SOURCE: The St. Petersburg Times
DATE: Issue #810 (75), Tuesday, October 8, 2002
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TITLE: Russia, Ukraine Sign Transport Deal
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russia and Ukraine on Monday signed off on Monday on the basic principles for forming an international consortium to manage the transportation of natural gas from Siberia to Western Europe, a key source of revenue for both governments. 
 
"[Russia and Ukraine] agreed to work together on energy-sector issues, including ... the gas sector, an important sphere," President Vladimir Putin said in the Moldovan capital, Chisinau, during this week's summit of CIS leaders.
 "Of course, this is far from the final resolution of the problem, but it is an important step as we further our cooperation," he said.
 While Russian and Ukranian officials have portrayed the deal as a win-win situation for both sides, opponents in both countries have harshly criticized it.
 Many Ukrainians believe Kremlin control over their natural-gas-distribution network will lead to lower transit prices and, thus, lower revenues for the country, while Russian critics question the logic of deepening business ties with the leadership of a country that has yet to make good on its promise to pay off its $1.4 billion gas debt.
 An initial agreement on the consortium was struck in June, when Putin and Ukrainian President Leonid Kuchma met in St. Petersburg to discuss bilateral cooperation in the natural-gas sector. The next day, German Chancellor Gerhard Schroeder said that Germany, one of Russia's biggest customers, is interested in having a say in how its gas is transported.
 Monday's deal, signed by Prime Minister Mikhail Kasyanov and Ukrainian Prime Minister Anatoly Kinakh, is in some ways a capitulation on Ukraine's part. Kiev lobbied for a controlling stake in the yet-to-be-formed company that will operate the transit pipeline system, but the final draft of the agreement envisages a joint venture that will give Gazprom and Ukraine gas monopoly Naftogaz 50 percent stakes.
 A source at Gazprom said a feasibility study for the consortium's goals, which include renovations and additions to Ukraine's trunk pipeline system, is scheduled to be complete by August 2003, Interfax reported.
 Gazprom exports 130 billion cubic meters of gas to Europe a year, the lion's share of which goes through Ukraine.
 "Right now, there isn't enough investment flowing toward modernization of Ukraine's system," the source said. "This is something that can change with the creation of the consortium."
 Others, including some of Kuchma's political opponents, are not so sure.
 Yulia Timoshenko, a former Ukrainian deputy prime minister, told Ukrainian radio on Thursday that, as a consequence of the deal, Ukraine will lose half of its $2 billion in budget revenues reaped from transit fees.
 "This is how we leverage our influence, and we're about to lose it," Timoshenko said.
 Oleksandr Gudyma, head of the Ukranian parliament's subcommittee on the gas industry, said claims that the consortium would attract $2.5 billion in investment were "complete nonsense."
 "The gas-transportation system isn't about to be privatized, and its current status excludes any investment possibilities," Gudyma said.
 Russia's ambassador to Kiev, former prime minister and Gazprom founder Viktor Chernomyrdin, dismissed such concerns.
 "I am convinced that Ukraine stands to lose nothing in the process," Chernomyrdin told local reporters in Kiev last week.
 "Do we have a problem? Let's start with the declaration that both presidents signed. The consortium will be created by Russia and Ukraine, with each side getting an equal share. After the consortium's creation, European companies will be invited to join. Germany has already signed on, the Italians want to," Chernomyrdin said.
 "Ukraine doesn't need this system for itself, to supply itself with gas. It's a transit system. Of course, it is expensive, it demands money, it needs to be continually modernized, renewed and developed," he said. "Thus, we believe that if both the supplier and the buyer participate in it, then it will be beneficial."
 In order to mollify Ukraine, Russia agreed to register the consortium in Ukraine, meaning it will be subject to Ukrainian regulations, and to establish the head office in Kiev.
 But these overtures will mean little if Putin's vision of smooth cooperation between gas suppliers, transporters and buyers meets the same fate as Ukraine's promise to pay its gas debt, signed one year ago, almost to the day.
 Ukraine officials said Naftogaz Eurobonds have been issued and deposited with the Bank of New York but Gazprom refuses to claim them because of possible tax penalties. Gazprom has said Ukraine is at fault for the delays. In any case, Russia has yet to receive any payment.

TITLE: K-19 Film Premieres at Mariinsky Theater
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: The film "K-19: The Widowmaker," about a Soviet nuclear submarine that suffered a deadly reactor failure in the North Atlantic in 1961, drew mixed reviews on the weekend from some of its most knowledgeable critics - the crew of the boat itself.
 
Fifty-two veterans and widows of the crew of the submarine were flown in from across Russia and Ukraine to attend the Russian premiere of the film at a gala event at the Mariinsky Theater on Sunday. After the screening, they praised the film for the heroism portrayed by the actors, but took issue with what they described as a large number of inaccuracies.
 "I'm very thankful to the American filmmakers who finally reflected the heroism of the K-19 sailors, who had to keep silent about the accident for decades," said Vladimir Pogorelov, who served as the chief of the electrical engineering group on the sub.
 Yuri Mukhin, another K-19 veteran, agreed, calling the movie "impressive." He said that the film affected him to such a degree that he had to take a heart pill during the screening.
 The K-19 (later given the nickname "Hiroshima" by Russian sailors) was the first Soviet sub to carry ballistic missiles and was on its first training voyage in neutral waters in the North Atlantic in July 1961, when the coolant system for its nuclear reactor began to leak, causing a rise in reactor-core temperature, and threatening a meltdown and the possible detonation of its missiles.
 The danger posed by the accident was extreme. An explosion so close to NATO bases could have provoked a NATO response, ultimately leading to a nuclear confrontation during the Cold War.
 But the severe crisis was averted by the actions of the submarine's captain, Nikolai Zateyev, and the crew of 139, who remained aboard the vessel to repair the coolant system, ultimately exposing themselves to severe doses of radiation. Eight of the submariners died within two weeks of the episode, and 12 more died over the next two years. A large number of the remainder suffered longer-term sickness and disability.
 Big-name producer Kathryn Bigalow ("Point Break," "The Weight of Water") of Intermedia Films took the ship's story as the material for her next blockbuster film, which was budgeted at $90 million.
 The film stars Harrison Ford as Zateyev.
 Bigalow, who was on hand for the premiere, along with co-star Liam Neeson, explained the draw of the story for herself and U.S. audiences.
 "I was inspired by this story," Bigalow said at a press conference at the Mariinsky Theater after the screening. "It was also a very moving experience for American audiences to realize what courage those people had shown in order to save the rest of the world."
 In Russia, however, the original script proposal for K-19 sparked an angry reaction from a number of the crew members who had the chance to read it.
 One of the veterans' chief concerns was the conflict between Ford's character and that of Neeson, who played the second-in-command on the boat. While it forms the dramatic center of the movie, K-19 veterans say that no such conflict ever took place.
 The veterans also protested against the portrayal of the crew as a bunch of swearing, drunken and undisciplined Russian sailors, saying that it came from stereotypical Hollywood portrayals of the Soviet Union and in no way reflected the reality on the submarine.
 They went so far as to demand that their real names not be used, and that the name of the submarine and the date of the accident be changed for the film. They also petitioned the head of the Russian Navy, Vladimir Kuroyedov, not to allow filming to take place at Russian Navy bases.
 "If we had the type of crew that was portrayed in the first script, the submarine would have sunk before it even had a chance to leave port," said Valentin Shabanov, 70, a navigator on the K-19.
 Since filming at the port of Murmansk, in the north of Russia, was prohibited, the scenes at sea were shot in Canadian waters.
 Bigalow listened to the complaints and, while the central dramatic conflict remained, the script was altered somewhat to address the veterans' concerns.
 "I'm so happy that Kathryn Bigalow paid attention to our input," said Ninel Kozyreva, the widow of Anatoly Kozyrev, one of the officers who went into the radioactive reactorcompartment. He died in 1970 from radiation poisoning.
 "We have been apprehensive for the last two years, fearing how our beloved husbands would be portrayed in the film," she said.
 While the veterans and their widows were pleased that the script had been changed, the inclusion of the conflict between the captain and his second-in-command still disturbed some.
 "There's no way that a captain could be handcuffed on board a Soviet submarine by his own crew, as the movie portrays," Mukhin said. "We didn't even have handcuffs on subs."
 Mukhin added that not only was the captain never locked up, but NATO forces never detected the presence of the K-19 near its bases or offered rescue help, as shown in the film.
 "Every film based on actual events is usually a synthesis of the real facts and fiction," said Neeson, who confessed that he was very nervous before the K-19 veterans saw the premiere. "Unfortunately, often the true facts alone do not make good drama for a movie."
 "We know that, in real life, the captain and his assistant were on respectful terms with each other," he added.
 Lidia Yenina, widow of Vladimir Yenin - Neeson's character - said that she had already reconciled herself with the filmmakers' plot fantast, and said that Neeson was a perfect choice to show the character of her husband.
 "My husband was as honest and brave as Neeson played him," Yenina said.
 Yenina said that her husband was one of the sailors to go into the radioactive compartment and received a high dose of radiation. She said that he subsequently underwent three bone-marrow-transplant operations and lost all of his hair and eyebrows, but died only five years ago.
 For Pogorelov's part, he said that he was impressed by Harrison Ford's performance.
 "Ford even looks like our captain. He managed to show the image of a Soviet captain realistically," he said.
 Whether as a result of a mellowing of their attitudes since they first became aware of the script, or the effect from seeing the film itself, most of the veterans and widows were positive in their overall assessment of the finished product.
 "I understand that the Hollywood filmmakers were creating the movie to the tastes of American audiences, in such a way as the American people would be interested to see it," said Shabanov.
 Many went so far as to say it was the first Hollywood movie they had seen that was reasonably authentic and not biased against Russians.
 Aside from having paid for the flights of the veterans and widows to be present at the premiere, the film-distribution company MGN/Paradise, which is handling the distribution of the film in Russia, intends to donate 1 percent of the receipts from theater orders for the film to the foundation for K-19 veterans.
 Earlier on the day of the premiere, the veterans went to pay their respects to their dead crewmates at St. Petersburg's Krasnenkoye Cemetery and the Nikolsky Navy Cathedral.
 For the veterans and widows gathered, the day was all about remembrance.
 Some of the K-19 veterans cried as the movie was shown.
 "[The film is] a requiem for heroes," Pogorelov said.

TITLE: Putin Again Center of Attention
AUTHOR: By Steve Gutterman
PUBLISHER: The Associated Press
TEXT: MOSCOW - The Russian people, accustomed to centuries of living under rulers cast as omnipotent and omniscient, showered gifts and attention on their president as he turned 50 Monday - a display that some say is reminiscent of a Soviet-style cult of personality.
 
But others say that Vladimir Putin is just a highly popular, humble leader who does all he can to shun the accolades and adoration.
 He has been flattered in book and song, his face plastered on T-shirts, billboards and nesting matryoshka dolls. There's a Putin look-alike, there's a young man who assumed the Russian president's last name and there's a dog that can bark his first.
 From classes about him in a school in the Ural Mountains city of Yekaterinburg, to a parade and a prayer in his name in the Volga River city of Nizhny Novgorod, to a Moscow conference about the presidential image, Putin was the focus of events across the country.
 TV news shows devoted vast amounts of time to Putin. Newspapers listed developments in the growing myth surrounding the former KGB agent who has cast himself as a reformer and champion of order.
 Children were encouraged to write Putin letters with their hopes and advice. The daily Komsomolskaya Pravda printed a letter from National Hockey League star Pavel Bure saying he was "gratified that we finally have a national leader whom the people link with real hopes for the revival of Russia."
 Putin was away from the whirlwind, attending a summit of the Commonwealth of Independent States in Moldova - not surprising, since aides claim he is uncomfortable about the myth-making.
 But the other leaders were aware of the occasion. The summit's informal program included birthday greetings at a cave complex filled with fine Moldovan wine. On Monday morning, the country's president, Vladimir Voronin, gave Putin a bottle of wine with the Russian leader's portrait, and a crystal crocodile. Ukraine's president gave him a solar clock.
 In Russia, the NTV network had a story about a woman who has trained her dog to bark "Vova" - short for Vladimir - and a man who changed his patronymic and last name to Putin's, calling the president an "angel" who had given his life meaning. It also showed a Putin look-alike who said he planned to give the president a car he built with an engine from a Russian Volga and chassis modeled after an antique Mercedes.
 The gift that said the most, however, was a hat - a replica of the sable-lined, jewel-encrusted Cap of Monomakh, an early tsarist-era symbol of the Russian autocrat's absolute power - that a group of jewelers and cultural figures said they planned to give Putin for his birthday.
 The newspaper Gazeta quoted an unnamed Kremlin official as saying the Cap of Monomakh had not yet arrived and that if it did, Putin would not try it on. That comment suggested the Kremlin is eager to show that if anybody is making the president into a mythical figure, it is the Russian people - not him.
 Alexei Pushkov, the anchor of a political news program on the Moscow network TV Tsentr, said there is a lot to that theory. "The whole stability of Russia is based on the image of Putin - there is no [other] objective basis for stability, either social or economic. There are high oil prices and there is the image of Putin. Under these conditions, when society seeks a strut of support, it turns to Putin," Pushkov said in an interview.
 He said the myth-making around Putin also results from his popularity and others trying to make money from it.
 Political analyst Andrei Piontkovsky, director of Moscow's Center for Strategic Studies, said the image of Putin - who was plucked from obscurity by former President Boris Yeltsin as his successor - is largely a creation of Kremlin insiders determined to stay in power.
 "This all starts at the top," he said.

TITLE: Kremlin Looks To Tighten Grip
AUTHOR: By Andrei Zolotov Jr.
PUBLISHER: Staff Writer
TEXT: MOSCOW - Contrary to what some see as a friendlier phase in President Vladimir Putin's relationship with the governors, the Kremlin is cobbling together plans to strengthen its grip on the regional powers.
 
The presidential commission in charge of developing proposals on the separation of powers between the governmental branches has drafted a bill introducing new rules for the firing of governors, Vedomosti reported on Monday.
 The Kremlin could replace governors temporarily with presidential appointees during a natural disaster or when a regional government has an unpaid debt amounting to at least 30 percent of its budget, according to the bill.
 Furthermore, if a regional government is caught "misappropriating funds or violating the Constitution, a federal law or other norms," the Cabinet - not the president - would be allowed to replace the governor temporarily.
 The bill is part of a raft of legislation that will be submitted to the State Duma in early November, Vedomosti said. Other bills in the package are to include a breakdown of how tax money is split between regional and federal budgets.
 The commission overseeing the legislation is headed by Dmitry Kozak, the deputy chief of the Kremlin administration.
 The proposed measures are spooking some governors. "To send in the Audit Chamber, which would find a particularly cynical misuse of funds and then suspend [the governor] with a simple Cabinet resolution, is dangerous, infringes on our rights and destabilizes the regions," Pskov Governor Yevgeny Mikhailov was quoted by Vedomosti as saying.
 Under the bill, the president would need the court's support before he could act in most cases. For instance, if a governor issues a decree threatening the "the legal and economic unity of Russia" and does not retract it two months after a court ruling, a second court must decide that the governor failed to comply with the first ruling. Only then could the president remove the governor.
 In another example, a regional legislative assembly could be dissolved if it failed to adapt a local law to federal norms within three months of being ordered to do so by the court. The bill also strips regional lawmakers of their immunity from criminal prosecution.
 Spokespeople for governors contacted Monday said they were unfamiliar with the bill and refused to comment. 
 Vedomosti said that most of the regional leaders it polled did not object to court-sanctioned Kremlin interference. They said it would require a longer and more transparent procedure to make firing a governor more difficult then it is now.
 Currently, the president can suspend a governor accused of committing a crime on the basis of a statement from the prosecutor general.
 But the proposal to allow the Cabinet to suspend governors drew criticism.
 Kremlin-connected political analyst Sergei Markov said the bill was likely to sail through the Kremlin-controlled State Duma. But the final laws would not be as far-reaching as the draft reported by Vedomosti, he said.
 He said the proposals are in line with President Vladimir Putin's concept of government reform.
 "The president's right to suspend a governor and a governor's right to suspend a mayor in extreme situations is a concept that corresponds to the ideology of today's authorities and will undoubtedly pass through both chambers of parliament - but in a reduced form," Markov said.
 The Cabinet's right to fire a governor is a negotiating position that the Kremlin is likely to drop in the process of discussions. "In the end, it will be the president's decision based on the Cabinet's proposal, and the list of instances when a governor can be fired will be smaller," Markov said.
 Andrei Ryabov, a political analyst with the Moscow Carnegie Center, said the commission's proposals were among many being circulated and were intended "to keep the governors in shape."
 He said they were unlikely to be sent to the Duma because Putin would not want to antagonize the governors ahead of parliamentary elections next year and the presidential election in 2004.
 Ryabov said the recent election in Krasnoyarsk showed that election commissions alone cannot guarantee the Kremlin results, meaning Moscow still needs the governors' support.
 He also said that a Constitutional Court decision in July allowing governors to run for a third term marked a new phase in the Kremlin's relationship with governors. He said they were slowly winning back the privileges that they had under President Boris Yeltsin.
 Markov disagreed. He said that the outcome of the 2003 and 2004 elections will, to a large extent, be decided by the national television channels, which are loyal to the Kremlin. As for the governors, they would rather campaign for Putin than have the Kremlin send its own campaign staff in their regions.
 Both analysts agreed, however, that the main battle in both Kozak's commission and the Duma will not be over the power to fire and hire but over the division of tax money.

TITLE: Report: Prosecutor Slams Smolny Over Extremism
AUTHOR: By Claire Bigg
PUBLISHER: Staff Writer
TEXT: While human-rights organizations are warning against a rise in racially motivated extremism among youth groups in St. Petersburg, news agencies reported on Monday that the City Prosecutor's Office had filed a document with Smolny at the end of September slamming the city administration for its failure in fighting extremism in these groups.
 
The Prosecutor's Office says that the an investigation it carried out in September to assess the city's track record in combating the formation and actions of these groups returned negative grades across the board.
 "The study of youth and teenage crime shows minors and young people to be increasingly violent, which is the result of unsatisfactory youth policies on the part of government organs and administrative bodies, insufficient attention paid to the problem of youth crime by law-enforcement organs, the increasing lack of educational work and general preventive measures against youth and teenage crime," reads the report, a copy of which was obtained by the St. Petersburg Times.
 The report was sent by the City Prosecutor's Office to St. Petersburg Governor Vladimir Yakovlev.
 "An analysis of the current situation with regard to the manifestation of extremism in youth organizations reveals the lack of any kind of measure to uncover unofficial youth groups in St. Petersburg, their active members, leaders and places of meeting, as well as the necessary exchange of information between the St. Petersburg administration and the law-enforcement organs," the reports continues.
 The results of the report came close on the heels of one of the most gruesome recent incidents of racial violence in the city, only a few weeks after a 53-year-old Azeri watermelon vendor, Mamed Mamedov, was beaten to death in the street by a group of young skinheads.
 The Police investigation in to the murder has, so far, singled out two boys born in 1986 as the chief suspects.
 The next day another Azeri man was attacked in the stairwell of his building by a number of young men who he said had shaved heads and were wearing black leather jackets. The victim was cut a number of times with razor blades and said that the assailants threatened him with more violence if he and his family did not leave the city.
 A monument to the victims of Soviet repression on Troitskaya Ploshchad has also been painted over with extremist graffiti twice in the past two weeks and a group of young skinheads organized a march in the center of the city toward the end of September that went unhindered by police and largely unreported by the local press.
 The city administration, however, is reluctant to interpret the series of incidents that have taken place the city in the past few weeks as signs of a rise in the level of extremism among youngsters, let alone agree that it is the administration's responsibility for fighting them.
 "What can the administration's Youth Committee do?" said Alexander Afanasyev, the governor's spokesperson, in an interview on Monday. "There has been a lot of talk about a few extremist slogans here and there. For me, this doesn't indicate a rise in extremism, it is simple hooliganism."
 Afanasyev called Mamedov's murder "an isolated incident," and said that Yakovlev had still yet to receive the report the Prosecutor's Office says that it sent him last month.
 But local human-rights groups largely supported the investigation's findings and are calling for the administration to take action to stem the rise of extremist youth groups.
 "Lately I have noticed a lot of groups of youths with shaved heads, black clothes and swastikas. I think it is the administration's duty to fight this kind of extremism," said Yelena Amiriyan, the president of local Jewish charity fund Eva. "If these youths are displaying themselves so openly, it can't be that hard to identify them."
 "The perpetrators of these extremist acts should be identified and punished," she added.
 Vladimir Shnitke, co-president of the human rights group Memorial, says that, although no racist or anti-Semitic attacks have been reported to the association lately, the recent rise in the number of extremist incidents is undeniable.
 "We have had a large number of phone calls recently informing us that extremist slogans had been painted on walls," he said.
 Shnitke says that, while extremism existed before in St. Petersburg, it is acquiring an increasingly organized character, which, according to him, is a sign that extremist groups are attempting to achieve legal standing and political power.
 "There has definitely been a mass aspect to extremism lately. The emergence of organized groups is largely explained by the upcoming legislative and gubernatorial elections. These groups are getting organized and one of their aims is to run candidates in the elections," he said. 
 The politicization of extremist groups gained its first victory last month, when the Justice Ministry registered a radical nationalist party with an openly anti-Semitic leadership. 
 On September, 16, the Justice Ministry registered the National Power Party (NDPR), giving it the right to participate in elections at the national and regional levels, despite its openly racist statements.
 "Non-Russians, or people related to non-Russians either by blood or by marriage, should not be allowed to hold high ranking government positions. It is necessary to declare Judaism illegal and to declare that the country's greatest danger comes from the West and the democrats," states one of the party's documents.
 "Despite such stupid and racist statements, the Justice Department decided to register the party, after allegedly having studied the documents for a month," Shnitke said. "I am convinced the NDPR will run for the Duma elections."
 St. Petersburg's legislative elections are slated for December, 8, 2002, and the State Duma elections for December, 2003.
 Shnitke said that this tendency was not limited to St. Petersburg and was apparent throughout Russia.
 Like the Prosecutor's Office, Memorial asserts that the city administration is not doing its job in preventing and punishing extremist activities.
 "By law, the administration has the duty to take measures against extremism. If it doesn't, who will? Civil organizations are not capable of stopping extremist groups from acting," Shnitke said.
 Meanwhile, the Prosecutor's Office is demanding that the city administration launch a series of measures to counter extremism and hold accountable administration officials responsible for fighting extremism among minors and teenagers.

TITLE: Radio Liberty Stripped Of Former Special Status
AUTHOR: By Andrei Zolotov Jr.
PUBLISHER: Staff Writer
TEXT: MOSCOW - Radio Liberty, which has irritated President Vladimir Putin's Kremlin with its coverage of Chechnya, has been stripped of the special legal status it had enjoyed since 1991.
 
In a decree released Friday, Putin revoked a decree issued by President Boris Yeltsin during the democratic euphoria of August 1991 that granted Radio Liberty, a U.S.-funded Russian-language radio station, the right to open its Moscow bureau and gave Radio Liberty reporters the freedom to work unhindered throughout Russia.
 Radio Liberty said the decision would have no immediate effect on its operations.
 The Kremlin's information department said Yeltsin's decree "was meant to demonstrate the new Russian leadership's commitment to freedom of speech and press," Interfax reported. But, over time, laws allowing free media were developed, while Radio Liberty remained in a privileged position compared to other Russian and foreign media outlets. Putin's decree, the Kremlin said, "restores justice on the Russian information playing field."
 At the same time, a Kremlin official complained that, despite the end of the Cold War and a new trust in Russian-U.S. relations, the editorial policy of Radio Free Europe/Radio Liberty, or RFE/RL, "has not only failed to lose its ideological bias but recently acquired an even more tendentious character."
 "One can see it clearly in its broadcasts to Chechnya and Ukraine, when the choice of news is selective and one-sided," the unnamed official told Interfax.
 He added, however, that the decree has nothing to do with RFE/RL's editorial policy.
 The station has a license to broadcast until next year on 1044 AM in Moscow. The station has no license for a station in St. Petersburg, but its broadcasts are carried on two AM stations.
 Foreign Minister Igor Ivanov informed U.S. Secretary of State Colin Powell of the decision in a telephone conversation Thursday night.
 The Foreign Ministry said Friday that Powell had not objected, Russian news agencies reported.
 Radio Liberty officials said they were unworried if the decree meant nothing more than the station losing its special status. "If we are treated in accordance with codified international norms for freedom of the media, there is nothing wrong with this decree," RFE/RL spokesperson Sonya Winter said by telephone from Prague, where the station has its headquarters. "But if it is another expression of harassment and discrimination, then we would not be happy."
 Yelena Glushkova, the Moscow representative for RFE/RL, said she was in touch with the Foreign Ministry on Friday and received assurances that the bureau's accreditation remained valid and that it would not have to re-register.
 She said the decree would not affect the station's broadcasting in Russia, which is carried out by a Russian subsidiary that holds the license to the frequency. "I tend to think that this is just a technical decision aimed at unifying the legal base for media organizations," she said.
 Radio Liberty Moscow bureau chief Andrei Shary said he was waiting for further clarification of the station's status.
 Igor Yakovenko, the head of the Russian Union of Journalists, said Putin's decree did not raise any red flags, but he said he planned to keep a close eye on the situation.
 "It is wrong when all of the media have their freedom guaranteed by the law and one gets a decree on top of it," he said on Ekho Moskvy radio. "But we know that our authorities can apply the law selectively, as was the case with NTV and TV6. If nothing changes for Radio Liberty, it will mean that the government is simply leveling the playing field. But if the station begins to have problems, it will mean that President Putin's decree is political."
 Despite its relatively small audience, Radio Liberty has historically occupied a special place among both foreign and Russian-language media. It was built during the Cold War years by merging U.S. government funding and broadcast facilities with the talent of Soviet refugees. The radio's mission was conceived as a "surrogate" local free media to fill a void of information created by Soviet censorship and thus help undermine the Soviet system. The station, which was repeatedly jammed by the Soviet government, served as an important source of news and opinion for anti-establishment Russian intellectuals.
 Radio Liberty has always been heavily focused on the political scene, and it continues to declare the promotion of liberal democracy as one of its main goals. Although its Moscow bureau currently has some of Russia's best reporters on its staff, its criticism of the Kremlin, its inherent dissident mentality and its emphasis on minority rights are often perceived here as anti-Russian.
 Yeltsin's decree, which was issued Aug. 27, 1991, just days after the collapse of the hard-line coup attempt, singled out Radio Liberty for its role in reporting about "democratic processes" in Russia and particularly "the activities of the legal leadership of the Russian Soviet Federative Socialist Republic during the coup d'etat in the U.S.S.R." It allowed Radio Liberty to open a permanent bureau in Moscow and instructed Russia's Foreign Ministry to accredit its correspondents. It also instructed the mayor of Moscow to "allocate space" for the bureau and asked the press and communications ministries to provide the bureau with "communication channels."
 Glushkova said that the bureau has always paid for its office space and broadcasting channels. "We have never felt privileged," she said.
 Radio Liberty has evoked Yeltsin's decree several times in defending its editorial policy on Chechnya from a furious Kremlin. That was the case in January 2000, when Radio Liberty reporter Andrei Babitsky, who was accused by Russian officials of taking a pro-rebel stance in his reporting, was arrested in Chechnya and later exchanged for Russian prisoners held by the separatists.
 In January this year, the Kremlin's chief spokesperson on Chechnya, Sergei Yastrzhembsky, expressed outrage at a RFE/RL decision to begin broadcasting in three Caucasus languages, including Chechen. He warned that the government would monitor the station's coverage and might revoke its Russian broadcasting license.
 In April, RFE/RL launched the Chechen broadcasts, as mandated by Congress two years earlier.
 Glushkova said the Moscow bureau was not aware of ever being monitored.
 Press Ministry spokesperson Yury Akinshin said Radio Liberty would be allowed to continue business as usual. "We have no grounds to revoke its license," he said. "All it [Putin's decree] means is that it will continue developing on the basis of the law and not on [Yeltsin's] decree. It should feel like an ordinary company in Russia, not a privileged one."

TITLE: Nemtsov Says Army Trying to Derail Reform
AUTHOR: By Simon Saradzhyan
PUBLISHER: Staff Writer
TEXT: MOSCOW - Union of Right Forces leader Boris Nemtsov angrily accused the military's chief of the General Staff on Friday of trying to derail the Kremlin's plan to introduce a professional, non-conscript army.
 
"Chief of General Staff Anatoly Kvashnin should be removed from supervising army reform to avoid it being completely discredited," Nemtsov told reporters.
 He called on the Kremlin to take military reform out of Kvashnin's hands, saying the issue should only be influenced by Defense Minister Sergei Ivanov and the cabinet.
 "Kvashnin is doing his utmost to discredit reform and, in the end, undermine it," he said.
 Nemstov's remarks came a week after Kvashnin visited the 76th Airborne Division in the Northwestern city of Pskov to review an experimental transition from conscript to contract soldiers.
 Kvashnin told the soldiers that only those who were married would get the subsidized apartments promised in their contracts. Single men would have to stay in the barracks.
 As a result, 40 soldiers demanded early discharges, Itar-Tass reported, citing sources in the General Staff.
 However, a top officer, Lieutenant General Valery Smirnov, said only six soldiers had asked to leave.
 Paradoxically, Nemtsov himself has suggested doing away with subsidized housing for contract soldiers. During a visit to the 76th division on Sept. 26, he said the soldiers should either stay in the barracks or rent apartments at market prices to keep the costs of the transition experiment under control, Gazeta.ru reported.
 The Pskov contract soldiers are paid 4,000 rubles ($130) per month, far from enough to pay rent at market prices.
 The government has earmarked 2.67 billion rubles ($84 million) for the Pskov experiment. The cost of housing the 76th division would eat up most of that amount.
 The General Staff says the army needs at least nine years - until 2011 - to make the transition and that 300 billion to 400 billion rubles will be needed for new apartments alone.
 President Vladimir Putin on Saturday repeated his call for a professional armed force, saying at a Kremlin meeting with Russian teachers and educators that "contract soldiers and professionals should be posted in places where [military] service involves risk to life."

TITLE: Moscow Still Stuck Over Kaliningrad
PUBLISHER: The Associated Press
TEXT: President Vladimir Putin expressed frustration Saturday that the European Union has not accepted Russian proposals for visa-free travel for residents of the Kaliningrad exclave.
 
"I'm sure we will solve the problem in the end," Putin said at a joint news conference with his Finnish counterpart, Tarja Halonen, after the two held talks in St. Petersburg.
 "I just hope that, along the way, we don't lose something of our good relationship with Europe, particularly the high level of trust we have in each other," he said.
 Moscow has insisted that Russians be allowed to travel overland to and from Kaliningrad without visas. The EU has instead proposed creating a multiple-entry Kaliningrad pass, an idea that Moscow dismissed a surrogate visa.
 "The without-visa train would not break any rules of the Shengen agreement, because Russian passengers won't step down on the land of other countries," he said, calling on the EU to summon the "political will" to solve the problem.

TITLE: Conference Focuses on 'Russian Rip-Off'
AUTHOR: By Lynn Berry
PUBLISHER: Staff Writer
TEXT: WASHINGTON - From U.S. Secretary of State Colin Powell to Ambassador Alexander Vershbow to American entrepreneurs and lawyers, the talk at a conference last week in Washington was all about how to prevent investors from being, in the ambassador's words, "ripped off" in Russia.
 
Powell set the theme for the U.S.-Russia Business Council's two-day annual meeting in his opening keynote address. He said that although President Vladimir Putin's government has done a good job of getting legislation passed to make it easier to do business in Russia, more needs to be done, especially in the regions, to make sure officials follow the new rules.
 "As representatives of the private sector, you can help with this process," Powell told council members Thursday. "You can encourage local officials to apply the new laws consistently so that businesses can develop free from artificial constraints and corruption, and to show why it's in their interest to attract that kind of investment, that kind of trade into their towns."
 Powell called U.S. investment in Russia over the past decade "totally inadequate," but he said that there was a reason for this. "Trade and investment flow to countries where there is transparency, where there is predictability, where there is respect for intellectual property and when there is accountable governance."
 Powell expressed confidence that as Russia continues to make progress in these areas, U.S. trade and investment will grow.
 U.S. investment in Russia totaled $5.6 billion at the end of 2001, while trade with Russia in 2001 amounted to $7.9 billion, or just a little more than trade with South Africa or Argentina, Powell said.
 Vershbow, who has made protecting the rights of U.S. investors one of his main causes since coming to Moscow a little more than a year ago, picked up where his boss left off. The ambassador said that, if there is anything that still poses an obstacle to expanded trade and investment in Russia, it is a lack of respect for the rule of law.
 "In many cases, our companies have been treated unfairly, ripped off, outrageously in some cases, and even when they get their side of the argument upheld by the Russian courts, these court decisions aren't implemented," he told the gathering of about 300 people.
 Vershbow said that he typically has a list of 12 to 15 aggrieved U.S. investors whose cases he is lobbying, and the number is not declining. As some cases are settled, others appear.
 The conference was attended by several entrepreneurs fighting to protect or recover investments in Russia, among them Henri Bardon, who runs Euro Asian Investment Holding, Inc. Bardon invested $12 million in a Vladivostok grain company that has been stripped of its assets in what he describes as a rigged bankruptcy.
 "We can't get anything out of the courts any more - we won all our cases," Bardon said in an interview. "We have judgments we would like to enforce but all the assets are gone."
 The Russian legal system was a hot topic of discussion among entrepreneurs and lawyers at the conference. Several had tales of court decisions in their favor that had been undermined or simply ignored, and many complained of corrupt judges under the thumb of the politically powerful.
 Randy Bregman of the law firm Squire, Sanders & Dempsey said that one of the problems is that Russian judges are inexperienced in commercial issues, since most of them studied law before most of the relevant laws were passed and, in some cases, before Russia even had a market economy, and as a result the judges are more susceptible to pressure. "That is the risk of investing in a country with a new legal system," he said during a panel discussion Friday on commercial dispute resolution.
 It does not help that many investors have a cynical perception of the courts, according to Bregman and his colleague Sarah Carey. "People come in not believing there's a real legal system and don't want to pay to have proper lawyering done," said Carey, who moderated the discussion.
 Venyamin Yakovlev, the chief judge of the Supreme Arbitration Court, was to have attended the USRBC meeting to participate on that panel but, because of a mixup at the State Department, his visa came through too late for him to make the trip.
 Some longtime players in Russia said that investors need to be willing to defend their investments.
 "When you make an investment, roll up your sleeves and get to work defending your investment," said Igor Gundobin, a partner at Sun Capital.
 Bernie Sucher, chairperson of Alfa Asset Management, said that, "Investors need to defend themselves, they need to do due diligence." Part of this, he said, is understanding that business does not operate the same way in Russia as in America. "There are rules of the game, a more or less reliable guide to how to stay out of trouble," Sucher said in an interview.
 While in the United States, dispute resolution is handled largely by the courts, this is not yet true in Russia. "There are other levers and we know what they are," Sucher said. "Some are kind of shady and gray, some are just common sense. Who is your partner? What's his motivation?"
 Despite the problems, Sucher shared the optimism of many conference participants for investing in Russia. "The risk-reward ratio - and I've been doing this for 10 years - has never been better," he said.

TITLE: BasEl Plans Air-Cargo Center in Samara
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - Base Element wants to turn the central Russian city of Samara into an international air-cargo hub, handling traffic between Southeast Asia and Europe.
 
BasEl subsidiary Aviakor-Aeroport, which is handling the project, revealed the plan in Brussels late last week in a presentation before a panel of European and Russian transport officials in a bid to attract international interest and Western financing.
 Some 1,000 kilometers southeast of Moscow, Samara would give cargo haulers a three-hour edge over the popular stopover in Dubai, and would offer cheaper fuel prices than Tashkent, as well as the chance to ship local cargo - all factors the project's authors think will help win Western clients over.
 Located along one of the world's busiest flight corridors, the facility - to be based at Bezymyanka airfield - could be handling 140,000 tons of cargo annually within a decade, Aviakor-Aeroport Deputy General Director Boris Kandaurov said in a telephone interview Thursday.
 The company envisages an initial $34-million overhaul of the existing facilities, including navigation systems, cargo storage and the 3,600-meter runway, once used for testing the Tu-154 and the Tu-95 bomber before being reconstructed for the Buran space shuttle program.
 A new cargo terminal will then be built, along with other infrastructure, including a business center, and will require a total investment of $150 million over the next 20 years, according to the plan.
 To finance the project partly, Aviakor-Aeroport is looking for a foreign investor and is prepared to give up 49 percent in its equity.
 The Aviakor airstrip is currently capable of handling all types of domestic aircraft, including the giant An-124 Ruslan. The facility will be ready within a year to serve commercial cargo flights for domestic companies, Kandaurov said.
 He added that several local companies, including carmaker AvtoVAZ, rocket manufacturer Progress and confectioner Rossia, have tentatively agreed to use the facility when completed. This should bring at least 3,000 tons of cargo per year initially, he said.
 But it is mostly Western clients that Aviakor-Aeroport is targeting, and it says that it will be ready to service Western cargo planes by 2004 to 2005, including Boeing 747s, for which it will reinforce the runway.
 The ultimate goal, however, is to make the airport the core of an air, rail, road and river transport hub.
 "Samara is conveniently positioned from a geographical point of view - the Trans-Siberian [Railroad] is just 200 meters away and a dedicated rail link comes onto our territory. There are also two river ports," Kandaurov said.
 "Our task is to create not a regional but an international hub, and we will strive to establish Western standards," he added.
 To this end, Aviakor-Aeroport commissioned two consultants - Austrian Airport Consulting Vienna GMBH and Canadian SNC Lavalin - whose studies confirmed the project's feasibility.
 "The study of the market we made convinced us that Samara is a very good location for a technical stop [on the way] between Europe to Asia. The advantage is that the airline can combine a technical stop in Samara with service to the Russian market," said Alain Decors, managing director of Lavalin.
 "I think it's an interesting project. What they are doing is very professional and ... it could work," said Larry Coyne, the president of the International Air Cargo Association. "We are certainly interested in continuing dialogue with them about the possibility of maybe opening up something from Western Europe into Samara," he said.
 The plan has met with a mixed response at home.
 "As an airline, we can only welcome investment into the aviation industry," said Alexei Rayevsky, general director of East Line cargo airline. "Samara's strong suit is its location."
 But the director of nearby Kurumoch Airport, Vyacheslav Chernavin, said that there is no need for a separate cargo airport, as Kurumoch already has cargo facilities with the potential for further development.
 Russian Association of Airports President Viktor Gorbachyov agreed. "There is no sense in building another facility 50 kilometers away from one that already exists," he said, adding that the location of Aviakor's facilities within city limits could jeopardize safety.
 "It is not enough to say that you want to create a hub, you have to know how to fill its capacity," said Anatoly Kondratyev, head of the Association of Air Cargo Carriers. "Its profitability has to be calculated."

TITLE: Russian Hacker Gets Three-Year Jail Sentence
PUBLISHER: Combined Reports
TEXT: SEATTLE - A 27-year-old Russian hacker snared in an FBI scheme has been sentenced to three years in prison for convictions on 20 counts of conspiracy, fraud and related computer crimes.
 
Vasily Gorshkov, 27, of Chelyabinsk, was also ordered by U.S. District Judge John Coughenour to pay restitution of nearly $700,000 for losses he caused to Speakeasy Network of Seattle and online credit-card-payment company PayPal of Palo Alto, California, U.S. Attorney John McKay said Friday.
 Gorshkov was one of two men from his hometown persuaded to travel to the United States as part of an FBI undercover investigation that arose out of a nationwide FBI investigation into Russian computer intrusions directed at Internet service providers, e-commerce sites and online banks in the United States.
 The hackers defrauded PayPal using stolen credit-card information to generate cash, the U.S. attorney's office said.
 The FBI set up a bogus Seattle computer-security company called Invita Security to snag the hackers, inviting them here to demonstrate their skills. They arrived on Nov. 10, 2000, and met with undercover FBI agents, ostensibly to discuss a partnership.
 As the Russians demonstrated their skills at the shell company, the FBI used what amounted to computer eavesdropping to gather the tools it needed to reach across the Internet and break into their computer system in Russia.
 The men were arrested after the meeting. Alexei Ivanov, 23, was transported to Connecticut to face charges in a computer intrusion at the Online Information Bureau of Vernon, Connecticut. The status of Ivanov's case was not immediately known.
 Gorshkov and Ivanov were charged in federal court in Washington with conspiracy and 19 additional crimes involving Speakeasy, Nara Bank of Los Angeles, Central National Bank of Waco, Texas, and PayPal.
 Court records alleged a sinister pattern. First, the FBI alleged, the hackers broke into computer systems. Then they sent e-mails to company officials demanding payment in exchange for not distributing or destroying sensitive documents, including financial records.
 When the FBI accessed two of the men's computers in Russia, agents found large databases of credit-card information stolen from ISPs, the U.S. attorney's office said.
 They established thousands of anonymous e-mail accounts at sites such as Hotmail and Yahoo!, then created associated accounts at PayPal with random identities and stolen credit card information. Additional programs allowed them to control e-Bay auctions so that they could act as both seller and winning bidder at the same auction, then effectively pay themselves with stolen credit cards, court papers said.
 John Lundin, Gorshkov's lawyer, said by e-mail that prosecutors had been seeking a sentence of at least 16 years, but the judge rejected virtually every sentencing enhancement the government sought.
 "The judge departed downward to reflect the very difficult circumstances under which my client's family live in Russia and the health problems they face," Lundin said.
 <i>
 (AP, SPT) </i>

TITLE: Kasyanov Unleashes War on Counterfeit Trade on Streets
AUTHOR: By Alex Nicholson and Larisa Naumenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - The Cabinet declared war on the country's burgeoning market in pirated goods Thursday, voting to set up a task force to purge the streets of stalls and kiosks selling unlicensed audiotapes, videos and DVDs.
 
The intellectual-property task force will be headed by Prime Minister Mikhail Kasyanov and made up of representatives of the Economic Development and Trade, Justice, Press, Culture and Interior ministries, as well as representatives of Rospatent and intellectual-property organizations.
 Its priority will be to replace outdoor stalls offering pirated goods with specialized stores selling licensed goods.
 &quot;The upshot will be that stalls will be liquidated,&quot; Press Minister Mikhail Lesin said after the cabinet meeting, Interfax reported.
 But the stalls are unlikely to be cleared out overnight.
 &quot;These are only recommendations said out loud,&quot; said Alexander Shelemekh, vice president of the Coalition for Intellectual Property Rights, a lobbying group.
 Kasyanov slammed the country's intellectual-property laws at the cabinet meeting Thursday, calling them weak and &quot;the hallmark of a backward country.&quot;
 He said that the booming industry for pirated music, videos and DVDs was harming foreign investment.
 &quot;Representatives of foreign investors ask how money can be put into the country when counterfeit products are sold along with chewing gum on stalls everywhere,&quot; he said.
 Intellectual-property rights are an important and largely ignored area on Russia's checklist for entry into the World Trade Organization.
 In August, U.S. Ambassador to Russia Alexander Vershbow sent a letter to Lesin listing factories suspected of producing fake audio and video products, including some in the military-industrial sector.
 Copyright violations, mostly pirated audio and video sales, have cost the country $1 billion and $5 billion respectively over the past few years, according to estimates by the Press and Interior ministries. Fifty percent of videos, 64 percent of audio products and 90 percent of DVDs are fake, the ministries said.
 While it costs 15 rubles to make a CD and 25 rubles for a DVD, the bootlegs are sold for about 80 rubles and 500 rubles, respectively.
 Annual demand for licensed CDs alone accounts for 12 million units, according to the International Federation for the Phonographic Industry in Russia and the CIS. However, 18 CD plants with a capacity of 200 million discs are currently operating in Russia, it said.
 Although the experts welcomed the cabinet's decision, they said that the government is acting in haste. Shelemekh said that rather than make a loud announcement about closing stalls, the focus should be on improving legislation.

TITLE: FTA Pushes Its Unwanted $400M Fiber Cable
AUTHOR: By Todd Prince
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW - Even though the project has been lambasted as a white elephant and the market for data transmission is saturated, a little-known Cypriot firm is pushing ahead with a $300-million to $400-million project to lay fiber-optic cable from Europe to Asia across Russia.
 
FTA Enterprises Ltd. gained approval from the Communications Ministry earlier this year to build the cable - called the Trans-Russian Optical Network (TRON) - through Unified Energy Systems' national power grid. The first stage of the ambitious project began in August, when FTA ordered cables for the first leg of the fiber-optic line from Sweden to Latvia.
 FTA officials are upbeat about TRON, saying data transmission between Asia and Europe is about to boom in the years to come and a Russian route offers advantages over building undersea lines in the Atlantic and Pacific oceans, other than being a shorter route.
 &quot;Laying lines across Russia is cheaper compared to laying them across the sea. They can support more fibers than undersea cables, and they are easier to maintain,&quot; said Carl Shaw, the head of FTA's Moscow-based development unit.
 The trans-Russia data-transmission market, however, is dominated by long-distance telephone monopoly Rostelecom, as well as subsidiaries of two natural monopolies - the Railways Ministry's Transtelecom and Gazprom's Gaztelecom - which are close to completing their own lines.
 Analysts say that there is little or no demand for TRON.
 &quot;I really doubt that this project will be completed - there is not enough traffic between Europe and Asia to justify another trans-Russia line,&quot; said Nadezhda Golubeva, an analyst at the Aton brokerage.
 She said that Rostelecom has not been able to encourage traffic between Moscow and Khabarovsk in the Far East since it upgraded its line two years ago.
 Transtelecom and Gaztelecom are also having trouble filling their networks.
 &quot;This market isn't even big enough for three operators,&quot; Golubeva said.
 The project may have looked good several years ago, when the telecommunications industry was booming and companies were laying down cable in anticipation of huge growth in Internet traffic. There is now much more fiber-optic capacity than is needed, and any new fiber-optic project looks highly unprofitable.
 &quot;With the massive buildup of capacity, I am surprised that a company would pour more money into such a project,&quot; Mark Holland, an analyst at London-based telecom consulting and research firm Ovum, said of TRON.
 TRON would replace the grounding wires in the UES grid with a backbone containing 24 pairs of optical fibers, Shaw said. One pair of fibers would be dedicated to Europe-Asia traffic, while the other would be available for rent by local operators.
 The project is to be carried out in several stages over the next five years. Some $20 million will be spent on the line from Stockholm to Ventspils along the bottom of the Baltic Sea, set to be completed by the end of the year.
 From Ventspils, the line is to be built along the Latvian railroad to the Russian border, where it is to be connected with UES's power grid. FTA hopes to complete the first Russian leg of the project, running from the Latvian border to Moscow, before the end of 2003.
 Shaw said that FTA will then lay fiber-optic cable to Kazakhstan, where it will connect with the Kazakh and then the Chinese power grid. TRON is expected to reach Hong Kong within two years.
 FTA has both U.S. and Russian investors, but the firm declined to name them. FTA general director Andrei Malenko said that the firm has disclosed its ownership structure to potential investors and partners.
 Malenko added that FTA is holding negotiations with several major European and Asian operators to sign data-transmission contracts.
 Analysts are skeptical the line will ever make it to Kazakhstan.
 While economic and political instability inhibited investors from pumping cash into trans-Russia fiber-optic cables in the 1990s, the weaker-than-expected growth in data traffic has hindered companies this decade.
 Analysts had predicted a dramatic 1,000-fold annual increase in Internet traffic during the late 1990s, but this growth never materialized, although companies spent billions on high-speed fiber-optic cables.
 Some pan-Atlantic and pan-Pacific fiber-optic cables are being used at only 5-percent capacity for minimal fees - and some of the companies that built them have gone bankrupt. WorldCom, for example, declared bankruptcy - the largest in U.S. history - after building a worldwide fiber-optic network.
 FTA, meanwhile, has had a hard time trying to find investors. The firm originally had planned to begin the TRON project last year, but the date had to be pushed back for lack of investment.
 &quot;We are having a difficult time at the moment trying to raise cash,&quot; Shaw said. &quot;We have gone to major lending houses, but they see it is a telecoms project and they are scared off. But it is also a telecoms project in the developing world, which scares them even more.&quot;
 Rostelecom, Transtelecom and Gaztelecom have been unable to sign contracts with European and Asian operators seeking to receive and send data through their systems, although Rostelecom has signed an agreement with Chinese operators to mutually lower prices on traffic between the two countries.
 But FTA is confident nonetheless.
 &quot;If we can be in a position to offer competitive prices, high capacity and a safe data highway, we can establish a competitive position in this market,&quot; Shaw said. &quot;You don't hear anybody saying, 'We have AT&amp;T, why do we need more?'&quot;
 Tariff trends, however, are working against FTA.
 &quot;It is very cheap to buy capacity along trans-Atlantic and trans-Pacific routes right now,&quot; Holland said. &quot;These cable operators have drastically lowered tariffs and they have devalued the market. That makes it very difficult for a new project, which will have to set rates that enable it to recoup on its investment.&quot;

TITLE: Local Stocks Swim Against Tide
AUTHOR: By Victoria Lavrentieva
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russian blue chips have been bucking the global trend of collapsing share prices that have decimated leading markets.
 
While American exchanges ended September with the worst quarterly losses since Ronald Reagan was president, the benchmark Russian Trading System index lost a little more than 7 percent, but, in the year to date, remains one of the best performing in the world after nearly doubling in 2001.
 Although daily trading volumes, which averaged $14 million in September, remain low, the RTS managed to post a moderate gain of a third of a percent in the traditionally weakest month of the year, making it No. 8 in the world in terms of performance, according to Bloomberg.
 No index in the world rose more than 10 percent in September. Costa Rica's benchmark index led the way with a gain of just over 9 percent, followed by Venezuela's index, which rose 5.32 percent.
 In annual terms, Russia has performed even better, rising 30 percent so far this year, No. 4 in the world behind Pakistan's benchmark index, which is up 61 percent, and India's Bombay index, which is up 51 percent.
 Market players say the RTS is in for a robust fourth quarter providing a bottom is reached in the world's largest economies.
 &quot;There is a general perception that Russia is going in the right direction in the global environment, where many countries are slipping and suffering,&quot; said Philip Poole, head of the emerging markets research with ING in London.
 &quot;In relative terms, Russia has done quite well this year, and the major factor for that is that the RTS index is still dominated by oil stocks,&quot; Poole said.
 The seemingly inevitable U.S.-led military strike on Iraq has boosted oil prices to record highs in the past few weeks, meaning a windfall in revenue for Russia's largest companies.
 The prospects for future increases in the price of oil, coming at a time when Russian oil producers are already expanding their production, and gearing up for yet further increases.
 This optimistic mood regarding fossil fuels was further boosted when Economic Development and Trade Minister German Gref lead a Russian delegation of top oil and gas officials and executives to meet their U.S. counterparts in the first Russian-American energy summit in Houston, Texas, last week.
 Renaissance Capital noted that following No. 2 oil producer Yukos' announcement last month that it intends to nearly double production to 2.6 million barrels by 2006, any hint of a strategic agreement between Russian and American oil companies could ignite the sector.
 &quot;The future investments in Russia have not really taken place yet,&quot; said James Fenkner, chief strategist with Troika Dialog.
 &quot;Russia is going to be one of the biggest growth markets in terms of oil services,&quot; he said, adding that &quot;there will be more direct investments coming in the fourth quarter.&quot;
 &quot;In fact, Russia is now considered by many people as a safe haven, as the sentiment has changed dramatically over the last two years,&quot; Poole said.
 &quot;Many fund managers will be happy to have overweight positions in Russian equities due to the lack of opportunities elsewhere,&quot; he said. 

<strong>WORLD </strong>
<strong>World's Best % Change
 </strong>Pakistan Stk Ind 63.13
 Bombay Stock Ex 50.96
 RTS 30.02
 Prague Stock Exch 29.28
 Jakarta Composite 20.12
 <strong>World's Worst
 </strong>DAX (Germany) -40.72
 OMX (Sweden) -40.15
 NASDAQ -39.91
 CDAX (XETRA) -36.17
 DJ Euro Stoxx 50 -35.29
 <i>Source: Bloomberg </i>

<strong>RUSSIA </strong>
<strong>Top 5 % Change
 </strong>Sberbank 35.7
 Chelyabinsk Tube Plant 27.1
 AvtoVAZ 21.4
 RITEK 20 Center Telecom 20.0
 
 <strong>Worst 5 % Change
 </strong>VolgaTelecom ordinary -19.0
 Norilsk Nickel -12.5
 GUM -11.1
 VolgaTelecom preferred -11.1
 Lenenergo -10.7
 <i>Source: RTS </i></p>

TITLE: Gearing Up in the Car-Insurance Market
PUBLISHER: Combined Reports
TEXT: With legislation making automobile insurance compulsory expected in the near future, massive changes are expected in the Russian car-insurance market - a market that is still very much in its infancy. At present, however, analysts are observing a lull before the storm that will come with compulsory insurance in July of 2003. 
 
The price war once evident in the market is over, and has been for some time, according to analysts. Roughly two years ago, insurers were forced by the competition to make major price cuts in order to attract clients, but now those prices are beginning to steadily rise. Since the beginning of the year, insurers have raised their tariffs by from 20 percent to 30 percent, and those increases look set to continue. 
 Between 1997 and 1999, serious attempts were made to carve up the car-insurance market. The ensuing price cuts led to substantial losses in the industry, as companies tried to establish themselves and, along the way, there were casualties, with major insurers such as Contintent-Policy and Narodny Rezerv going bankrupt. 
 Since then, the rates for insurance policies have continued to steadily increase in price. In 2001, they went up by an average of 15 percent to 20 percent. 
 For the moment, it looks as if the trend is set to continue. &quot;There are no serious differences between 2002 and 2001 in the automobile-insurance market - prices continued to increase, particularly in the private car-insurance sector,&quot; said Andrei Ivanov, head of the car-insurance department at Renaissance Insurance. 
 The Expert RA research agency analyzed insurance rates for a specific car - a Volga 3110, with a price tag of around $5,400. The agency set insurance firms certain specific conditions: the driver of the car to be insured had received his license two years previously, there should be no restrictions as to where the car had to be stored at night and the car was fitted with an alarm system. At the beginning of 2002, a full insurance package for the car, including third-party, fire and theft, came at a cost of around $600 to $650. 
 With the same scenario being given to insurers in late September 2000, a number of companies, such as AlfaStrakhovanie and Ingosstrakh, had not altered their prices. &quot;We're not raising anything. Everything is going according to plan,&quot; said Vitaly Knyaginichev, a department head at Ingosstrakh.
 Several companies, however, had raised their prices during the same period, some of them significantly. The Military-Insurance Company, for example, quoted a price of $850, giving an increase of $200 - a 31-percent price hike in well under a year. 
 The same policy offered by Rosno had also increased over the nine-month period, rising from $698 to $729. &quot;I see this as being a case of the major players bringing their tariff policies into line with the real levels,&quot; said Dmitry Popov, a spokesperson for Rosno.
 Svetlana Adamovich, an analyst at the Insurance Information Center, said that prices in the insurance market are rising in response to the increasing demand for automobile insurance. This was confirmed by Popov from Rosno, who said that, &quot;Automobile insurance is finally forming in the consciousness of the population as a first-choice product.&quot; 
 The price war may be over, but insurers continue to compete in terms of the services offered. According to Andrei Ivanov from the Renaissance Insurance group, competition between insurers is becoming less of a priority. &quot;The rates offered by the insurers that are forming the market are pretty much on the same level. In the fight to gain clients, other factors are being given more significance, such as getting the injured away from the scene of the accident in good time, getting experts to the crash and round-the-clock dispatch centers,&quot; he said. 
 In St. Petersburg, the prices for car insurance are increasing at a much slower pace, according to local market analysts. &quot;They're rising to keep up with the increase in costs for spare parts and the rates charged by car-service centers,&quot; said Andrei Goryainov, spokesperson for the Progress-Nave insurance company. 
 &quot;The demand for car insurance is slowly growing, but there are still a lot of old, outdated cars around. Insurance companies don't want to touch cars of that kind,&quot; says Andrei Znamensky, head of Rosno's St. Petersburg subsidiary. 
 For almost a year, the prices for car insurance have remained at a level of 8 percent to 10 percent of the car's value for fire and theft policies, with third-party coverage costing another $80 to $100. The total of number of car owners taking out policies has increased significantly in the same period, according to Konstantin Baykov, head of the St. Petersburg branch of the All-Russia Insurance Union.
 St. Petersburg prices have also been kept down by the arrival of Moscow insurance companies. Keen to establish themselves, they have cut prices to attract clients and only slowly begun to push those prices back up to what Goryainov describes as &quot;actual levels.&quot; 
 According to statistics provided by the All-Russia Insurance Union, it is the Moscow branch offices that are leading the way in the St. Petersburg market with the highest turnovers. In total, the union puts the current value of the private car-insurance market in St. Petersburg at a modest $6 million, while insuring fleets of cars for firms and institutions amounts to $7 million. 
 Despite the massive market that will be created by compulsory third-party car insurance, local companies express caution in their predictions for the development of the sector. According to Znamensky, local insurers are worried that the rates for policies will be set by the government and that, in addition, those rates will be at too low level, making it an unprofitable business. The appearance of compulsory third-party insurance is also expected to reduce demand for voluntary insurance, leading to market stagnation. Much will depend on whether or not insurance companies will be able to convince Russian customers that compulsory third-party insurance is not enough and should be topped up with additional policies, Znamensky says. 
 
 <i>(Vedemosti, SPT) </i>

TITLE: Coverage Is Limited for The Perils of Financing
AUTHOR: By Angelina Davydova
PUBLISHER: Special to The St. Petersburg Times
TEXT: The majority of insurance companies operating in Russia believe that there is a strong need for financial-risk insurance in the local business environment, but there are a number of serious obstacles to the development of such services. Not least, the lack of transparency in Russian business practices has meant that companies are unable to develop convincing credit histories - the key to being provided with insurance of this kind. 
 
In turn, this has meant that there is, for the time being, no solid statistical base in the industry from which insurance companies can calculate risks. Similarly, the stunted growth in the industry has meant that there is a lack of local experts who would be capable of making those calculations from such a database, had it been developed.
 Nevertheless, in recent months, a number of insurance companies have been provided with licenses for issuing financial-risk policies and the market is showing faint signs of life as companies gear up for a possible growth in demand. 
 Until recently, there were very few companies offering such policies, but the number is increasing. 
 A number of companies in St. Petersburg offer property insurance that acts as a security for loans, such insurance also being available for leased or mortgaged property. &quot;For most leasing and mortgage schemes, insurance is a compulsory condition,&quot; said Alla Orlova, a spokesperson for Class Insurance. 
 Despite the fact that many companies now have licenses for financial-risk insurance, essentially, there are only two companies on the local market that offer to insure financial risks - Ingosstrakh and St. Petersburg Pomoshch. For the most part, they provide coverage against export-credit risks. Pomoshch began a program in this field three years ago and to date has provided coverage for 3,000 export contracts. 
 Pomoshch also insures brokerage companies against their financial risks, but stock-market insurance is not widespread in St. Petersburg or Russia in general. &quot;No company will insure against stock-market risks - the falls and rises on the Russian stock market are so drastic that an insurance company could go bust on the prices quoted for RAUES alone. And the stock market itself provides forms of insurance by means of financial instruments such as swaps, futures and options,&quot; said a source at the St. Petersburg Stock Exchange, who wished to remain nameless.
 The second company offering financial-risk insurance is Ingosstrakh. It offers a wide array of programs which are, for the most part, aimed at financial institutions. The demand for such products, however, has been relatively low, partly due to the relatively high prices.
 The second reason for the low demand is perhaps more indicative of the condition of the Russian market. In order for Ingosstrakh to reinsure its policies with foreign reinsurance companies, it must provide a wealth of banking documents and statistics - something that customers interested in acquiring policies are, for the time being, not terribly keen to provide. It is this resistance to transparent business practices that is acting as a break on financial-risk insurance in St. Petersburg.

TITLE: Security Arrives in Real Estate
AUTHOR: By Angelina Davydova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Until recently, risks taken on the local real-estate market have gone uninsured. Insurance companies have been wary of taking on responsibility for both real-estate and construction firms, particularly in view of the large number of bankruptcies that have been a feature of the sector, as well as the high number of &quot;shady&quot; dealings and blatant confidence tricks that have plagued the St. Petersburg market. The situation, however, is now changing radically and, in recent months, several local insurance companies have begun to offer products aimed specifically at those venturing out into the real-estate market. 
 
The real-estate market in St. Petersburg breaks down into new and resale housing, with a different set of risks applying to each. For new apartments in new housing blocks, often sold prior to completion of the building, there is a danger that the developer or the construction firm involved may go bankrupt. Needless to say, there's also a danger that either or both may simply skip town, having collected enough deposits. 
 According to figures from the city administration's Construction Department, around 1 million square meters of new housing are constructed every year. Over 90 percent of this construction is carried out by developers employing pre-payment or subscription to finance their projects. Similarly, about 80 percent of new housing is bought by private individuals while construction of that housing is still underway. 
 For some, the temptations of a quick buck have proved overwhelming, with typical scams involving one apartment being sold to a multitude of buyers, the development firm simply vanishing or firms putting back deadlines for the completion of buildings in order to blackmail private buyers into making additional payments. 
 Risks in the resale market, on the other hand, are generated by mistakes made by real-estate agents or by the behavior of the apartment's former inhabitants. Russian law stipulates that the rights of children registered in apartments and absentees (whether they are in the hospital or in prison) have precedence over the rights of those registered and genuinely living at the abode. Legal cases arise when former inhabitants claim a right to an apartment, with purchasers running the risk of losing both their new apartment and the money that they paid for it. According to the St. Petersburg Real Estate Association, every 200th sale of an apartment is contested, while every 500th contract is eventually broken on some legal grounds. 
 It would seem, then, that there are genuine risks and a genuine market for insurance in St. Petersburg real estate - private investors have little or no control over the construction process or the financial schemes used to finance it and, as a result, the risks are high. In addition, people who can afford to purchase new apartments would appear to have the purchasing power needed to pay for insurance. Nevertheless, insurance companies have for years shied away from the real-estate business as the risks have been too high, even for them. 
 The first insurance companies to begin operating in the real-estate market were First Title Insurance Company, Pomoshch Insurance and the St. Petersburg subsidiary of Spasskiye Vorota, a Moscow insurance firm. They began where the risks were lower, in the resale market. Typical deals involved apartment buyers purchasing policies that would cover them for three, five or ten years. In the event of a court ruling that the contract could be broken, the buyer would either receive financial compensation or a new apartment. 
 First Title Insurance soon began to offer policies covering apartments in new buildings. &quot;In 2000, our company, in cooperation with Pomoshch Insurance, began insuring private investors in buildings being built by the Rosstro construction company, and now, we'll insure investors in almost every construction company in St. Petersburg,&quot; says Valentin Loginov, general director of First Title. The policy costs 1.5 percent to 3 percent of the total cost of the apartment, though the insurance company may refuse to give coverage if it believes that the investment risks are too high. &quot;We're now also holding talks with the Military Insurance Company and Spasskiye Vorota on the organization of a joint real-estate-insurance program,&quot; Loginov says. 
 Over the summer, a number of other insurance companies launched special programs aimed at the real-estate market, though most of them were limited to coverage of deals concluded with specific construction companies. Industrial Insurance and the Nevsky Syndicate construction firm launched a &quot;build-your-own-apartment&quot; package, with investors in Nevsky Syndicate signing an insurance contract with Industrial Insurance and any money paid being returned in full if the investor doesn't receive the property rights to the apartment within six months of its being completed. 
 Sergey Ogoreltsev, director of Industrial Insurance's St. Petersburg subsidiary says that the company is in negotiation to expand its coverage to seven more construction companies in St. Petersburg. &quot;We are also planning to insure entire construction sites, rather than just individual private investors,&quot; he says. 
 Spasskiye Vorota runs a similar program with the Severny Gorod construction company. Tatyana Gitina, head of Severny Gorod's property-insurance department, says that investors will have their money returned if the building is not completed for a variety of reasons, such as bankruptcy or the financing for the project breaking down, if the apartment is not given to the investor on completion, if the investor's property rights are not registered or if the apartment being constructed has been sold more than once. The insurance policy costs 3.5 percent of the total cost of the apartment. 
 Russky Mir, another insurance company, is developing a similar joint venture with the SoyuzPetroStroy construction company. 
 Despite the growing number of insurance programs available in the real-estate market, analysts in the sector have noted that there does not seem to be any marked increase in demand.
 Insurance companies have complained that joint projects with construction companies, such as those listed above, merely serve to attract customers to construction companies, rather than to insurance companies. Investors have demonstrated a tendency to believe that, if an insurance company is prepared to guarantee the construction process, that's more than enough.

TITLE: Foreign Insurer Observes 'Dynamic' Development
TEXT: Andrea Nama, project manager for Europe and the Middle East at Mondial Assistance Group, came to St. Petersburg last week to present new joint insurance projects being implemented with local insurance companies. In 2001, the group had a turnover of 910 million euros, providing medical policies to 11.9 million people worldwide. With many countries requiring that Russians take out medical insurance when travelling abroad - forcing 70 percent of Russians visiting foreign countries to have policies - the medical-insurance sector has become one of the largest in St. Petersburg. Nama spoke to </i><strong>Angelina Davydova </strong><i>about medical insurance and the prospects for the St. Petersburg insurance market in general. 
 </i>

 <i><strong>
Q: </strong></i><i>How long have you been working in St. Petersburg?
 </i><strong>A: </strong>We started working in the Russian insurance market eight years ago. At present, we have about ten partners that are Russian insurance companies. We reinsure their portfolios of medical-insurance policies for customers who are going abroad.
 
We also provide services, which is to say that we provide medical care to the customers of our partners when they are abroad. 
 In St. Petersburg, we have been working with ASK-Peterburg, Russky Mir and Ost-West-Alliance. In Moscow, we're working with the Nasta Guta insurance companies, Ingosstrakh and several others. As Ost-West-Alliance has left the St. Petersburg market recently, we are currently looking for other partners. 
 We're expecting the market to develop, and we hope to increase the volume of assistance payments collected in St. Petersburg by 20 percent to 25 percent, and reinsurance payments by 15 percent. 
 
 <i><strong>
Q: </strong></i><i>How would you describe the medical-insurance market in St. Petersburg at present?
 </i><strong>A: </strong>It's one of the most dynamic. It hasn't yet been developed to the full market capacity, however. There are no savings or bonus-insurance programs on the market. Such programs allow different sets of medical and personal risks to be insured under one policy. That means, for example, that when a client who has voluntary medical insurance goes abroad, they won't need to get an extra policy to cover them for their trip. 
 

 <i><strong>
Q: </strong></i><i>What new insurance products are appearing on the market?
 </i><strong>A: </strong>We're carrying out research in order to establish how compulsory third-party car insurance will affect the market, and how Russia's joining the World Trade Organization will affect our business here. We'd also like to develop a technical assistance service. At present, Russian citizens driving abroad should have third-party insurance, but we think there's a demand for car-damage insurance, whereby Russians who have car trouble while abroad will be provided with technical help - their cars will be towed to car service centers, quotes will be given for the repair and the necessary work will be done. 
 

 <i><strong>
Q: </strong></i><i>What can foreigners who find themselves needing emergency medical services while they're in St. Petersburg expect?
 </i><strong>A: </strong>Things have changed - just a few years ago, foreigners needing emergency medical care in St. Petersburg were evacuated to Finland. Now, almost all medical treatment is provided on the spot in St. Petersburg, or, if the case very difficult, the patient is transported back to their home country.

TITLE: Bush Makes a Bad Deal Worse
AUTHOR: By Joseph E. Stiglitz
TEXT: ALTHOUGH the economy was slowing even before U.S. President George W. Bush took office, he has made the situation much worse than it had to be. What could have been a mild and brief recession has instead turned into a prolonged downturn likely to last more than two years. In terms of increases in unemployment and the gap between the economy's actual and potential performance, the downturn is already substantial.
 
Bush seems to believe that every economic problem is spelled T-A-X. That thinking has precluded him from adopting a sound policy program.
 The centerpiece of his economic agenda, the tax cut pushed through Congress, was fiscally irresponsible.
 The administration also disingenuously disguised the true cost of the tax cut, both by having it magically disappear in 2010 and by using the little-known alternative minimum tax to reduce the recorded revenue loss.
 The administration belatedly tried to sell the tax cut as a short-term stimulus measure, but that is like arguing that a few new Ferraris are the solution to a city's public transportation problems. The cost-effectiveness is abysmally low.
 A better alternative to the sports-car approach to economic stimulus would have provided assistance to states and localities to meet the fiscal shortfall that inevitably develops as the economy goes into a downturn. This assistance would have provided more generous unemployment benefits to displaced workers, who will almost immediately spend the money on goods and services.
 Similarly, on the corporate scandals, the Bush administration should have acted faster and more resolutely. The administration still has not advocated legislation forcing companies to properly report stock options as expenses. The indiscriminate awarding of such options has been shown to be an important underlying source of the problems facing corporate America; they provided strong incentives to report large profits. Top executives did better for themselves by increasing these reported profits than by improving the fundamentals of the corporation.
 To be sure, I believed that the Clinton administration should have supported such a reform in the 1990s. At the time, my argument was based on the theory that bad information leads to bad decisions.
 Some of my other qualms about economic policy during the 1990s apply with much more force now. For example, partly in an attempt to break the legislative deadlock with the conservative Republicans who took over Congress in 1995, the Clinton administration allowed the deregulation agenda to be pushed too far. 
 Even today, the administration has not owned up to the excesses of the past - mistakes evidenced by electricity deregulation in California and elsewhere - nor has it set forth a program for dealing with the myriad scandals facing the financial industry, from allocations of initial public offerings of stock to distorted advice given by brokerage houses with clear conflicts of interest. As we should have learned long ago, market-friendly government regulation is necessary if markets are to work well.
 I wish that we had done more to address corporate welfare in the 1990s, but we didn't. Now Bush has made the situation much worse. Indeed, corporate coddling has reached new heights with soaring agriculture subsidies, most of which go to rich farmers and corporate farms, and new steel tariffs, which have rightly exposed us around the world to charges of hypocrisy.
 It's no secret that I am a tough grader on economic policy. The Bush administration may want to pretend that its F is really an A. But that won't change the reality. We'd all be better off if the administration spent more time rethinking its policies and less time muddling the debate with doublespeak.
 
 <i>
Joseph Stiglitz, a professor at Columbia University, and a recipient of the 2001 Nobel Prize for economics, was chairperson of the Council of Economic Advisers under former President Bill Clinton. He contributed this comment to the Los Angeles Times. </i>

TITLE: It's Business as Usual for Elections in Krasnoyarsk
TEXT: ELECTION results are usually annulled by revolutions and coups d'etat. Last Sunday, the role of zealous revolutionaries was played by the Krasnoyarsk election commission, which showed true proletarian commitment to duty by invalidating - on its day off - the results of the gubernatorial election on the basis of... Well, no one actually knows on what the commission finally based its decision. Apparently, the candidates spent far more on the campaign than is officially permitted.
 
The regional election commission was undoubtedly right. The official numbers on campaign spending in Russia have as little to do with reality as the tax returns filed by federal ministers. The Krasnoyarsk election commission shouldn't stop at this chump-change regional ballot issue. It should use the same criterion to invalidate the State Duma elections, the election of Presidents Vladimir Putin and Boris Yeltsin, and so on.
 What happened in Krasnoyarsk?
 The oligarchs whose candidate came up short got the bright idea that if governerships in Russia can be viewed as assets in the same way as factories, then ownership of these assets can be contested just as easily as the results of another share issue.
 Technically, everything was done according to the letter of the law. Russian election law, however, contains a curious little loophole. The Central Elections Commission can't repeal the decision of a regional commission. It can dissolve the commission, but only at the close of the election process.
 The regional election commission's decision can be overturned only by the regional court. In the current battle of the titans, the court will probably sit on its hands for three months and decide nothing. Even if it does rule, its decision goes back to the regional election commission, which can opt to invalidate the election all over again.
 While all this is going on, Krasnoyarsk will continue to be run by acting Governor Nikolai Ashlapov, with whom Russian Aluminum has an excellent relationship. In the early 1990s, Ashlapov ran the Achinsk Alumina Plant (during his tenure the plant was driven into bankruptcy), then became mayor of Achinsk and RusAl's man in Krasnoyarsk. For RusAl, invalidating the election only made sense to keep the loyal Ashlapov in power, not to benefit Alexander Uss, a questionable figure in RusAl's books who was said to be tight with Anatoly Bykov not so long ago.
 It's not hard to figure out why RusAl was unhappy with the election result. Norilsk Nickel and the Krasnoyarsk Aluminum Plant, or KrAZ, are roughly the same size, but the year before last (the most recent data available, unfortunately) Norilsk Nickel posted 137 billion rubles in sales, while KrAZ managed only 17 billion rubles.
 &quot;Sales volume&quot; at KrAZ really means the volume of tolling operations at the plant - processing other companies' alumina into other companies' aluminum. For some strange reason, the plant sets such rock-bottom prices for its processing services that it barely breaks even.
 As a result, Norilsk Nickel's tax bill accounts for 60 percent of the regional budget. Judging by the amount that KrAZ contributes to the public coffers, you'd think it was producing chicken parts.
 Alexander Khloponin's victory at the polls threatened to put a stop to RusAl's free ride. For Khloponin's opponents, the response was obvious: They secured the regional election commission's decision, which will serve as an asset to be used in further negotiations, i.e. if you forget about your threats to outlaw tolling schemes, the election commission will forget about its decision.
 Whether or not this logic will work is another matter. But there's no need to perceive the goings-on in Krasnoyarsk as the death of democracy. Russian elections had already become a mix of Krasnoyarsk and Nizhny Novgorod in the previous millenium. The regional election commission's decision is merely an expansion of the financial instruments used by the oligarchs in their mutual and fruitful dialogue.
 
 <i>
Yulia Latynina is author and host of &quot;Yest Mnenie&quot; (&quot;Some Believe&quot;) on TVS. </i>

TITLE: Demonstrators Are in a State of Distraction
TEXT: WASHINGTON - The demonstrations Friday were openly illegal: The stated aim was to stop traffic, cripple all business for the day and shut down D.C.
 
Police never let it happen: They hemmed in protesters by the city block, along with anyone else who happened to be walking by - commuters, journalists, etc. - and then started arresting people by the hundreds. The next morning's Washington Post reported on the 649 arrests. The coverage included a photo of an older man in a business suit who had been swept up in the dragnet. He was holding up a cardboard sign that read simply, &quot;Help!&quot; As in: I'm just trying to go to work! The caption described him as a protester holding up a sign.
 That was Friday, a chilly, rainy day. Saturday dawned sunny and beautiful, and its protests were permitted, legal and peaceful. I'd never been to a demonstration against the IMF and World Bank, and I'm sympathetic to critiques of those institutions. So, I went down to the Washington Monument to tag along with the marchers.
 There had been talk of 20,000 people; instead, somewhere from 2,000 to 5,000 marched. A few hundred of the most hard-core protesters were still being processed and released after a night in jail; perhaps their example kept turnout so much lower than predicted.
 There were &quot;anarchist cheerleaders&quot; - young women dressed in red-and-black cheerleader outfits performing perky synchronized cheers against the system with refrains like &quot;Resist! Resist! Resist!&quot; There were guys in Dick Cheney masks (and sandals) who were surrounded by a crowd holding police tape; other protesters dressed as doctors and nurses attacked the Cheneys with baseball bat-sized syringes, part of a complicated street theater involving &quot;inoculating&quot; against corporate greed. (But isn't it too late for Cheney? Shouldn't other people be getting inoculated, so he can't infect them? Never mind.)
 There was a Trojan Horse made of cardboard, mounted on four big bicycle wheels. Its minders had to keep stopping and lifting it to turn it, and then, near the march's end, they got snagged on a tree and accidentally tore its head off. The horse, of course, represented World Bank aid, the gift one needs to check the teeth of before accepting. There were people on stilts (don't see much of that at Republican rallies) and lots of people wearing bandannas like Old West train robbers. The bandannas were to hide from the undercover cops - older men on mountain bikes dressed for peace marches in the 1970s and carrying top-flight camera gear. &quot;Camera!&quot; people would shout when a police officer started taking pictures, and many would hide their faces.
 There was also some of the hands-down worst oratory - aimless, self-involved, confusing, uninspiring - I've heard this side of Gennady Zyuganov. This movement really needs to focus on a few core concepts. Instead it insists on embracing every charge against the fund and the bank, major and minor, without prioritizing them - a catch-all approach that becomes impossible to summarize or defend. 
 Then again, Saturday's marchers are currently far more concerned about whether we'll go to war with Iraq. In London that same day, hundreds of thousands of people gathered to protest against such a war. A peace demonstration in Washington is already planned for next month. It's incredible to think we might already be at war by then.
 <i>

 Matt Bivens, a former editor of The St. Petersburg Times, is a Washington-based fellow of The Nation Institute [www.thenation.com]. </i>

TITLE: Bad Rap Cops Give The City the Same
TEXT: In response to &quot;Cops Getting Worse Rap From Consulates&quot; on Oct. 4.
 

 
Editor,
 </i>I am a Boston, Massachussetts lawyer who is married to a woman from St. Petersburg and who has been to St. Petersburg four times.
 
I was once questioned by three police officers and they were proper in the way they dealt with me. So not all or, perhaps, only a few St. Petersburg police officers are doing such things to people. But the actions of the few will deeply hurt all.
 The issue must be solved immediately or the 300th-anniversary show will be a very big financial disappointment to St. Petersburg's people and merchants.
 <i>Frederic Halstrom
 Boston, Massachussetts
 </i>
 <i>
Editor,
 </i>I've just finished reading the article about cop robbery cases in St Petersburg.
 
I've been there in your city several times since the beginning of the year and never experienced any problems with either the police or regular citizens. All the people with whom I talked while I was there were very nice.
 Of course, I'm not denying the facts you mention and don't know whether there really exists such a large number of police officers acting delinquantly. As a resident of the European capital of Brussels, I can say that similar cases probably exist here, but seem to attract less attention.
 Of course, I agree with mister Loschilov when he says that this doesn't excuse the behavior, but foreigners and, especially, tourists have to learn a little about the country they are visiting. Each time I hear a noisy and obnoxious voice it is coming from some very arrogant and &quot;I am the king &quot; tourist.
 Don't get me wrong. I'm not saying that all foreigners and, especially, tourists, behave in this way but, if I were to give them some advice, it would be to show a little more respect and a little less fawning.
 <i>Pierre Husson
 Brussels, Belgium
 </i>
 <i>
Editor,
 </i>I am British and I lived and worked in St. Petersburg for three years, mainly as a teacher but also as a freelance writer. I currently live and work in Warsaw as a journalist.
 
It's surprising that the diplomatic community has taken so long to address this problem, as it has been a serious blight on what is otherwise an incomparably fascinating city for some years now.
 I lived in St. Petersburg from 1998 to 2001, and lost count of the number of times I was stopped in the street by police who would plunge their hands into my pockets for a good (uninvited) rummage, supposedly to check for any nefarious materials I might be carrying. What they invariably found was 500 roubles or so of my hard-earned cash, which they claimed as their own. I had to admire their fleetness of hand, however, as I would only discover the theft after they had trotted back to their patrol car and driven off.
 On another two occasions I was picked up and driven around the city in the back of a police vehicle. The second time this happened, I had just stepped out of a bar with a friend, when a police van pulled up and two or three officers wrestled us into the back of it. Inside, they frisked us and asked if we were British spies. It all seemed like a big joke as they were laughing among themselves. We then arrived at a police station and were told to sign some sort of document by a doctor, who said that unless we did so we wouldn't be released. This we refused to do, so we spent the next couple of hours sitting in the waiting room and making occasional calls to contacts who might help us out. Eventually we just asked the duty officer if we could leave, a request to which he assented with a comical shrug. Bizarrely, the police had actually stolen nothing from us this time around.
 While farcical experiences such as these certainly add spice to one's perception of St. Petersburg, there's already quite enough going on within the city without the police getting in on the act.
 I dream of returning to St. Petersburg again but I just hope that I won't have to look over my shoulder for the police when I'm there.
 Unless the diplomats really kick up an effective stink, I suppose it's a fact of life there that I'll just have to put up with.
 <i>Colin Graham
 Warsaw, Poland
 </i>
 <strong>
<b>Just Doing Business
 </strong></b>

 <i>
Editor,
 </i>I'm writing to you about the possible closing of my bookstore, Shakespeare and Company Moscow, due to censorship and harrassment by Russian officials.
 
The Russian press and The St. Petersburg Times have carried stories about Vladimir Sorokin and his controversial book, &quot;Blue Fat.&quot; My partner, Alexander Ivanov, is Sorokin's publisher and the owner of Ad-Marginem Bookstore, which is next to our jointly owned bookstore. &quot;Blue Fat,&quot; a novel, has a scene with Stalin and Khrushchev making love. This has incensed President Vladimir Putin and his supporters. &quot;Blue Fat&quot; has been sold in my bookstore.
 The police continue to visit the store and confiscate any copies they find. They have also confiscated all papers relating to our lease and the publication of &quot;Blue Fat.&quot;
 Shakespeare and Company, mainly an English-language bookstore, opened on April 1, 1996 and has been a meeting place for Russian and Western intellectuals and book-lovers. We are located on Novokuznetsky Per., near the Paveletskaya metro station. Most noted Russian writers meet and speak at Shakespeare and Company.
 Normally, I travel to Moscow several times a year, but my staff and partner have advised me not to come for fear that I will be questioned or detained by the Moscow authorities. They are &quot;investigating&quot; the U.S. money that funded the bookstore. In reality, Alexander and I each contributed $6,500 in 1994 to remodel a rat-infested basement. Most of our original stock came from another English-language bookstore that closed two weeks prior to our opening. We bought their books on consignment and paid for them as they were sold. 
 I thought you'd like to know what is happening in Moscow. This assault on Shakespeare and Company is pure politics, especially when you consider the raw sex that is carried on Russian TV and the pornography that is available in the kiosks. We are a general literary bookstore and do not specialize in pornography unless Henry Miller or James Joyce fit that category.
 <i>Mary Duncan
 Paris, France
 </i>
 <strong>
<b>Come Together
 </strong></b>

 <i>
In response to &quot;Chechnya Is Trapped in Bloody Deadlock&quot; on Oct. 1.
 </i>

 <i>
Editor,
 </i>Welcome to the wonderful world of Islamist terrorists. If you guys are smart, you'll stop your criticizing of Bush's tough stance on Iraq, and team up with India and the United States in a concerted effort to eliminate the vermin.
 <i>
Kyle Robertson
 Phoenix, Arizona</i>
 <strong>
<b>A Different Tack
 </strong></b>

 <i>
In response to &quot;Arab's Sharon Perceived as U.S.'s Hussein,&quot; a comment by Nicholas Berry on Oct. 4.
 </i>

 <i>
Editor,
 </i>The comparisons of Israel and Iraq here seem totally wrong. 
 
The article forgot to mention that, from its birth, Israel has been under vicious attacks, the bloody Intifada being the latest.
 To date, Israel remains the only true democracy in the region. Calling Israel hard-line and not mentioning suicide murders is a strange omission. 
 Israel went into &quot;helpless&quot; Lebanon for a good reason - to root out the PLO and the other murderous factions.
 Does Berry have any doubts that if the United States or the United Kingdom were attacked with weapons of mass destruction they would retaliate in kind? Why pick on Israel? 
 Omitting facts and taking events out of context makes poor analysis. I am surprised to find such a biased article in your fine newspaper. Please do not turn The St. Petersburg Times into a hysterical, leftist leaflet.
 If Berry is short of good ideas, he should try comparing Putin to Milosovich.
 <i>Alex Kantarovich 
 London, United Kingdom
 </i>
 <i>
Editor,
 </i>I am a very busy ophthalmologist and don't have time for anything but my profession. However, I happened to read the comment &quot;Sharon as Saddam Hussein&quot; that you published.
 
After publishing in your paper such an immensely ignorant and crooked interpration of history and current events as that contained in this comment, how can you possibly expect your newspaper to be regarded with any respect?
 That is, Western, scientific respect. My parents were taught in Soviet schools the &quot;history&quot; made up by the Communist Party. I thought that stopped long ago.
 <i>Yaniv Barkana
 Shoham, Israel
 </i>
 <i>
Editor,
 </i>It disturbed me deeply to read Nicholas Berry's piece. I am shocked that this opinion piece would be published, given the amateurish and clearly erroneous content of the article.
 
How can one compare a tyrannical dictator of a totalitarian, rogue state to a democratically elected prime minister of a free country? Perhaps beneath Berry's comparison is a smattering of an odious and ancient hatred?
 One could have chosen many other leaders in the Middle East with whom to compare Saddam Hussein - Assad. Hosni Mubarak, Moummar Qaddafi, and Mohammad Khatami are but a few: All brutally repress their citizens and persecute minorities while committing gross crimes against humanity. Why chose Sharon?
 Saddam Hussein not only possesses weapons of mass destruction, but he actually used them (chemical weapons) against the Kurds and Iranian civilians in the 1980s. Israel, even if it does have weapons of mass destruction, has NEVER used such weapons, nor does one person, Sharon or otherwise, have the complete and total control over when and how these weapons are to be used.
 Furthermore, how Mr. Barry claims that Israel was the aggressor in the relentless Arab wars to annihilate it and perpetrate a holocaust of all Israel's citizens (something Arab and Iranian leaders do NOT deny) is an outrage!
 If I may remind Mr. Barry, it was Egypt, under the control of Nasserite fascists that closed off the Suez straits twice - in 1956 and 1967. It was Egyptian, Jordanian, and Syrian terrorist Fedayeen attacks on Israel (with Soviet backing) that warranted Israel's response. After all, the international community refused even to consider Israel's case because of Soviet and Arab petro-dollar blackmail and manipulation at the UN. The Yom Kippur War of 1973 is a fine example, when neighboring Arab states launched a surprise attack on Israel without provocation - yet it was Israel that was condemned because it was outnumbered in the UN by the Arab League and Communist Bloc.
 Incidentally, it was this same evil alliance of the Arab League, the Soviet Bloc, and their Third World cronies that created the so-called &quot;international law&quot; at the UN that is still used to delegitimize Israel. Perhaps Mr. Berry has been fooled by the twisted and hateful anti-semitic logic behind Arab, Iranian, and old Soviet foreign policy?
 Finally, unlike Iraq, Israel has given its minorities full national, linguistic, and cultural autonomy (which is more than any Western European state has granted to its Arab minorities). So what Arab second-class citizenship is he talking about? Why choose Israel for comparison with Iraq? Saddam Hussein refuses to even grant linguistic or religious freedom to Kurdish and Shi'ite Iraqi citizens. In fact, Hussein doesn't even have the slightest respect for human rights in Iraq or elsewhere. In distinction to Hussein, during his tenure as prime minister, Sharon has met with representatives from Druze, Bahais, Bedouin, Christian and Muslim Arabs, as well as women's and gay-rights groups. Can any one imagine Hussein or any other Middle Eastern leader doing the same?!
 I hope that The St. Petersburg Times will better screen opinion pieces for factual content in the future!
 <i>Yevgeny Mikhailovich
 New York, New York
 </i>
 <strong>
<b>Clarification
 </strong></b>

 <i>
In response to &quot;Caring for the Child Victims of Chechnya,&quot; on Oct. 4.
 </i>

 <i>
Editor,
 </i>I would like to clarify that the World Health Organization has been the main source of funding for Malkh children's rehabilitation center since March 2002.
 <i>
Mussa Dalsayev
 Director, Malkh Center
 Grozny
 </i>
 <strong>
<b>Let's Hope
 </strong></b>

 <i>
In response to &quot;The Lessons of East Timor for the Middle East,&quot; a comment by Ian Urbina on Oct. 1.
 </i>

 <i>
Editor,
 </i>I enjoyed reading the comment. I worked in Indonesia for a number of years with U.S.A.I.D., so I am familiar with the East Timor problem.
 
I have travelled extensively in the Middle East and am, therefore, knowledgable concerning the Palestinian problem.
 Your presentation of a suggested solution to the latter was quite uplifting. Hopefully it may come to pass.
 <i>Patrick Gage
 Shropshire, United Kingdom
 </i>
 <strong>
<b>Name Flip
 </strong></b>

 <i>
In response to &quot;Putin, Aliyev Sign Agreement That Divides Up Caspian Sea&quot; on Sept. 24.
 </i>

 <i>
Editor,
 </i>I was pleased to read the story. However, it's quite ironic and unfair to call Nagorno-Karabakh an &quot;Armenian province in Azerbaijan.&quot; If you knew the history a little bit better, you would probably rephrase Azerbaijan to Armenia, because a document signed by one psycho cannot rewrite history.
 <i>
Suren Khachatryan
 Santa Barbara, California
 </i>
 <strong>
<b>No Choice
 </strong></b>

 <i>
In response to &quot;How Long Can Bush Back Sharon?,&quot; a comment on Sept. 27.
 </i>

 <i>
Editor,
 </i>The only infrastructure Israel has set out to destroy has been that of the terrorist networks, and indeed, as you write, to assume security control. After 14,000 attacks, hundreds of deaths, and thousands of gruesome casualties, doesn't Israel have a responsibility to do something to prevent attacks on its citizens?
 
You mention Operation Defensive Shield, then jump months ahead with &quot;two suicide bombings later.&quot; This fails to mention that fact that there were absolutely no suicide bombings for the entire period Israel assumed security control, and the suicide bombings resumed upon Israel's withdrawal.
 The siege of Ramallah was symbolic - it did not freeze any peace processes. It only demonstrated to Arafat the choice he faces: Either make an effort to stop Palestinian attacks or lose your position as part of the peace equation.
 Ultimately, the accountability for halting attacks without Israel occupation lies on Palestinians themselves. Israel cannot stop its efforts at self-defense because of political unpopularity, or even if, believe it or not, it is a stumbling block for Bush's machinations with regard to Iraq.
 <i>Iosif Tartakovsky
 Moscow </i>

TITLE: Chechnya Policy Changing?
AUTHOR: By Masha Lipman
TEXT: ABOUT three weeks ago, the government newspaper Rossiiskaya Gazeta published a piece by Yevgeny Primakov on the war in Chechnya. Primakov is a heavyweight politician who has held important government positions, including chief of foreign intelligence, foreign minister and prime minister. Back in 1999, he seemed to have the best chance of winning the presidency. What Primakov says in his article is that the current policy on Chechnya needs revision. He says the crisis cannot be resolved without talking to the field commanders in Chechnya. And he points out that regardless of whether the war continues, the military must not be allowed to play the dominant role in decision-making. Primakov also suggests a six-point plan for dealing with what appears to be the hardest problem of President Vladimir Putin's administration.
 
Primakov is an unlikely figure to counter Russia's hawks; he is not a Westernizer or a proponent of human rights. He is, on the other hand, respected by the Russian political elite and fully loyal to Putin. He may be a good choice for a probe of Chechnya policy, with an eye toward changing it.
 September marked the third anniversary of the start of the second war in Chechnya. Putin's generals have shown themselves unable to win it for him. No matter how upbeat the military and government reports may sound, the war goes on, the death toll rises (more than 4,500 Russian soldiers have been killed, according to official information) and atrocities against civilians continue. The situation in Chechnya is chaotic. Those Chechens who opt for collaboration with the federal authorities are continually hunted and often killed by the fighters.
 Large-scale military action resumed late last month. A large group of Chechen fighters appeared quite unexpectedly in the territory adjacent to Chechnya and, in the ensuing fierce and bloody battle, at least 14 Russian soldiers were killed. The Russians lost a helicopter and an armored vehicle.
 The inefficiency of the military and the incapacity of the intelligence service to fulfill its duties in Chechnya have been demonstrated repeatedly. In August, an immense military helicopter was downed by an anti-aircraft weapon just after it had taken off from a Russian air base. At least 119 service personnel were killed. Whoever was carrying the anti-aircraft weapon managed to get it near the military airfield undetected. Moreover, it turned out that the whole operation was filmed by an accomplice, who was able to get inside the grounds of the air base, then escape and sell his tape to a Turkish news agency.
 Putin should have serious doubts by now that the problem in Chechnya can be resolved by the use of force, or at least by the force that the Russian military may offer. Unfortunately, alternatives to military action, such as talks with field commanders or a gradual pullout of troops, are unlikely to make a noticeable difference anytime soon. But there does seem to be an awareness in the Kremlin that the war is at an impasse. Moreover, it is costing Russia too much - in soldiers' lives, in unaffordable expenditures and in the fostering of nationalism and ethnic violence within the country.
 Of course, whatever policy change Putin may be considering, he faces a major problem with his military, which will not admit defeat and will vehemently oppose anything that smells of betrayal by the supreme power. Putin thus needs a solid argument against the military. The clear evidence of their poor performance appears to provide it. And, if poor performance in itself is not enough, there is plenty of evidence of deceit and embezzlement, as well as the extremely low morale of service personnel. (In one recent episode, more than 50 soldiers left their unit because of severe beatings.)
 Putin sent his military a warning a few weeks ago, after the helicopter disaster: He issued humiliating administrative reprimands to the top generals in charge of the Caucasus region. Last week, the debate between liberal legislators and the defense ministry over the need to make the top brass clearly accountable for military expenditure was unexpectedly resolved (no doubt at the top level in the Kremlin) in the liberals' favor. Moreover, Putin has entrusted a group of liberals with inspecting the course of military reform.
 All of this suggests that Putin may indeed be setting the stage for a reduction in the clout of the military. It gives some hope of a policy change in Chechnya. It is likely that Primakov has been picked as a probe on both points.
 Handling the military and bringing an end to the bloody, senseless war in Chechnya are no easy tasks. Only Putin can accomplish them. He started this war. He must also be the one to set about putting an end to it.
 
 <i>Masha Lipman, deputy editor of Yezhenedelny Zhurnal, contributed this comment to The Washington Post. </i>

TITLE: U.S. Should Be Consistent Over Change
TEXT: THE U.S. government likes to say the establishment of a democratic government in Iraq could be a model for political reform in the Islamic world. Unfortunately, while the United States is preparing to fight a war in Iraq, in part to achieve that goal, it is doing little to address undemocratic practices nearly everywhere else in the region.
 
Washington's democracy agenda must not begin and end with Iraq, where political life has been stunted by dictators for decades. Other predominantly Muslim countries, such as Turkey, Pakistan, Morocco, Kuwait, Bahrain and Egypt, offer more fertile ground, with important elements of democratic culture and politics already in place.
 Turkey, Iraq's northern neighbor, is the most striking example of Washington's hypocrisy. In many respects, Turkey already resembles a Western democracy, with regular elections, a secular constitution, civil rights for women and a lively independent press. But its democratic institutions remain warped by the influence of a meddling, authoritarian military leadership.
 The U.S., Turkey's most influential ally, could easily help shift the country's political balance toward civilian rule, but does not. The reason is no secret. Turkey's armed forces have long provided Washington with valuable military bases. During the Cold War, Turkey offered proximity to the Soviet Union. Today, it provides air access to northern Iraq.
 Last month, under pressure from the military, Turkey's highest electoral authority banned Recep Tayyip Erdogan, the leader of the country's most popular political party, from running in this fall's parliamentary election. At a political rally five years ago, when Erdogan was mayor of Istanbul, he recited a combative poem that advocated the advancement of the Islamic faith in Turkish society. The verse was ruled a crime, inciting religious hatred, and Erdogan was convicted and stripped of his political rights.
 Although Erdogan's party had been leading by a wide margin in the polls, he is now ineligible to serve as Turkey's next prime minister. It is hard to see how excluding the leader of a party favored by nearly a quarter of the voters strengthens democracy.
 If U.S. President George W. Bush's administration is truly interested in promoting democracy, it will also tell Pakistan's military dictator, General Pervez Musharraf, that it will no longer wink at his constitutional manipulations and fraudulent electoral exercises. It should increase its pressure on Egypt's president, Hosni Mubarak, to free Saad Eddin Ibrahim and other democracy advocates, end his intimidation of independent news media and permit genuinely free elections.
 
 <i>This comment appeared as an editorial in The New York Times. </i>

TITLE: British Report On Iraq May Only Backfire
AUTHOR: By Pavel Felgenhauer
TEXT: THE United States and Britain were, at the end of last month, wooing the other permanent members of the UN Security Council - France, Russia and China - to support a draft resolution that threatens the use of force, if the Iraqi dictator Saddam Hussein does not promptly surrender all weapons of mass destruction (WMD).
 
To reinforce its firm stand on Iraq, the British government last week published an assessment of Iraq's WMD-development programs, based on the work of the British Joint Intelligence Committee. But the French, Russian and Chinese governments do not seem to have been convinced.
 In the 1980s, Iraq produced large amounts of chemical agents (2,850 tons of mustard gas, 210 tons of tabun, 795 tons of sarin and 3.9 tons of VX nerve gas) as well as lethal biological materials.
 Iraq also attempted to make nuclear weapons, although it never managed to develop technologies to enrich uranium as fissile material.
 Iraq has also produced 16,000 free-fall bombs and more than 110,000 artillery rockets designed to deliver chemical and biological agents. Hussein never used biological weapons, but large amounts of mustard gas and nerve agents were used during the 1980s against Iranian troops and rebel Kurds. Some 20,000 Iranian soldiers and 5,000 Kurds, mostly civilians, are reported to have perished during those gas attacks.
 After 1991, most of Iraq's WMD were destroyed with their delivery systems. A relatively small number of such weapons, according to the British document, could have been hidden by Hussein, including up to 20 al-Hussein missiles capable of carrying chemical or biological warheads. But are these residual capabilities really a serious threat?
 The al-Hussein missile that, in 1991, was used to attack Israel is a modified Soviet-designed Scud-B with extra range - 650 kilometers instead of 290 kilometers. But the extra range comes at the price of a much smaller payload and decreased accuracy. The al-Hussein missile used in 1991 did not have a detachable warhead - the entire missile traveled as one piece at supersonic speed, crashing together with its warhead and increasing the damage in the impact area.
 But such a missile is totally unfit for delivering and dispersing chemical or biological agents. A chemical (or biological) ballistic warhead would need a radio or other noncontact fuse that could burst open the warhead cover in flight, so that the incoming air stream would disperse the liquid agent in an aerosol cloud.
 Iraq acknowledged in the 1990s that it had produced 50 chemical and 25 biological warheads for its ballistic missiles, but they were never used and there is no evidence that extensive flight testing ever took place. An unprepared chemical or biological attack today, using an untested warhead on an inaccurate al-Hussein missile against Israel, for example, could well result in a lethal aerosol cloud engulfing a Palestinian city, if the warhead worked at all.
 Hussein is a bloody tyrant who obviously wants to obtain WMD, but the UN arms inspections managed to contain him during the 1990s and may be effective today. The international community will have to choose whether to continue with containment until Hussein dies of natural causes or is overthrown by an internal revolt, or to go in and remove him by force. The British document was apparently intended to bolster the &quot;regime change&quot; option, but its findings actually provide strong support for a policy of containment.
 
 <i>Pavel Felgenhauer is an independent defense analyst. </i>

TITLE: Global Eye
TEXT: <b>Brass in Pocket
 </b>
We've talked a lot about grand strategy and national purpose the last few weeks, but now let's leave that rarefied air and get down to what your savvy, no-nonsense operators like Dick Cheney and Don Rumsfeld would no doubt call, in their jaunty, plain-man jargon, &quot;brass tacks.&quot;
 
Namely: who's going to gobble up the loot from President Pretzel's buggering of Baghdad?
 Besides the oil industry, of course. Their slobbering over Saddam's barrels of black gold - the second-largest oil reserves in the world - has reached such proportions in recent weeks that even the Dear Leader's cheerleaders in mainstream U.S. media have had to put down their pom-poms for a second and take note of it. Usually in this vein: &quot;An unexpected side benefit of U.S. President George W. Bush's campaign to liberate the Iraqi people could be the opportunity it represents for some of America's largest hydrocarbon enterprises to develop profitable new venues for their useful goods and services,&quot; or some other such gumming of milky pablum. In any case, that particular fat cat is now out of the bag.
 We don't wish to be simplistic, however. Crude assertions such as &quot;This is a war for oil&quot; or &quot;Bush will kill thousands of people to enrich his fellow oil barons&quot; do a grave injustice to the complexities - the subtle nuances - of the situation. And Mr. Bush - despite the many unjust aspersions cast upon his intelligence by liberal bigots and late-night comedians - is in perfect command of these complexities. He knows he is not going to &quot;kill thousands of people to enrich his fellow oil barons.&quot; No; he's going to kill thousands of people to enrich <i>a whole range of special interests, </i>not just oil barons.
 Who says Dub don't do nuance?
 So what if other war profiteers are high on the Bush hit parade? It's certainly no surprise to find our old friends, the Carlyle Group, turning the shredded viscera of dead children into boffo box office for its associates.
 For those who came in late, the Carlyle Group is the world's largest &quot;private equity&quot; firm - a gang of former government honchos cashing in on their connections while keeping a place warm for current officeholders who throw sweetheart deals their way. Carlyle specializes in transactions controlled by dispensers of state largess: defense contracts, privatizations - anything that can be done on the QT with a nod and a wink between old pals.
 Their heavy-hitters are hardwired into the global power grid: James Baker (Bush I's secretary of state), Frank Carlucci (former Reagan secretary of defense, and college chum of Rumsfeld), John Major (moralizing ex-British prime minister turned tabloid fodder this week after being outed as an adulterous hypocrite by a former lover), and of course, George Herbert Walker Bush, who serves as a roving shill for the group, sealing backroom deals with old family friends - like the bin Ladens of Saudi Arabia. Carlyle is now one of the top U.S. military contractors, and is busy expanding its tentacles into America's client states. Just last month, Tony &quot;The Ranch Hand&quot; Blair privatized one of Britain's top-secret defense laboratories and gave a chunk of it to Dubya's dad, despite strong objections from Parliament. The Groupsters are also negotiating a deal for Israel's anti-terror training unit, which is being privatized by the Sharon government.
 It's a cunning business plan, worthy of the Harvard Business School grad in the White House. More war means more money for Carlyle. More terror means more money for Carlyle. The more war you wage, the more terror you will provoke. And that means - what else? - even more money for the family firm.
 Carlyle is not the only insider making out like a bandit from the Bush Wars, of course. There's Halliburton, which just before the 2000 election gave Dick Cheney a $36 million &quot;retirement package&quot; - i.e., <i>bribe </i>for services to be rendered once he was installed in office. And he has come through for the home team: Halliburton's military-services division has been given open-ended, no-bid Pentagon contracts worth untold billions. Its other main business - oil services - will reap even more profit from the upcoming conquest.
 Meanwhile, Rumsfeld sold up to $91 million in defense-related stocks last year, including his major stake in a partnership with family members of China's communist leadership: a technology venture designed to give the Red Army protection against, er, U.S. computer espionage. Like Cheney, who did $30 million in business with Saddam Hussein during the 1990s, Rummy swings both ways when there's money to be made.
 Here's the bottom line: every military action taken by the United States puts money directly into the pockets of George W. Bush, his family and their elite business associates around the world. Every act of terrorism against the United States puts money directly into those same pockets - because such acts lead to more military responses, more military spending, more anti-terror measures in both the public and private spheres.
 Thus every single decision that George W. Bush makes about war and terrorism is compromised and corrupted by the indisputable fact that he and his closest associates stand to profit directly from conflict, destruction, fear and death. The more aggressive his response, the more money they will make. Whatever other motives you choose to see behind his decisions, this one fact taints them all.
 These men have shown that they put profit above everything else; for them there is no profit in peace.
 <i>

 For annotational references, please see the &quot;Opinion&quot; section at www.sptimesrussia.com </i>

TITLE: Lula Wins, But Not by Big Enough Margin
AUTHOR: By Bill Cormier
PUBLISHER: The Associated Press
TEXT: SAO PAULO, Brazil - They lighted fireworks, danced the samba and waved flags emblazoned with the red star, but Brazil's left scored only a partial victory in a presidential race that now goes to a second round.
 
Unable to win a weekend election outright, former labor boss Luiz Inacio Lula da Silva is headed for an Oct. 27 showdown with the second-place finisher, government-backed candidate Jose Serra, Brazil's Supreme Electoral Tribunal confirmed Monday.
 &quot;Let us go wage the fight, let's go to the streets immediately!&quot; said Jose Geonino, one of Silva's closest aides, as he rallied more than 1,000 cheering supporters of the leftist Workers' Party candidate after Sunday's ballot. &quot;I call for the vote of all who want to change Brazil.&quot;
 With 98.3 percent of the ballots counted, Silva had 46.4 percent and Serra had 23.2 percent. Eliminated in first-round voting were former Rio state Governor Anthony Garotinho with 17.9 percent and Ciro Gomes with 12 percent.
 Silva's campaign announced it would immediately begin hunting for votes from Garotinho, who had strong support from evangelical groups, and from Gomes, a center-left politician seen as sympathetic to Silva.
 All told, more than three quarters of the electorate rebuffed the government candidate, Serra, and the free-market policies he promised to continue from outgoing President Fernando Henrique Cardoso.
 &quot;Lula! Luuuu-Laaa!&quot; people shouted in Sao Paulo, Silva's home turf, waving the Workers' Party flag, with its red star, into the early hours Monday, amid a barrage of fireworks after a compulsory ballot by 115.3 million registered voters.
 Francisco Pereira, whose foot had to be amputated last year because of diabetes, limped to the polls on splintered crutches from his dusty shantytown slum, Villa Prudente, the city's largest and most violent <i>favela</i>.
 &quot;Things are bleak,&quot; said Pereira, 49, after punching in his vote on a computer in a public school whose green chalkboard was pitted and worn from years of use.
 Like millions in Brazil, Pereira said Silva was the workers' candidate and would look kindly on the fate of the poor, the unemployed and those in ill health.
 &quot;I hope for a lot from him,&quot; he said.
 The economy grew 1.5 percent last year and is forecast to finish 2002 with growth of 1.4 percent.
 But the weak economy, coupled with an unemployment rate of 8 percent, have turned millions of Brazilians against free-market policies and the government candidate, Serra.
 Brazil, weighed down by $230 billion in foreign debt, saw its currency in a freefall in recent weeks over its ability to keep up debt obligations and adjust to a possible Silva victory.
 Some Silva supporters worried the next round would be the most vicious.
 Vitor Hugo Simoes, a 41-year-old school teacher, was crushed that the leftist didn't clinch an outright victory.
 &quot;I am so saddened,&quot; Simoes said. &quot;I was so sure he would win in one round.&quot;

TITLE: WORLD WATCH
TEXT: <b>Talks Collapse
 </b>

LOS ANGELES (AP) - Labor talks broke off between stevedores and shipping lines after the union rejected the latest contract proposal in a dispute that has shut down West Coast ports and dealt billions of dollars in damage to the economy.
 After the International Longshore and Warehouse Union rejected the offer, talks broke off indefinitely at about 11:30 p.m. local time on Sunday, said Steve Sugerman, a spokesperson for the Pacific Maritime Association.
 "The PMA presented a comprehensive proposal to the longshore union, which would have made their members the highest-paid blue-collar workers in America," said Sugerman.
 The Pacific Maritime Association, which represents shipping companies and terminal operators, has locked out 10,500 members of the stevedore's union, claiming the dockworkers had engaged in a slowdown late last month.
 The lockout entered its second week Monday, with the number of cargo vessels stranded at West Coast docks or backing up at anchor points rising to 200. Dozens more were still en route from Asia.
 
<b>Nobels Awarded
 </b>

STOCKHOLM (Reuters) - Sydney Brenner and Sir John Sulston of Britain and Robert Horvitz of the United States won the 2002 Nobel Medicine Prize on Monday for work on how genes regulate organ development and cell death.
 The three share the $1-million prize for seminal discoveries into how genes affect organs and the death of cells, shedding new light on the development of many diseases, Sweden's Karolinska Institute said in its citation.
 Programmed cell death - or "cell suicide" - is a natural process in which billions of cells die every day while a similar number of new ones are created to allow the body and its organs to develop.
 "Knowledge of programmed cell death has helped us to understand the mechanisms by which some viruses and bacteria invade our cells," the institute said. "We also know that, in AIDS, neurogenerative diseases, stroke and myocardial infarction, cells are lost as a result of excessive cell death."
 Brenner, born in South Africa in 1927, Sulston, born in 1942 and Horvitz, born in 1947, worked on roundworms to look into how genes control animal development and behavior.
 
<b>Nationalist Comeback
 </b>

SARAJEVO, Bosnia-Herzegovina (Reuters) - Nationalists looked poised on Monday to stage a comeback in Bosnia after preliminary election results showed a surprise surge for hardline Muslims and a whipping for the main moderate party.
 If confirmed, the results would show that reformist parties who ejected nationalists from power at the state level in the last poll two years ago will find it difficult to govern without the hardliners who led Bosnia into and through the war of 1992 to 1995.
 Saturday's parliamentary and presidential polls had been promoted as a make-or-break chance for Bosnians to choose reformist leaders, to bury ethnic divisions and push through reforms before Western aid and patience run short.
 The election commission cautioned late on Sunday that not all constituencies had been counted. More detailed results were expected on Monday.
 The multi-ethnic Social Democrats (SDP), which had been Bosnia's biggest party and the driving force behind the moderate ruling bloc, saw its vote tumble in favor of the purely Muslim Party of Democratic Action (SDA). 



TITLE: World Stars Dazzle Crowds at Ice Palace
AUTHOR: By Olga Dervenyova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Professional ice shows, widespread all over Europe and North America, seem finally to be becoming profitable and in demand in Russia.
 
Good evidence of this could be seen at the Ice Palace on Sunday evening, when the main organizer of Russia's only such show, Artur Dmitriyev - himself a double Winter Olympic champion, at Nagano, Japan in 1998 and Calgary, Canada in 1992, and double world champion - kept the promise that he made last year and returned to St. Petersburg with some of his world-famous friends, champions and prize-winners at major figure-skating events, to present the &quot;Ice Olympus 2002.&quot;
 The return of Dmitriyev's show proved popular with St. Petersburg sports lovers, as the stadium was about two thirds full - amounting to an audience of some 14,000 people.
 Most of the participants in last year's &quot;Ice Olympus 2001&quot; came back to the Ice Palace for this year's spectacular, including Viktor Petrenko of Ukraine; Surya Bonaly, the &quot;Pearl of France,&quot; with compatriot Philippe Candeloro; Russian ice-dance duo Anzhelika Krylova and Oleg Ovsyannikov; this year's Winter Olympic joint gold medalists Yelena Berezhnaya and Anton Sikharulidze; their fellow St. Petersburg skater Alexei Urmanov; and the event's &quot;hosts,&quot; Oksana Kazakova and Dmitriyev. They were joined by several newcomers to the event: Italians Barbara Fusar-Poli and Maurizio Morgaglio; Margarita Drobyazko and Povelas Vanagas; Tatyana Navka and Roman Kostomarov; and others. There were, however, some prominent no-shows, including former Olympic champion Brian Boitano, and his Canadian compatriot Elvis Stoiko
 The show included both new and tried-and-trusted programs. The unusual pair of Ukrainian ice acrobats - and double world champions - Alexei Polishchuk and Vladimir Besedin combined both the old and the new, producing their familiar &quot;Swan Lake&quot; tricks to a variety of Russian classical music. Bonaly could win plaudits as an acrobat soon, by exhibiting some powerful, high jumps; especially noteworthy was her famed back-flip to land on one leg.
 One of the best actors on the ice, Petrenko, the Olympic champion in 1992, landed several triples with a large toy dog on his arm, as he skated to the energetic beats of the Baha Men's hit, &quot;Who Let the Dogs Out?&quot; Another actor, Candeloro, was no less creative, dressing in Scottish tartan for the first half of the show, and subsequently as a hero from the Wild West - but with a <i>shapka-ushanka, </i>a Russian fur hat, in the second program.
 None of these skaters, however, were asked for an encore, in contrast to the Italian newcomers, Fusar-Poli and Morgaglio, who skated their Olympic bronze-medal-winning program, which rocked the crowd with its high velocity, emotional power and technical difficulty.
 Despite all the other big names present, there was only one pair who were ever going to be the heroes of the evening, as the whole show was geared toward the official greeting in St. Petersburg of the Salt Lake City champions Berezhnaya and Sikharulidze, and their coach, Tamara Moskvina.
 &quot;You are the real champions,&quot; said Russian Figure-Skating Federation President Valentin Piseyev, referring to the scandal at the games that led to the subsequent awarding of a second set of gold medals to Canadian pair Jamie Sale and David Pelletier, who had finished second.
 &quot;You won your title on the rink, but not inside the Olympic Committee lobby,&quot; added Piseyev, as he awarded the pair and their coach special badges - and a huge cake - for their particular efforts in the development of figure skating.
 Piseyev's congratulations were followed by those of the show's organizers.
 &quot;I know that the best gift for skaters is their colleagues' applause,&quot; said Dmitriyev, doing just that.
 &quot;Thank you for your smiles, for your support,&quot; replied Sikharulidze.
 After the award ceremony, which finished with a ballad from the film &quot;Zemlya Sannikova&quot; (&quot;The Land of Sannikov&quot;), sung by the show's MC, Fyodor Vasilyev, the spectacular, colorful exhibition went on for another hour, to the delight of both the spectators and the athletes.
 The show wrapped up with a thanksgiving to St. Petersburg - the native city of a number of champions - in which all the participants came out and skated simultaneously, to the accompaniment of songs glorifying the city.

TITLE: NFL Team Inspires Oakland Sports Fans
PUBLISHER: The Associated Press
TEXT: NEW YORK - As the A's crashed out in baseball's playoffs, Phillip Buchanon helped the Oakland Raiders stay unbeaten, and the Denver Broncos made certain their AFC West rival ended the day as the only undefeated team in the NFL. Brian Griese threw for 316 yards as Denver handed San Diego its first loss Sunday, beating the Chargers 26-9.
 
The Broncos held LaDainian Tomlinson to 48 yards, a week after he tied the team record with 217 yards in a victory over New England that moved San Diego to 4-0.
 Denver (4-1) moved into a tie with the Chargers for second in the AFC West. Both teams are a game behind Oakland, which improved to 4-0 with a 49-31 victory at Buffalo. The Raiders sealed the win on Buchanon's 81-yard interception return for a touchdown.
 Instead of aggressively pursuing Tomlinson, Denver's defenders hung around the gaps, waiting for him to make his move before collapsing on him. The plan forced San Diego to lean on quarterback Drew Brees, who was 26-for-42 for 235 yards, but had two passes intercepted by Deltha O'Neal.
 O'Neal, ejected for bumping an official last week against Baltimore, also returned an interception 28 yards for a TD.
 
 <strong>
Oakland 49, Buffalo 31. </strong>At Orchard Park, New York, Buchanon stepped in front of Drew Bledsoe's pass toward Peerless Price and ran untouched for the clinching score.
 
Oakland improved to 4-0 for the sixth time in franchise history and the first time since 1990.
 The interception came with Oakland clinging to a 35-31 lead and Bledsoe orchestrating another scoring threat.
 A week earlier, the rookie cornerback returned a punt 83 yards for a touchdown and had an interception to set up another TD in Oakland's win over Tennessee.
 Bledsoe had led the Bills (2-3) to two victories in their three overtime games, but he couldn't engineer another great finish. He threw for 417 yards but also had three interceptions.
 Oakland's Rich Gannon was 23-of-38 for 357 yards.
 
 <strong>
Baltimore 26, Cleveland 21. </strong>At Cleveland, Ray Lewis turned the night game into his own prime-time special for three quarters as Baltimore (2-2) built a big lead and held on to beat the Browns.
 
Lewis had an interception, forced a fumble that he recovered, and made four tackles before he injured his left shoulder and had to sit out the fourth quarter.
 Cleveland (2-3) trailed 23-0 at the start of the period, but with starting quarterback Tim Couch sitting dazed on the bench with a concussion, the Browns stormed back behind Kelly Holcomb.
 After recovering an onside kick, the Browns moved the ball to the 17 in the final minute, but Holcomb's final pass was picked off by safety Ed Reed.
 
 <strong>
Miami 26, New England 13. </strong>At Miami, Jay Fiedler threw two touchdowns and ran for another score - all on third down - as Miami beat New England to take over sole possession of first place in the AFC East.
 
Jason Taylor had two sacks and forced a fumble by quarterback Tom Brady to set up Miami's first score. Ricky Williams gained 105 tough yards on 36 carries- a Miami regular-season record.

TITLE: SPORTS WATCH
TEXT: <b>Sorenstam Supreme
 </b>

VALLEJO, California (AP) - Annika Sorenstam won her ninth tournament of the season Sunday - beating the record of eight she set last season - shooting a 7-under-par 65 to pull away from Cristie Kerr and win the Samsung World Championship.
 "I think I'm playing even better now," said Sorenstam, who shot all four rounds in the 60s. "I want to beat my record last year and here I am."
 Sorenstam finished with a 22-under 266 - shattering the tournament record of 14 under - at Hiddenbrooke Golf Club, six shots ahead of Kerr, who began the day tied with Sorenstam.
 Kerr finished at 16-under after shooting a 71 Sunday. Michele Redman eagled the last hole for a 68, finishing third at 15-under. Se Ri Pak (70) and Rosie Jones (71) tied for fourth, finishing 13-under.
 
 
<b>Harrington Triumphs
 </b>

ST ANDREWS, Scotland (AP) - Padraig Harrington won the Dunhill Links Championship on Sunday with a 4-meter birdie putt at the second extra hole against Eduardo Romero of Argentina.
 The Irishman ran in a 6-meter putt for birdie at the last hole of regulation to get into the playoff when Romero missed from under 3 meters. They finished with totals of 269, 19 under par.
 Both parred the first playoff hole, before Harrington struck for his first victory of the year at the second, where Romero missed his birdie attempt from 2 meters.
 Colin Montgomerie, a week after his heroics at the Ryder Cup, showed he had not finished by closing with a 9-under-par 63, equalling the course record for the Old Course set by Paul Lawrie when he won the event last year.
 He birdied nine of his first 12 holes and the tough 17th, though a bogey at the last cost him an even higher finish, after he began the final round eight shots off the lead.
 He finished joint third at 17-under with Sandy Lyle and Vijay Singh.
 
 
<b>Racism Challenge
 </b>

LONDON (Reuters) - Kicking racism out of European soccer will be at the top of the agenda this week when UEFA officials meet to discuss an alleged volley of abuse faced by black players this season. British clubs have been pushing the agenda, after players at Arsenal, Liverpool, Fulham and Ipswich Town complained about their treatment in Champions League and UEFA Cup away games.
 Top internationals, such as Arsenal's Thierry Henry and Liverpool's Emile Heskey, say they have been targeted by local fans who have hurled abuse, spat and thrown objects at them.
 UEFA's disciplinary body is expected to take firm action on Thursday, particularly after chief executive Gerhard Aigner insisted last month that there was no place for racism in football.
 However, UEFA is equally convinced that the task of ridding the game of racism cannot be its alone.
 "Hundreds of European games go on in Champions League, UEFA Cup and youth and women's competitions in which there are no incidents," said Mike Lee, UEFA's director of communications. "But we take every incident seriously and I think the European football family knows that UEFA absolutely and totally condemns racism."
 "But we cannot solve these problems on our own," Lee said. "Everybody has a responsibility - clubs, leagues, national associations, players, stewards, police." 



TITLE: Yankees, DBacks Fall at First Hurdle
PUBLISHER: The Associated Press
TEXT: ANAHEIM, California - There will be no rematch of last year's thrilling World Series: The Arizona Diamondbacks and New York Yankees were both sent home long before the Fall Classic. 
 
The Yankees, so eager to return to the Series after last year's heartbreaking loss, instead were the first team knocked out of the postseason, beaten 9-5 by the surprising Anaheim Angels on Saturday.
 Meanwhile, Randy Johnson, Curt Schilling and the Diamondbacks were swept by St. Louis in three games. Behind a big game from Miguel Cairo, the inspired Cardinals won 6-3 on Saturday, to eliminate the team that beat them last postseason.
 On Sunday, the Minnesota Twins downed the Oakland A's 5-4 in the decisive Game 5 of their series. Also Sunday, the San Francisco Giants battered Tom Glavine to beat Atlanta 8-3 to take the series to a fifth game.
 
 <strong>
Anaheim 9, N.Y. Yankees 5. </strong>The Angels roughed up Andy Pettitte, Mike Mussina and David Wells in succession to win the AL division series 3-1 and end New York's four-year run as league champions. The World Series will be without the Yankees for the first time since 1997.
 
&quot;It's been a long time coming for myself and this organization, a lot of blood, sweat and tears,&quot; rightfielder Tim Salmon said after the Angels won a postseason series for the first time. &quot;To finally come through and do it, it's just special.&quot;
 Shawn Wooten homered and hit an RBI single during an eight-run fifth inning as the wild-card Angels put an emphatic end to 42 years of frustration.
 &quot;I didn't have my head in the sand, a lot of people didn't give us much of a chance,&quot; manager Mike Scioscia said.
 &quot;The perspective is, it's one rung up the ladder,&quot; he said. &quot;It has to give us confidence to beat the incredible club we just played against.&quot;
 The no-name Angels hit .376 - the highest ever in a postseason series - against a vaunted pitching staff Yankees manager Joe Torre had called his best in his seven-year tenure.
 New York's 8.21 ERA was its worst in 57 postseason series.
 &quot;It really got ugly for us,&quot; Torre said. &quot;I have no reasoning for it or excuse for it. It's a bad taste right now. They played a whole lot better than we did. They did what they needed to do and we weren't there.&quot;
 
 <strong>
St. Louis 6, Arizona 3. </strong>Miguel Cairo, starting in place of injured Scott Rolen, drove in two runs and scored twice as the Cardinals completed a three-game sweep.
 
The Cardinals had inspired play down the stretch, winning 21 of their last 25 in the regular season, and have now advanced to the NL championship series for the second time in three years.
 &quot;I wasn't trying to put pressure on myself,&quot; Cairo said. &quot;I was just trying to take it like a regular game, relax and have fun. It was excellent approach.&quot;
 It was typical for the Cardinals, who kept adjusting en route to the NL Central title. They were forced to use 14 starting pitchers and 26 overall.
 The Diamondbacks, who won the World Series in record speed - it took them only four years - lost their crown in just three games.
 Minus injured star Luis Gonzalez, who separated his shoulder in the final week of the regular season at Busch Stadium, Arizona totaled a mere six runs and 18 hits in the series against St. Louis, the team they beat 3-2 in the first round last year. The Diamondbacks batted just .184.
 &quot;Our bats were silent an awful lot,&quot; said David Dellucci, who hit a two-run homer in the second inning. &quot;That's something this team's not used to. But you have to look at the people they had on the mound.&quot;
 The Diamondbacks also missed Craig Counsell and Danny Bautista, two more injured players.
 
 <strong>
Minnesota 5, Oakland 4. </strong>The low-budget, big-hearted Twins aren't contracting. Their amazing season is still expanding - all the way to a most unlikely AL championship series.
 
Brad Radke pitched 6 2/3 dominant innings to beat Oakland again, and the Twins survived a late rally to top the Athletics on Sunday in Game 5.
 The Twins didn't get it done without drama. After A's closer Billy Koch gave up three runs in the ninth, Mark Ellis hit a three-run homer against Minnesota closer Eddie Guardado to pull Oakland back within a run.
 Randy Velarde singled with two outs, but Ray Durham - who homered earlier and had three hits in the game - fouled out to second baseman Denny Hocking.
 <strong>
San Francisco 8, Atlanta 3. </strong>Barry Bonds drove in the first run, and the Giants led all the way, sending both teams back to Atlanta for a decisive Game 5.
 
Handed a 7-0 lead, Livian Hernandez - the 1997 NLCS and World Series MVP - improved to 6-0 in the postseason. Even after a disappointing record of 12-16 in the regular season, he was confident before his first outing of this series.
 &quot;I never lose in October,&quot; he said.

TITLE: Mathieu, Maleeva Recover To Claim Kremlin Crowns
PUBLISHER: Combined Reports
TEXT: MOSCOW - French qualifier Paul-Henri Mathieu upset Dutch seventh seed Sjeng Schalken, 4-6, 6-2, 6-0, in the Kremlin Cup men's final on Sunday to win his first major title.
 
Another unseeded player won the women's final when Bulgarian Magdalena Maleeva - who beat Venus Williams earlier in the week - upset second seed Lindsay Davenport, 5-7, 6-3, 7-6, to win her third Kremlin Cup title.
 Twenty-year-old Mathieu, who knocked out top seed Marat Safin in the semifinals, crushed his 26-year-old opponent in the final set to earn the $133,000 prize.
 &quot;Coming to Moscow, I had never dreamed of reaching the final, never mind winning it,&quot; said Mathieu, the first qualifier to win an ATP title this year. &quot;I was just hoping to make the main draw here but I started playing better and better.&quot;
 The French player, who had never reached a semifinal before, said losing the first set had shaken his confidence.
 &quot;Of course I was nervous, it was my first final, but I was able to calm myself down,&quot; he said. &quot;After all, I lost the opening set six times here but still managed to win in the end.&quot;
 Mathieu said his win in Moscow improved his chances of being included in the French team for the Davis Cup final against Russia later this year.
 &quot;Well, I think I have a better chance now, but still it's an outside chance they will pick me to play the tie,&quot; he said.
 Schalken said Mathieu kept a tight hold on the match despite losing the first set.
 &quot;Even in winning the first set I was a step behind all the time,&quot; said the Dutch player, who beat second seed Yevgeny Kafelnikov in the semifinals to end the Russian's 28-match Kremlin Cup winning streak.
 &quot;After the second set, he got an energy explosion and I just couldn't do much anymore,&quot; added Schalken. &quot;I was still one step short everywhere and he played so hard, so well ... he was just a better player.&quot;
 After battling her opponent for two hours, Maleeva, who knocked out top seed Williams in the second round, prevailed 7-4 in the third set tie-breaker for her third Kremlin Cup title.
 &quot;I consider Lindsay the best player in the world and beating her in the final, it's just unbelievable,&quot; said the 23rd-ranked Bulgarian, who won back-to-back Kremlin Cups in 1994 and 1995. &quot;She killed me a couple of times we played but I played very aggressively for the whole week here. I also played the big points very well, so I think I deserved to win.&quot;
 &quot;I have never beaten three top-10 players before, so this definitely is the best week of my life.&quot; Maleeva pocketed a $182,000 first prize, while Davenport took home $97,000.
 Davenport, playing in her first tournament since she lost in the U.S. Open semifinals to eventual champion Serena Williams, had trouble holding her serve in the third set.
 &quot;I had my chances but I was never able to get up in the third set,&quot; said Davenport, who had been bidding for her first title of the season.
 She fired 15 aces, but also had six double faults and committed 41 unforced errors compared to only 22 by Maleeva.
 In Tokyo, Jill Craybas of East Greenwich, Rhode Island, reeled off the final six games to beat Silvia Talaja of Croatia 2-6, 6-4, 6-4 Sunday and win the Japan Open for her first-ever WTA Tour title.
 Kenneth Carlsen of Denmark beat Magnus Norman of Sweden 7-6 (8-6), 6-3 in the men's final, for his first title since 1999.