive to derive as many benefits as possible from its cooperation with the United States while defending its own interests - such as the billions of dollars owed by Iraq, which is clearly first on the U.S. target list for preemptive action.
"We must cooperate with the Americans in fighting terrorism to the extent of joint intelligence and military operations, but only if the United States gives Russia what it needs," said Sergei Markov, a Kremlin-connected political analyst.
Chief among Russia's needs, he said, are U.S. assistance in isolating Chechen rebels in the international arena and the lifting of an informal ban on sales of Russian weapons to NATO member states.
Other analysts named debt relief and entry into the World Trade Organization as priorities.
For the Kremlin to get what it wants, its best bet is to provide passive support for the U.S.-led coalition to counter terrorism, said Vyacheslav Nikonov, head of the Politika think tank.
By doing that, it will be less likely to alienate traditional allies such as Syria, Libya, Iran and North Korea, which Washington considers to be rogue states, while at the same time reaping the benefits of being a partner with the West, he said.
"Today is the best period of Russian-American relations, and in this new climate Russia can expect more concessions from the United States in regards to its entry into the World Trade Organization and the negotiation of Russian debt," he said.
The litmus test that could define Russia's role in Bush's new doctrine - which envisions taking preemptive action against states and terrorist groups the United States accuses of trying to develop weapons of mass destruction - is shaping up to be Iraq.
Moscow, which has close ties with Baghdad and has pressed Washington not to launch an attack as part of its war on terrorism, has also indicated it would not drop out of the counterterrorism coalition should strikes take place.
Markov said the Kremlin needs to provide political and military support to the White House in its declared goal to topple Saddam Hussein - but only if it is allowed to participate in the formation of a new Iraqi regime that will honor previous obligations to Russia.
Nikonov said joint military action was out of the question because all diplomatic avenues have not been exhausted, but he agreed Russia needs to look out for its interests in Iraq.
"We must pursue Iraq's debt to the Soviet Union and the contracts it has with Russian oil companies," he said.
Russia is eager to collect some $6 billion to $9 billion in Soviet-era debt from Iraq and safeguard lucrative contracts to explore the country's oil-rich southern region. Oil fields there are estimated to be worth some $70 billion. By playing its cards correctly, Washington would likely accept Russian demands for debt repayment and oil, Nikonov said.
"Whether or not an offensive [against Iraq] takes place doesn't depend on Russia, and raising a clamor would be silly to say the least," said Ivan Safranchuk, head of the Moscow office of the Washington-based Center for Defense Information. "Washington would not force any country to join it in a strike against Iraq. All it wants is neutrality ... [and] Russia must use this to its advantage."
He said Russia's influence in the Arab world would probably not be damaged if it adopted a passive role, largely because Moscow has long had a stronger presence in the region than the United States.
Safranchuk, however, warned against overestimating Russia's diplomatic weight, saying government officials would have to watch their step if they to act as mediators with traditional allies Syria, Libya, Iran or North Korea.
TITLE: Russia Loses, but This Time There's No Riot in Moscow
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW - Police beefed up security on Moscow's Manezh Square on Friday as thousands of soccer fans turned up to watch a widescreen broadcast of the World Cup match between Russia and Belgium, successfully deterring the widespread violence that erupted after a game several days earlier.
About 3,000 fans, many with the white, blue and red of the national flag painted on their faces and with flags drapped around their shoulders, gathered on the fenced-in square where a crowd of 8,000 rioted June 9, killing two and destroying a number of cars and shop windows.
Some 2,000 police officers, some on horseback and others with dogs, kept a wary eye on the square, frisking those who entered the fenced-off area for alcohol and weapons and escorting rowdy fans away.
Disruptions were kept to a minimum, the police said. Fifty-nine fans were detained for rowdiness, including 15 who set off fireworks or smoke bombs in the crowd during the match.
About a kilometer away, 10 teenagers broke about 15 lamps on an escalator in the Pushkinskaya metro station and were immediately detained, Interfax reported.
As the Belgian team scored its third goal and it became clear that Russia would lose, disappointed fans, some weeping, began streaming away from Manezh Square, walking past a column of truncheon-wielding police officers.
Moscow police chief Vladimir Pronin, who remained on the square throughout the match, said he recognized "many familiar faces" in the crowd from video footage shot during the June 9 riot.
No alcohol was available for sale near the square, and many kiosks on nearby streets were closed.
Moscow Mayor Yury Luzhkov and Deputy Mayor Valery Shantsev made a brief appearance on the square during the game.
Deputy State Duma Speaker Vladimir Zhirinovsky joined the crowd before the match started and stayed with several bodyguards until the end of the game.
His colleagues in the Duma voted not to interrupt a plenary session for the match, but many still followed it closely. ORT television showed several visibly agitated deputies, including Deputy Speaker Lyubov Sliska, watching the match on televisions in their offices.
The Federation Council voted first thing in the morning to move its lunch break so that it coincided with the game.
TITLE: Rampage Ends With Deserters Dead
PUBLISHER: The Associated Press
TEXT: ROSTOV-NA-DONU, Southern Russia - Law-enforcement officers on Monday shot dead two soldiers who had killed two police officers after deserting their unit in the southern Adygeya republic over the weekend, officials said.
The two soldiers were spotted in the village of Sadovaya early Monday, said Yury Nevzorov, a spokesperson for the Emergency Situations Ministry. Police opened fire, killing one soldier on the spot. The other died on the way to the hospital, he said.
The two army privates led authorities on a day-long manhunt after fleeing their motorized-rifle brigade in Adygeya's capital, Maikop, on Sunday. Some 600 police and soldiers were involved in the search and had orders to shoot the deserters on sight.
The soldiers left their unit armed with automatic rifles, officials said. They hijacked a car and driver and forced him to drive away from Maikop at gunpoint. When traffic police stopped them at a checkpoint, the deserters opened fire, killing two police officers. They then stole the officers' pistols and fled on foot into nearby woods.
The deserters put up resistance when confronted by police Monday, the official said. No police or soldiers were wounded.
The manhunt came just days after a soldier in Chechnya shot and killed two officers, then fled his regiment. The soldier committed suicide on Saturday when police tried to detain him.
A border guard, armed with an assault rifle and pistol, also deserted his unit Sunday in the northwestern republic of Karelia, the border guard service said.
Desertions, suicides and violence have plagued the Russian military in recent years, often blamed on dismal conditions and fierce hazing of new recruits.
Last February, two runaway paratroopers went on a bloody, day-long rampage, killing at least nine people before being shot dead by police.
TITLE: Salvage Op Lifts Part of Kursk's Nose
PUBLISHER: The Associated Press
TEXT: MOSCOW - The navy's salvage mission to recover more wreckage of the Kursk nuclear submarine from the Barents Sea floor has lifted a large fragment of its nose section, navy officials said Monday.
The fragment of the Kursk's nose, weighing 5 tons, was recovered last week using remote-controlled equipment, Northern Fleet spokesperson Captain Vadim Serga said Monday in a telephone interview.
Other fragments, including a part of a torpedo tube and a high-pressure air cylinder, were raised earlier, Serga said. He added that the salvage team had also raised several buoys left by a Norwegian electronic intelligence ship that Russian officials said was monitoring the Kursk rescue mission.
The Kursk, one of Russia's largest and most advanced submarines, exploded and sank during naval maneuvers in August 2000, killing all 118 people aboard. The bulk of its wreckage was lifted in an international operation last October, allowing prosecutors to retrieve remains of 115 of the crew memebers and search the carcass for clues to the disaster's cause.
The Kursk's fore section, mangled by powerful explosions, was sawed off and remained on the sea floor while the rest of it was raised, due to fears that it could break off and destabilize the lifting.
The Russian navy hopes that fragments of the Kursk's nose section will help shed light on the disaster's cause. Officials initially claimed that the Kursk's sinking might have been caused by a collision with a Western submarine, but have since pointed at a flawed practice torpedo as more likely. The navy has already ordered such weapons removed from service, but the government has not offered a final conclusion about what caused the practice torpedo to explode, detonating other weapons in the bow.
Serga said that a government commission is expected to decide later this week whether it is necessary to raise more fragments of the bow. Once the salvage operation is over, the navy plans to blow up the remaining wreckage.
Meanwhile, Colonel Nikolai Makarchuk, acting head of the navy's search and rescue department said Monday that the navy had purchased $30 million worth of rescue equipment for its submarines, according to the Interfax-Military News Agency.
TITLE: FSB Identifies 1999 Bombing Suspects
AUTHOR: By Sergei Venyavsky
PUBLISHER: The Associated Press
TEXT: ROSTOV-NA-DONU, Southern Russia - Russia's Federal Security Service (FSB) said Monday that it has identified three men who took part in a 1999 apartment house bombing that killed 18 people and that the culprits are hiding in the former Soviet republic of Georgia.
The three men helped to plan and carry out the bombing in Volgodonsk, in southern Russia, said Vasily Matyugin, a spokesperson in Rostov-na-Donu for the FSB. He said FSB officials also know which town the suspects are living in, and even on which street.
The Volgodonsk explosion was one of four 1999 apartment block bombings that killed some 300 people, terrorized the country, and sparked a wave of popular support for Russia's second military invasion of Chechnya later that year.
Russian officials blamed the blasts on Chechen rebels, though rebel leaders denied involvement and suggested Russian security services played a role in the blasts to justify the subsequent military campaign. In addition to Volgodonsk, two blasts occurred in Moscow, and another in the southern Russian city of Buinaksk. Russian courts have already sentenced 11 men for alleged participation in the bombings.
Matyugin did not give the names of the suspects said to be hiding in Georgia, but he said an extradition request had been passed on to Georgian authorities. A spokesperson for Georgia's State Security Ministry refused to comment on the case.
Relations between Russia and Georgia have been strained over Moscow's allegations that Georgian authorities have been harboring rebels from Chechnya. Georgia has refused to let Russian forces flush the rebels out, and instead invited some 200 U.S. military instructors to train Georgian soldiers in anti-terrorist tactics.
Georgia's separatist province of Abkhazia has also been a major source of tension between Russia and Georgia throughout the decade since the Soviet Union's collapse. The Black Sea province won de facto independence in 1993 after routing Georgian government troops in a two-year war.
TITLE: Duma Approves Terrorism Accord
PUBLISHER: The Associated Press
TEXT: MOSCOW - Russia's lower house of parliament ratified an international convention Friday that aims to curb funding of terrorism.
The international convention to curb terrorist funding was approved at the U.N. General Assembly in New York in 1999 and signed by the Russian government in April 2000. In order to take effect, the convention must be signed by the upper house and by President Vladimir Putin, and both approvals were expected to go through smoothly.
The bill, passed 362-1 by the State Duma, provides for prison sentences of four to eight years for first-time offenders convicted of crimes of a terrorist nature, including training people for acts of terror or financing terror activities. Repeat offenders can face prison sentences of seven to 15 years.
TITLE: IN BRIEF
TEXT: Classified Seizure
VLADIVOSTOK, Far East (AP) - Border guards in the Far East seized a package of classified military documents and aircraft parts on a train headed for China on Monday, Russian officials said.
The package contained documents related to Russian military aircraft as well as several aircraft parts, the State Customs Committee said in a statement. It was found in the locomotive car of the train when the train stopped in the village of Pogranichny, the committee said. It was not immediately clear where the package came from.
15 Charged Over Riot
MOSCOW (AP) - Moscow prosecutors have filed criminal charges against 15 people in connection with last week's soccer riot, which left two people dead and caused widespread damage in the city center, officials said Monday.
The charges range from participating in mass unrest to hooliganism to looting kiosks, the prosecutor's office said in a statement. Nine of the suspects are already in custody, it said.
Land-Mine Victims
MOSCOW (AP) - More than half of the approximately 150,000 people forced from their homes during the current Chechen conflict are mothers and children, and some 3,500 to 5,000 minors have fallen victim to land-mine explosions since the beginning of the first Chechen war in 1994, said the United Nations Undersecretary General Olara Otunnu, the international organization's special representative for children and armed conflict.
"The incidence of land mines in Chechnya is among the most extensive of anywhere in the world," Otunnu said Monday. After meeting with Foreign Minister Igor Ivanov and Deputy Prime Minister Valentina Matviyenko, Otunnu was due to visit refugees in Ingushetia, North Ossetia and Chechnya itself.
Kuchma's Words
KIEV (Reuters) - President Leonid Kuchma decreed on Monday that all schoolchildren and students must study a 72-page parliamentary address he gave last month urging the country to embrace the West.
Andriy Chyrva, head of the information department at the presidential administration, said Kuchma had ordered the government to distribute copies of the address to schools and universities across the country of 49 million people.
Independent-media outlets were quick to condemn the order, saying it was a return to the Soviet-era practices when schoolchildren and students were obliged to pass exams on the Communist Party's policy guidelines.
Budanov Trial
ROSTOV-ON-DON, Southern Russia (AP) - A court in southern Russia ruled Monday to stop calling witnesses in the murder trial of Colonel Yury Budanov, clearing the way for closing arguments to begin, the prosecutor in the case said. Budanov has admitted killing 18-year-old Heda Kungayeva in Chechnya two years ago, but says he was temporarily insane at the time.
No further witnesses will be called in the trial, which began in February 2001, and closing arguments will begin Tuesday, Prosecutor Sergei Nazarov said in remarks broadcast on TVS television
Talking Help
MOSCOW (AP) - Russia on Monday urged the Organization for Security and Cooperation in Europe to help protect the rights of ethnic Russians living in the Baltic states and other ex-Soviet republics.
The issue was set to dominate Monday's talks between Russian Foreign Minister Igor Ivanov and Rolf Ekeus, the OSCE 's high commissioner for national minorities, ministry spokesperson Alexander Yakovenko said Monday.
TITLE: G7 Shows Support for Russian Entry to WTO
PUBLISHER: Combined Reports
TEXT: HALIFAX, Canada - The world's richest industrial countries on Saturday voiced their support for Russia's bid to join the World Trade Organization, and urged Moscow to keep on the path of economic reform and clean up business practices so that it can sustain its recent growth.
The Group of Seven finance ministers said in a statement that Russia's bid to join the WTO is seen as a catalyst for further reforms and the G-7 underscored the importance of the country's membership in the organization that promotes free trade.
Decade-long talks on Russia's entry to the WTO gained momentum under President Vladimir Putin, who has made membership a priority and the country now stands a chance of joining before the end of next year.
Ministers also urged Russia to continue to fight money laundering and the financing of terrorists.
"We encourage further efforts to strengthen the financial sector, improve corporate governance and the investment climate, and combat money laundering and terrorist financing," G-7 ministers said.
Russian officials started participating in small parts of G-7 finance ministers' meetings as the country began its painful transition from communism to capitalism.
Moscow is now a full member of the Group of Eight on political issues, but its economy is far smaller and its ministers are excluded from most of the broad G-7 finance ministers' discussions on economic issues.
European Monetary and Economic Affairs Commissioner Pedro Solbes told a news briefing that Finance Minister Alexei Kudrin, who is also a deputy prime minister, sought to soothe the concerns of his G-7 colleagues about whether Russia's projected-economic growth of 3.5 percent to 4 percent this year could be sustained.
Solbes said Kudrin noted the progress on the country's structural reforms and painted a positive outlook for the Russian economy. According to Itar-Tass, Kudrin told his counterparts that gross-domestic product grew 3.5 percent in the first four months of the year.
Itar-Tass quoted Kudrin as saying that at the meeting he stressed recent successes in slowing the pace of capital flight, which has been estimated to be as high as $20 billion a year.
He also spoke about the government's commitment to small businesses.
Russia, the world's second-largest oil exporter, rebounded strongly from the 1998 financial crisis, helped by rising crude prices. But economists and international organizations say the country needs to strengthen its banking sector and limit dependence on oil and gas exports to secure solid, long-term growth.
(Reuters, SPT)
TITLE: A-Pressen Acquires Stake in Russia's Leading Newspaper
AUTHOR: By Andrei Zolotov Jr.
PUBLISHER: Staff Writer
TEXT: MOSCOW - Norwegian media group A-pressen said Monday that it would pay at least $5 million for a blocking stake in the country's top-selling newspaper, Komsomolskaya Pravda, controlled by tycoon Vladimir Potanin's Prof-Media.
A-pressen will pay Prof-Media and private shareholders $5 million for 25 percent plus one share of the newspaper immediately and up to an additional $2.5 million over a two-year period depending on the company's performance, said Reidar Karlsen, managing director of A-pressen subsidiary A-pressen Russian Media.
"It is a major step for us," Karlsen said by telephone from Oslo. "It gives us a strategic position in Russia."
Karlsen said the company's board of directors decided to exercise a call option on the stake, which it received along with a seat on Komsomolskaya Pravda's board in December 2000. A-pressen and Prof-Media in June 2001 signed a deal to invest collectively $12 million to build a new color printing press near Moscow.
A-pressen is negotiating the purchase of a 25-percent-plus-one-share stake in the second-largest sports daily in Russia, Sovietsky Sport, which Prof-Media has owned since last August, Karlsen said. He declined to disclose the sum of the deal before it is completed, but said the process "is only a matter of technicalities."
The Oslo-based media group already owns stakes in newspapers in Nizhny Novgorod and St. Petersburg. It has been active in the Russian media market since 1997, when it started building, with the help of a loan from the European Bank for Reconstruction and Development, the first of several printing presses in the regions. The company recently launched construction of a $3-million facility in Novosibirsk, in addition to two similar facilities already functioning in Yekaterinburg and Nizhny Novgorod.
Komsomolskaya Pravda, once a leading and progressive Soviet newspaper, has turned into a sensationalist tabloid over the past few years while holding on to the top spot in terms of circulation, selling 780,000 copies of its daily edition and 2.8 million copies of its weekly, according to the newspaper.
Yevgeny Abov, deputy general director of Prof-Media, said his company would retain control of Komsomolskaya Pravda because it was selling only 5 percent of its stake, meaning that around 20 percent will come from individual shareholders.
Komsomolskaya Pravda's editor in chief, Vladimir Sungorkin, who is one of about 20 individual shareholders who are selling part or all of their stakes to A-pressen, said that under the December 2000 agreement all the money received from A-pressen will be invested in the company.
Sungorkin added that no significant changes in the editorial policy of the newspaper are expected as he said that A-pressen "is happy with the growing readership."
Karlsen, however, did not exclude the possibility of future editorial changes.
TITLE: Global Branding Developing a Foothold in the Russian Market
AUTHOR: By Alex Nicholson
PUBLISHER: Staff Writer
TEXT: MOSCOW - Were it not for the Eastern European Merchandising Corp., Frodo Baggins' journey from New Line Studios in Hollywood to bubble-gum wrappers in Russia might have been as arduous as his travels through Middle Earth.
In a market where Western film and cartoon characters are routinely hijacked for use on everything from toothpaste to key chains, only a handful of licensing agents legally broker the deals between the studios that own the trademarks - but have no local presence - and local manufacturers, who can then confidently place Harry Potter on their T-shirts and Spiderman on their chewing gum.
Russia remains virgin territory for such companies for the most part and, according to Kalman Istok, president of EEMC, it has gone from bringing his company zero revenue to being its second-biggest market in the space of just one year.
Local producers have woken up to the benefits of official licensing, Istok said, and are set to reap the rewards as World Trade Organization membership looms and authorities get tough with pirates.
"The guys that have gotten in there first are going to recapture the market share from the counterfeiters," Istok said.
As well as "The Lord of the Rings" deal signed with chewing-gum producers K-Artel, EEMC holds the rights to license the use of some 40 characters from films and cartoons - known as "properties" in the business.
Given the transitory nature of any blockbuster-driven merchandising frenzy, the cartoon characters offer the best value, according to Dmitry Gordinsky, director of EEMC's Russian office.
A well-chosen property can reduce or even remove the need to advertise a product, said lawyers from the Gorodissky and Partners law firm, which specializes in patent and copyright law.
According to Margarita Divina, a lawyer with the firm, sales can be increased by 20 percent to 25 percent.
EEMC is talking with leading local confectioners and food companies. While it declined to give names, it said deals are already on the table.
Olga Nechayeva, head of juice-and-dairy giant Wimm-Bill-Dann's advertising department, said that her company has no such licenses at present, but that "this would depend on how the market develops and how our business develops.
"A problem could arise in that the mark distracts from the actual brand of the company, but all the pros and cons would have to be weighed out," she said.
Typically, the licensee will pay a commission of 10 percent of the total sales of items like clothes or stationery and 4 percent to 6 percent for food products, Divina said.
Gordinsky declined to name the average royalty for a single property, saying that, in this game, ballpark figures don't exist.
"There are so many variables - property, licensee, term, territory, product - that nobody can give you a simple figure," Gordinsky said. "A good property can bring in $200,000 in royalties and a perfect one supported by a national television presence and sold at the right time can bring in up to $1 million."
Of this, the agent may get between 30 percent and 40 percent of the client's total royalty income.
Once they sign on the dotted line, local licensees gain access to the property owner's voluminous style guide.
"The Simpsons" is huge, Istok said, and 20th Century Fox actively encourages licensees to use Bart and Co. in new and unusual ways.
Marvel Comics keeps its images on a password-protected Web site, while the "Planet of the Apes" style guide clocks in at a full 17 disks worth.
Based in New York, EEMC has been in the licensing business in Eastern Europe for 10 years and counts big names in the Western entertainment business - 20th Century Fox, New Line Cinema and Marvel Comics to name a few - among its clients.
International licensing company Plus Licens AB, proud holder of the Harry Potter licensing rights, is the only international competition. Istok said there were only two local companies licensing Russian properties.
TITLE: Builders Go On Strike in Germany
AUTHOR: By Geir Moulson
PUBLISHER: The Associated Press
TEXT: BERLIN - German construction workers launched their first major strike in more than 50 years Monday, following members of the country's main manufacturing union in walking out earlier this year to back up demands for higher wages.
The IG BAU union said at least 8,000 workers stayed off the job at 400 sites in the capital, Berlin, as well as the northern city of Hamburg and the industrial Ruhr Valley area in the west. The walkouts came after a strike ballot last week produced a 98.63 percent vote in favor of industrial action.
"We're going to step up the strikes in the next few days," union leader Klaus Wiesehuegel promised at a rally in front of Berlin's historic Brandenburg Gate.
"There must be a better offer from the employers, and at the moment I don't see one," he told reporters.
The strike is the first large-scale action in the construction industry since 1949.
Last month, Germany's biggest factory-workers union, IG Metall, secured a 4-percent wage increase for the coming year for workers in the automotive, engineering and electronics industries after staging brief strikes at companies including DaimlerChrysler and Volkswagen's Audi division.
The country's bank workers are also voting on whether to strike.
TITLE: British Farmers are Heading to a Farming Klondike in Russia
AUTHOR: By Yevgenia Borisova
PUBLISHER: Staff Writer
TEXT: MOSCOW - Under a project run by a British-based company, British farmers seeking new opportunities are coming to Russia to establish farms on rich but idle agricultural land in the Penza region.
When George Green, a Scot, visited Russia for the first time in 1997, to appraise a small project in the south, he immediately fell for the land and the people.
"The moment I came to Russia, I just felt something about the place that really, really appealed to me," the 40-year-old farming contractor said in a telephone interview from Scotland, where he is finishing his contract job within the next year before moving to Russia to grow crops in the Penza region.
"It is a culture that really does interest me and the challenge of Russia appeals. I immediately liked Russia as a country, I liked the people. I feel there are opportunities there - the partnership of Western technology and knowledge and the Russian labor force, raw material resources, land. It interests me. The challenge interests me."
Green will be among the first of dozens of British farmers who are expected to start tilling land in Penza within the next five years, with the option of staying long-term.
The project, which receives no funding from the British government or the European Union, is managed by Britain's Heartland Farms Ltd., through its 100-percent-owned Russian branch.
The project has the support of the Penza administration, which sees its potential for bringing jobs to the region and raising tax revenues. Despite Penza's rich, black earth, much of its land now stands idle. Most farms have little money to invest in new machinery and have trouble staying in business.
The Agriculture Ministry is also on board. "The Agriculture Ministry is in favor of a project that approves the lease of land by foreigners who want to work it, especially land that stands idle at the moment, on the condition that it is used for agricultural production," Alexander Rasskazov, head of the entrepreneurship, farms and cooperatives development department in the ministry, said by telephone. "We would welcome them even more if they bring new equipment and demonstrate new technologies."
From the 2.4 million hectares of arable land in the region, the British farmers will receive tracts ranging from 3,000 hectares to 10,000 hectares on subleases from Nottinghamshire-based Heartland Farms, which is leasing land from the region and local farms for up to 49 years. They will start by cultivating cereals.
"It's a long-term project. It is not a quick fix. Nothing will happen overnight," said Heartland Farms general director Colin Hinchley. "We want to build a strong platform for the future. If this project is successful, it will outlive all of us."
The British farmers will operate under the umbrella of Heartland Farms, which will "hold them by the hand" during their first five years in Russia, Hinchley said. For a "minor fee," the company will provide the farmers with legal and accounting advice, lease them Western machinery and supply seed, fertilizer, chemicals and anything else needed for successful farming. It will also arrange accommodation for the farmers and provide them with interpreters and insurance.
To establish a business, each British farmer or consortium of farmers will have to invest about $500,000 of their own money per 5,000 hectares and - also via Heartland farms - register their own Russian company.
The size of the company's investment into the project is not something Hinchley would reveal, but he did describe it as "substantial," adding that Heartland Farms is prepared to arrange a $120 million line of credit - from a European bank he declined to name - for the farmers to obtain machinery.
The crops produced by the farmers will be contracted back to Heartland Farms to be marketed through its pooling system, Hinchley said. The system is already in place, created by Heartland Farms' shareholders who have been involved for the past 10 to 20 years with grain trading in the Soviet Union, via state channels and within Russia, as private grain trader Matrix.
"The pooling system is basically like a kolkhoz," Hinchley said. "Grain from, say, five farms goes into the designated silos for storage. We, as a marketer, enter a contract with buyers and sell it as a group rather than from each individual farm. It offers greater security and saves costs."
Hinchley said he believes most of the crop will stay in Russia because the country offers a large market. He cited barley as an example. "There's a big expansion in breweries. But at the moment Russia is importing 640,000 tons of malt, which is crazy. There's all this soil here and the people with the expertise to grow it, yet it's being imported."
Next year, the Ochakovo company will open a $100-million brewery in Penza and is also building a $50-million malt factory in Lipetsk.
"Of course, our company is interested in a long-term relationship with barley growers," said Ochakovo spokesperson Svetlana Luzgina. "Why don't these Brits contact our marketing department right now with their suggestions?"
A boost in grain production could aid the revival of poultry and animal farms, Hinchley said, adding that investors now prefer to buy processing enterprises, while not putting a lot of thought into the primary production base. As a result, many have to import raw materials. "You've got to get the base going first," he said.
Matrix still operates in the region and has established working connections with local transportation and fuel companies, grain warehouses and, importantly in Russia, has developed good relations with the local administrations.
Hinchley said the first farmer from Britain is expected to come over in July to sow winter wheat, and Heartland Farms expects to have about 80 farms throughout the western part of the Penza region within the next five years. Farmers should be able to return their initial investment within three years, he said.
How It All Started
Hinchley is not new to the game. Before coming to Russia five years ago, he worked in various farming structures in Nottinghamshire, in the East Midlands of England, for 20 years. He was runner-up in the U.K. Farm Contractor of the Year competition in 1995, going on to win it two years later.
Hinchley also has something to be proud of in Russia: a demonstration farm in Zalesnoye, in Penza's Kamensky district, which he got involved with at the request of local authorities. He grew enormous sunflowers last year and eliminated most of the weeds.
Agriculture officials estimate that between 20 million and 30 million hectares of arable land in Russia have been abandoned by farmers in the past decade and subsequently overrun by weeds. At Zalesnoye, Hinchley managed to reclaim 1,700 hectares.
"He worked very well here," said Anatoly Tereshkin, a tractor driver from Zalesnoye. "We had 420 weeds per square meter in our fields. Imagine ... how many nutrients are eaten by weeds. With his technology, Colin coped with perennial weeds completely, and if he'd stayed on, would have gotten rid of the rest."
Tereshkin said Western technology and machinery helped Hinchley grow huge sunflowers and achieve a yield of four tons of winter wheat per hectare, up from the farm's previous yield of 1.9 tons per hectare.
Hinchley says four tons could be a norm for the region and six tons is also achievable if the weather is favorable. "I can say I have grown wheat in Russia," he said proudly. "By using local seeds, putting in fertilizers and chemicals, we demonstrated that we were able to double the harvest."
Tereshkin said that, after their encounter with Hinchley and Western technology, local farmers would be more than willing to work for a British farmer. "It is such a pleasure to work when you can see good results," he said. "People in Zalesnoye are almost signing up on the waiting list to work with the Brits."
The British Interest
Over a year ago, Heartland Farms registered its Russian entity and kicked off the project, publishing articles in British agriculture magazines and organizing visits to the Penza region for 25 farmers from northern England, Scotland and Northern Ireland who got in touch.
Hinchley said it isn't just any British farmer who could accept the challenge of coming to Russia. "You've got to have the will, the entrepreneurial spirit, the pioneering spirit," he said.
East Yorkshire farmer Richard Wasling, 48, visited Penza at the beginning of May. He said he is considering taking 5,000 hectares of land - 3,000 hectares more than he has at home - and growing cereals.
"We are looking into it mainly because of the size of the areas of land that are available and it is a level of land you can afford to farm and make a profit," he said. We are struggling to make a profit farming over here in Great Britain, and also we are laden with a lot of red tape."
Wasling said he has looked at land in Hungary, Poland, the Czech Republic and Romania, but the conditions offered by Heartland Farms and the administration in Penza look best of all.
"There were four of us visiting Russia. If we decide to come over, then we will combine our business over here, which would then operate the business in Russia," he said. "So we would come - the four of us. This minimizes the risk if anything goes wrong."
Green said that as soon as his contract in Scotland expires, he will start growing barley, wheat, sunflower seeds and probably potatoes in Russia.
"Our farm is in the north of Scotland. The soil is not nearly as good as in Russia. Scotland is a very, very small place. It's very difficult to expand in farming here. I like the potential in Russia." Before his trip to Russia, Green said he traveled to Australia and New Zealand to check out opportunities, but they "don't interest me as much as Russia does."
British farmers' interest in Russia and other countries reflects a crisis in Britain's farming industry. In 1999, the National Farmers' Union polled 5,000 farmers across Britain, and three-quarters of those surveyed said they had no confidence in the future of farming, and 66 percent of farmers' children did not intend to take over the family business, a BBC report said.
"Things have been declining since 1996," NFU economist Blair Keenan said in a telephone interview. "The industry is definitely in crisis."
Keenan said the strong British pound has rendered exports unprofitable, assistance from the European Union is insufficient and recent factors, such as a decline in world cereal prices because of competition from Ukrainian and Russian grain exports, have also dealt serious blows. He said farmers are also burdened by red tape: various layers of British and Europe-wide regulations.
What Russia has to offer, he said, is low costs of land and labor.
Why Penza?
Half of the region's land is black earth, according to last year's national land survey by the land-quality-research institute RosNIIZemProekt. Legend has it that during World War II, German forces took the rich earth back to Germany by the truckload.
The land is good for growing buckwheat, barley, millet and wheat, especially fodder wheat, said Alexander Blinokhvatov, an academic with the Russian Academy for Natural Sciences and rector of the Penza-based Agriculture Academy.
Blinokhvatov said the soil contains 10 times more selenium than soil in the Moscow region and most other areas in Russia, and is loaded with a "full range of vitamins."
Konstantin Artyushin, head of the international department in the regional administration in Penza, said Penza has other advantages, including low overhead expenses, proximity to Moscow, low labor and accommodation costs, good transportation connections and the third lowest crime rate in Russia.
"The only risk here is the weather, but 97 percent of Russia is in a zone of risky farming," he added.
Foreign Enterprise
In the past decade, agriculture production in the region has dropped by half, Blinokhvatov said. Only about 40 percent of the region's farms are profitable, said Alexander Makarov, head of the department of crops in the Penza region's agriculture committee.
The Penza administration clearly understands that the money and expertise needed to revive the agricultural sector is not going to come from within Russia.
"We want an effective owner to appear here at last," Artyushin said. "It is not revenues generated by leasing land that we are really expecting from this project. It is jobs for locals now and tax revenues in the future that will support local communities. And we will give the Brits our support."
The head of the Nizhnelomovsky district administration, Vasily Samylkin, said he is glad that Heartland Farms is leasing land from five farms in his district. "Only half of our 86,000 hectares of arable land is in use. That's not right."
"For now, it's hard to say what we are expecting from the Brits, but what we are sure of is that they will introduce high standards of agriculture, which will stimulate other farms to follow their example," he said.
The region, which has a population of 50,000, has nine large farms and 78 small households as agricultural producers. Samylkin said the biggest farm, Vozrozhdeniye, made a profit of 18 million rubles ($575,000) in 2001, while smaller farms earned 8 million rubles or less.
"The situation with the machinery is just pathetic," said Ivan Khodzinsky, chief agronomist of the Nizhnelomovsky district. "It hasn't been renewed in the past decade, it is 100 percent worn out. Out of what used to be 10,000 machines, 6,000 are left, but they just work for a week and then need fixing."
Even farms without enough spare land to participate in the new project have tried to establish connections with Heartland Farms.
When Hinchley first met Nikolai Mushtakov - the director of a farm named after the revolutionary Valerian Kuibyshev - at the end of May, they immediately struck a deal.
"We give you seeds, you sow, we harvest and then divide the crops 50-50," Hinchley offered.
Mushtakov then asked about the power of the harvesters offered by the British. His jaw dropped on hearing "100 hectares a day" in reply. Local harvesters could do only 35 hectares and are also known to lose about 20 percent of a crop. Quick harvesting also reduces the danger the crop will be damaged by rain.
Mushtakov and Hinchley shook hands on the deal.
Heartland Farms is willing to work with all local farmers, Hinchley said. "It's not a case of drawing a line, saying this is one system and this is another. It's very much an integration of societies and ideas," he said. "If we could support other farmers with seeds, machinery, we would do it, too."
Blinokhvatov, the Penza academic, said he was impressed with the British company's approach. "What I really appreciate is that they don't start with the aim of getting rich overnight. They are really smart and they don't start with issues that would bring them an immediate lucrative result."
"The Brits start from scratch - from the production of raw materials - and this is very wise. What we need at this stage is a real tangible example to follow."
Those For and Against
The Penza branch of the Communist Party said it will protest the British project, but local officials said they are not worried that the Communists will succeed in spoiling it.
"I spoke to a few local communists - they are over 70, but they are very hard line," said Samylkin, the district administration head. "They were worried that all the crops would be exported to England. I told them that no, on the contrary, we will soon have a problem selling them and it will be good if we could eventually export."
"Well, they understand it with their heads, but their hearts protest and we can do nothing about it. But, of course, there is nothing to worry about - they are not going to do any damage to the Brits."
Boris Zubkov, first secretary of the regional branch of the Communist Party, predicted that the foreign farmers would do nothing to help the local communities and said any taxes they paid "would be stolen."
"Look, the state has not built a single school or kindergarten in the past 10 years. It abandoned social needs altogether. The farmers who took over a lot of the land haven't cared about this either," Zubkov said.
"These newcomers will also skip this fundamental issue - they will just technically exploit the land, while the people, 535,000 rural residents, will be left with nothing."
"Of course we are going to organize protest actions against these foreigners," Zubkov said.
But Vladimir Bashmachnikov, head of the All-Russia Farmers Union, or AKKOR, said that, although he had not heard about this project, his association would support it.
"Communist actions?" he said. "Well, I am sure our local members will be able to think of something of the same order to show their support. Let these farmers come, let them work, there is enough land for everyone. Let them not listen to the Communists, because there is no logic in their words."
Bashmachnikov, however, advised the British to take the situation in the impoverished villages into account.
"You can't be rich alone in the village," he said. "That's the way to disaster. They must not be hostile, they must be friendly. Those of our farmers who can afford it make donations to local schools, providing kids with lunches, or give some produce to local hospitals."
Mikhail Petrov, his Penza colleague, said providing jobs to local residents might not be enough to win their support. He suggested the British establish good connections with the local members of AKKOR, who have a lot of influence with the rural population.
"A positive attitude from the locals is the key to success here," Petrov said.
Local officials said what is likely to unite local residents and the British is pure commercial interest.
Farm director Mushtakov agreed. "If these people work honestly here for 49 years, people will pray for them. There will be some envy, of course, but I am sure there will be no fires or pogroms. I hope they will teach other farmers to farm properly, and their success will also give us an incentive to demand changes from the government that will allow us to operate in equal economic conditions."
The Project's Prospects
The project should develop step by step, Hinchley said. If all goes well, livestock and potato farming is also possible, as well as further development of infrastructure, including the purchase of a grain warehouse, he said.
Hinchley said that if 80 British farms appear in the region within the next five years, it should give jobs to at least 1,600 local residents and boost his current staff of four - who will act as a support team for the farmers - to at least 50 people, most of whom will be local. Blinokhvatov's academy is already teaching English to a group of its graduates so that they can work as professional agronomists and managers at the farms in the future.
TITLE: Russian Media Tries Opening a Business
TEXT: OF all the things written about the press in the past few weeks, something that appeared on the back page of Izvestia's May 31 edition made the biggest impression on me. The newspaper's management published its financial results for last year, approved by the main shareholders, Interros and LUKoil, and certified by auditors.
So what's the big deal?
Until recently, the Moscow-based press, to me, looked like a beautiful but barren branch of the Russian press. It had the bottomless pockets of the oligarchs at its disposal and the opportunity to sell political services. Money from all over the country poured into Moscow to pay for zakazukha (paid for articles). There was simply no incentive for the press to develop as a professional business, and transparency was the last thing anybody wanted.
The fact that Izvestia seems to be ending this tradition signals an important change in the Russian media market.
Following this event, Izvestia chief editor Mikhail Kozhokin told me a number of interesting things. For example, Izvestia has started to pay out dividends to its shareholders and is planning to write a corporate code of conduct for its editorial staff. But I was really struck by a seemingly insignificant remark:
"We decided that it was not cost effective to send a correspondent to the World Cup."
What exactly was it that struck me?
Izvestia is the leading Russian newspaper brand. A controlling stake is owned by one of the leading oligarchic groups, Interros. It was acquired during the era of "information wars" as a political tool. Not long ago it would have been a sin for Izvestia not to send someone to cover the World Cup - for prestige purposes, if for no other reason. Under Vladimir Gusinsky, NTV journalists would proudly recount how they had spent thousands of dollars on hiring an airplane just to get a few exclusive aerial shots of the area where the Kursk catastrophe took place.
But then, suddenly, the oligarch-owned Izvestia starts applying business logic to its editorial policy. Moreover, by making public its financial results for the year, it is insuring itself against a potential conflict between the main shareholders, Interros and LUKoil, whose relations are far from cloudless - just such a conflict brought down TV6 not so long ago. At the same time, making the company more transparent renders it more attractive to investors.
Worth noting is the striking change in the atmosphere within the media community over the past few months. It was not so long ago that Russia was being overrun by "freedom of speech" tourists.
These days we are witnessing similarly feverish activity in the area of restructuring the media market. The Russian-American Media Entrepreneurship Dialogue, for all its failure to deliver concrete results, has stirred the media industry from its slumber, and soon a major industry conference is to be held in Moscow. A promising organization - the Council of Media Industry Associations - has been set up by six major industry organizations. And last, but not least, an open committee on media policy - a Soros Foundation initiative - is gathering together market leaders and representatives of the economic ministries - who until now have not been actively involved in public debates on the mass media.
Of course, the approaching national elections do not provide the most auspicious backdrop for structural reform in such a sensitive area as the media. However, it seems to me that the process of transforming the mass media from playthings of the state and of oligarchs into players in a normal information market has already gathered momentum and cannot be halted.
Alexei Pankin is the editor of Sreda, a magazine for media professionals (www.internews.ru/sreda)
TITLE: Organically Defining State Standards
AUTHOR: By John Balzar
TEXT: DON'T smirk. Empathize. Walk in the other fellow's shoes awhile. Look at things from someone else's perspective.
OK, I'm trying now. I've got myself in a suit and tie and a Washington frame of mind. I'm imagining now what it's like to plunge into the fight over a much-mocked little industry that sprouted from hippies and has now gone mainstream. It's organic foods. No grinning, because, pound for pound, this industry is growing faster than the technology racket.
At least one purveyor has zoomed from practically zero to more than $100 million in a year, capitalizing on the U.S. public's appetite for wholesome nutrition. And overall, sales of organic foods have grown an average of 23 percent per year over the past 10 years.
But there is a problem: The country can't agree on what organic means.
Believe it or not, the federal government has spent 12 years bickering about it. We've had false starts, public outcries and bureaucratic foot-dragging. But at last the U.S. Department of Agriculture is on track to clarify matters. Organic farmers want it. Consumers demand it. Common sense insists upon it.
So, beginning Oct. 21, meat and dairy products can be labeled as organic only if the animals are fed 100-percent-organically-produced and genetically-unaltered feeds, and no supplemental antibiotics or hormones. Organically-raised animals cannot be fed animal parts or manure.
Yes, any one of us could have saved them 11 years and 11 months to come up with this definition, but empathize. This is Washington.
So what's the problem?
Same thing: This is Washington.
Nothing is ever quite as it seems. This is where 12 years' work comes down to the 12th hour and just a phone call.
We're talking about carving loopholes in standards that haven't even taken effect.
A Los Angeles Times report recently disclosed that an influential chicken company in Georgia wants to cash in on the organic craze but cannot exactly meet the test. It's hard to find organic chicken feed, you see. And it doesn't cost chicken feed to buy it either. So Fieldale Farms has asked the government for a "waiver." It would like to sell as many as 300,000 chickens a week, calling them organically raised when they are not.
The perspective on this is simple: If a consumer is willing to pay double for an organic chicken, someone could drive profits right through the old coop roof if their only cost was to change the labels.
In California and scattered other states that have set up their own patchwork standards for organic food, the results would be even greater confusion. Consumers in these states would see their local regulations superseded by the new federal standards, and suddenly non-organic chickens would show up on the shelves proudly labeled organic.
Don't smirk. This is why lobbyists live so well.
The office of Agriculture Secretary Ann Veneman says it will consider the loophole request just the same as it considers all requests, because government cannot close the door on people, chicken farmers included.
But a deputy said that this doesn't mean Veneman will really consider it, as in make a decision now or any time. "There is nothing on her desk," the deputy explained. And besides, congress just ordered up a study of the availability of organic feed, and who knows what that means. Veneman's aide couldn't say. Unfortunately for Veneman, another underling had already put things in writing a little differently. In a letter to the Georgia chicken farmer, the second deputy allowed that situations may arise "where there is justification for a change in the national standards to help the market perform more efficiently."
Efficiently? Where did that word come from? The new standards for organic food make no mention of efficiency as far as I can see. Organic agriculture is by its nature inefficient. But remember, we are not in Kansas anymore, Toto.
It's an old story. You could look back at our securities laws. Originally written in common-sense language to protect investors, they have been hollowed out by decades of wheedling by lawyers, lobbyists and provincial members of congress.
Today, almost anything short of outright embezzlement lies in a vast area of regulatory gray.
John Balzar is a columnist for The Los Angeles Times, to which he contributed this comment.
TITLE: Corrupted Capitalism Vulnerable To Attack
AUTHOR: By Sebastian Mallaby
TEXT: In the 2000-U.S.-presidential campaign, Al Gore tried to spice up his roadshow by lashing out against big business. He was laughed off the stage because the 1990s boom had made populist rants sound hollow. At about the same time, say between 1999 and 2001, anti-globalization protests vilified big business too. The movement petered out because its leaders were so muddled.
Now, however, things have changed. Enron has created a natural moment for a smart assault on capitalist excess. The wonder is that political leaders and social activists alike do not seem to have seized it.
The assault starts with the myth that Internet-era plutocrats were nicer than their predecessors. In the popular imagination, the typical billionaire of the 1990s was a pony-tailed geek on a mountain bike, not a top-hatted baron of the Gilded Age or a besuited Wall Streeter from the 1980s. Kevin Phillips's new history of the rich recalls the excesses of past plutocrats: They said things like "greed is good" (Ivan Boesky) and "Only the little people pay taxes" (Leona Helmsley). In contrast, 1990s wealth was informal and discreet. It was tinged with environmentalism and social consciousness. It was virtuous and honest.
This stereotype overlooked the philanthropy of past barons - the endowments created by Carnegie and Rockefeller and, more recently, by popular villains such as Michael Milken. But it also painted the 1990s in too soft a light. Bill Gates has endowed a terrific charity, but his appetite for monopoly-profit matches that of the oil and railroad trusts, circa 1900. Larry Ellison, the second richest cyberbaron, collects yachts and sports cars and wives; he is as modest as Madonna. The past few months have given us Ken Lay, the Enron chief who urged employees to buy doomed company stock while he was dumping it. They have given us John Rigas, the founder of Adelphia, who helped himself to billions of shareholders' cash. And they have given us Dennis Kozlowski, the departed boss of Tyco, who seems to have used company funds to buy himself an $18-million apartment.
But the new attack on business is not just about plutocratic greed. It is about the core principles of capitalism. Our system is supposed to reward people for producing stuff that others want. Enron and Adelphia and Tyco poison this system of meritocratic reward: Their bosses did well not because they served consumer needs, but because accountants lied about their records. When firms cheat like this, capitalism forfeits both efficiency and morality.
What's more, the corporate culture of cheating extends beyond accounting. Last week a study in the Journal of the American Medical Association found that published statistics on new drugs are often little better than Enron's accounting. In one egregious example, first reported by Susan Okie in The Washington Post last year, Pharmacia Corp. funded a study to show that a medicine called Celebrex works better than cheap alternatives such as ibuprofen. The study collected 12 months of data, which suggested no Celebrex advantage. So the authors selectively published the first six months of results, which purported to show that Celebrex had fewer side-effects. In 2001 alone, this trick caused patients to spend $3 billion unnecessarily.
The pattern here should be politically explosive. A firm's stock price is supposed to go up when it has produced something people want, not because its accounts are fraudulent. A drug firm is supposed to reap $3 billion when it makes something wonderful, not when it rigs scientific data. Yet cheating goes on far too much. Last week a survey found that, in the past five years, 993 companies have been forced to restate their results after misrepresenting them the first time around. A week earlier another study showed that two-thirds of the "new" drugs granted patents between 1989 and 2000 were old drugs with a minor twist and a major marketing budget.
Put this together with other corporate scams, and you've got a campaign message. Companies are fleeing to offshore havens, forcing you to pay more tax. They lobby for farm subsidies and other corporate welfare, so that tax dollars get wasted. And look at Enron and Adelphia and those pharmaceutical firms: They are wrecking retirement funds with accounting tricks, jeopardizing your job security by siphoning cash out of firms and bankrupting your grandmothers with sky-high drug prices.
Forget the dumb attacks on globalization and free markets. The real injustice is that firms are rewarded for lies and lobbying clout, rather than for honest goods and services. The scandal isn't capitalism, in other words. It's that capitalism has been corrupted.
Sebastian Mallaby is a member of the editorial staff of The Washington Post, to which he contributed this comment.
TITLE: Trouble in Moscow, but Blinchiki in Denver
TEXT: In response to "Police Take Rap for Failing To Stop Trouble," a June 11 article by Nabi Abullaev.
Editor,
In the article it is written that: "The ROMIR polling agency interviewed 500 Muscovites on Monday and 40 percent of them, the largest share, also put the blame on city police. The rest of the blame was shared among city authorities (17 percent), the fans (15 percent) and even the Russian soccer team (2 percent), presumably for losing."
Only 15 percent blame the fans!
Interesting, since the riot started with them. The fans chose to behave abominably. That the police failed to anticipate such behavior was perhaps short-sighted, but the riot itself - initiated by fans, fed by fans, prolonged by fans - was completely the fault of the fans.
Angela Eanes Marietta,
Georgia
New Neighbors
In response to "Laugh and the World Laughs With You," a June 11 column by By Vladimir Kovalyev.
Editor,
I just returned to my home in Denver after two weeks in St. Petersburg.
In America we have a saying, "the grass is always greener on the other side of the fence." Although I appreciate the beauty, cleanliness, low crime and un-employment rate, and all the other comfort and conveniences an American city affords, I was enchanted with St. Petersburg's architecture, appreciation of art and culture, it's cosmopolitan style, the overwhelming hospitality and friendliness of its residents, and their pride in their city.
I hope to move there for a period of time to teach English while retaining my home in Denver. I made more friends in St. Petersburg in two weeks than I have in two years in Denver.
Here in Denver, you will see that everyone stays safely in their cars independent of human contact. You will be amazed at the number of overweight, unhealthy people, the lack of any sense of fashion, and the casual attitude toward any rules or guidelines governing etiquette and behavior in public and in peoples' homes.
We are still a country searching for its identity.
On the other hand, you will be enchanted by the beauty of the mountains, the conveniences and efficiency afforded to you in your daily life, and all the smiling people.
So, Vladimir, I invite you to my home in Denver when you are feeling homesick for Russia and we will have some blinchiki and tea, and discuss our two great cities.
Ken Taft
Denver, Colorado
Out of the Blue
In Response to "Global Eye: Croker Sack Blues," a June 11 column by Chris Floyd.
Editor,
I have been reading The St. Petersburg Times for over a year now, and I appreciate its generally informative and thought-provoking articles. However, I found Chris Floyd's recent article, "Croker Sack Blues," to be extremely misleading.
For example, Floyd's article states that "[Bush] then announced that, henceforth, the United States will 'impose preemptive, unilateral military force when and where it chooses,' the Washington Post reports." Written in this manner, Floyd's article implies that the Washington Post actually quoted Bush speaking such words.
In reality, the Post quoted Bush as saying: "We must take the battle to the enemy, disrupt his plans, and confront the worst threats before they emerge ... In the world we have entered, the only path to safety is the path of action. And this nation will act."
Following this quote, the Post reporters summarized their own impressions of Bush's speech. The quote in Floyd's article is taken from this summary, and it therefore represents only the opinions of the Post reporters who wrote the article. Bush himself did NOT make the specific "announcement" that Floyd attributes to him.
In addition, Floyd - correctly - quotes Army Private Matt Guckenheimer as revealing that he was specifically ordered to kill women and children in Afghanistan. Floyd understands this to mean that the U.S. Army commanded its troops "to put a bullet in the brain of, let's say, a two-year old girl."
However, Floyd apparently did not read the letter that Private Guckenheimer wrote to The Ithaca Journal, in which he clarified the context of the order to "kill women and children." In his letter, Guckenheimer explains that the order was intended to "[make the U.S. soldiers] aware of the fact that the hostile forces ... might include women and children. In that event, if those women and children showed hostile intent, we were ordered to kill them as hostile forces, just like any other hostile force we encountered. However, this does not mean that we were ordered to slaughter noncombatants such as babies."
In short, the soldiers were being told that enemy forces did not consist solely of men old enough to grow beards. This does not mean that they were being ordered to kill helpless infants, as Floyd insinuates.
Finally, Floyd points to the BBC headline "Afghan Pipeline Given Go-Ahead" and implies that this business deal was the main reason for the entire war in Afghanistan. Apparently though, even Floyd couldn't find any evidence to support this theory, as he offers none.
In fact, he doesn't even mention what the article was really about. I looked it up. The article Floyd references is about a new deal to build an oil pipeline in Central Asia. According to the article, US-based Unocal had backed out of building the pipeline in 1998 because the company did not want to be seen as supporting Taliban-controlled Afghanistan, through which the pipeline would run. So I assume that Floyd expects readers to believe that the U.S. government has spent the last four years plotting to wage war against the Taliban, for the sole purpose of giving Unocal the ability to build a pipeline without sullying its reputation? Without any evidence at all to support this claim, it seems a bit absurd.
Also, Floyd conveniently ignores the fact that the same BBC article reports that "Unocal has repeatedly denied it is interested in returning to Afghanistan" to build the pipeline.
Now, I realize that Floyd writes in the "Opinion" section, and so, of course, his article is intended to present one particular view. Even so, to use quotes out of their original context is dishonest and reflects a lack of journalistic integrity. The Guckenheimer quote may have been an honest error, but the quote from the Post was truly misleading.
Similarly, Floyd's quoting of the BBC headline, without any other clue as to the content of the article, also seems either useless at best or manipulative at worst. Perhaps we were supposed to assume - without reading the BBC article - that the Taliban had disallowed the pipeline and thus prevented American access to oil, causing the war? But the BBC article implies that the pipeline could have been built either before or after the war. In fact, given the BBC article's utter lack of relevance, I have to wonder if Floyd ever read it himself, or just happened to find its headline useful.
Reading Floyd's article, it seems as though he simply set out to lambaste the Bush administration's foreign policy, hunted through Western newspapers looking for sinister sound-bites, and then loosely strung these together to create the most sensational story possible. In doing so, he ignored or obscured the context from which he gathered the quotes. Such a practice discredits Chris Floyd, as well as The St. Petersburg Times.
Even more unfortunately, by presenting such questionable information, Floyd makes it easier for people to assume that other articles critical of the Bush administration are nothing more than similarly unreliable rants.
By the way, I am including links to the interview with Guckenheimer, his letter of response, and the Washington Post and BBC articles that Chris Floyd refers to. I hope that your readers will look up these articles themselves and form their own opinions, rather than rely solely on Floyd's dubious insinuations.
In any case, thanks for publishing your paper online. I will continue to enjoy reading it, although I'll probably skip Floyd's columns in the future.
Sarah Carlson
Santa Clara, California
The Ithaca Journal's article about Guckenheimer and his letter of response: http://www.theithacajournal.com/news/stories/20020525/topstories/380284.html http://www.theithacajournal.com/news/stories/20020604/opinion/440857.html
BBC News article about pipeline through Afghanistan: http://news.bbc. co.uk/hi/english/business/newsid_2017000/2017044.stm
Editor,
Chris Floyd's opinion piece is excellent.
Thank you very much for having the courage to publish truthful assessment rather than the flowery propaganda of most mainstream media in the United States covering for the non-elected person currently residing in our White House.
Jacquelyn H. Webber
Newport, Tennessee
Editor,
Please allow me to take a minute to thank you for publishing the enlightening and inspiring words of Chris Floyd. His well-argued and well-researched columns are very much appreciated, and I salute the S. Petersburg Times for providing Mr. Floyd with a forum.
Jeffrey Coleman
Seattle, Washington
Personal Reasons
In Response to a letter from Michael Brudoley on June 11.
Editor,
"Personally, I have very little compassion for those Chechens who have chosen to remain in Chechnya."
Okay, let us make it personal. In 1941, my grandmother was 24. She was a history student at Leningrad State University. Her father, my great-grandfather, worked at a military factory. When the enemy approached Leningrad, and the factory was being evacuated, the family was offered a place in one of the departing trains, with enough room for their modest belongings.
Considering the imminent danger of the city being taken over by the Nazis, to take that train was a prudent choice. My grandmother said no. On the rare occasions that she spoke about it later in her life, her only explanations were patriotism and being a 24-year-old native of Leningrad.
The parents stayed behind with their daughter. The blockade began. My great-grandfather died of hunger.
A while later, the apartment where the family lived was destroyed by an artillery shell. Luckily, my grandmother and her mother escaped, and were eventually evacuated by the doroga zhizni - the Ladoga ice road.
My grandmother lived until 1988. She could never forgive herself for that romantic impulse, which cost the life of her father.
Thousands of blockade survivors can tell you their stories of patriotism, romantism, death and survival in the besieged city.
Back to your letter, Mr. Brudoley. Your lack of compassion leads you to believe that "there is no reason to stay in a war zone when the borders are open, unless you are a combatant?" You are undoubtedly entitled to such a valuable, well-researched opinion. You have an inalienable right to disseminate it to any audience, anywhere.
But please, not in St. Petersburg.
Alexander Tiskin
St. Petersburg - Coventry, England
ATM Hassle
In response to "Carrying Cash Going Out of Style With Locals," a June 11 article by Boris Fyodorov.
Editor,
I'm a long-time Sberbank client who has been using plastic cards for about three years now. All I can say about it is that any system intended to make things easier in other countries does just the opposite in Russia.
This is especially true concerning the operation of Sberbank's ATM machines in the city. For instance, Sberbank has decided that an ATM located at the Petmol milk factory - the only round-the-clock ATM near my home - will no longer be accessible to general clientele, but only to factory employees.
You can still withdraw money at Sberbank branch offices, but most of them are closed on Sundays. Even when they're open, the terminals are often out of service, or you have to wait from 20 to 30 minutes until a sluggish employee takes care of you.
Now, to get cash on Sunday, you sometimes need to take a long tour, because one ATM may be out of order, another may not contain any more money, etc. Sometimes the whole network is down, so you cannot buy anything and cannot withdraw your money at all.
This is the way the largest Russian banking behemoth operates. You ask me why I don't opt for another bank? Well, it's just because the other banks are even worse.
Max Sher
St. Petersburg
Why the Hatred?
In response to "Chechnya Isn't a War Made for the Courts," a June 7 comment by Yulia Latynina.
Editor,
I read this article and have to say that I did not expect such a bluntly antagonistic stance from Yulia Latynina, who usually writes such intelligent and sensible analyses.
Although I agree with certain aspects of your criticism concerning the farcical conduct of the Budanov case, I must say that I was shocked to read a sentences such as "The Chechens are our enemies," or your statements concerning the "right" of both Russians and Chechens to hate each other.
Most of all, I was appalled by your assertion that crimes against Chechens "should not be" prosecuted in the same ways as crimes committed against other Russian citizens are prosecuted. Does this mean that every crime committed by the Russian army in Chechnya is justified because the two countries are at war? She cannot possibly mean this!
I would really like to understand why she holds so much resentment against Chechens. She wrote that, because she is a Russian woman, she has the same feelings towards Chechens that a Chechen woman might have toward Russians. I assume that the feeling she refers to is hatred. I do not think it is the case that all Chechen women hate Russians. In fact, I know quite a few who do not.
I volunteer at Tyoply Dom (Warm Home), a small NGO in Moscow, working with Chechen refugee families. We hold a group meeting on Sundays with Chechen and Russian women alike, trying somehow to go beyond the animosities that exist on both sides.
I am sorry to say this, but Latynina has done a hell of a job at fueling this hatred with her article. How is there ever going to be even the slightest chance for peace if the two nations just content themselves with hating each other? Maybe women, especially, can make an effort of laying the groundwork for an eventual conciliation, although prospects of this certainly seem meager in the near future. However, what are the alternatives to trying?
I would like to invite Latynina to attend one of our Sunday meetings sometime, if she likes. There she could see for herself how many of the Chechen women living in Moscow really do think and feel. Perhaps it will even help to somewhat modify her hostile position.
If those whose lives have been more or less devastated by this war don't have to turn to hatred, maybe Latynina doesn't have to, either.
Eva Schissler,
Moscow
TITLE: Subcontinent a Chance To Strengthen New Ties
AUTHOR: By Ian Bremmer
TEXT: SINCE the demise of the Berlin Wall, hardly a year has passed without pronouncements being made about how the Cold War is finally over. The breakup of the Soviet Union, new strategic arms treaties, the aftermath of Sept. 11 and - most recently - the establishment of the NATO-Russia Council in Rome last month, have all been hailed as historic changes that bring the era of confrontation between the two former superpower rivals to a close once and for all.
The politicians doth protest too much, of course, for everyone knows that U.S.-Russian relations, even during the better moments, have had more than their share of problems over the past decade. Today, concerns that, despite all the forward momentum - evidenced by backslapping summitry and new treaties - the two countries could return to a competitive, if not confrontational, relationship are ripe. For one thing, the warmth between the two presidents does not spread to their broader domestic constituencies. For another, the foundation for a lasting partnership - military alliance - remains elusive.
For all the good intentions, years of effort to bring Russia closer to a strategic partnership with NATO have delivered surprisingly little. The Partnership for Peace served as a basis for cooperation on defense planning and budgeting, military exercises and civil emergency operations, but provided no role in NATO military planning or operations. The 19+1 agreement offers arrangements for Russia to cooperate with NATO as long as no NATO member state dissents. The NATO-Russia Council provides further structure, but NATO still reserves the right to act unilaterally on any issue, at any time.
The simple truth is that, however many new Brussels councils will be established, NATO will not succeed in integrating Russia until both sides can find an area where strategic cooperation can actually occur. So far this has not worked: Most regional conflicts are buried in the heritage of "old" Cold War competition or "new" emerging rivalries, or both.
In the Middle East, Israel and Palestine could readily benefit from widespread international engagement, but Russia's cozy relations with the United States' regional enemies render mutual efforts unlikely. A U.S. attack on Iraq might yield Russian acquiescence, but not active participation.
Meanwhile, the Caspian Sea area has the United States and Russia pursuing dramatically different goals in their regional energy policies. Russia continues to provide arms and nuclear technology to "evil axis" member Iran. And Moscow's fears that the United States is setting up shop in Russia's southern backyard has only deepened with U.S. troop presence in Kyrgyzstan and Uzbekistan, and military advisers present in Georgia.
The United States also does not share Russia's position that the war in Chechnya is a war against terror. Combine this with Russia's continued unwillingness to support NATO enlargement and the prospects for alliance any time soon seem dim.
Yet there is one conflict where Russia-NATO cooperation can occur: the conflict between India and Pakistan.
This is the one conflict in the world where the major global powers would prefer any outcome other than armed confrontation. Neither the United States nor Russia has primary geostrategic or economic interests on the subcontinent. However, as the situation in Kashmir has escalated to military confrontation, the threat to global stability could hardly be more evident.
First, there is the obvious danger of nuclear exchange. Second, Pakistan President Pervez Musharraf's ouster and replacement by a militant Islamic regime is a threat to all parties concerned. And third, the prospect of heightened military alert could lead to the diffusion of Pakistan's nuclear weapons from central command and control, and their loss or sale to terrorist organizations.
U.S.-Russian cooperation has already been seen on this front, when U.S. President George W. Bush asked President Vladimir Putin to help initiate mediation between India and Pakistan. At the recent Asian Summit in Almaty, Putin worked hard to bring Musharraf and Indian Prime Minister Atal Bihari Vajpayee to the negotiating table, including extending an invitation to them to meet with him in Moscow. For Russia, the India-Pakistan conflict is an obvious chance to reassert itself as a major power in the international arena, demonstrating that it is up to par with other NATO members.
As talks progress, Russia is likely to become more broadly involved in Kashmir and could play a key diplomatic role in ending the standoff. For his part, Putin could step up to play a role akin to that of British Prime Minister Tony Blair in the early days after Sept. 11 - a function more difficult for Blair himself to exercise at present, as his own popularity erodes.
Progress will not come easily. Musharraf's ability to close down terrorist training camps in Pakistan-controlled Kashmir and to prevent militants from slipping over the border into India will destabilize his regime if not met with concessions on Kashmiri status by India. And such concessions will prove extremely difficult to extract from an Indian government that seeks to appease its own domestic constituency. Part of any answer, beyond the negotiations, is an international military presence to help enforce a settlement and separate the two sides. India and Pakistan are far from making a deal happen.
Yet it is hard to imagine that the United States will muster the commitment or the focus to pull it off on its own. U.S. Defense Secretary Donald Rumsfeld and Secretary of State Colin Powell have both been directly engaged in trying to defuse the Pakistan-India conflict in the past months - Rumsfeld again just last week - and it has taken valuable time and energy away from U.S. efforts to resolve problems in the Middle East and, most importantly, from plans to remove Saddam Hussein from power. In Washington, at the very least, Russian support to resolve the conflict between Pakistan and India would be welcome.
And aside from Putin's willingness to engage, Russia has a useful role to fulfill. It has a reasonably good relationship with India, through growing bilateral trade relations and arms sales, and can leverage its authority accordingly. Russia's intelligence resources in the subcontinent far outstrip those of the United States.
It would not be the first time Moscow has played a constructive role in the subcontinent. In 1966, Soviet Prime Minister Alexei Kosygin was successful in brokering a peace between India and Pakistan, resulting in the signing of the Tashkent Declaration.
Times have changed. As we have heard often enough, the Cold War is over. Looking back in a decade, the India-Pakistan conflict may be remembered as the event that brought Russia into NATO once and for all.
Ian Bremmer is president of Eurasia Group, and senior fellow and director of Eurasia Studies at the World Policy Institute. He contributed this comment to The St. Petersburg Times.
TITLE: Kaliningrad Hard Line Is Bound to Backfire
AUTHOR: By Pavel Felgenhauer
TEXT: THE incredible week of nonstop East-West summits in the second half of May, at which the Cold War was "finally" buried time and again, ended with a new, potentially disruptive public spat involving President Vladimir Putin over the future of Kaliningrad.
Until 1945, Kaliningrad was the capital of German East Prussia, Konigsberg. After the war, East Prussia was annexed and divided roughly in half between Poland and Russia, with Lithuania also getting a small section. The German population was cleansed and Russian, Polish and Lithuanian settlers populated the land. The Russian part, with the capital Kaliningrad, was separated from Moscow by Lithuania and Belarus, though all were part of the Soviet Union.
After the Soviet Union's demise, Kaliningrad became an enclave. Up until now, Moscow has had an agreement with Lithuania that Russians may pass in and out of the region without visas, just by showing an internal Soviet passport with a paper identifying Russian citizenship at the border crossing.
Now Lithuania is hoping to become an EU member in 2004 and also to join the European Shengen visa-free zone. In preparation for the transition, in January, Russian citizens from the mainland traveling to Kaliningrad by land will need a Lithuanian visa that will be issued according to Shengen rules. In a year, residents of Kaliningrad will also need visas.
Since most Russians don't have passports for foreign travel, lots of problems are inevitable. The Russian authorities' uncompromising stand on Kaliningrad further complicates the situation.
Moscow is demanding that its citizens be allowed to travel through Lithuania visa-free by a special nonstop train, by car or by bus with a 12-hour transit stay limit. But any free corridors through Shengen territory may be used as a window for illegal immigrants to get into Europe, and the EU, under its own rules, cannot and will not allow any such arrangements.
The EU is offering to issue multi-entry, one-to five-year Shengen visas to Kaliningrad residents and Russian businesspeople connected to the region for a symbolic fee of 5 euros ($4.70). The EU is ready to help in building new consulates in Kaliningrad and in modernizing border crossings.
Kaliningrad Governor Vladimir Yegorov is also ready to seek out compromises. Many residents of Kaliningrad - and also many Poles and Lithuanians - make a living out of cross-border trade (small-scale smuggling). They need the 12-hour transit corridor not to go to Moscow and see the Kremlin, but to trade goods (cigarettes, alcohol, gas) and get back into Kaliningrad.
The same activities may be performed with even better results by having a multi-entry Shengen visa with full access to all of Europe. At a meeting in Moscow before the recent EU-Russia summit, Yegorov asked that the cheap visa offer be put on paper and asked Foreign Ministry officials why they were blocking the building of a new consulate in Sovietsk on the Lithuanian border.
A Foreign Ministry official reacted angrily: "We are withholding permission for the consulate because we want a visa-free corridor, not new consulates." The Foreign Ministry is not doing anything to speed up the issuing of passports to Kaliningrad residents. The public rhetoric of Russian officials and politicians on the Kaliningrad issue has recently become so heated it would seem they are getting ready to send tanks to "liberate" Kaliningrad as soon as the visa regime is introduced.
But no tanks will go - up to 80 percent of Russian tanks have no batteries in any case. Russia's uncompromising public stand on Kaliningrad can only end in a humiliating retreat.
Apparently, that may be the main objective of the Kaliningrad spat. Many influential vested-interest groups in our country are deeply unhappy with Putin's present, pro-Western policies, with the opening up of Russia economically and politically. Since it's impossible today to remove Putin in person, the best strategy may be to expose the Kremlin's newfound Western friends as villains who want to tear Russia apart.
The campaign seems to have been at least partially successful. Putin has taken an uncompromising stand on Kaliningrad that will inevitably lead to his public humiliation in the near future. The planned expansion of NATO and a possible U.S. attack on Iraq will add to this. If the humiliation still fails to turn Putin, he himself may be exposed to the Russian public as a Western sellout. The real fight for Russia's future is only just beginning.
Pavel Felgenhauer is an independent defense analyst.
TITLE: Global eye
TEXT: Hellraiser 2.0Terror works. Terror pays. Terror feeds the bulldog. It's the first principle of any violent criminal organization: scare the hell out of the people you're trying to control. Just ask the Mob. Ask bin Laden and his boys.
Or ask the Bush regime, which has just launched a two-pronged assault in its increasingly desperate bid to deflect attention from revelations about its incredible - some might say incomprehensible - failure to stop what we now know was the almost-certainly preventable terrorist attack on Sept. 11.
First up: the proposed creation of a new bureaucratic monstrosity, the Department of Homeland Security, which George W. Bush last week proudly hailed as the "greatest reorganization of the federal government since Harry Truman's National Security Act of 1947."
This is not the most comforting of pedigrees. Among many other things, Truman's little jewel created the CIA, ushered in the militarization of the American economy, and secretly committed the United States to endless covert and overt war against Satanic "subversion" in all its forms - including, of course, that subversive document known as the Constitution, with all its pinko eyewash about liberty, legality and individual rights.
The Act and its secret codicils spawned a "military-industrial complex" of such sinister potential that its very avatar, General Dwight Eisenhower, warned the nation against it in his last speech as president. To no avail, alas. Already, on his watch, the CIA had subverted democratic governments in Iran and Guatemala - leading to decades of bloodshed and terror - while welcoming a whole cadre of Nazi war criminals into American service.
Greater things were to follow, of course: millions dead in Southeast Asia; a million dead in Indonesia; thousands dead in Pinochet's Chile; tens of thousands murdered and tortured during the Reagan-Bush proxy wars in Central America; and the arming of Islamic extremists, which has led to countless thousands of deaths, including 3,000 on the streets of America - all aided and abetted by Truman's clandestine apparat.
Now Bush seeks to top this class act with his great "security reorganization," which unaccountably leaves out the agencies - like the FBI, the CIA, and the National Security Agency - who failed to protect the security of those expendable saps, the American people. In fact, just last week we learned that the NSA - the Pentagon spy shop - had actually been tracking alleged 9-11 ringleader Mohammed Atta in the months before the attack, recording his conversations with al-Qaida honchos, the Miami Herald reports. Trusting souls, the NSA kept this information to themselves and let Atta enter the United States, where he lived - and plotted - in perfect safety.
At least they protected his security.
So as Bush begins his upgrade of Truman's travesty, it's worth remembering what Senator Arthur Vandenburg said when he saw Harry's plan for a permanent war machine combining global military reach with unprecedented political repression at home: "You're going to have to scare the hell out of the American people to get all that."
False Note
And that's where the second prong comes in. The Regime put on a masterclass in hell-scaring last week with the story of the alleged thwarting of an alleged al-Qaida attack with radioactive "dirty bombs."
First came a wave of dramatic announcements to grab the headlines: "U.S. Foils Nuclear Attack by bin Laden!" Fortuitous timing for an outfit reamed by weeks of bad press about its criminal dereliction of duty.
But once the main spin was established, the truth - or something like it - began dribbling out. Quietly. Suddenly we're told by officials that there "was no actual plan;" the suspect didn't have a bomb; he didn't have the materials to build a bomb; he was, at most, carrying out an alleged "reconnaissance" for potential future missions of an unspecified nature.
That's not quite as good a headline, is it? "Chicago Man With Alleged Ties to Al-Qaida Arrested Last Month While Re-Entering the Country With 'No Actual Plan' to Commit Terrorism, Officials Say." Doesn't really sing, does it?
No, terror always trumps the truth. It sings. It pays. Just ask Bush. And look at the headlines.
Clarification
Last week in these pages, we reported on the admission by an American soldier that he and his comrades had been ordered to kill women and children during "Operation Anaconda" in Afghanistan earlier this year. "We were told specifically that if there were women and children to kill them," Army Private Matt Guckenheimer told the Ithaca Journal last month.
Guckenheimer has since qualified this disturbing revelation. Perhaps shaken at seeing his words in cold print - or shaken by someone who saw his words in cold print - Guckenheimer wrote a letter to the Journal modifying his remarks. He now says the soldiers were ordered to kill only those women and children who showed unspecified manifestations of "hostile intent."
The orders did note that even "very young children" - of unspecified age - were being trained as soldiers by the heathen Mohammedans, and so could not be "just dismissed as noncombatants," said Guckenheimer. "But this does not mean we were ordered to kill noncombatants such as babies."
Well, thank God for that. It is indeed a saving grace that U.S. ground forces were actually not ordered to kill babies. That would be a very serious breach of military protocol - everyone knows the killing of babies and other innocent parties is reserved for the launchers of "smart bombs," "daisy cutters," B-52s, CIA drones and other purveyors of faceless, long-range death.
Glad we could clear that up.
For annotational references, please see Global Eye in the "Opinion" section at www.sptimesrussia.com.
TITLE: All Beijing Internet Cafes Shut Down
PUBLISHER: The Associated Press
TEXT: BEIJING - Beijing officials have closed down the city's 2,400 Internet cafes after a fire at an unlicensed cafe killed 24 people, a move that could temporarily keep millions off the Internet.
State media called the pre-dawn fire the deadliest in the Chinese capital in more than 50 years.
Zheng Wenjing, the 36-year-old owner of the cafe in Beijing's university district, surrendered Sunday and was under investigation, said Liu Wei, spokesperson for Beijing's Public Security Bureau. Liu wouldn't say what charges Zheng might face.
Chinese officials contend that Internet cafes are polluting the minds of children and teenagers with pornography and subversive material. Internet cafes are required to install special software to track which sites users visit, and thousands have been closed for failing to do so.
More than 30 million people use the Internet in China, although many families can't afford to buy computers. Most young people access the Internet at cafes.
The government encourages Web access as a way to promote commerce, yet has also taken pains to stifle dissent by blocking sites that it considers subversive.
In Shanghai, the police Internet office takes tips by e-mail on people who reproduce banned Web information.
The state-run Beijing Morning Post newspaper has announced a hot line for readers to report illegal Internet cafes, deemed "hei wang ba'' or "black cyber cafes.''
The fire at the 24-hour Lanjisu Cyber Cafe broke out early Sunday morning, when most of the customers were students taking advantage of lower Internet access rates offered late at night.
A survivor, who was identified only by the surname Li, said that there were about 30 customers at the cafe.
"It was around 3 a.m. when I smelled gasoline and saw thick smoke coming up from the bottom of the stairs,'' said Li, who went to the cafe with about 10 other students from Beijing Technology University.
"I told a cafe employee who went downstairs to check. He yelled that there was a fire and we all tried to escape,'' Li said.
Li said the fire had blocked the stairs and people began yelling for help through the windows, which were covered by iron grills. Neighbors managed to unscrew one grill and Li said he escaped with about seven other people.
TITLE: Lowe Stays Modest After Win
AUTHOR: By Rick Freeman
PUBLISHER: The Associated Press
TEXT: NEW YORK - Derek Lowe stopped his team's losing streak, beat one of the best pitchers in baseball, and has the best record in the AL.
Lowe still doesn't consider himself the best pitcher on the Boston Red Sox, even though Pedro Martinez and John Burkett have as many losses and fewer wins than he does.
"I'm not the ace, I'll tell you that right now," Lowe said. "This is only 2 1/2 months. To be considered an ace, you've got to do this for years. I'm the third guy in line, and I just try to win games."
Lowe struck out a career-high 10 and allowed seven hits in seven innings as the Red Sox beat Tom Glavine and the Atlanta Braves on Sunday.
The Braves won 10 of 11 games before they ran into Lowe, including the first two games of their weekend series.
Lowe (11-3) became the AL's first 11-game winner and got his first major league hit, singling up the middle against Glavine in the third.
"It was neat to be able to help the team out and help yourself out, too, because we ended up scoring a couple of runs that inning," Lowe said. "That's the beauty of interleague play. You look either real good or real bad."
Four of the seven hits Lowe allowed didn't leave the infield. He got out of a two-on, one-out jam in the sixth by striking out Chipper and Andruw Jones, and retired three straight in the seventh after giving up back-to-back singles to lead off the inning.
The matchup with Glavine was only the second meeting of ERA leaders in the two leagues. The other was June 26, 1998, when Al Leiter of the Mets faced Hideki Irabu of the Yankees.
This was Glavine's shortest outing of the season. He gave up five runs - though just three were earned - in five innings. His ERA grew to just 1.71, and the homer he gave up to Trot Nixon leading off the third was his sixth in just over than 110 innings.
Glavine's record (11-3) is still second best in the NL, and he and Lowe could meet again in the All-Star game.
It wouldn't be the first time. Lowe's first appearance came as a starter,though he went as a closer in 2000. Glavine has been to seven since 1991.
New York Mets 3, New York Yankees 2. Mo Vaughn hit a three-run homer off David Wells in the eighth inning to give him 1,001 career RBIs and lift the Mets past the Yankees at Shea Stadium.
The Mets took two of three from their crosstown rivals, only the second time they've won a series against the Bronx Bombers in nine tries since interleague play began in 1997.
Armando Benitez, who blew a ninth-inning lead Friday, pitched a perfect ninth for his 15th save in 17 chances.
Athletics 2, Giants 1. Barry Zito won his eighth straight, and Adam Piatt drove in the go-ahead run as Oakland won the Bay Bridge series, beating San Francisco at Pacific Bell Park.
Oakland took two of three on the weekend from its cross-bay rival with another outstanding performance from Zito, who gave up four hits and struck out five in 6 2/3 innings.
TITLE: Red Wings' Cup Triumph Ranks Them With the Best
PUBLISHER: The Associated Press
TEXT: DETROIT - Amid the red-and-white confetti, as players piled merrily upon Dominik Hasek, the champion Detroit Red Wings finally revealed why they might be one of hockey's greatest teams ever.
All those things that can preoccupy star players - the Hall of Fame rings, the broken records, the huge Stanley Cup-winning bonus checks - simply didn't matter.
Theirs was a rare convergence of time, talent and fate, where egos don't matter, where winning games and a big silver trophies became more important than contract extensions, bonuses and individual awards.
The Red Wings are Stanley Cup champions for the third time in six years because their all-stars became all for one. Hall of Famers willingly agreed to be grinders. One of the hockey's greatest scorers sacrificed his statistics to watch over a line with two youngsters - "two kids and an old goat," as Brett Hull himself called it.
And then there's coach Scotty Bowman, who is so old-style that he'd be running the single wing if he were a football coach. And captain Steve Yzerman, who kept playing shift after shift, grueling game after grueling game, on a knee so badly ripped up he needs reconstructive surgery and might not play for six months.
Hasek, one of the sport's greatest goalies ever, but never a Cup winner before, put aside the individualistic quirkiness that sometimes marks his play, stopping everything in sight. Including, until the proper time, the speculation he may retire.
"We'll talk about that later," he said before the Red Wings wrapped up the 10th Stanley Cup in franchise history - and the ninth and last for Bowman - by beating game-but-not-good-enough Carolina 3-1 in Game 5 on Thursday night.
The 2002-03 Red Wings won't resemble these champions, because Bowman won't be the coach, Hasek might retire and player movement is inevitable.
"Time takes care of it all - always," Bowman said. "That's the way I feel."
If that's true, these Red Wings should be judged very well by history. Not only were they the right team for the times, they were a team for all time.
TITLE: Tiger Roars On, Halfway To Grand Slam
AUTHOR: By Doug Ferguson
PUBLISHER: The Associated Press
TEXT: FARMINGDALE, New York - The longest course in U.S. Open history was only a short stop for Tiger Woods on his way to a possible real Grand Slam.
Another runaway victory in golf's toughest test made it look inevitable.
What was billed as the "People's Open" came down to one person. Woods captured the U.S. Open on Sunday and became the first player since Jack Nicklaus in 1972 to win the first two major championships of the year.
His rivals wilted at Augusta National. They battled at Bethpage Black.
It didn't matter. Nothing stops him.
Woods showed the power and skill to reach the 13th green with a two-iron from 237 meters for a birdie that smothered his final challenge. And he had the mental toughness, as always, to block out everything around him except the shiny trophy waiting for him at the end.
The only sour note was the ending - bogeys on two of his last three holes, including a meaningless three-putt in gathering darkness on the 18th for a two-over-par 72.
It was the first time the U.S. Open was played on a truly public golf course, and the Black Course at Bethpage State Park certainly held its own. Woods was the only player to break par, at three-under-par 277.
He still finished three strokes ahead of Phil Mickelson, who is now 0-for-40 in the majors but hardly felt like a loser.
"It's certainly a difficult challenge, five back to the best player in the world," he said after closing with a 70.
Woods moved into a tie with Tom Watson for most majors in a career, with eight and took one more step toward his ultimate goal, the record 18 professional majors that Nicklaus won.
Mickelson and Sergio Garcia each got to within two strokes at times, but not for long.
Woods simply gave them no chance. He missed only two fairways in the final round and putted for birdie on 17 out of 18 holes. Even after his early miscues at the start, he didn't panic.
"I kept telling myself that I wasn't playing bad," he said. "You're going to make some mistakes. Get them out of your system."
Mickelson and Garcia made more than a U.S. Open allows, especially when trying to track out the world's best player.
Mickelson got to within two strokes of the lead with a two-putt birdie from the fringe on No. 13, which put him at two under par.
Woods answered with his two most important shots of the day.
He hit a perfect drive on the 449-meter 12th hole, the longest par 4 in U.S. Open history, to take bogey out of the equation. Then, he nailed another one on the 13th to put him in position for a two-putt birdie.
"I knew I still had some tough holes to play and couldn't afford a mistake," Woods said.
Mickelson made it easier for him with bogeys on the 16th and 17th holes.
It was Mickelson's seventh top-three finish in a major, tying him with Harry "Lighthorse" Cooper among players who have never won one.
Jeff Maggert had a 72 and finished third at 282, although he was never a factor.
Garcia was the only other player to make a run at Woods.
He got to within two strokes after Woods three-putted the first two holes, and stayed on his heels until the 22-year-old Spaniard made the kind of mistakes that a U.S. Open won't allow. Three times he overshot the green, wound up in ankle-deep grass and couldn't save par. Garcia had a 74 to finish fourth.
His only consolation was that Woods finally spoke to him - but only after the Open had been decided. Earlier in the round, Garcia tried to be his pal, even retrieving a divot for Woods on the fourth hole.
Woods never looked at him. This was Sunday in a major championship, and Woods had only one thing on his mind.
TITLE: Kafelnikov Stops Kiefer In Ideal Wimbledon Warmup
PUBLISHER: The Associated Press
TEXT: HALLE, Germany - Yevgeny Kafelnikov rallied to win the Gerry Weber Open for the third time on Sunday, ending the upset run of Nicolas Kiefer, 2-6, 6-4, 6-4.
Kafelnikov nearly was forced to quit with a foot injury that he has had since May. It won't cause him to miss Wimbledon, which starts in a week.
"Believe me, I was very close to retiring, the foot was very painful, but I didn't want to spoil it for the spectators," Kafelnikov said. "I wasn't thinking about the result anymore, but then I started player better - it's ironic."
The two-time grand slam winner, mired in one of the worst slumps of his career, needed just under two hours to beat Kiefer, who reached the final after beating Pete Sampras and Roger Federer at the $510,000 event.
The top-seeded Russian took control of the match with a third set break to lead 2-1. He whipped a backhand down the line against Kiefer, who was cheered on by 10,500 spectators on the center court built to resemble Wimbledon.
"I wanted to win my first German title, but Kafelnikov was better," Kiefer said. "I lost my serve twice in a dumb way and that decided the match."
There was just one break in each set. Kafelnikov played well after he missed two volleys at the net and double-faulted in the first set to give Kiefer a 4-2 lead.
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LONDON - Top-seeded Lleyton Hewitt won his third consecutive Queen's Club grass-court championship after overcoming Tim Henman, 4-6, 6-1, 6-4 on Sunday.
Hewitt, the world No. 1 player, is the first player to win three straight Queen's Club titles since John McEnroe completed the feat in 1981.
The rematch of last year's final was Hewitt's fifth straight win over Henman.
"To win it three times is incredible. To walk inside the club and see all the pictures of the past champions and to have my name up there with all those great players is a great honor," the Australian said.
Henman appeared unsure whether to attack or rally from the baseline on several points, trying both with varying degrees of success. He was often strangely tentative on his volleys, and made far too many unforced errors to threaten Hewitt.
Errors from Hewitt were a rarity as he served well, hit some blistering returns and threaded several winning passes down the line.
The most important of those came at 3-3 in the third set, as a double-handed backhand left Henman helpless and earned Hewitt a decisive break.
In Birmingham, top-seeded Jelena Dokic won her first title on grass when she beat sixth-seeded Anastasia Myskina of Russia, 6-2, 6-3 in the DFS Classic final Sunday.
"Winning this is huge for me," Dokic said of her fifth career title. "I had titles on all surfaces but grass, even though I had always done well at Wimbledon. I am very happy with this result, particularly as I had not won a match here before.
"Even when I didn't play well, I was mentally tough and had to cope with some difficult situations during the week. I came in feeling good and now I feel even better."
Three double faults in a row from Myskina cost her a second break of serve in the first set, putting her down 1-5.
Meanwhile, former champion Lindsay Davenport withdrew from Wimbledon last week after failing to fully recover from knee surgery.
Davenport, who won in 1999, had surgery on her right knee in January and has missed the Australian Open and French Open, causing her to drop from No. 1 to No. 6 in the WTA world rankings.
Fellow former champion Martina Hingis, who won in 1997, also withdrew last week after undergoing surgery last month to repair ligaments in her left ankle.
Two-time Wimbledon finalist Arantxa Sanchez-Vicario has also pulled out citing "extreme exhaustion."
TITLE: U.S. Stuns Mexico, Advances to Quarters
PUBLISHER: The Associated Press
TEXT: JEONJU, South Korea - The United States continues to defy expectations.
Brian McBride and Landon Donovan scored on counterattacks to lead the Americans to a 2-0 victory over Mexico on Monday and into the quarterfinals of the World Cup.
Also on Monday, four-time champion Brazil defeated Belgium 2-0, with second-half goals from Rivaldo and Ronaldo to advance to the quarterfinals. Like Brazil, Rivaldo was shut down for much of the match by a determined and stubborn Belgium team. But, in the 67th minute, he scored a goal worthy of the World Cup stage.
"When I got to the locker room, I said, 'This is really weird,'" Donovan said. "It's like it's not happening. It's like a dream."
It is the best showing for the U.S. team since the first World Cup in 1930, when it beat Belgium and Paraguay in the first round, then lost to Argentina 6-1 in the semifinals.
The United States next plays on Friday against Germany, a three-time World Cup champion that pushed the Americans around during a 2-0 victory in the first round at the 1998 World Cup, when the U.S. team finished last in the 32-nation field.
While the Mexicans held the ball for almost 70 percent of the game, they couldn't get it past goalkeeper Brad Friedel, who had another brilliant performance for his first World Cup shutout. He got some help on a non-call.
Portuguese referee Vitor Melo Pereira failed to see U.S. midfielder John O'Brien punching the ball out of danger on a corner kick in the 57th minute, one of four corners in a three-minute span.
The Mexicans were incensed they weren't awarded a penalty kick.
"They showed the replay on the big screen and we saw it, 40,000 fans saw it," Mexico coach Javier Aguirre said.
McBride beat goalkeeper Oscar Perez from 12 meters out in the eighth minute after U.S. captain Claudio Reyna - playing right midfield instead of in the center in Arena's revamped lineup - made a fine run.
Reyna crossed to Josh Wolff, near the goal line, and Wolff flicked the ball back to an open McBride, who hit the left side of the net with a hard right-footed shot.
With the Mexicans pressing, Donovan scored in the 65th minute on a header from just inside the 6-yard box off a cross from Eddie Lewis, who had sped upfield. Donovan then whipped off his shirt to celebrate.
"It was all Eddie," Donovan said. "It's hard to miss balls like that."
The Americans are already thinking about Germany.
"We understand that they are the overwhelming favorites," Arena said. "On paper, it looks to be no match. However, we don't play this game on paper."
Rivaldo scored his fourth goal of the World cup when he took a long pass off the right wing from Ronaldinho on his chest, touched it with his left foot and spun to face the goal. He let it bounce once and shot from 18 meters out, the ball finding the net after deflecting off the foot of Belgian midfielder Timmy Simons.
Twenty minutes later, Ronaldo scored his fifth goal of the tournament, taking a pass from the wing on a counterattack and scoring from 10 meters away on a low, hard shot that skidded under goalie Geert de Vlieger.
Brazil, the only Latin American team left in the tournament, faces England on Friday in Shizuoka, Japan.
Brazil fielded its regular 11. Belgium was missing starting defender Glen De Boeck, who was replaced by Simons.
Belgium, which had more than its share of chances, looked as if it had scored in the 36th minute when Marc Wilmots' header beat Brazil goalie Marcos. But Jamaican referee Peter Prendergast disallowed the goal, ruling the Belgian had pushed Brazilian defender Roque Junior as the two jostled for position.
Belgium spent much of the time on the attack, getting a scoring chance less than a minute into the game.
Belgian striker Mbo Mpenza looped a shot that Marcos had to leap high to deflect over the bar.
With David Beckham and other English players watching from the stands, Brazil began to get more and more chances after about 15 minutes.
In the 19th minute, Ronaldinho ran by several defenders and dished the ball off to Ronaldo, who shot high and wide from just inside the box.
Minutes later, Ronaldo cut the ball back to Rivaldo, who kicked a volley high from 6 yards out.
Ronaldo had two more chances toward the end of the half. On the first, he kicked the ball into the face of a sliding De Vlieger from point-blank range. The second was a missed volley from close in.
Brazil struggled to find its rhythm to open the second half with Wilmots and Mbo Mpenza pressing in the Belgium half. In the 55th minute, Marcos raced out of his box to make a key save on Mpenza.
With the victory, Brazilian fans in the stands unfurled a sign that read: "England Here We Come - God Help the Queen."
"I think it's going to be a better match with England because they come stronger in attack," Ronaldo said. "It's going to be a match among equal forces."
"I was not worried at not having scored so late in the match. You have to wait and run and try till the very last minute. Hope is the last thing that dies.''