SOURCE: The St. Petersburg Times
DATE: Issue #823 (88), Tuesday, November 26, 2002
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TITLE: Summit Accents New Approach
AUTHOR: By Andrei Zolotov Jr.
PUBLISHER: Staff Writer
TEXT: At least in its trappings, Friday's meeting between Presidents Vladimir Putin and George W. Bush in the Catherine Palace in the St. Petersburg suburb of Pushkin offered proof of a profound change in the relationship between the two countries.
 
Whereas global confrontation between the rivals in past decades meant that summits were meticulously prepared events of great importance, this time around the U.S. president, who reportedly accepted his Russian counterpart's invitation on the spot in a telephone conversation last month, appears to have simply stopped by for a couple of hours to touch base on issues of joint concern.
 To complete the picture of a friendly and informal visit, Bush even gave Foreign Minister Igor Ivanov a ride home from the NATO summit on Air Force One.
 It is not clear how the two presidents managed to cover what Putin described as "practically everything" - NATO enlargement, Iraq, energy and high-tech cooperation between the two countries and the struggle against terrorism - during their 80-minute meeting, which also required time for translation, but Bush and Putin appeared pleased when they briefly spoke to reporters in one of the palace's richly gilded rooms. They agreed they had had a productive and frank meeting.
 "Like [with] other good friends I've had throughout my life, we don't agree 100 percent of the time," Bush said. "But we always agree to discuss things in a frank way."
 Compared to Russia's once-vociferous opposition to NATO enlargement, Putin's reaction to what Bush had described as the main theme of the visit - to assure Russia that NATO's expansion was "good for Russia" - was markedly reserved. He said Russia still did not consider the expansion necessary, but took Bush's assurances at face value and would cooperate with NATO's members and the alliance as a whole.
 "As the alliance keeps transforming, we do not rule out the possibility of deepening our relations with the alliance," Putin said. "Of course, that is the case if the activities of the alliance are in accord with Russia's national-security interests."
 Russia's demands for security guarantees from the enlarged NATO are topped by a request that the Baltic countries join the adapted Conventional Forces in Europe Treaty, which determines military strength in different regions of Europe.
 Bush won more support from Russia in his drive to isolate Iraqi leader Saddam Hussein. As a result of the meeting, the two presidents issued a joint statement calling on Iraq to fully comply with UN Security Council Resolution 1441. If Iraq does not "unconditionally cooperate" with the United Nations and fulfill its obligations to disarm, it will face "serious consequences," the statement said.
 But, with the Bush administration transfixed on the threat coming from traditional Russian ally Iraq, Putin used the occasion to elegantly poke his friend on traditional U.S. allies that also can be seen as potential sources of threat in the new war against terrorism.
 "We should not forget about those who finance terrorism," Putin said to a question from a U.S. reporter on whether Bush had asked Russia to participate in military action against Iraq.
 "Of the 19 terrorists who committed the main attacks on Sept. 11 against the United States, 16 are citizens of Saudi Arabia, and we should not forget about that." Actually, 15 were Saudi citizens.
 "Where has Osama bin Laden taken refuge?" Putin continued. "They say that somewhere between Afghanistan and Pakistan. We know what [Pakistani President Pervez] Musharraf is doing for stability in his country and we support him. But what can happen with armies armed with the weapons that exist in Pakistan, including weapons of mass destruction. We are not sure on that aspect and we should not forget about it."
 Viktor Kuvaldin, chief political analyst with the Gorbachev Foundation, said Sunday that, by mentioning Saudi Arabia and Pakistan, Putin had pointed to an imbalance in U.S. anti-terrorist policy, which is heavily concentrated on Iraq.
 Kuvaldin said the terrorist threat does away with Cold War-era divisions, which once allowed the United States to justify questionable allies by saying "he's a son of a bitch, but he's our son of a bitch."
 "Putin told Bush once again: Hey guys, look where the real threat is coming from," Kuvaldin said in a telephone interview.
 The joint struggle against terrorism continues to be the main rallying point in the friendship between Bush and Putin, while harsh rhetoric in regard to terrorists appears to be what sets them apart from European leaders.
 Responding to a question from a U.S. reporter, Bush said the arrest of Abd al-Rahim al-Nashiri, described as al-Qaida's Persian Gulf operations chief, was a major victory in the war on terror.
 "The message is ... that we are going to hunt them down one at a time, that it doesn't matter where they hide," Bush said, using language similar to the language used by Putin in 1999, but stopping short of specifying where terrorists could hide, such as toilets.
 "I am very pleased to see the mood the U.S. president is in," Putin said in reaction. "That's what we need."
 As predicted, Bush made no public mention of Chechnya, a subject on which Putin is particularly sensitive.
 Official statements also made no mention of Bush's intention to honor Russian economic interests in Iraq, which he had expressed in an interview with NTV last week. But Izvestia, which is in part owned by LUKoil - a company with major interests in Iraq - dedicated most of its summit coverage to the oil issues. The only other document the two presidents issued was a statement praising the so-called Russian-U.S. energy dialogue, in which the governments and oil majors are discussing the possibility of increasing Russian oil exports to the United States to decrease its dependency on Arab oil.
 Apparently timed with the summit, LUKoil President Vagit Alekperov met Friday in Moscow with the U.S. Energy Department's chief of staff, Kyle McSlarrow, Interfax reported.
 The oil giant said in a statement that if UN sanctions against Iraq were lifted, LUKoil would in three years make $65 million to $70 million from its 68-percent stake in a consortium to develop the Western Qurna-2 oil deposit in Iraq.
 However, Lilia Shevtsova, a political analyst with the Moscow Carnegie Center, said on TVS television Sunday that in the economic field, the Russian-U.S. partnership has yet to bear fruit.
 The "energy dialogue" continues to lack substance, and there has been no progress on the lifting of limitations on U.S. high-tech companies for supplying technology to Russia, Shevtsova said.
 In a sign of how the summits have become routine, the Russian media was low key in its coverage of the meeting. It was the main item on television newscasts Friday, but did not earn a front-page story in any newspaper Saturday except for state-owned Rossiiskaya Gazeta, which gave its report a resonating headline: Idushchiye Vmeste ("Walking Together"), a reference to a pro-Putin youth group.
 Television reports focused attention on the fact that Putin spoke to Bush without an interpreter during their walk through the chain of rooms, which included a preview of the reconstruction work on the famous Amber Room, which is to be presented during St. Petersburg's 300th anniversary next year.
 Bush was predictably impressed, with "Wow!" being his most frequently used expression during the brief tour, Tsarskoye Selo Museum Director Ivan Sautin said on Rossia television.
 "Every time I come to St. Petersburg, he [Putin] keeps showing me more and more beautiful rooms. So I'm coming back next May," Bush said.

TITLE: Danes Find Russian Trade Tricky
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - Trucks loaded with Danish sausages, air conditioners and freezers are piling up at the border in a customs slowdown that exporters and Danish officials fear might be linked to a spat over Chechnya.
 
However, customs officials denied targeting Danish companies, leaving the Danes scratching their heads about the 10 days of delays.
 "I don't know whether it is new rules but, apparently, customs started investigating our goods in a more severe manner 1 1/2 weeks ago," said Jens Christiansen, sales director for meat giant Danish Crown.
 "We normally ship up to 100 trucks to Russia on a weekly basis. Last week, we shipped 20 trucks less, which were waiting at customs," he said by telephone from Copenhagen. "Normally, customs clearance took hours, now we are experiencing [delays of] three to four days."
 A Danish Foreign Ministry official said he feared Russian customs officials were following an unofficial government regulation ordering them to deal with Danish companies in "a special way."
 "It surprises us in light of the very firm statement of President Vladimir Putin at the EU-Russia summit, where he underlined his intention to normalize the situation between Denmark and Russia," the official, speaking on condition of anonymity, said in a telephone interview from Copenhagen.
 "If that is really the case, that's something that surprises us quite a lot, because it would not be in the interest of anybody to put obstacles to trade between the European Union and Russia," he said. No other countries have complained of delays.
 The customs slowdown comes less than a month after Putin harshly criticized Denmark for allowing Chechen separatists and their supporters to meet in Copenhagen for a peace conference. The dispute over the Oct. 28 to Oct. 29 conference, which came just days after Chechen rebels seized the Moscow theater, forced the European Union to move this month's EU-Russia summit from Copenhagen to Brussels.
 Putin said at the summit that Russia would harbor no ill will toward Denmark.
 The idea of targeting Danish goods was brought up by a group of State Duma deputies at the start of this month, four days after Danish police arrested Chechen rebel envoy Akhmed Zakayev in Copenhagen. Zakayev was detained after the Chechen conference on an Interpol warrant issued at Russia's request. Moscow is demanding his extradition, and a Copenhagen court was scheduled to hear the case Tuesday.
 Demanding Zakayev's extradition, Duma deputies allied with the United Russia party, which controls the chamber's centrist majority, called for a boycott of Danish goods on Nov. 3. Then, despite Moscow's protests, Danish authorities allowed another Chechen conference to be held Friday in Copenhagen.
 "Denmark's relations with Russia have become dependent on a small group of local politicians who specialize in spinning the Chechen 'card,'" Russia's Ambassador to Denmark, Nikolai Bordyuzha, told Itar-Tass on Friday. "If this continues, Denmark could have serious problems in its relations with Russia."
 Danish exporters said Monday that they were worried the hassles could be a sign of such problems. Industrial group Danfoss announced Thursday that it had stopped shipments to Russia. However, it said Monday that it would continue shipments despite the delays, which it called "not serious," Interfax reported.
 Danish Crown said it was continuing with shipments despite the delays. "We are still shipping products to Russia, but some of our customers in Russia have problems because they are not getting products on time," Christiansen said.
 Denmark exports goods worth about $753 million a year to Russia, according to the Danish Embassy. About 50 percent of the exports are food, mostly meat. Nonfood exports include industrial equipment, machinery, pharmaceuticals and chemicals.
 Martin Lindbo, head of international affairs at Danish Transport and Logistic, a lobbying group, said shippers are facing tougher veterinary demands and other red tape at the border. "Almost 90 percent of the transport companies that deal with exporters say they are experiencing certain delays at the customs clearance," he said. "There haven't been any changes in rules and instructions, nothing official to indicate that it is special campaign, but that's what we all are experiencing now."
 He added: "There is no secret there is a special political situation between the two countries. But we would like to be very careful [and] not just blame the Russians for calling a special campaign against Danish companies."
 Hens Slemts, the head of the Danish Industry Organization, which represents the majority of Danish exporters to Russia, said he has received complaints over the past 10 days and was at a loss to explain what was happening. "The political climate seemed to become better after the successful meeting during the summit in Brussels. ... That's why we can't comprehend what happened to the customs regulations," he said.
 "We are surprised that several companies independently told us about new procedures at the border. Some companies said that their shipments have been stopped at customs and that they don't know when they are going to [be allowed to] pass," he said. "The official word from the Russian authorities is that nothing is going on, which is reassuring."
 A spokesperson for the Central Customs Department, Vladimir Ageichev, denied Monday that Danish companies were being singled out.
 "We have not received any signals or orders from the top about Danish companies," he said. "It is impossible that their interests are being trampled."
 State Customs Committee spokesperson Irina Skibinskaya stressed that the delays were not politically motivated.
 "This is unconnected to the political relations between the two countries," she told Itar-Tass on Monday. She blamed the delays on customs procedures, without elaborating.

TITLE: Gryzlov Appointed To Shake Up Party
AUTHOR: By Natalia Yefimova
PUBLISHER: Staff Writer
TEXT: Back in February, Vladislav Surkov, the Kremlin's influential pointman for overseeing domestic politics, chided the United Russia party - created to support President Vladimir Putin - for its lack of initiative and fresh ideas. Surkov warned the party that if it didn't speed forward as a "locomotive" of Russia's politcal life, it would become nothing more than "a detachable railway car."
 
Last week's selection of Interior Minister Boris Gryzlov to a top party post was widely seen as a sign that the country's ruling elite - first and foremost the Kremlin - is not willing to entrust next year's parliamentary elections to United Russia's current leadership and will try to consolidate control of the party. However, political analysts said it was not clear how instrumental Gryzlov could be in helping the party win a majority in the State Duma in the December 2003 polls.
 Party officials have acknowledged that the Duma elections are United Russia's main short-term political goal.
 "We are nearing [the start of] the election campaign and are mobilizing our party ranks. ... All those who live in the country, who are not indifferent to Russia's political fate, should take a closer look at our party and join it," Gryzlov said Wednesday after he was elected chairperson of the party's higher council.
 On paper, the higher council is an advisory body. But its other three co-chairpeople - the party's "public face" - are powerful political players: Moscow Mayor Yury Luzhkov, Tatarstan Governor Mintimir Shaimiyev and Emergency Situations Minister Sergei Shoigu. Day-to-day operations are overseen largely by Alexander Bespalov, chairperson of the party's general council. It is his effectiveness that experts believe is in doubt.
 "Party-building in United Russia is going badly," Boris Makarenko of the Center for Political Technologies said in a telephone interview Monday. Gryzlov's appointment "amounts to an admission that the current leadership has proved incapable of turning the party into something more or less independent."
 Bespalov has proved a somewhat volatile figure. He has repeatedly criticized the cabinet and has organized expensive public-relations campaigns that have had questionable political returns. The party's popularity rating inched down from 30 percent in January to 28 percent in October, according to the latest figures from the All-Russia Center for Public Opinion Research, or VTsIOM.
 "As the party's public face, Bespalov did not work," Andrei Ryabov, a political analyst with the Moscow Carnegie Center, said Monday. Gryzlov would be better because he is more predictable, even-handed and controllable, Ryabov said. But whether he is charismatic enough to greatly improve the party's chances for Duma seats "is a big question."
 The most important thing in any personnel shuffle in United Russia is to establish control over the party, Makarenko said. Gryzlov could be a good candidate for this task.
 Several days before Gryzlov was elected, Lyubov Sliska, a top party official and the first deputy Duma speaker, said he would bring greater order and discipline to the party, and that "three co-chairpeople ... are no longer necessary; the party needs a single leader."
 Yury Korgunyuk of the INDEM think tank expressed doubt that Gryzlov would have any real power, but said that United Russia combines different clans whose interests must be counterbalanced. "The party of power is not United Russia. The party of power is a real conglomerate of powerful elites" both in Moscow and in the regions, he said Monday. "United Russia is just a smoke screen."
 While the Duma's Unity faction, the pillar of United Russia, is easily controlled, Korgunyuk said, other factions making up the Duma's pro-Kremlin majority - such as Fatherland-All Russia and Russia's Regions - must be persuaded with concessions and haggling.
 "Gryzlov is the kind of man who knows how to establish those kinds of contacts across the board, including with people who represent Fatherland" and other factions, Carnegie's Ryabov said. These contacts "are behind the scenes, not widely publicized, and that makes them all the more effective."
 Even party officials hinted that this was part of the logic behind Gryzlov's appointment. "The point of this personnel decision is not only to centralize the party's leadership on the eve of the upcoming Duma elections, but also to ensure a united position of parliament's centrist coalition," Vladimir Pekhtin, head of the Unity faction, said last week.
 Some politicians have speculated that Gryzlov's pull at the Interior Ministry would allow him to mobilize police resources in the election campaign; however, Makarenko and Korgunyuk did not think this was likely.
 Gryzlov's position as the country's top cop is only important for him personally, both analysts said, because it gives him control of a powerful ministry and, therefore, political clout. Korgunyuk even suggested that Gryzlov's unexpected appointment to the Interior Ministry in March 2001 was a strategic attempt by the Kremlin to boost his public image before transferring him back to party work.
 "It was the euphoria of the days circa 1999, when the Unity bloc was put together out of thin air ... and was fashioned into the second-largest party in the State Duma," Korgunyuk said, musing over the motivation behind such a move. "But it was doomed to fail. He had no authority before and he has none now."
 Ryabov predicted that Bespalov would remain an influential figure, although press reports have speculated that his powers could be curtailed at the party caucus due to take place late this year or early next year.

TITLE: Putin Agrees To Soften Media Law Stance
AUTHOR: By Andrei Zolotov Jr.
PUBLISHER: Staff Writer
TEXT: MOSCOW - Meeting with a select group of media managers, President Vladimir Putin announced Monday evening that he had heeded their plea and vetoed the restrictive amendments to the laws on media and terrorism.
 
Last Wednesday, top managers of both state and non-state media displayed unusual solidarity in petitioning the president to do so. Journalists and free-speech advocates vigorously protested the amendments, which parliament had adopted on the heels of the "Nord Ost" hostage crisis, warning that if interpreted broadly they could ban any discussion of the government's action in crisis and coverage of the war in Chechnya.
 Putin made it clear Monday that he agreed with only some of journalists' arguments and was displeased with some media's coverage of the hostage crisis. Without naming the channel by name, he was particularly critical of NTV and accused it of consciously violating the law and verbal agreements with government officials in order to boost its ratings.
 In the letter to Putin, media leaders acknowledged "mistakes" in the crisis coverage but said they were not consciously disregarding the rules of special responsibility in time of crisis.
 "Let's be honest," Putin said in televised remarks, restraining his anger but not hiding it. "The television picture on one of the national channels several minutes before the storming [of the Dubrovka theater] which showed the movement of special forces and reported on what was happening inside the theater could have led to a huge tragedy." It was a clear reference to NTV.
 "The people who were doing it could not fail to understand this," he continued. "They consciously ignored the agreements with the Press Ministry and consciously ignored the instructions of the head of the crisis center. Why was this done? To increase ratings, to increase capitalization ... to make money."
 Putin recalled his meeting with media managers in June, when he said that only financially-independent media could be politically independent. "Thank God someone can make money, but not at any cost, not on the blood of your own citizens, if, of course, those who do this consider these citizens to be their own," he said Monday.
 Boris Jordan, NTV's U.S.-born general director, was conspicuously absent from the group of 11 media figures called to the Kremlin. So were representatives of TVS, TV Center, Kommersant, Izvestia and others among the 22 who signed last week's appeal. Included in the 11, however, were Komsomolskaya Pravda editor Vladimir Sungorkin, who did not sign the appeal, and the head of the entertainment-oriented Sem Dnei publishing house Dmitry Biryukov.
 Konstantin Ernst, general director of semi-state Channel One and head of the Media Industrial Committee lobbying group, defended journalists and said the media would swiftly develop their own corporate crisis guidelines and incorporate them into a new version of the media law that the industrial committee is drafting.
 Ernst also reiterated the media managers' position that many problems arose because of law enforcement's failure to develop an effective system for coordination with the media.
 He said that, instead of the vague amendments, which could have been used to shut down a television station or newspaper, lawmakers, special services officers and journalists should develop more concrete guidelines.
 Putin agreed and said criticism from the media was necessary. "We need to find a finer balance between limiting the media in concrete, defined situations and fully informing society about the actions of the state so that the state does not start seeing itself as infallible," he said.
 Putin said he would have a "separate conversation" with law-enforcement officials in regard to all aspects of the operation, Interfax reported. 
 The president criticized the media for going beyond the bounds of their responsibility. "The special services must save people and the media must honestly present the news and tell the truth," he said. During the crisis, some media were involved in negotiations while others reported certain news, such as a non-existent peace rally on Red Square, following the hostage-takers promises that some people would be released.
 Putin said the media should be aware of their role in the fight against terrorism and contribute to the struggle against "terrorist ideology."
 "Terrorists' main weapon is not bullets, grenades or machine guns, it is blackmailing citizens and the state," he said. "And the best way to do this is to turn the terrorist act into a live show." In such situations, he said, hostages and their relatives are easily turned into instruments of the terrorists.
 Journalists have disagreed in their many post-crisis internal discussions on the degree to which reporting the hostages' and their relatives' demands was permissible.
 Despite the criticism, Putin thanked journalists for "showing civic responsibilty, professionalism and reserve."
 Putin said he had written to the State Duma and Federation Council speakers asking them to form a conciliatory commission to develop a new version of the amendments.

TITLE: FSB Raids Office of Siberian Activists
AUTHOR: By Yevgenia Borisova
PUBLISHER: Staff Writer
TEXT: MOSCOW - The Federal Security Service raided the offices of a Irkutsk environmental group on Friday and seized computer hard drives containing ecological information pertaining to a planned $2.5-billion oil pipeline to be built through Siberia to China.
 
In their search of the Baikal Environmental Wave office, FSB officers also seized maps showing contamination around the Angarsk chemical plant, which works with uranium, environmentalists said.
 The official explanation for the search was Baikal Wave's contract with the Sosnovgeos geological laboratory for the creation of the maps in February. But environmentalists said the timing indicated the maps were only a pretext and the real aim was to prevent them from compromising the planned pipeline, which is to be built by Yukos.
 "Officers pretended they were looking for some secret maps in our office, but those maps were made public at the beginning of the year," Marina Rikhvanova, co-chairperson of Baikal Environmental Wave, said by telephone from Irkutsk on Friday. "We believe they were interested in confiscating the ecological expertise materials that we were preparing for public hearings on the oil pipeline, which will take place Nov. 27."
 A deputy head of the FSB's regional office in Irkutsk, Alexander Nikolyuk, told Rossia television on Sunday that no criminal charges will be filed against the environmental group. Charges of disclosing state secrets will be filed, however, against "those who supplied secret information, including reports about radiation safety, to the environmentalists, but not against the environmentalists themselves," he was quoted by The Associated Press as saying.
 The FSB did not respond to faxed questions on Friday.
 The Moscow office of Greenpeace, which works with the Irkutsk group, issued a statement suggesting that Yukos was behind the FSB raid. "Use of the state law-enforcement structures by big commercial companies to stand behind their financial interests, unfortunately, is not such a rare phenomenon in our routine life," the statement said.
 Yukos spokesperson Alexander Shadrin denied any connection to the raid. Yukos, he said, is in contact with Baikal Wave and, in early November, supplied it "with ecological data on the project. It would not have made sense to now be getting it back via the FSB."
 "If [the project] does not meet environmental-protection standards, no construction will take place," he said. "And, look, remember that it is not our pipeline - we are fulfilling a state order under a Russian-Chinese intergovernmental agreement."
 The pipeline, to be developed jointly by Yukos and China's state-owned National Petroleum Corp., will run for 2,500 kilometers from Angarsk near Irkutsk to China's industrial northeast.
 Shadrin said the feasibility study had been sent to the State Construction Committee and Natural Resources Ministry for their approval.
 Rikhvanova said environmentalists' main concern was that the pipeline not run either through the Tunkinsky nature reserve in Buryatia or close to Lake Baikal. Both areas, she said, are prone to earthquakes. "We can't allow any pipeline in this area because of the threat to water reserves in case an earthquake damages it," she said.

TITLE: Analysts: Russia Must Secure Its Weapons
AUTHOR: By Simon Saradzhyan
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russia should take stock of its own weapons stockpile and boost security near its airbases and southern frontiers if it wants to limit the number of aircraft shot down by Chechen rebels, military analysts said Monday.
 
Igla shoulder-fired missiles were blamed for two of the three helicopter crashes in Chechnya in the past three months. At least 119 people died in one of the crashes.
 In response, Defense Minister Sergei Ivanov last week urged his counterparts from other former Soviet republics to take a tally of their Igla missiles, saying he suspected that some had ended up in rebel hands after being sold or stolen. He also recently suspended the chief of army aviation.
 Analysts said that even if Russia's neighbors do take stock, it might still prove impossible to determine how Chechen rebels got the Iglas. While the missiles' launch tubes should bear serial numbers showing where they were produced, it would be near to impossible to figure out where some of them ended up after the breakup of the Soviet Union.
 "Ivanov's appeal does put pressure on Russia's neighbors to act ... but it may prove impossible to implement," said Marat Kenzhetayev, a conventional-weapons expert at the Center for Arms Control, Energy and Environmental Studies.
 The Defense Ministry lost track of 260,000 small arms and light weapons, including Igla and Strela shoulder-fired missiles in the Transcaucasus region alone, as Soviet republics rushed to claim sovereignity over Soviet arsenals on their territory, according to the Center for Analysis of Strategies and Technologies.
 "There was a bit of chaos as the republics divided up the weapons," said Maxim Pyadushkin, an arms expert with the research center. Iglas also might have been whisked out of poorly guarded arsenals in the early 1990s, he said.
 Furthermore, there are a number of countries that have purchased Iglas since 1991, including Singapore, India and Malaysia. Malaysia and Singapore even produce their own Iglas under license, but it is unlikely that they have sold any of these missiles to Chechen rebels, Pyadushkin said. However, Russia should first take a look at its own inventory, since it has more of these missiles than any of its neighbors, he said.
 "There should be an inventory taken to see where thefts could have occurred," he said.
 A decade after the Soviet collapse, the Russian armed forces have yet to count exactly how many and what kind of weapons it has in its arsenals. Almost every defense minister has promised to perform the count, but it has never been completed, Pyadushkin said.
 Federal forces have seized more than a dozen Iglas in Chechnya this year. The latest find was reported Monday. Authorities have been checking the serial numbers of the seized tubes against the records of the Degtyarev plant in the city of Kovrov in the Vladimirskaya Oblast, which remains the sole manufacturer of the missiles in the former Soviet Union. So far, however, there have been no arrests as a result, although the checks have allowed the Federal Security Service to conclude that some of the Iglas used to down helicopters in Chechnya were produced in the 1980s.
 Iglas, which the Degtyarev plant started to produce about 20 years ago, have a guaranteed service life of 10 years, Pyadushkin said.
 An Igla can hit a target at an altitude of up to 3 1/2 kilometers. All Iglas produced for the Soviet or Russian armed forces are equipped with a friend-or-foe system, which should prevent the missiles from hitting Russian aircraft.
 That means Chechen rebels have either managed to find a way to deactivate the system or they use Iglas that have been exported to foreign countries and have no such system, Kenzhetayev said.
 Government agencies have not recently released any statistics for the number of aircraft brought down in Chechnya since the beginning of the ongoing military campaign. The Air Force press service declined to comment Monday.
 However, a count done by Ezhenedelny Zhurnal found that at least 37 helicopters and 11 warplanes have been lost due to various causes, including enemy fire. In comparison, the military lost only 14 helicopters during the war from 1994 to 1996, the magazine reported in August.

TITLE: Legal System Not Much Better, Despite Sweeping Reforms
AUTHOR: By Natalia Yefimova
PUBLISHER: Staff Writer
TEXT: MOSCOW - About a year after President Vladimir Putin's push for sweeping judicial reform, legal experts argued that the overhaul has allowed for progress in individual cases, but has failed thus far to improve the court system as a whole.
 
"Justice can be an individual affair, but it has not become an affair of the state," Sergei Pashin, a former judge and veteran court reformer, said at a Moscow round table on judicial reform Friday.
 Sergei Vitsin, who worked with Pashin in authoring some of the first post-perestroika legal reforms a decade ago, and who now serves as deputy chairperson of the presidential advisory council on improving the court system, agreed that the rule of law was far from firmly entrenched in Russia, but praised some improvements introduced under Putin.
 Vitsin said that, under the new Criminal Procedural Code, most of which took effect July 1, the number of arrests has dropped by 33 percent. The code stipulates that warrants for arrests, searches and wiretaps must be sanctioned by the courts, rather than issued by prosecutors. Vitsin also applauded the expanded rights of defendants and the higher standards applied to evidence presented by prosecutors in criminal cases. But he lamented that laws were not always applied consistently and transparently, and that citizens do not know their rights.
 "In many ways, we remain Soviet people and we are accustomed to the idea that the authorities can do with us whatever they please," Vitsin said.
 Pashin, a critic of Putin's reform, said it has made the court system more dependent on authorities and judges more dependent on their superiors.
 Because salaries are low, Pashin said, judges are eager to please their superiors and get the perks they can provide, such as apartments, trips abroad or stays at health resorts. At the same time, judges are easy to fire.
 "The judicial system has become a means of strengthening the vertical structure of power and nothing more," he said.
 Criminal lawyer Karinna Moskalenko agreed that judges have become more dependent and said they continue to view their primary duty as punishing defendants, rather than giving them a fair trial.
 "Neither the old nor the new Criminal Procedural Code can change the mentality of judges," she said.
 Both Pashin and Moskalenko said the court system is so overburdened that procedural violations and corner-cutting are commonplace.
 One judge now handles 20 to 40 requests for arrest warrants per day, Pashin said. "How many of these decisions can be just? ... It's a conveyer belt."
 Yury Schmidt, a lawyer who helped secure the acquittal of environmentalist Alexander Nikitin, agreed that the new laws are far from perfect, but warned that blanket condemnations would only hinder the reform process.
 "Constructive criticism is needed," Schmidt said. He praised a number of the changes in criminal law, including the ban on "additional investigation" - a tactic often used by prosecutors to patch up shoddy investigative work - and new restrictions on appealing acquittals.

TITLE: Russia Is a Friend, Says Georgia
AUTHOR: By Misha Dzhindzhikhashvili
PUBLISHER: The Associated Press
TEXT: TBILISI, Georgia - President Eduard Shevardnadze said Monday that, in spite of his country's desire to join NATO, Georgia valued Russia as its closest neighbor and strategic partner.
 
"We are going to actively cooperate with Russia in several areas of regional and interstate security, including in the fight against terrorism," Shevardnadze said in his weekly radio interview.
 Shevardnadze told NATO leaders in a speech at last week's summit in Prague that Georgia aspired to join the western alliance. He underlined Monday that this desire did not mean Georgia was turning its back on Russia, and said that he wanted to deepen cooperation between Georgian and Russian special services and border guards who would together protect their frontier from incursions from either side.
 Russian officials have accused Georgia of giving refuge to Chechen rebels and their allies, and have put the Chechnya conflict at the center of Russian-Georgian relations. Georgia, in contrast, has tried to throw the spotlight on what it considers the biggest bone of contention with Russia: the status of its breakaway Abkhazia region.
 Shevardnadze said Monday that Russia's contacts with and support for separatists belied the commitments it had made in the UN Security Council to seek a peaceful settlement in Abkhazia.
 "It must be said, too, that Russia is ignoring the decision of the heads of government of the Commonwealth of Independent States to isolate the Abkhazian separatist regime," Shevardnadze said.
 The Black Sea province of Abkhazia won de facto independence after the war from 1992 to 1993 that forced hundreds of thousands of ethnic Georgians to flee. A Russian-led peacekeeping force has patrolled the border area since 1994.
 Georgian officials have accused the Russian peacekeepers of favoring the separatists. They have also objected to Russia's granting citizenship to more than 50,000 residents of Abkhazia, calling it akin to annexation. However, Moscow has defended the action as legal, saying that a new Russian citizenship law that took effect over the summer encourages granting Russian passports to those who have lost their citizenship.

TITLE: IN BRIEF
TEXT: <b>Tunnel Vision
 </b>

ST. PETERSBURG (SPT) - Three men and two women were arrested by St. Petersburg police Sunday night in the collapsed metro tunnel running between the Ploshchad Muzhestva and Lesnaya metro stations.
 Construction workers involved in repairing the line spotted the people inside the tunnel with a movie camera and called the police, the St. Petersburg police press service said on Monday.
 "The workers had the impression that the people were trying to hide," said Pavel Rayevsky, the head of the police press service.
 Rayevsky said that the investigation had been turned over to the Federal Security Service (FSB).
 The FSB would not comment on the case on Monday.
 Rayevsky said that the case had been taken over by the FSB because of the sensitivity of public-transport facilities from a security standpoint.
 
 
<b>Fatal Crashes
 </b>

ST. PETERSBURG (SPT) - Two senior officials from local municipal administrations were killed in automobile accidents in the space of three days - the first on Saturday and the second on Monday, Interfax reported.
 The first deputy head of the Primorsky Region, Vladimir Korenkov, died Saturday from injuries suffered when his Volga official car hit another car parked near the intersection of Ulitsa Marshala Blyukhera and Grazhdansky Prospect.
 On Monday afternoon, Larisa Gladysheva, the head of the administration of the Kolpinsky Region, a suburb located to the south of the city, was also killed when the Nissan she was driving collided with another car on Moskovsky Shosse.
 
 
<b>Composer Attacked
 </b>

ST. PETERSBURG (SPT) - Well-known local composer Sergei Banevich was attacked and robbed at the entrance of his apartment building on Ul. Sikeirosa on Saturday, Interfax reported.
 The St. Petersburg police told Interfax that Banevich had been struck on the head by unknown assailants, who then took his wallet and fled the scene. Banevich was hospitalized in the incident.
 Banevich is best known for children's operas, such as "Istoriya Kaya i Gerdy" ("The Tale of Kay and Gerda"), and for the music he wrote for the films "Paganini" and "Doroga bez Kontsa" ("The Endless Road").
 
 
<b>Canada Terror Talks 
 </b>

MOSCOW (AP) - The foreign ministers of Russia and Canada met Monday to discuss the international campaign against terrorism, along with other global issues and bilateral relations.
 "We are deeply satisfied with the positive development of a political dialogue between our countries," Foreign Minister Igor Ivanov said at talks with his Canadian counterpart, Bill Graham.
 Before meeting with Ivanov, Graham held talks with Nuclear Power Minister Alexander Rumyantsev to discuss his government's plan to earmark $100 million to help Russia dismantle its nuclear submarines, Interfax reported. 
 Yakovenko said Russian and Canadian officials were expected to sign an agreement envisaging Canadian assistance for Russia's efforts to dismantle its chemical weapons stockpiles. 
 Ivanov and Graham were also to discuss bilateral economic ties, following up on cooperation plans put forward during Canadian Prime Minister Jean Chretien's visit to Russia in February. 



TITLE: North America's Finns Caught Karelia Fever
AUTHOR: By Joy Ziegeweid
PUBLISHER: Staff Writer
TEXT: PETROZAVODSK, Karelia - School No. 17 in the capital of the Republic of Karelia has been known since its inception in 1967 as one of the best schools in Russia for English-language instruction.
 
And no wonder. Its long-time principal, Paul Corgan, is a native English speaker, and the school's teachers were trained at the Petrozavodsk Pedagogical Institute by Paul's sister, Mayme Sevander.
 Paul, Mayme and their sister Aino, the children of a prominent Finnish-American communist, were all born in the United States and came to Karelia as children in 1934. Although their father, Oscar Corgan, was killed in Josef Stalin's purges and their mother died in 1946, all three children have spent the rest of their lives in Petrozavodsk.
 The Corgan family was not alone. In a little-known chapter in Soviet history, thousands of Finnish-Americans and Finnish-Canadians left North America in the 1920s and 1930s to forge a new life in far northwestern Russia.
 Some simply sought adventure. Others were homesick and thought that Karelia would bring them closer to Finland. Many, though, were committed political activists who were convinced that they could live out their socialist ideals of fair wages, good health care and free education only in the Soviet Union.
 &quot;It was that communist movement,&quot; Ruth Niskanen, a native of Minnesota, said in a telephone interview from her current home in Joensuu, Finland. &quot;My mother married a man who was a communist, my stepfather. My mother thought that she would never be able to give an education to her [elder] son because she didn't have the money, and she thought, in the U.S.S.R., he'd get a free education.&quot;
 Niskanen was in seventh grade when she came to Karelia in March 1932 with her mother, stepfather, older brother Raymond and younger brother Roy. She said Raymond, then 14, was known as &quot;Genius&quot; at their school in Minnesota because he was so smart, especially in math.
 Finnish migration to Karelia began in 1918 after the Finnish Civil War. Red Finns fleeing the victorious Whites crossed the border to Karelia and, in 1920, the Karelian Labor Commune was formed under the leadership of Edvard Gylling, a Finnish patriot who took Soviet citizenship.
 Gylling began to gather Finns for a Finnish-Karelian autonomous region and, by the early 1920s, the Karelian Revolutionary Committee and Soviet People's Committee were discussing bringing foreign workers in to develop the Karelian economy - and maintain its ethnic-Finnish character.
 &quot;Gylling was envisaging the possibility of an independent Finnish homeland in Karelia, albeit under the umbrella of [the Soviet] administration,&quot; said Alexis Pogorelskin, a history professor at the University of Minnesota-Duluth.
 On the other side of the Atlantic Ocean, thousands of Finns with left-wing beliefs were interested in the socialist experiment being carried out in the new Soviet Union. Many of them had had originally left Finland in order to search for greater opportunities, but they found that American labor conditions could be brutal. By the mid-1920s, approximately half the membership of the American Communist Party was of Finnish descent.
 North American Finnish communities held fundraisers to send money to Karelia, and a few Finns emigrated in the 1920s to form communes. But it wasn't until the late 1920s that the North American Finns and the Karelian government began to systematically recruit.
 Karelian officials wanted to increase the region's population of ethnic Finns in order to maintain its status as a culturally Finnish republic, with the ultimate goal of becoming a Soviet socialist republic, rather than an autonomous region of the Russian SSR.
 But more important to the central government in Moscow, Karelia desperately needed skilled workers and technology, and North American Finns - many of them working in the logging industry - were perfect candidates.
 In summer 1930, the 16th Party Congress passed a resolution to &quot;expand the practice of drawing workers and specialists from abroad and inviting foreign engineers, masters and qualified workers to the U.S.S.R.&quot;
 &quot;Because of this decision, Gylling was given permission to recruit [Finnish] 'national cadres,'&quot; says Irina Takala, a professor of history at Petrozavodsk State University.
 Gylling lost no time. The Karelian Immigration Department opened in Petrozavodsk in 1930. In the fall of that year, the first loggers came from Canada, thanks to a personal arrangement between Gylling, Stalin and Vyacheslav Molotov.
 Karelian Technical Aid, the primary organization through which money was raised and Finns who were to move to Karelia were recruited, was formed in New York on May 1, 1931. Another branch worked in Toronto to recruit Canadian Finns.
 As &quot;Karelia fever,&quot; as it was known, heated up in the early 1930s, Oscar Corgan - a member of the U.S. Communist Party and editor of the Finnish-language Tu&ouml;mies, or Working Man, newspaper in Superior, Wisconsin - moved with his family to New York, where, in 1932, he took over the leadership of Karelian Technical Aid.
 The system of funding and recruitment was cumbersome and bureaucratic, but it worked. Hopeful Karelian settlers got a recommendation from a local workers' organization and filled out an application, which was then sent to Technical Aid. The committees in New York and Toronto read the applications, chose candidates and forwarded their recommendations to Petrozavodsk. Officials in Petrozavodsk sent the forms on to Moscow, which approved entry visas.
 The criteria for immigrants were professional skills (priority was given to construction workers, logging workers and fishermen), political convictions and - most important - the financial and equipment contributions a potential immigrant had to offer.
 &quot;The first question on the application was: 'How much money can you contribute to the machine fund?'&quot; says Takala. The immigrants brought cars, tractors, industrial machinery and even the materials to build an entire brick factory with them to Karelia.
 Despite the Great Depression, North American Finns were moving to Karelia not out of desperation, but out of sheer idealism, she says.
 &quot;People really believed they were needed, that they were going to build socialism,&quot; Takala says.
 But the clash between ideal and reality became evident almost as soon as the new immigrants stepped off the train in Petrozavodsk, and many - probably around 1,500, according to Takala - returned to Finland or North America not long after their arrival in Karelia.
 &quot;The fact is, re-emigration began almost as soon as the first groups of immigrants arrived, because the reality of Karelia didn't correspond at all with what they'd been promised. These people were from a different world,&quot; she says.
 Those who stayed tried to make their new home more like the one they left behind, Takala says. They started Finnish-language schools and a theater. They were able to use their hard currency to buy goods to which ordinary Soviet citizens had no access. They also had ration cards that gave them more food, and they tended to have better living and working conditions.
 The result was that the Finnish-Americans were almost immediately resented in Karelia, Pogorelskin says.
 &quot;Documents in the Karelian state archive reveal that their cars, typewriters, clothing and access to special dollar stores, at least up to 1935, aroused the ire of Soviets who had never seen such tools and machinery and whose diet was often inadequate,&quot; she wrote in a history of Karelia posted on the Internet.
 According to Takala's research, the immigrants from Canada were better able to fit in. Most were loggers, who were poorer and brought fewer things with them, and since they were out in the woods, it was harder for them to form a segregated community the way those living in Petrozavodsk could.
 Until 1935, nearly anyone who wanted to do so was allowed to return home, she says. But, by 1935, the Soviet Union was grinding inevitably toward the Great Terror.
 In October 1935, at a plenum of the regional committee of the Communist Party in Karelia, a mention was made of &quot;Finnish bourgeois nationalism&quot; - Finns were now under suspicion.
 At that point, many immigrants could not escape because they no longer had valid U.S. or Canadian passports. Many had voluntarily acquired Soviet citizenship or did not have the money to travel to Moscow or Leningrad to renew their foreign passports, and so received Soviet citizenship and passports instead.
 It is likely that at least some of the Finns had an intimation of the horror to come. In her book &quot;They Took My Father,&quot; Mayme Sevander describes worried late-night conversations between her parents and their friends not long after the family arrived in Karelia and, particularly, after Leningrad Party boss Sergei Kirov's assassination on Dec. 1, 1934. Sevander relates how her father was called to the Comintern in Moscow by Yrjo Sirola, a prominent Finnish Bolshevik, who warned him that bad times lay ahead and urged him to leave with his family while he still could.
 Oscar Corgan, however, refused to go unless all the Finns he convinced to come to Karelia would also go. On Nov. 4, 1937, he was arrested in the middle of the night. The family never saw him again.
 Most estimates put the number of Finnish-Americans and Finnish-Canadians who came to Karelia at 6,000 to 6,500. According to Takala, many were simply considered Finns by nationality in the records, and of the 15,000 or so ethnic Finns living in Karelia in the mid-1930s, 10,000 were Finns from Finland. Counting the North American Finns was complicated by the fact that many of them were actually born in Finland.
 Exact numbers of Finnish-Americans and Finnish-Canadians killed in the purges may never be known. In addition to those arrested and shot, huge numbers were exiled, particularly those living near the Finnish border, because of the perceived security risk.
 Paul Corgan recalls that, in 1938, his family, minus his father, was living in Uhtua, a small town in Karelia next to the Finnish border. That summer, they were exiled to Kem, a Karelian town farther north and away from the border.
 &quot;They took a family or two in one truck and people came to their new living place, and there was just a big, big house with one wall dividing it into two parts,&quot; he says.
 When war broke out with Nazi Germany in 1941, Finns were evacuated farther away, most to the Ural Mountains or Siberia.
 After the Winter War of 1939 to 1940, in which Finland lost parts of Karelia to the Soviet Union, Finland attacked with Germany, hoping to regain the lost areas. The Soviet government did not trust its citizens of Finnish descent to remain loyal.
 There were exceptions, though. Mayme Sevander was recruited for reconnaissance missions into Finland and remained in Petrozavodsk.
 Ruth Niskanen, too, was deemed useful to the war effort. She worked in hospitals at the front as an interpreter, although her mother and younger brother were sent beyond the Urals, where her mother died of hunger and her brother Roy, then 12, was put in an orphanage.
 Her older brother, Raymond, who graduated from the Petrozavodsk Pedagogical Institute in 1938, fought in the Soviet Army and was killed at the front.
 Corgan recalls that he, his mother and Aino were sent to a <i>kolkhoz</i>, or collective farm, in what is now the Perm region. Paul worked at the kolkhoz briefly but, in November 1942, he was drafted. However, unlike Raymond Niskanen, as a Finn he was considered too big a risk to send to the front and instead was put in a labor brigade and shipped east to Chelyabinsk, where he spent nearly five years building the giant metallurgical plant there in horrific conditions.
 &quot;Thousands died there. It was altogether difficult, terrible,&quot; he says.
 After the war ended, Finns gradually made their way back to Petrozavodsk.
 &quot;That was the place we came to from America and our friends were there,&quot; Ruth Niskanen says, &quot;Karelia was a little higher in culture than [the rest of] Russia in those years.&quot;
 Many of the sons and daughters of the 1930s idealists managed to live reasonably well in postwar Karelia. Thanks to Soviet territorial gains in the Winter War, Karelia had become the Karelian-Finnish Soviet Socialist Republic, the 16th SSR. Russian and Finnish were both official languages, and Finnish was taught in schools and universities.
 But discrimination against the Finns continued. Paul Corgan wanted to enroll in the geology department at Petrozavodsk State University, but geology was deemed a potentially sensitive area, and he was not admitted.
 &quot;My father was arrested, I wasn't Russian, they didn't give me a place,&quot; he says simply.
 Eventually he studied mathematics - a less dangerous subject, it seemed - and became a teacher and school principal. When the city educational authorities decided in 1967 that Karelia needed a school for English-language instruction, they asked Corgan to run it. He remained the school's principal until retiring in 1999.
 At the same time, his sister Mayme had left her job as a principal and English teacher at School No. 25 to become dean of the foreign-language department at the Pedagogical Institute.
 Between the two of them, Corgan, now 77, and his sister, who is two years older, improved the level of foreign-language instruction in Petrozavodsk - and eventually helped build international connections for the small city.
 Although they were stuck behind the Iron Curtain, they continued practicing their English and Finnish and, when the political conditions mellowed, they spearheaded cultural and educational exchange programs with other countries, particularly the United States and Finland.
 Petrozavodsk now has a thriving sister-city relationship with Duluth, Minnesota, forged in 1988, in large part because of the many residents of Finnish extraction in both cities.
 A university exchange between the University of Minnesota-Duluth and Petrozavodsk State University in 1989 was the first of its kind in the Soviet Union. Seven American students came to Petrozavodsk in June and, two months later, Anatoly Shishkin, whose stepfather, Eino Hirvonen, immigrated to Karelia from Duluth and survived a Siberian work camp, led a group of 10 Russian students to Duluth.
 Also in 1989, an exchange program was established between School No. 17 and Amherst Regional High School in Amherst, Massachusetts.
 Tatyana Martynenko, a former student of Mayme Sevander and a teacher at School No. 17 since 1970, traveled to Washington in 1989 for a three-month program sponsored by ACTR, the American Council of Teachers of Russian.
 She spent her time trying to drum up an exchange partner and, a few days before her departure, found Amherst high school willing. In February 1990, the first group of Russian students traveled to America and, in April, Americans went to Petrozavodsk.
 In the last 12 years, the program has thrived, surviving funding cuts on both sides and falling enrollment in Russian classes in the United States.
 But when students from School No. 17 who traveled to Amherst last spring were asked if they knew the story of American Finns in Karelia, or the effect they had on their school, the roomful of teenagers looked blank.
 Paul Corgan acknowledges that the story of the Finns and their struggles and hardship in the Soviet Union is being lost. &quot;Those books Mayme has written - they should be written in Russian, but nowadays to print a book takes so much money. It's especially the young people who know nothing,&quot; he says.
 Although he wishes that more people knew and understood the story of Karelia fever and the contributions the immigrants made to the region - not to mention the horrors they suffered - he feels remarkably little resentment for what happened.
 After his long and distinguished career - which includes three Soviet awards as well as the title of Distinguished Citizen of Petrozavodsk - he considers Russia home.
 &quot;Myself, now I cannot say that I'm a Finn or an American. I'm a <i>Rossiyanin</i> [&quot;inhabitant of Russia&quot;], as Yeltsin always said. Not a Russian, but a Rossiyanin.&quot;

TITLE: VAZ Unveils 'Anti-Crisis' Production Plan
AUTHOR: By Simon Ostrovsky
PUBLISHER: Staff Writer
TEXT: TOLYATTI, Central Russia - On normal days, the lifeblood of this one-company town pulses 16 hours a day, six days a week, pumping out 200 cars an hour. 
 
But these aren't normal days for AvtoVAZ or its sprawling complex near the banks of the Volga River, where 120,000 people work to produce 70 percent of the country's automobiles.
 The usually thriving grounds of the factory now resemble a ghost town - traffic virtually non-existent, bus stops vacant.
 The auto giant has fallen on hard times. Rising prices and a recent surge in second-hand car imports has resulted in a glut. As a result, the company, founded in the 1960s with the help of Italian automaker Fiat, has been forced to halt production for the first time since 1998.
 But two-week stoppages, both last month and this, did little to clear the backlog of 70,000 cars parked in storage or on dealership floors. 
 Now, with 50,000 Ladas, Nivas and Samaras still in stock, the company is hitting the brakes again. On Saturday, the assembly line rolled for just over five hours. And, on Tuesday, the automaker will switch to a new &quot;anti-crisis&quot; production schedule that will last through the end of the year.
 &quot;Our anti-crisis production plan will cut production down to two shifts a day, five days a week,&quot; AvtoVAZ Vice President Vladimir Kuchay said Saturday. 
 AvtoVAZ plans to return to its regular schedule of three shifts, totaling 16 hours, six days a week, on Dec. 29, although many believe it could take the company well into the New Year before it turns to normality.
 The move represents a production decrease of roughly 62 percent, based on the factory's average output of 200 cars per hour. In an average month, AvtoVAZ produces 70,000 cars, but in October it rolled out only 54,000, bringing its total for the first 10 months of the year to 631,000.
 Company officials say that they are now reviewing targets not just for 2003, but also 2004 - during which AvtoVAZ had hoped to produce 800,000 units - but insisted that there would be no layoffs.
 &quot;If anybody is fired, it will be people in administrative positions,&quot; said AvtoVAZ spokesperson Vladimir Artsykov.
 But, while staff and their salaries may be protected - for now - management admits that cash-flow problems are putting future plans in doubt as domestic banks are becoming less interested in lending to the company.
 &quot;We are chronically lacking in turnover capital,&quot; said Kuchay. &quot;As soon as our sales slowed down, banks' lending policies became more strict, so we are looking into crediting options abroad, where financing is cheaper.&quot;
 AvtoVAZ executives deny that being forced to look abroad for financing is a reflection on their performance.
 Plunging sales, they say, are due to circumstances beyond their control.
 &quot;Flooding this summer, a poor harvest and people buying used imports in expectation of an import-tariff increase have led to our poor sales,&quot; said Corporate Managing Director Pyotr Nakhimovich. 
 &quot;AvtoVAZ cars are still the most sought after on the market,&quot; he added.
 Auto-industry analyst Yelena Sakhnova of United Financial Group sees no easy way out for the company.
 Steadily rising prices - which AvtoVAZ attributes to higher prices for steel and electricity - are a big reason for the supply glut, and AvtoVAZ can't lower its prices without selling at a loss, Sakhnova said.

TITLE: State Toasts Relaunch of Top Vodka Labels
AUTHOR: By Alex Nicholson
PUBLISHER: Staff Writer
TEXT: CHERNOGOLOVKA, Moscow Oblast - The government relaunched production of Stolichnaya and Moskovskaya vodkas on Friday, but its rival for the brands, SPI Group, said that it would never be able to export the produce.
 
&quot;This is a very important event, not just economically, but politically,&quot; Agriculture Minister Alexei Gordeyev told reporters at the Chernogolovsky Distillery after plucking the first bottle off the conveyor belt.
 The vodka is being produced under license with Soyuzplodoimport, which the Agriculture Ministry set up last year to manage 43 vodka trademarks held by the government, including Moskovskaya and Stolichnaya.
 State trademark agency Rospatent handed over the brands to the ministry earlier this year, following a series of court cases against SPI Group, which was accused of acquiring them illegally from Soyuzplodoimport in the mid-90s.
 SPI was banned from producing the vodka domestically but retained the rights to the brands abroad - to the ire of the government.
 SPI now produces and bottles the vodka in Latvia.
 Before Friday, no Stolichnaya or Moskovskaya had been made in Russia for months, but leftover stock was being sold.
 Soyuzplodoimport chief Vladimir Loginov called the launch a victory on the domestic front of the vodka war.
 &quot;Soon, production of all the vodkas on the government list will begin,&quot; Loginov said.
 &quot;Starka Sibirskaya, Stolovaya, Russkaya will all be produced starting next year. Not just here, but all over the country.&quot;
 Loginov said that lawsuits would be filed in European courts by the end of the month challenging SPI's distribution rights abroad.
 SPI was unfazed and even welcomed the challenge.
 &quot;We will be glad when they file suit - we can't wait,&quot; SPI spokesperson Sergei Bogoslavsky said.
 SPI says that it won a court case in Germany last month overturning a verdict upholding a complaint against the company's German distributors by a local rival, Dovgan GmbH.
 Dovgan argued that SPI did not have the right to label Moskovskaya &quot;genuine Russian vodka&quot; because it was produced in Latvia.
 The Hamburg court ruled that SPI could write &quot;genuine Russian vodka&quot; on the bottle, but must also say that it is made in Latvia on the reverse side of the label.
 &quot;Once again, they'll prove that it is impossible to win. Once again, the government will be convinced of this,&quot; Bogoslavsky said.
 The yearlong battle began when Yury Shefler, while head of the old Soyuzplodoimport, the privatized successor to the Soviet food-and-drink import-export agency, sold the trademarks to Soyuzplodimport, a similarly named company that he set up.
 Shefler had controlled the agency after the Soviet Union's breakup and sold its only valuable assets - the domestic rights to the vodka brands - to what would become SPI Group's Russian division in 1997 for $300,000.
 The government says that the deal was illegal and the price ridiculously low, but Shefler defended the transaction, saying that he shouldered the company's multimillion-dollar debts.
 SPI began registering the vodka rights abroad, in some cases fighting for them in the courts, and today the company owns the rights to the brands in more than 100 countries.
 Earlier this year, customs officials in Kaliningrad, where SPI's main distillery was located, impounded $40-million worth of Stolichnaya and Moskovskaya, after which Shefler moved production to Latvia.
 A criminal investigation was later launched after Soyuzplodoimport's Loginov claimed that Shefler had threatened to have him killed.
 Shefler denies the allegation, which he says is meant to discredit him. Nonetheless, the Prosecutor General's Office wants him for questioning, and Shefler says that he will not return to Russia.
 Meanwhile, Soyuzplodoimport is ready to crank up production, and has signed agreements with eight domestic distilleries to produce a total of 5 million decaliters of vodka per year, Loginov said Friday.
 More agreements will follow, said Loginov, adding that some 10 million decaliters of vodka should be produced by the end of 2003.

TITLE: Authorities Put Squeeze On Charter Airlines
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - The State Civil Aviation Service has released a directive with strict new requirements for operating charter flights, citing massive delays by some of the country's leading airlines.
 
Airlines that do not meet the requirements could have their flights cut back or lose their charter programs altogether, Mikhail Parnev, head of the service's transportation-monitoring department, said Friday at a news conference.
 &quot;We have issued a directive that takes into account violations of charter flights we've registered this year,&quot; he said. &quot;The goal of this directive is to avoid such violations in the future.&quot;
 Among the airlines named are Sibir, KrasAir, Transaero, Kavminvodyavia, Aviaexpresscruise and AJT, according to the directive, a copy of which was obtained by The St. Petersburg Times.
 Some Transaero flights have been delayed by as much as 9 1/2 hours, according to the Transportation Ministry, while one Kavminvodyavia flight, on June 21, was held up for more than two days.
 The directive states that airlines - which are required to obtain a charter license and then apply for flights - must prove the availability of a backup plane fitted with an airborne collision-avoidance system and backup crew in the airport, at the time of takeoff.
 Airlines must produce documents proving that they are liable to pay damages to tour operators and passengers for delays, have meals on hand if the flight is delayed for more than three hours and have a system to inform passengers and airports of the status of flights.
 Early next year, a commission made up of tour operators and airlines is to work out more comprehensive rules for regulating the charter industry, Parnev said. Those rules are to be ratified by a governmental commission made up of the Transportation Ministry and Economic Development and Trade Ministry.
 The aviation service will consider applications for charter flights as they are submitted. &quot;We have begun receiving applications from airlines and will consider them next week,&quot; Parnev said.
 Aviation authorities declined to say which airlines may have their charter programs cut back. Some 30 carriers operate charter flights to other countries.
 Parnev said that the number of charter flights grew some 19.5 percent in January to August to 18,500 return international trips, mainly to Turkey, Croatia, Cyprus and Greece, while the number of passengers increased 36 percent to 2.2 million.
 Sibir spokesperson Mikhail Koshman said that companies that flew the most charter flights were being singled out.
 &quot;We meet practically all the requirements, but as for the backup planes, where will we get them?&quot; he said in a telephone interview.
 With some 20 flights daily from Moscow, it would be absurd for Sibir to have a backup plane for each flight, Koshman said.
 &quot;We don't have a sufficient number of airplanes, and the industry is not building any to meet our demand,&quot; he said. &quot;If you have a backup plane for each flight, your flight program will be slashed by at least a third.
 &quot;When we are planning the program, we have a backup, but the weather sometimes fails us,&quot; he said.

TITLE: Murder Allegation Stokes Fires in Coal Feud
PUBLISHER: Combined Reports
TEXT: MOSCOW - The heads of rival coal companies accused each other last week of murder, blackmail and slander.
 
On Thursday, Oleg Misevra, general director of SUEK, the country's top coal producer, accused Vadim Varshavsky, the head of rival Russky Ugol, of threatening to have him arrested for the August murder of Ivan Kartashev, the deputy director of SUEK's trading arm Rosuglesbyt.
 Kartashev was shot at his parents' dacha outside Moscow. Prosecutors are investigating the case, in which Misevra has said that he is a witness.
 &quot;[Varshavsky] told me to choose between <i>sukhari</i> and oranges,&quot; Misevra said. The Russian word sukhari, or dried bread, is a reference to going to prison.
 Varshavsky denied the charge on Friday and vowed to sue for slander.
 &quot;Misevra's comments are an outright lie,&quot; Interfax quoted Varshavsky as saying. 
 Both men have been locked in a months-long battle for control of Dalvostugol, a major coal producer in the Amur region, and both have powerful patrons: SUEK is controlled by financial-industrial giant MDM Group, while Russky Ugol is owned by state-owned oil company Rosneft and Mezhprombank, the country's third-largest private bank.
 SUEK owns about one-third of the country's coal and the companies it manages are expected to produce about 70 million metric tons this year, while Russky Ugol is expected to produce about 5 million tons.
 Both are eager to expand in the rapidly consolidating industry and both have made no secret of their desire to control Dalvostugol, one of the largest steam coal suppliers to power stations in the Far East.
 MDM bought 30 percent of Dalvostugol this summer but has since been unable to install its own management at the company, SUEK Vice President Andrei Shtorkh said Friday.
 The Amur region division of the Tax Ministry and Polikhim, a trading partner of Dalvostugol, filed bankruptcy charges against the coal company in August.
 Misevra said that Varshavsky told him that he would face murder charges if MDM did not give Russky Ugol the 30 percent stake by Dec. 2.
 After the new bankruptcy law comes into effect Dec. 3, a creditor or shareholder may provide financial guarantees for a company facing bankruptcy charges to save the company from liquidation. Thus, MDM would only need to guarantee Dalvostugol's debt in order to take charge of the company.
 The controlling stake in Dalvostugol belongs to the state. A privatization auction held early this year was called off after SUEK, which won the right to buy the 39-percent stake for $30 million, found Dalvostugol being stripped to a shell. MDM walked away, losing a $1.5 million down payment, Shtorkh said.
 A spokesperson for the Moscow Oblast prosecutor's office said Thursday that no one has yet been charged in connection with the murder and that there is no information about arrest warrants.
 
 <i>(SPT, Vedomosti) </i>

TITLE: Picking Up and Passing On the Pieces of Russia's Privatization
TEXT: As the economy evolves into a more sophisticated beast, mergers and acquisitions have begun to replace the naked asset-grabbing that was the hallmark of the Yeltsin era. </i><strong>Ben Aris </strong><i>reports on the country's third, and so far quietest, redistribution of property.
 
 </i>Neither a candy nor a rapper, M&amp;A is all the rage in corporate circles, as savvy tycoons and entrepreneurs are increasingly snapping up and expanding their corporate castles out of the industrial Legos left scattered about after the the first wave of privatizations a decade ago.
 
M&amp;A, or mergers and acquisitions, have quickly become the driving force of the country's third, and so far least controversial, redistribution of property.
 The process began two years after the 1998 default and devaluation, when Oleg Deripaska's Siberian Aluminum - now known as Base Element, or BasEl - bought the PAZ bus factory, and it reached maturity earlier this month with Mobile TeleSystem's purchase of Ukraine Mobile Communications, or UMC, for just under $200 million. UMC is the second-largest cellular operator in a country of 50 million people, and the deal was Russia's biggest cross-border telecoms acquisition.
 
 <strong>
PICKING UP THE PIECES
 </strong>The privatization process of the early 1990s was a crude affair, but it created myriad investment opportunities that only recently became worth pursuing.
 
The problem the government faced was that, with the absence of a working free market, there was no one to buy the newly independent companies. Instead, every single factory, bakery and kiosk was made into an independent legal entity, and most were given to employees and managers via privatization vouchers.
 In the years that followed, powerful business people grabbed the few assets that were actually making money - mostly raw-material producers - and the rest were left to wallow in economic misery.
 The devaluation of the ruble completely changed the playing field for investors. Assuming that the country is finally settled on the road to recovery, thanks to rising consumer spending and corporate profits, whole new classes of assets have become attractive.
 It wasn't just the rich and powerful who saw and capitalized on the possibilities. While the likes of the International Monetary Fund and investment bankers were predicting doom and depression for Russia - the IMF said that the economy would contract by 8 percent in 1999, when it actually grew 5 percent - oligarchs and entrepreneurs went on a shopping spree, unable to resist the bargains.
 &quot;[In 1998], good companies could be bought at rock-bottom prices. They were cheap, not because their equipment was obsolete - although it is old - but because most of these companies were in a difficult financial condition and it took little money to buy them,&quot; said Dmitry Sokolsky, the head of Zenit's investment-banking group.
 Factories that are worth millions today were snapped up for as little as $60,000, Sokolsky said. Now, according to M&amp;A specialists, nine out of 10 deals are relatively small, involving only a few million dollars and no banks.
 
 <strong>
CLOSING THE DEAL
 </strong>&quot;Most of these deals are made between the two principles sitting in a room with a bottle of vodka and thrashing out the details,&quot; said Lucas Wilson, head of corporate finance at UBS Warburg. &quot;They had no need of a bank, which would probably just get in the way.&quot;
 
With more businesses chasing fewer choice acquisition targets, prices are rising to the point where those that simply bought businesses at the end of the 1990s because they were cheap are now thinking about selling them.
 For example, MTS and the other mobile-phone companies have been snapping up regional operators over the past year. MTS paid $350 per subscriber to take over Kuban-GSM at the start of the year, but $705 per subscriber for its most recent acquisition, Dontelecom.
 &quot;Real M&amp;A started over the last 18 months,&quot; said Vladimir Rashevsky, chairperson of MDM-Bank. &quot;Russia's business people have seen the example of a few companies like [No. 2 oil producer] Yukos and [leading dairy producer] Wimm-Bill-Dann increase their value by several times and want to do the same.&quot;
 Now, businesses are concentrating more on their long-term strategies, and a round of selling is under way as major groups begin focusing on specific areas of interest.
 &quot;No one was interested in the agricultural sector a year ago, but then Agros began buying dairy and milk plants, as did Millhouse Capital,&quot; said Alexei Panferov, head of MDM's investment banking operation. &quot;They went into this business thinking about how they could get out again, and the business plans are thought right through to eventual IPOs.&quot;
 Agros is the recently spun off agricultural arm of Vladimir Potanin's conglomerate Interros, which controls, among other companies, metals giant Norilsk Nickel. And the new company wasted no time embarking on an acquisition binge.
 Millhouse Capital, Roman Abramovich's holding that includes Sibneft, the country's fifth-largest oil company, has done the same, setting up an agriculture and food-processing subsidiary called Planeta Management.
 Typically, the parent company gives the subsidiary a big dollop of seed capital and then leaves it to fend for itself.
 Planeta and MDM recently cut the first leveraged takeover deal - where a bank both organizes an acquisition and lends the money to complete it - for a large meat-processing plant in Irkutsk. According to bankers, Planeta didn't have enough money to do the deal on its own but couldn't tap Sibneft directly for the balance.
 &quot;Millhouse gave Planeta some money to get it going, but management is not going to use all its resources on a noncore business. Planeta's management have to run their business on their own,&quot; Panferov said.
 
 <strong>
COMPARTMENTALIZATION
 </strong>This compartmentalization of different businesses in a group is new. In the past, a big business would deliberately confuse the structure of its businesses to make it easier to disguise cash flows and move cash offshore.
 
Now, however, the trend is for subsidiaries to prove that they are profitable in their own right; there is little cross-subsidization within groups once the initial capital has been committed.
 &quot;Interros is looking much more focused than it did a few years ago,&quot; said Steve Jennings, president of Renaissance Capital. &quot;It is being realistic. These companies can only manage a few things well. The small and relatively inexperienced teams can only cope with so much. They still have core assets that need a lot of restructuring.&quot;
 There are other processes pushing this tendency forward. Banks used to be at the heart of major financial-industrial groups, but are no longer the cash cows they were in the 1990s. Industrial groups' banks are increasingly doing real banking business, while the separate industrial parts are receiving investments to make them more profitable.
 And the owners of the real cash cow in the group - Sibneft in Planeta's case, Norilsk Nickel for Interros - are trying to boost the company's share price; portfolio investors prefer to see noncore businesses kept separate.
 &quot;The industrial groups are now buying assets in different sectors - chemical, pulp, timber or agriculture - and pulling together something that can reach critical mass or take advantage of the economies of scale,&quot; said Alfa Bank chief executive Alexander Knaster.
 &quot;It remains to be proved if these groups will add value or not, but they are doing the basic things - putting in decent management and imposing some financial discipline.&quot;
 What differentiates these deals from the asset-grabbing fest of the Yeltsin era is that, for the most part, companies have to buy shares in their acquisition targets on the open market at market prices. None of these acquisitions will make money from day one, as an oil company or a metal producer can be expected to do. They all need investment and restructuring. This difference has brought about a revolution in thinking: Managers are no longer concerned with how much cash a company generates, but with the return that can be earned on the money invested - the return on capital.
 
 <strong>
SHIFTING EMPHASIS
 </strong>Return on capital has been an alien concept in Russia for most of the past 10 years, but there is nothing like spending your own money to make people learn.
 
&quot;The novelty of running a business is beginning to wear off,&quot; Jennings said. &quot;The owner/managers are more aware of being a shareholder and the value that brings. There is an ongoing trend of bringing in professional managers as the majority shareholders begin to step back from their businesses. The emphasis is shifting from merely controlling a company to adding value to it.&quot;
 Banks are still playing a relatively small role in the current round of M&amp;A, as the bulk of the deals are small, while, at the other end of the scale, the really big deals are still more about politics and government connections than finding a fair price.
 Knaster estimated that the fees that banks earn from M&amp;A are between $50 million and $100 million a year, a tiny amount compared to those in more developed countries. But banks are building up their M&amp;A departments in anticipation of bigger cross-border deals.
 The big money will be earned when multinationals start buying local producers as a simple way of breaking into the Russian market.
 However, direct investment remains mired at about $4 billion per year, as most are still sitting on the sidelines and leaving the play to the Russians.
 Russian companies buying attractive assets in the &quot;near abroad&quot; are doing almost all of the cross-border M&amp;A, and Russia has been a net exporter of capital for at least a year. MTS's purchase of UMC is typical of a Russian M&amp;A deal, and the $250 per subscriber it paid for UMC makes these assets cheap even by domestic standards.
 &quot;Foreigners see Ukraine as a politically unstable and risky place to work - much worse than Russia,&quot; said Viktor Frumkin, chairperson of Bridgetown, a Russian food-processing company that is about to open a factory in Ukraine. &quot;But for the Russians, Ukraine is like another Russian region, except this one has over 50 million people - a third of Russia's population.&quot;
 Another oddity of the Russian M&amp;A business is that there is very little 'M' at all. The first attempt at a big merger quickly fell to pieces and underscores the problems.
 In 1997, oil companies Yukos and Sibneft tried to join forces and create Yuksi, but the deal quickly disintegrated, as neither of the two owners could agree who would step aside.
 &quot;Mergers are not part of the Russian corporate culture. In Europe, the company's general manager can step down but, in Russia, it is almost impossible for one of the owners to step aside,&quot; Sokolsky said. &quot;When only a few hands control big companies, then you can't say the company is public, even though it has publicly traded shares. There are very few truly public companies in Russia.&quot;
 
 <strong>
SMOOTH EXCEPTION
 </strong>The most obvious exception has been the merger of 70-plus regional fixed-line telecoms companies into seven super-regional holdings as part of the ongoing overhaul of the industry. The process is due to finish by the start of next year, and it has gone very smoothly.
 
&quot;The [telecoms mergers] were made easier as there was a clear champion in Svyazinvest, which helped in persuading the daughters [the regional telecoms companies that make up Svyazinvest] and a few rogue shareholders, as well as doing a lot of the analytical work,&quot; said Alexander Tolchinsky, Alfa Bank's board member in charge of corporate finance. &quot;It went very smoothly, but everyone will benefit as these mergers have made the sector vital again.&quot;
 The emphasis on return on capital is a key change and will drive the current redistribution of property toward more efficient market and better corporate governance, since there is no point buying an attractive business that can't be sold off.
 The main danger is that too much economic power will be concentrated in the hands of too few companies. But, at the moment, companies are simply chasing profits, which is what they are supposed to do.
 &quot;In 10 years, the structure of the economy will be as if communism and central planning never happened,&quot; Jennings said. &quot;The changing shape of Russian industry is the same as has happened in every other country, just here it is changing five times faster.&quot;

TITLE: The 1998 Crisis Saved Russia
AUTHOR: By &Aring;nders Aslund
TEXT: FOUR years ago, Russia was riveted by a horrendous financial crash. Today, that is difficult to believe. The standard judgment now is that that was precisely the wake-up call that the country needed.
 
Russia is not only a very stable economy, but also a remarkably dynamic one. After three years of average economic growth of 6.5 percent per year, the worry is that economic growth will stop at 4 percent this year. Seldom has a crisis been resolved more successfully.
 Strangely, in his much-hyped new book, &quot;Globalization and Its Discontents,&quot; the Nobel prize-winning economist Joseph Stiglitz has a chapter titled &quot;Who Lost Russia?&quot; Stiglitz's answer is the International Monetary Fund and the U.S. Treasury Department, which encouraged Russia to pursue the policies of the &quot;Washington consensus,&quot; involving price and trade liberalization, financial stabilization and privatization. His overall judgment is &quot;that Russia's kind of ersatz capitalism did not provide the incentives for wealth creation and economic growth, but rather for asset stripping&quot; - a statement that is soundly contradicted by the current reality.
 Stiglitz complains that the IMF compelled Russia to undertake excessively radical market reforms, but objective measurements undertaken by the European Bank for Reconstruction and Development show that Russia carried out its reforms far slower than the early reformers in Central Europe and the Baltics. Reforms were impeded by the Communists and their allies in the State Duma. Only after Russia's reforms had advanced sufficiently far did they breed economic growth, and the August 1998 crisis helped the country cross a critical threshold.
 While Stiglitz accuses the IMF of complete failure in the financial crisis, the IMF action appears a remarkable success in hindsight. Russia's problem, patently, was an excessive budget deficit of about 8 percent of GDP. To finance it, the government took too many domestic and foreign credits, which was the main cause of the August financial crash.
 Stiglitz argues that the exchange rate was grossly overvalued, but, in fact, Russia never had a current account deficit. Another alleged problem was tax collection, but the government has persistently collected one-third of GDP in taxes - exactly the U.S. level.
 Instead, the real budgetary problem was the enormous, corrupt subsidies handed out to enterprises, and the main regulatory problem has been the arbitrary and lawless extraction of taxes.
 In the summer of 1998, Russia had a reformist government under Prime Minister Sergei Kiriyenko. Together with the IMF and the World Bank, his government concluded a radical economic-crisis program. The IMF issued a first loan of $4.8 billion, showing that it was genuinely serious about helping Russia. Alas, although the country was on the brink of disaster, the parliament refused to adopt the necessary fiscal legislation.
 As a consequence, the state's finances had become untenable by August 1998. At first, it appeared as if market reforms were over, as several Communists entered the government - but soon the tables were turned.
 Immediately after the crash, the government had little choice but to cut public expenditures - essentially the huge enterprise subsidies - as all sources of financing had dried up. 
 The new parliament and newly-elected President Vladimir Putin seized on this wave of market-economic sentiment, undertaking one fundamental reform after another. They introduced a flat personal-income tax of 13 percent and a corporate-profit tax of 24 percent, undertook judicial reform, legislated private ownership of land and adopted new banking laws, a new labor code and much more. Surprise, surprise, it turned out that capitalism worked in Russia as well.
 Today, it is all too evident. The financial crash of 1998 taught Russia the necessary lesson. In effect, the Kiriyenko-IMF program of July 1998 has been implemented ever since, and the results are impressive by any standard, showing that a market economy can work wonders in Russia as well. The country has returned two thirds of the credits it received from the IMF.
 Many economists have disputed the importance of speedy privatization, but the Russian economic expansion is entirely driven by private enterprises with concentrated ownership.
 The original form of privatization, which is Stiglitz's main preoccupation, appears ever less significant, as many corporations have changed hands many times (because private property can be transferred through sales or bankruptcy). The emerging conclusion is, on the contrary, that it does not matter how an enterprise is privatized - no strategic restructuring appears possible before its privatization.
 
 <i>
Anders &Aring;slund, a senior associate of the Carnegie Endowment for International Peace and author of &quot;Building Capitalism: The Transformation of the Former Soviet Bloc,&quot; contributed this comment to The St. Petersburg Times. </i>

TITLE: Golden Arches Suffering From Case of Indigestion
AUTHOR: By Greg Critser
TEXT: BLAME Max Cooper. He is the former McDonald's Corp. executive and current franchisee who came up with the notion of a &quot;value meal.&quot; Cooper, who in the mid-1970s began a wildcat experiment with the concept at his own stores, knew it was the next big thing. But he had trouble convincing other McDonald's executives.
 
&quot;Oh, the moaning and groaning,&quot; he recalls. &quot;All they could hear was that somehow I was advocating 'discounting,' which to them meant somehow devaluing the brand. But that wasn't what I was talking about at all. I was always talking about somehow replicating the notion of the table d'hote, as I had experienced it as a young man in Paris.&quot;
 As anyone who has ever hoisted a Big Mac knows, McDonald's headquarters got only one part of Cooper's message - and it wasn't the idea of bringing a French sensibility to fast food. What they grasped is that bargain meals, a.k.a. value meals, sell burgers. Value meals did exactly what Cooper thought they would do: increase foot traffic and overall purchasing. In the long run, they helped transform McDonald's into the most recognizable brand in the modern, global food industry.
 But recent trends - seven quarters of declining earnings, this month's stock price slide, a revolt by 500 franchisees, layoffs overseas and at home, and a growing worldwide protest over the company's omnipresent and nutritionally troubling food - point to an uncomfortable fact: McDonald's must fundamentally remake itself if it is to survive. 
 Tinkering with the present formula - as the company has unsuccessfully tried with its recent &quot;Big 'N Tasty&quot; campaign in the United States - won't work. In almost every domain, McDonald's must revisit the fundamentals that gave rise to its success.
 Consider supersizing. With U.S. obesity rates skyrocketing and government health policy increasingly attuned to the caloric imbalances that cause it, jumbo burgers and jumbo fries simply don't look so cool anymore. Worse, the concern is growing in lucrative overseas markets. Earlier this year, a major contretemps between McDonald's USA and McDonald's France erupted when the latter placed ads in popular women's magazines advocating that, for their health, customers should limit their consumption of fast food. (The collective &quot;mon Dieu!&quot; could be heard from Chicago to Paris.)
 The fundamental notion - more for less - has turned out to be a bad idea for sedentary modern societies. So has the use of cheap but outdated ingredients. The commodity revolution of the early 1980s, which produced huge surpluses of cheap meats, fats and sugars, is increasingly besieged by bad economies. There are also more and more troubling studies implicating McDonald's core-menu items in the development of chronic diseases, from dental caries (from high-fructose corn syrup) to obesity (from high saturated-fat content) to Type 2 diabetes (from both).
 Again, the fundamental notion - McDonald's as the overlord of Midwestern commodity imperialism - has some troubling limitations.
 &quot;Omnipresence&quot; - the notion that McDonald's could always outstrip its competitors through sheer physical growth, opening 1,000 new stores a year - has not only proved costly and self-cannibalizing, it has made the company a pariah among powerful new urban-interest groups. For 20 years, the company's franchisees have successfully used taxpayer-supported Small Business Administration loan guarantees to create a new urban nutritional infrastructure targeting young minority males. No wonder communities are questioning the need for a McDonald's on every corner.
 No one, of course, is writing obituaries for McAtlas. Yet. But considering the wrath and number of its critics and the aggressiveness of its competitors, McDonald's clearly needs to take some chances. That it can afford to do so is demonstrated by its recent decision to re-engineer its cooking oils to contain fewer unhealthy trans fats - an admission, long coming, that its fries were unnecessarily unhealthy.
 But that was too timid. In the arena of fats and oils, McDonald's needs to join the global 21st century, where much healthier oils are now available, particularly olive oil, which has become a cheap commodity with tons of urban cachet. It should find a way to use this new and very adaptable oil for deep frying.
 It must also take the leap into what nutritional policy-makers from U.S. Health and Human Services Secretary Tommy Thompson on down have begun to describe as &quot;smart-sizing.&quot; This means making it possible to buy an 8-ounce Coke, now impossible at any of its stores. It also means using its sizable advertising muscle to make smaller portions sexier. One imagines a &quot;Le Petit Mac,&quot; made with better ingredients and hawked by, say, Serena Williams.
 It might also revisit Max Cooper's original vision of a table d'hote, which would go a long way toward re-establishing a group dining culture in an increasingly fragmented food culture. By this, I do not mean that McDonald's must bear the weight of the kind of social re-engineering that should come from the ground up, but rather that it find ways to make money doing so. How about rewarding family dining with a reduced-rate bowl of salad for the entire table?
 A story that, every now and then, makes the rounds at McDonald's is particularly relevant here. In the early 1970s, chain founder Ray Kroc was engaged in a vigorous debate with David Wallerstein, one of his top executives, over the introduction of large bags of fries. &quot;Let them just buy two bags if they want more,&quot; was Kroc's standard reply to Wallerstein.
 But people were not buying two bags. So, Wallerstein began slipping out at various times of the day to watch people order fries at several McDonald's locations. He compiled an informal study and came rushing back with his results. &quot;Ray, people want more! But they don't order two bags because they don't want to be seen as gluttonous!&quot; Kroc, convinced of the logic, approved the new product, now known round the world.
 Did someone say it's time for the folks at McDonald's to start getting out more often?
 
 <i>
Greg Critser is the author of the upcoming &quot;Fat Land: How Americans Became the Fattest People in the World&quot; (Houghton Mifflin). He contributed this commentary to The Los Angeles Times. </i>

TITLE: Russian Billionaire Puts On Western Show
AUTHOR: By Anne Applebaum
PUBLISHER: The Washington Post
TEXT: Andrew Carnegie needed a lifetime; the Rockefellers required several generations. How long does it take nowadays to win respectability in Washington? About two years. That, at any rate, is how long it took Mikhail Khodorkovsky, CEO and main shareholder of the Russian oil company Yukos. Two years - and several billion dollars.
 
Khodorkovsky got his start in the late 1980s when he used his contacts as a leader of the Soviet Communist youth organization, the Komsomol, to move into the import business and then a bank. By 1995, Khodorkovsky had enough money to buy 78-percent state-owned Yukos. There were complaints at the time about the propriety of the sale, as well there might have been. Khodorkovsky's company paid $300 million for a business now thought to be worth more than $17 billion - of which his personal stake is worth $8 billion.
 Khodorkovsky spent his first few years at Yukos defending lawsuits and denying accusations of financial skulduggery and even murder, before wising up - and starting to think about floating his company on the New York Stock Exchange. About two years ago, I got a call from the office of Prince Michael of Kent - a member of the British royal family who moonlights in public relations - asking if I wanted to join a party of journalists on an all-expenses-paid trip around Russia. All travel was to be paid for by an unnamed tycoon, who was, it turned out, Khodorkovsky.
 Good entrepreneur that he is, Khodorkovsky has since thought of much smarter ways to spend his money. Rather than waste time with journalists, he started to bring Western standards of corporate governance and financial transparency to Yukos, even to reveal who actually owns the company's stock. He began improving his image with deeds instead of words, funding schools and hospitals in the decrepit northern cities where Yukos does its drilling, and starting the Open Russia Foundation, which really does fund exceptionally good causes, among them Western-Russian exchanges, archaeological digs and (in the Carnegie tradition) libraries.
 Most of all, though, he appears to have figured out that the swiftest road to respectability runs through the respectable. His company's international chairperson is now Lord David Owen, former British foreign minister and Balkans negotiator. His foundation's board members include Henry Kissinger and Sir Jacob Rothschild. James Billington, the librarian of Congress, presided over the foundation's U.S. launch, during which James Wolfensohn of the World Bank introduced Khodorkovsky. The British have an expression that well describes the sort of person Khodorkovsky has befriended: the Great and the Good.
 Now, there isn't, in principle, anything wrong with Khodorkovsky's behavior, nor is there any real reason why the Great and the Good shouldn't embrace him as they have. The charities he supports are excellent ones, and whenever I've run across him, he is invariably making a speech promoting the Westernization of Russia, not a cause anyone wants to oppose. There's no reason not to applaud when former oligarchs start to behave like capitalist philanthropists - as long as everyone understands what's at stake.
 Khodorkovsky has a direct financial interest in his own respectability. It potentially raises the price of his stock: More than one potential investor will feel better about a company with Lord Owen on the board. Khodorkovsky also has a direct financial interest in what gets said and written about Russia in the United States: If Russian business is perceived as cleaner than it used to be (or than it is), that could raise the value of Yukos too. He even has a direct interest in bringing Western values to Russia: He might someday need support to prevent his company from being re-nationalized. His civilized, modest presence at Washington soirees also helps ease American fears about Yukos' purchase of the Lithuanian petrochemical industry, as well as other planned investments in Poland and Hungary. These aren't reasons to show Khodorkovsky the door - quite the contrary - but they are something to bear in mind. Russian money is a new force in the land of lawyers, lobbyists and think tanks, and we ought to remember that it's there.
 
 <i>
Anne Applebaum is an editorial writer for The Washington Post, to which she contributed this comment. </i>

TITLE: The Westward Shift: Form Without Content?
AUTHOR: By Lilia Shevtsova
TEXT: AS the autumn political season draws to a close, it is a good time to take stock of the pro-Western shift effected so unexpectedly and so brilliantly by President Vladimir Putin in September 2001. Without hesitation and - no less importantly - without the demand for &quot;deliverables&quot; common in Russian diplomacy, Putin performed a foreign-policy revolution: For the first time ever, he made Russia a member of a Western coalition, without aspiring to play the dominant role, and allowed a Western power to have a military presence in Russia's geopolitical sphere of influence. His subsequent actions demonstrate that he has abandoned the doctrine of multi-polarity, which made it possible for Russia to preserve the outward appearance of being a great power.
 
The Kremlin under Putin has shown that its approach to diplomacy is based on pragmatism. The events of the past few weeks - Moscow's agreement, albeit grudgingly, with the European Union on the Kaliningrad visa issue; Russian support for UN Security Council Resolution 1441; and the Kremlin's calm reaction to the inclusion of the Baltic states in NATO - prove that Russia remains within the bounds of the existential choice made by Putin in favor of the West.
 However, other recent events also demonstrate that Moscow has failed to seize the chance to consolidate its pro-Western orientation. Putin's turn to the West is seriously undermined by the lack of national consensus on key issues of foreign-policy strategy, by openly anti-Western sentiments within the ruling class and, particularly, among the foreign-policy and defense communities and, most importantly, by the direction of domestic policy in Russia.
 Essentially, Putin's foreign-policy doctrine has two main components: striving to use Western sources to modernize Russia, and the existence of international terrorism as the main foreign-policy challenge. The first provided the basis for far-reaching efforts by Moscow to integrate itself further into the global economy. Paradoxically, international terrorism both provided a major stimulus for Putin's pro-Western shift and also confirmed the Kremlin's still-Soviet mentality, in which rooting out &quot;the enemy&quot; was always the main factor driving policy.
 The fact is that Russia's participation in the coalition against terrorism is prolonging the life of the traditional Russian system, based on top-down modernization, authoritarianism and a penchant for using force to resolve problems. Despite its westward shift, Russia remains a country with a domestic system that is alien to the West, and in which the state and its prestige is still more important than the freedom of the individual.
 The West has closed its eyes to the dichotomy that exists, in which Moscow pursues pro-Western policies externally, while internally pursuing traditional policies. Presumably, the West doesn't want to undermine Putin's position, or seeks to preserve the anti-terrorist coalition, or doesn't believe that broad democratization is possible in Russia. In Russia itself, the combination is considered by many to be a perfectly good formula for development.
 However, the October hostage crisis in Moscow and the way that the authorities handled the crisis came as a shock to Western public opinion and made Chechnya the criterion by which the West today measures the extent of liberal democratic transformation in Russia. For the first time, Russia's pro-Western course is dependent on the Kremlin's domestic political course.
 A year ago, during his visit to Berlin, Putin was greeted in the German Bundestag with a thunderous ovation. The ovation showed trust in a leader who, it seemed, had definitively turned Russia to the West. The muted reception that Putin received in European capitals earlier this month indicates that Europe has doubts about Moscow's pro-Western orientation, while it continues to play by the old rules of the game at home.
 But, not that long ago, it seemed that the Kremlin could ignore Europe's hypersensitivity. Moscow gives priority to its relations with the United States, on the basis of which it builds its foreign policy and can feel like a superpower.
 It appeared that the cooling of relations between Washington and Europe, and the conflicts between Western allies on key issues of the new world order - particularly regarding terrorism - might make it possible for Moscow to become the United States' main partner in the anti-terrorist coalition. Journalists have already started writing about the &quot;Washington-Moscow axis.&quot; U.S. President George W. Bush, as if to confirm the special relationship with Moscow, clearly has not wanted to upset his friend Vladimir, and has tried to tread as softly as possible on sensitive issues for Putin.
 So, we have a paradoxical situation: Relations with the EU, with which Moscow has a multitude of common economic interests, have progressed less than relations with the United States, with which Russia does not have a serious economic partnership. The main upshot of Putin's pro-Western shift has been Russia's cooperation with the West on security issues, but not on economic issues necessary for Russia's modernization.
 Bush's trip to Russia last Friday and the agenda of his meeting with Putin in Pushkin confirmed that Washington wishes to keep Russia as a very important partner in the anti-terrorism coalition. However, this summit couldn't compensate for the failures of Putin's European tour. In conversations with Bush, the Chechnya question could not be avoided, and it seems that Putin failed to persuade Bush that Chechnya is nothing other than a link in the chain of international terrorism. Washington made it clear that Chechnya is Russia's domestic problem, but that it hoped a peaceful solution could be found.
 Moscow drove itself into a corner in its attempts to prove the international dimension of the Chechnya problem. If the events in Chechnya have international roots, then the West is right to propose an &quot;international formula&quot; for resolving the conflict. In this context, NATO Secretary General George Robertson's statement that &quot;Russia can count on NATO support in the fight against terrorism&quot; can be interpreted as NATO's willingness to help fight terrorism in Chechnya. It is unlikely, though, that the Kremlin is ready for such a turn of events.
 Nonetheless, growing concern on the part of European states that the war in Chechnya could provoke a new round of terrorism, in particular targeting Russian nuclear facilities - which could pose a threat not only to Russia but also to European security - means that Chechnya will remain firmly on the international community's radar screen. And that means that a problem has arisen in relations between Moscow and the West that will complicate Russia's integration with the West.
 The next round of national elections is fast approaching. The president and the ruling class face a problem: Should they again campaign with slogans about law, order and stability, as they did in 1999-2000, or with the idea of radical transformation of the political system and moving away from the traditional inclination to resolve problems by force? How the Kremlin resolves this question will determine the content and extent of Russia's pro-Western orientation. However, both in Russia and the West, there is a growing understanding that Russia's integration with the West cannot be achieved only on the basis of certain shared security interests. Integration requires a shared system of values that, among other things, will enable a common understanding of the sources of terrorism.
 
 <i>Lilia Shevtsova, a senior associate of the Moscow center of the Carnegie Endowment for International Peace, contributed this comment to The St. Petersburg Times. </i>

TITLE: It's Time To Start Praying for the Homeland
TEXT: WASHINGTON - With all of their flaws, the CIA and the FBI have evolved over decades as institutions within a democratic and free society. Not so the United States' newly created Department of Homeland Security. The DHS will set up a rival intelligence and espionage shop - at a time of sullenly passive hysteria, under a White House unenthusiastic about our constitutional traditions, and amid a quasi-artificial war crisis. I find it incredible no one has really pointed this out; that no one is expressing fear, or at least wariness, of this monstrous new federal bureaucracy, which already has sweeping secret powers.
 
Instead, Tom Ridge, the man to oversee this enormous reorganization of the U.S. government, says, &quot;I may need to go to church every day&quot; for guidance. Church? Makes perfect sense. After all, consider:
 1. Unscrupulous people snuck some grasping and cynical extras into the legislation creating the DHS. For example, American companies that reincorporate abroad to avoid U.S. taxes have been banned from winning U.S. government business; the new DHS bill overturns that. In other words: Corporations that go out of their way to be bad citizens, and prefer to declare allegiance to Cyprus or the Cayman Islands instead, are rewarded for doing so - in the name of &quot;homeland security.&quot;
 The bill also goes out of its way to protect the pharmaceutical giant Eli Lilly from legal liability over its manufacture of thimerosal, a mercury-based additive to vaccines that some argue has caused autism in children.
 These and some other bizarre Republican-written provisions in the bill riled many in Congress. But this session of Congress has been winding to a close. And, rather than adjourn without passing a bill - Democrats were terrified they'd be accused by a popular president of dragging their heels on protecting the motherland - Congress approved it, in return for a &quot;promise&quot; that next year the Republican leadership will go back and get rid of the bad parts of the bill. (Pshyeah!)
 2. So, our Congressional representatives, poor things, ran out of time to properly do the people's business. However, they did find time - smack amid the homeland security debate - to declare that all Americans must pray and fast.
 The resolution starts by noting the president is leading a national fight against terrorism and extremism. It then segues into the healing power of prayer:
 &quot;Whereas it is appropriate and fitting to seek guidance, direction and focus from God in times of conflict and in periods of turmoil; whereas it is through prayer, self-reflection and fasting that we can better examine those elements of our lives that can benefit from God's wisdom and love; whereas prayer to God and the admission of human limitations and frailties begins the process of becoming both stronger and closer to God; whereas becoming closer to God helps provide direction, purpose and&quot; - yadda yadda yadda - &quot;it is the sense of Congress that November 27, 2002, should be designated as a day for humility, prayer and fasting for all people of the United States; and all people of the United States should observe this day as a day of prayer and fasting; seek guidance from God to achieve greater understanding of our own failings; learn how we can do better in our everyday activities; and gain resolve in how to confront those challenges which we must confront.&quot;
 So, don't forget to pray this Wednesday. The DHS will be watching.
 
 <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: Global Eye
TEXT: <b>Rough Beast
 </b>We've said it before, and we'll keep on saying it: A country whose leader has the power to imprison any citizen, on his order alone, and hold them indefinitely, in military custody, without access to the courts, without a lawyer, without any charges, their fate determined solely by the leader's arbitrary whim - that country is a tyranny, not a democracy, not a republic, not a union of free citizens.
 
Now, it may be that it is still a tyranny in utero, a rough beast slouching toward Bethlehem - or in this case, Washington - to be born, and not yet the full-blown monster, fangs bared and back plated with bristling armored scales. But the tyranny has been conceived, it's taken root in the womb, gained definite form and is clawing, tearing its way toward the light.
 President George W. Bush openly claims that he now holds this power of arbitrary arrest and imprisonment. His minions defend it with earnest arguments. They have already begun acting on its dictatorial tenets. If this claim is not rejected by the other two branches of government - an unlikely event, with both branches now held by Bush partisans - then the fundamental liberty of every American citizen will have been stripped away finally and completely. Henceforth, liberty is not the inalienable right of the citizen, but a privilege granted - or not - by an autocratic government.
 What we are witnessing is the mutation of a democratic republic into a military autocracy: Bush bases his claim of arbitrary power on the president's constitutional role as commander-in-chief of the U.S. armed forces. Although there is nothing in the constitution that warrants the extension of military command to cover arbitrary rule over the entire citizenry, and certainly nothing that countenances the abrogation of basic rights and liberties on the unchallengeable say-so of an all-powerful leader, the &quot;commander-in-chief&quot; argument nevertheless serves a useful purpose for the autocrat, creating the illusion of a limited and temporary suspension of liberties - a drastic but necessary &quot;wartime&quot; measure.
 But Bush and his officials have already warned us that this &quot;wartime emergency&quot; might never end. A direct quote from the commander-in-chief: &quot;There's no telling how many wars it will take to secure freedom in the homeland.&quot; The other branches concur in this militarization of American society. Citing a political landscape &quot;changed by war,&quot; the new head of the Senate Armed Services Committee, Republican John Warner, says he wants to &quot;break down the barriers&quot; - the constitutional barriers - that restrict the military's involvement in civilian life. The chief justice, William Rehnquist, whose Supreme Court stands as the last defense against the dictatorship of the executive branch, has already signaled his public approval of military rule, quoting the old Roman maxim: &quot;In time of war, the laws are silent.&quot;
 So, if the wars never cease raging, the laws will no longer speak. Or, rather, they will speak only to ratify the will of the authoritarian regime. Just last week, a &quot;special&quot; appeals court - a secret panel operating outside the ordinary judicial system - upheld the right of the state to invade the privacy of any citizen through expanded wiretap and surveillance powers, Reuters reports. These invasions no longer need meet the already lax standards previously required for domestic surveillance, but can now proceed virtually at the whim of the federal forces, even without any direct connection to suspected terrorist or espionage activity.
 The &quot;special&quot; court is a three-judge board made up of appointees from the Reagan-Bush administration, chosen for this secret duty by that obedient Roman, William Rehnquist. It overturned a lower-court ruling that curbed surveillance powers after documenting 75 cases of their abuse by federal agents in both the Clinton and Bush II administrations. However, Attorney General John Ashcroft - whose agents will carry out most of the secret investigations - said last week that the government will not &quot;overstep its legal bounds&quot; with the new, broader powers. And indeed, with a &quot;silent&quot; high court and a supine legislature willing to lend an air of legitimacy to any action of the ruling junta - hijacking a presidential election, imprisoning citizens without charge, waging aggressive war - no doubt Ashcroft is right. There are no longer any &quot;legal bounds&quot; to overstep.
 Bush's dictatorial powers of arrest and imprisonment are only part of an unprecedented expansion of militarized state power into American life, coupled with an unprecedented level of secrecy surrounding government activity. These changes are meant to be permanent - and they are meant to remain under the control of the Bush Regime and like-minded successors. It is absurd to believe that Bush, Cheney and the rest of the junta are constructing this vast machinery of dominance, only to risk turning it over to any political adversary who genuinely opposes empire, plutocracy and rule by a privileged elite.
 It is equally absurd to believe that these new, unconstrained powers will not be abused. The very fact of their assertion is itself an abuse, a perversion of the freedoms that Bush has sworn - falsely - to uphold. They are a far greater threat to the foundations of American liberty than even the most horrendous attack by murderous criminals. No foreign terrorist can strip the entire American system of its basic freedoms - the inviability of the citizen, the right to due process, the constitutional separation of powers, the people's right to know what their government is doing in their name.
 Only an American tyrant can do that. And he is doing it, day by day.
 
 <i>
For annotational references, see the &quot;Opinion&quot; section at www.sptimesrussia.com </i>

TITLE: New U.S. Bill Biggest Since Defense Department in 1947
AUTHOR: By Scott Lindlaw
PUBLISHER: The Associated Press
TEXT: WASHINGTON - U.S. President George W. Bush signed legislation Monday creating a new Department of Homeland Security devoted to preventing domestic terror attacks. He promised it &quot;will focus the full resources of the American government on the safety of the American people.&quot;
 
The president picked Tom Ridge as the department's first secretary.
 Bush's signature launched the most sweeping federal reorganization since the Defense Department's birth in 1947, a process that his spokesman said could take up to two years.
 &quot;Today we are taking historic action to defend the United States and protect our citizens against the dangers of a new era,&quot; Bush said. &quot;With my signature this act of Congress will create a new Department of Homeland Security, ensuring our efforts protect this country are comprehensive and united.&quot;
 Bush said he will nominate Navy Secretary Gordon England to be Ridge's deputy, and Asa Hutchinson, the head of the Drug Enforcement Administration, to be undersecretary of border and transportation security.
 &quot;With a a vast nation to defend, we can neither predict nor prevent every conceivable attack in a free and open society,&quot; Bush said. &quot;No department of government can completely guarantee our safety against ruthless killers who move and plot in shadows, yet our government will take every possible measure to safeguard ... our people.&quot;
 The bill became snarled in disputes on Capitol Hill, with Democrats refusing to grant the president the broad powers he sought to hire, fire and move workers in the new department. Bush would not yield, and made the disagreement a political issue, railing against Democrats as he campaigned for Republican candidates through the fall. Democrats reversed course after their Election Day loss of Senate control was attributed partly to the homeland security fight.
 The new department, which Bush initially opposed, will swallow 22 existing agencies with combined budgets of about $40 billion and employ 170,000 workers.

TITLE: WORLD WATCH
TEXT: <b>Haider To Quit
 </b>

VIENNA (Reuters) - Austrian far-right leader Joerg Haider will offer to resign his regional governor's post, saying he has had his fill of politics, after a crushing defeat in Sunday's election.
 "He will offer his resignation," his spokesperson, Karl-Heinz Petritz, said.
 Haider, who turned his Freedom Party into Europe's most successful far-right party with 27 percent of Austria's vote in 1999, saw the party lose almost two thirds of that support in Sunday's snap polls.
 "I was deeply hurt by the election results and see that there is a great deal of distrust towards me," Haider said on Carinthia radio. "I've absolutely had my fill of politics."
 It was unclear if the Carinthian Freedom Party would accept Haider's resignation, or if Haider - governor of the south Austrian province of Carinthia - was once again playing hard-to-get in an attempt to force his will on the party.
 Asked if he could be persuaded to change his mind from what would represent his fifth "retirement" from national politics, Haider said: "It will be very difficult."
 
 
<b>Gutierrez Wins Vote
 </b>

QUITO, Ecuador (AP) - A populist former army colonel who led a coup in 2000 and has pledged to fight corruption was elected as Ecuador's sixth president in six years, despite concerns that some of his radical supporters would scare investors.
 Lucio Gutierrez, 45, won 54.3-percent support in Sunday's runoff vote, topping the 45.7 percent gained by billionaire Alvaro Noboa, who counts among his friends several members of the Kennedy clan and Hollywood actors such as Charlton Heston.
 Gutierrez's run for the presidency worried some Ecuadoreans because of his support from a small Marxist party, radical Indian groups and leftist-led unions.
 But since he won the first round of elections on Oct. 20, setting up Sunday's runoff vote, Gutierrez has toned down his rhetoric and shifted toward the center, describing himself as "center-left."
 He insists he is not part of the trend of leftist, anti-globalization presidents who have come to power in Venezuela and Brazil, with the likelihood of another being elected next March in Argentina.
 "I am not a communist. I am a profoundly Christian man who respects private property and human rights," he said during the campaign.
 
 
<b>Cold-Shouldered
 </b>

PRAGUE, Czech Republic (AP/Reuters) - When Ukrainian President Leonid Kuchma arrived at the NATO summit Friday, organizers changed the seating order so U.S. President George W. Bush wouldn't have to sit next to the man he accuses of having sold a radar system to Iraq.
 To spare Bush and British Prime Minister Tony Blair having to appear next to Kuchma, NATO changed the summit seating order. Countries normally sit in alphabetical order in English, which puts Ukraine right next to the United Kingdom and the United States.
 By turning to its second official language, French, NATO put Ukraine last in the list of 46 countries attending the Euro-Atlantic Partnership Council, which brings NATO together with other European and Central Asian countries.
 Kuchma ended up with Turkish President Ahmed Necdet Sezer on one side and a gap on the other side between him and NATO Secretary General George Robertson. He was seven seats away from Blair of "Le Royaume Uni" and more than 30 away from Bush of "Les Etats Unis."
 "This is the first time I've seen a meeting like this arranged alphabetically in French," a NATO official said. "It's a very neat trick: the point is that he's not sitting next to the United Kingdom and the United States."
 
 
<b>It's a Washout
 </b>

RIO DE JANEIRO (Reuters) - Bones, coffins and crosses crashed through the kitchen wall of a Brazilian home over the weekend after a torrential rain washed out part of a neighboring cemetery, officials said on Monday.
 "It happened during the rain on Saturday night. Part of the cemetery wall fell and earth mixed with body parts, coffins and pieces of tombstones invaded the house that is located down the hill," said an official at the cemetery on the outskirts of Rio de Janeiro, who did not want to be named.
 Cemetery officials said the residents had to tolerate the remnants of the dead in their kitchen for the rest of the weekend. A funeral home in the area was expected to clean up the "haunted" house on Monday.
 The residents could not be reached for comment. Brazil's Extra tabloid newspaper showed a picture of a woman living in the house holding up a hip bone and a piece of a skull, with a pile of earth and a huge opening in a wall in the background.
 
 
<b>Exploding Table
 </b>

BELGRADE (Reuters) - A Montenegrin family thought a World War II artillery shell was the ideal replacement for a broken table leg - until it exploded, injuring eight people as they were about to eat a meal.
 The Miskovic family in the town of Danilovgrad was preparing the local specialty of grilled pork fat on the table when the old shell went off at the weekend, the Yugoslav daily Vecernje Novosti reported on Monday.
 "It was our own idea to replace the missing leg with this cannon grenade," house owner Milovan Miskovic said. "We thought it was harmless ... it was here in our courtyard for some 50 years."
 But "all of a sudden, we heard a loud bang and then everything went black," he said.
 The newspaper reported the victims suffered only light injuries.
 
 
<b>Sex Sells Well
 </b>

LONDON (Reuters) - Thousands of sex-hungry visitors poured into a vast show of erotic goods in London on Friday for what organizers billed as the world's biggest "love fest."
 
Ticketholders, who paid up to Pound20 ($31.66) to get into the event, can peruse 220 stalls of bizarre sex goods, and be schooled in the mystic arts of tantric sex and chocolate massage.
 Organizers of the three-day Erotica 2002 show predicted total crowds of 60,000 as they seek to dispel Britain's reputation as a nation of inept lovers. They also plan a similar exhibition in Manchester next March.
 Savvas Christodoulou, managing director of the show, said almost half the public attending were women. He stressed the show, with predicted sales of 3 million pounds ($4.75 million), aimed to display tasteful erotica, not pornography.
 "If you take a chicken feather and tickle your girlfriend's leg with it, that's erotica. If you use the whole chicken, that's pornography," he said. 



TITLE: Warner's Return No Help for Rams As Redskins Triumph
PUBLISHER: The Associated Press
TEXT: LANDOVER, Maryland - The St. Louis Rams were just a chip shot away from overtime when Kurt Warner lost the ball.
 
LaVar Arrington made the strip, and Daryl Gardener made the recovery at the 13-yard line. The Washington Redskins won 20-17 Sunday, giving coach Steve Spurrier an improbable victory based on defense, ball control and an error-free game from Danny Wuerffel.
 &quot;We would like to have had a little less drama, but we'll take the win any way we can,&quot; said Wuerffel, who completed 16 of 23 passes for 235 yards with no interceptions and no sacks.
 Stephen Davis scored three touchdowns and ran for 88 yards on 31 carries. The Redskins (5-6), who had an 86-37 pass-run ratio in their two-game losing streak, passed just 24 times and ran 39.
 &quot;Now we're in position to go to Dallas with a little bit of momentum,&quot; Spurrier said. &quot;Hopefully we'll play a little better than we did today and try to get back into whatever playoff race there is.&quot;
 The Rams are also 5-6, with their playoff hopes just as faint as those of the Redskins. 
 The Rams had won five straight to get from 0-5 to 5-5. They were down 20-10 in the fourth quarter before Warner put them in a position to tie or win.
 The final drive started at the Rams 20 with 3:28 remaining. Using short passes and runs, Warner moved the team downfield until his fumble on first-and-goal at the 6 with 17 seconds remaining.
 St. Louis coach Mike Martz faulted himself for calling the wrong play.
 &quot;That's a shame to come back and play like that at the end and not win,&quot; Martz said. &quot;I just made a bad call at the end. He had to hold it, got sacked ... We lost this one on a coaching error at the end.&quot;
 Warner said he never saw Arrington coming.
 &quot;It's one of those where you kind of start to feel him and try to look for somebody,&quot; Warner said. &quot;But not to the point where I thought he was coming free and had a clean shot at me.&quot;
 The play spoiled Warner's return, after missing five games with a broken finger. He completed his first 15 passes before hitting a mid-game slump, then recovered to lead a masterful touchdown drive - going 9-for-10 and hitting Ricky Proehl for a 5-yard TD to make it 20-17 with 6:08 remaining.
 Warner finished 34-for-49 for 301 yards with two touchdowns and one interception.
 &quot;It doesn't matter how I did,&quot; Warner said. &quot;We didn't win.&quot;
 
 <strong>
Tampa Bay 21, Green Bay 7. </strong>The Bucs' superb effort was overshadowed by an ugly, obscenity-laced exchange between Green Bay coach Mike Sherman and Warren Sapp as they walked off the field. Sherman was angry about a block Tampa Bay's All-Pro defensive tackle put on Chad Clifton during Brian Kelly's return of a third-quarter interception that set up the Bucs' go-ahead touchdown.
 
&quot;I went up to Warren and didn't appreciate the hit he put on Clifton,&quot; Sherman said.
 Clifton, who was not near Kelly, was knocked out of the game with a right hip injury. Sapp was unapologetic.
 &quot;I didn't clip him from behind or block him below the waist. I didn't hit him in the head. I didn't hit the quarterback. I didn't rough anybody,&quot; Sapp said. &quot;I didn't pick him up and slam him. What's the problem here?&quot;
 While several of the Packers said they would reserve judgment until after looking at the film, Sherman thought the hit was questionable and felt Sapp made it worse by standing over Clifton.
 &quot;I just don't think there's any place in the game for that,&quot; Sherman said. &quot;Maybe I overreacted to the hit. But what I saw looked kind of cheap. But who knows?&quot;
 Tampa Bay intercepted Brett Favre four times and Brad Johnson threw two second-half touchdown passes as the Bucs (9-2) won for the first time this season over a team with a winning record at the time it lost to Tampa Bay.
 Favre was sacked three times, including the game's last play, and had little success after taking advantage of Tampa Bay's only turnover to give the Packers (8-3) a 7-0 lead in the first quarter.
 The Bucs are off to their best start ever and thrust themselves into position to make a run for home-field advantage in the playoffs, which would be compelling for a franchise that's never won a postseason game on the road.

TITLE: Shaq's Back To Help Lakers Start To Win
PUBLISHER: The Associated Press
TEXT: LOS ANGELES - With Shaquille O'Neal back in the lineup, the Los Angeles Lakers have that championship look again.
 
O'Neal had 24 points and 11 rebounds in his second game of the season, and Kobe Bryant had a triple-double Sunday night to lead the three-time defending NBA champion to a 111-99 victory over the Milwaukee Bucks. It was by far the Lakers' best game of the season offensively, and they were pretty good at the defensive end in the last three quarters, holding the Bucks to 68 points on 38.7-percent shooting.
 &quot;I think we are getting better each game, getting better each practice,&quot; O'Neal said. &quot;We have most of our guys in there now, so we just have to get back to our old ways and get back to being a contender.&quot;
 That might take a while, with the Lakers (5-9) trailing the Pacific Division-leading Sacramento Kings by 5 1/2 games. But there are 68 games left before the playoffs.
 The Lakers were 13-1 after 14 games last season.
 O'Neal came off the bench to get 17 points and seven rebounds in 21 minutes Friday night in an 86-73 victory over Chicago in his first game since surgery Sept. 11 on his arthritic right big toe.
 He started against the Bucks, playing 28 minutes.
 &quot;I'm rusty,&quot; he said. &quot;I'm like an average big man right now. Average isn't good enough for me. Maybe it will take a week, maybe it will take a month. I'm not going to be that hard on myself.&quot;
 &quot;I'll get it back - very quickly,&quot; he said. &quot;I'm not worried at all. I'm back, spirits are up, we're into it.&quot;
 Bryant had 15 points, 11 rebounds and 11 assists for his third triple-double of the season and the sixth of his career.
 Derek Fisher had a season-high 21 points and seven assists, Rick Fox scored 11 points, and Robert Horry added 10 as all five Los Angeles starters scored in double figures.
 &quot;It felt like our old selves out there,&quot; Fisher said.
 &quot;We played well, we played better defensively,&quot; Bryant said. &quot;With Shaq in the game, we are able to get easy baskets and easy baskets quickly. He changes the tempo of a game.&quot;
 The 111 points were a season high, as was the 50.6-shooting percentage (44-of-87). The previous highs were 108 points and 45.9 percent against the Clippers on November 1.
 The Lakers entered shooting 38.9 percent - second-worst in the NBA.
 &quot;Things are different when I'm in there,&quot; O'Neal said. &quot;I get doubled a lot. I kick it out to guys and guys can take their time hitting shots. We don't have that many one-on-one players on this team. We are just getting back into form. It may take a week, it may take a month, but we will be there when it is all said and done.&quot;
 Michael Redd led Milwaukee with 19 points. Jason Caffey had season-high totals of 16 points and 12 rebounds, and Sam Cassell had 15 points, nine rebounds and eight assists.
 Milwaukee's Ray Allen, the NBA's seventh-leading scorer with a 23.6-point average, sprained his right ankle in the second quarter and sat out the second half. He shot 1-of-8 and scored four points in 16 minutes.
 &quot;It's serious,&quot; Bucks coach George Karl said of Allen's injury. &quot;It's not day-to-day, I think he's going to be out for a while. It's a moderate sprain.&quot;
 O'Neal's three-point play with 8:13 remaining gave the Lakers a 98-87 lead. The Bucks weren't closer than 10 points after that.
 
 <strong>
L.A. Clippers 90, Houston 89. </strong>Back at the scene of his first big NBA game, Yao Ming couldn't duplicate his performance of a week earlier.
 
The Clippers used Michael Olowokandi, Wang Zhizhi and Sean Rooks against Houston's rookie center Sunday, holding him to four points and seven rebounds in 28 minutes as Los Angeles beat the Rockets 90-89.
 &quot;I thought everybody did a good job,&quot; Los Angeles coach Alvin Gentry said of his team's defense against Yao, the No. 1 draft pick. &quot;He has gotten some big numbers the past four or five games.&quot;
 &quot;We did a good job of holding our positions on him, and we did a good job of coming down on him and not letting him get into any kind of rhythm.&quot;
 Yao had gone 9-for-9 from the field a week earlier at the Staples Center against the Lakers, then had a breakout 30-point, 16-rebound performance against Dallas. But the 7-foot-6 (228-centimeter) center managed to get off only four shots against the Clippers.
 &quot;Olowokandi is very strong and he has very good moves,&quot; Yao said. &quot;Wang Zhizhi also guarded me very well.&quot;
 Elton Brand had 26 points and 15 rebounds for the Clippers, who won for just the second time in seven games.
 Glen Rice scored 23 points on 9-of-11 shooting for Houston, all in the second half, after taking just one shot in the first half.
 
 <i>
(For other results, see Scorecard.) </i>