SOURCE: The St. Petersburg Times
DATE: Issue #874 (42), Tuesday, June 10, 2003
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TITLE: New Mariinsky Designs Go on Show
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The 11 designs for the Mariinsky Theater's new building went on display at the Academy of Arts on Monday, marking the beginning of the end of Russia's highest-profile architectural event in 70 years and drawing praise and criticism for the different visions to expand the theater.
The designs, by five Russian and six foreign teams, will be on show at the academy through June 25. The 13-member jury will announce the winner of the competition, officially entitled "Mariinsky II" on June 28.
"I need to fall in love with one of [the designs] to make the right choice," Mariinsky Artistic and General Director Valery Gergiev said at the exhibition opening. "What I see is anything but boring."
The new theater will be built on the site currently occupied by the Palace of Culture in Honor of the First Five Year Plan and linked to the current building by a bridge over Kryukov Canal that will be used by both visitors to the theater and to move scenery between the two buildings. Funding will come entirely from the federal government, which has earmarked $100 million for the project.
Currently, the theater only has 40 percent of the space required by Russian law for its 1,590 employees. The expansion will give the Mariinsky a total area of 35,000 square meters, more than double its present area.
The competition participants include some of the best-known names in Western architecture, including France's Dominique Perrault, Japan's Arata Isozaki, Switzerland's Mario Botta, Eric Owen Moss of the U.S. and Erick van Egeraat of the Netherlands. All participants received a flat fee of $30,000, regardless of the outcome.
The architects were all given a basic design for the new building that was worked out in close collaboration with Mariinsky staff by New York-based theater-consulting firm Artec, which drew up the ground-breaking design for Symphony Hall in Birmingham, U.K. Artec's design includes a 2,000-seat auditorium and an 80-place orchestra pit that can expand to hold up to 104 musicians. The current Mariinsky building has 1,700 seats.
St. Petersburg Chief Architect Oleg Kharchenko was circumspect about the designs on display, saying that they are "stylistically very different, which makes it hard to compare them."
The most striking designs are those by Perrault, known for his design for the French National Library in Paris, and Los Angeles-based architect Moss, famed for his deconstructionist buildings in Culver City, Calfornia.
Perrault's plan includes a huge golden net covering the new building while repeating the contours of the historical building, making the new structure seem like a phantom replica of the old one. Moss' design envisages a theater built of glass and granite that incorporates several asymmetrical glass cupolas.
Many projects, however, are less adventurous, relying on traditional lines and square effects. Mario Botta's design, for example, looks more like one of the city's Stalin-era metro stations than a cutting-edge theater facility.
After the uproar caused last year when Gergiev, hoping to force a fait accompli on city authorities, unveiled Moss' original design for the new Mariinsky, the competition's organizing committee, which includes Gergiev, Kharchenko, Culture Minister Mikhail Shvydkoi and other cultural figures, decided to make the contest a "competition by invitation" to attract the top architectural talent from around the world.
The competition's jury, which includes Joseph Clark, technical director of New York's Metropolitan Opera, Bill Lacy, executive director of the Pritzker Architecture Prize, and Colin Amery, director of Britain's World Monuments Fund, was originally 12 strong, but members asked for an extra member to avoid the possibility of a tied vote. Lyudmila Verbitskaya, rector of St. Petersburg State University, was chosen as the 13th member.
St. Petersburg Governor Vladimir Yakovlev welcomed the decision to put the designs on show and invite public debate, rather than picking a winner behind closed doors.
"I'm pleased to be able to point out the transparency of the competition," Yakovlev said at Monday's opening. "The projects are going on public display before the decision is announced, and public opinion is welcome."
Moss' original design drew stinging criticism from city authorities, and was derogatorily labeled "the garbage bags" by its detractors.
Last year's debate overshadowed a more pressing problem for the theater - the current building's acoustics, which were hampered by Soviet alterations that raised the orchestra pit and brought it closer to the audience.
"In the new building of Moscow's Bolshoi Theater [the Postmodern Theater, built last year to a design by Moscow-based architect Alexander Maslov], the acoustics are awful," music critic Iosif Raiskin of the Mariinsky Theater newspaper said. "Even so, everyone is still talking about the [external] design, rather than the acoustics."
In the wake of last year's debate, the design by Moscow-based studio Zemtsov, Kondiain and Partners, which suggests a radical reworking of a traditional-looking complex with a neighboring garden facing Novaya Gollandiya, also attracted positive comments on Monday and could also be considered one of the favorites.
"I'm glad to see that the hysterical verbal fencing over modern versus conservative designs is over," Deputy Culture Minister Vladimir Malyshev said Monday. "It took both courage and wisdom, but we're now where we should be - at a fair, open, unbiased competition."
During the construction of the new building, scheduled to be finished by 2006, the Mariinsky will continue with a full roster of performances. Restoration work on the current building will be completed by 2008. The new complex - which will allow the Mariinsky to stage four productions every day, if necessary, Gergiev said - also aims to spark an urban-regeneration effort of the area around it, from Teatralnaya Ploshchad up to Novaya Gollandiya.
Analysts said having a high-profile Western architect would make it easier for St. Petersburg to attract international investment.
"St. Petersburg was built as a European city, open to foreign influences," Malyshev said. "It is not an ancient Slavic town type of place, and this tradition should continue."
The competition is the biggest of its kind in Russia since Soviet leader Joseph Stalin invited designs for a Palace of the Soviets on the site of Christ the Savior Cathedral in Moscow. The palace was never built.
Gergiev would not comment on his opinion of individual projects on Monday, but indicated that he would go for an original design over a traditional, conservative one.
"Conservative designs show no emotion, but emotions are what I want to see here," he said. "Our city already has plenty of examples of conservatism, but we need to invent, not just restore and preserve our existing architectural treasures, to develop."
"I would like the new theater to be great in every way, from lighting equipment to air conditioning to storage facilities. It must be a very harmonious place."
TITLE: Defense Industry Shaken by 2 Killings
AUTHOR: By Simon Saradzhyan
PUBLISHER: Staff Writer
TEXT: MOSCOW - A Kremlin-connected executive in charge of one of the country's biggest defense concerns was shot dead on Friday and a top official at one of the company's subsidiaries was killed the same way hours later, a double murder that has sent the defense industry reeling.
Igor Klimov, acting general director of the Almaz-Antei Concern and a former aide in the presidential administration, died from bullet wounds outside his apartment building on Friday morning, in at least the fifth high-profile murder in Moscow in the past two months.
Klimov had been delegated by the Kremlin to streamline the development and production of Russia's best-selling air-defense systems by merging rival enterprises into an industrial behemoth expected to have annual combined sales in the hundreds of millions of dollars. But Klimov's murder will stall the formation of the conglomerate, an industry source told Interfax on Monday.
"This killing will undoubtedly wreak havoc on the shareholders meeting planned for late June and, ultimately, will significantly alter the formation of the holding's management," the source, who was not identified, told Interfax.
On Sunday, Moscow-region police said that Sergei Shchitko, commercial director at Almaz-Antei's subsidiary RATEP, was killed by three gunshots to the head shortly before midnight on Friday, Interfax reported. Shchitko was shot while sitting in his car outside a cafe in Serpukhov, the southern Moscow suburb where RATEP is located.
Officials at the Prosecutor General's Office, which has taken over the Klimov investigation, said on Friday afternoon that they were looking into his professional activities for clues, but could not rule out other leads, such as personal conflicts. It was not clear Sunday whether the office would also oversee the probe into Shchitko's death.
Klimov, 42, left his apartment building shortly before 9 a.m. and was walking toward his chauffeur-driven car when a young man brandishing a gun in a plastic bag approached him and demanded that Klimov hand over his briefcase, press reports cited detectives as saying. Instead of acceding, Klimov tried to fight off the assailant. The tussle was recorded by a surveillance camera on a nearby building, but the quality of the image was poor, Kommersant reported Saturday.
Klimov managed to wrest the pistol away from his attacker, but did not shoot at the man. There were conflicting reports on the number of bullets that hit Klimov's chest - three of five or one of four - and on the moment the first shot was fired, before the scuffling or during.
Investigators told Kommersant that the weapon used - a revolver with a silencer - was not typical for contract hits, which tend to involve more hi-tech firearms. Other reports suggested that the attack may have been an attempt either to rob Klimov or to simulate a robbery, since neither his briefcase nor several thousand dollars that he reportedly had in his jacket pocket had been taken.
The assailant, identified as a fair-haired young man in gray camouflage, fled through a neighboring courtyard. A police dog lost his trail nearby, suggesting that he may have escaped in a getaway car, Gazeta.ru said. RIA Novosti and Interfax reported that there had been two assailants, but a police spokespeople would not confirm this.
Klimov's body was discovered by his wife shortly after the shooting. He died before doctors arrived.
Klimov, who was appointed acting head of Almaz-Antei in February, was charged with the unenviable task of merging more than 40 companies - among them, bitter rivals - into a giant concern that would virtually monopolize the nation's air-defense industry.
Before joining the company, founded in April 2002, Klimov had served briefly as an aide to Viktor Ivanov, a deputy head of the presidential administration and a former intelligence officer whom President Vladimir Putin appointed to head Almaz-Antei's board of directors. A number of reports identified Klimov as a career intelligence officer but Kommersant reported that Almaz-Antei and Klimov himself had denied the claim.
The bitterest rivalry in the nascent concern has been between the two companies that gave it its name, Antei and Almaz, as well as the Oboronitelniye Sistemy group. The companies' top managers have quarreled repeatedly, with each camp hoping to have greater pull in the new concern. According to earlier press reports, Klimov's predecessor lobbied for the interests of Antei, which designed and produced the S-300V and Tor air-defense systems, while Klimov defended the interests of Almaz, which designed the better-selling S-300P system.
Oboronitelniye Sistemy, a holding that combines designers and producers, oversaw contracts for selling S-300P series air-defense systems to China and upgrading systems for Egypt.
RATEP is one of dozens of smaller companies making up Antei-Almaz, and has been rocked by disputes in recent months. Klimov had pledged to complete the formation of the concern by year's end, adjust its marketing policies to boost annual sales to $2 billion within the next five years and to obtain an arms exports license rather than selling through state exporter Rosoboronexport.
Antei exported some $184 million and $60 million worth of air-defense systems in 2001 and 2002, respectively. Oboronitelniye Sistemy, by comparison, exported $259 million and $231 million worth of systems in the same period, according to estimates from the Center for Analysis of Strategies and Technologies (CAST). Almaz, as a design bureau, did not have sales rights but received royalties from the sale of S-300Ps.
Staff Writer Natalia Yefimova contributed to this report.
TITLE: Glazyrev Could Be Communists' Savior or Spoiler
AUTHOR: By Francesca Mereu
PUBLISHER: Special to The St. Petersburg Times
TEXT: Chart the Communists' popularity ratings over the past decade and the result will be nearly a straight line. With State Duma elections just six months away and the Kremlin-backed United Russia party nipping at its heels in the opinion polls, the Communist Party is under pressure to breathe some new life into its support base. Now there seems to be one man who can help them do it. The big question is on what terms.
Duma Deputy Sergei Glazyev - a Communist-affiliated economist who has been chalking up some surprising political victories - has shown that he can reach beyond the party's traditional electorate and tap into a new group of voters.
"I think Glazyev's function is to enlarge the electoral potential of the Communist Party," said Dmitry Orlov, deputy director of the Center for Political Technologies. "He is able to attract not only the Communist electorate, but also leftists, those who vote 'against all' and large groups of voters who do not stand to gain from the oligarchic structure of the Russian economy. And there are many people who think this way."
Although Glazyev, 42, has been in politics for some time, he has managed to stand apart from the forces typically blamed for the country's woes - both his inert Communist allies and the democratizing "young reformers" of the 1990s.
This point was driven home when Glazyev - a member of the Communists' Duma faction but not a member of the party - won a surprising third place in the hotly contested gubernatorial elections in Krasnoyarsk last September. While the two front-runners, both linked to powerful industrial conglomerates, took 27.6 percent and 25.2 percent, respectively, Glazyev managed to earn 21.4 percent of the vote. Later, he complained that the election had been skewed against him, but the results stood.
Glazyev's success was especially noteworthy since the Communists' ceiling in the region had been about 15 percent of the vote, said Vladimir Pribylovsky, head of the Panorama political think tank. Pribylovsky added that a union with Glazyev - whose economic program preaches financial independence and industrial growth - could boost the Communists' share at the polls by as much as nine percentage points by attracting crucial protest voters who would never support the Communists themselves.
Such figures could prove significant considering the party's small advantage over United Russia, a mere five percentage points, according to the latest figures from the VTsIOM polling agency. A May survey of 1,600 respondents showed that 28 percent of those who plan to vote in December's elections will cast their ballots for the Communists, while 23 percent will support United Russia, up from 21 percent a month earlier. The margin of error was 3 1/2 points.
But Glazyev's popularity is a double-edged sword. Although he is likely to expand the Communists' support base, the party's old guard is wary of embracing a rising star who could eclipse them. If party leader Gennady Zyuganov, who has come in second in the past two presidential elections, takes a back seat ahead of the 2008 race, Glazyev would be a serious opponent for those in power, Orlov said.
For the time being, however, Glazyev lacks the political clout to strike out on his own. In a recent VTsIOM survey, where respondents were asked which of three left-wing leaders they would want to see as president, Glazyev came in third, with 11 percent, versus 25 percent for Zyuganov and 16 percent for Duma Speaker Gennady Seleznyov.
As a result, Glazyev and the Communists are carefully negotiating the terms of their alliance.
Last month, Glazyev chaired a conference aimed at uniting left-wing groups into a coalition capable of giving United Russia a run for its money. But the meeting of sundry communists, socialists and other "popular patriotic" movements did not yield any conclusive decisions.
"For the moment, we are still working on how to create a united coalition," Glazyev said in a brief interview last week, adding that something more definitive should come out of the Communist Party plenary meeting scheduled for June 28.
One of the key dilemmas is what role the Communists will play in such a coalition - flagship or simply one partner among many?
For Glazyev, the ideal would be a single electoral bloc that includes the Communists but does not center around them. Under the law, such a bloc can include up to three organizations including at least one political party.
The Communists, on the contrary, would like to serve as the umbrella for the coalition, as they did in the 1999 elections when a number of groups from the Popular-Patriotic Union - an opposition movement co-chaired by Zyuganov and Glazyev - ran for Duma seats under the slogan "KPRF for victory."
Party secretary Oleg Kulikov said that the Communist faction comprises many people from various political organizations and this faction is the "coalition we are talking about." He even hinted that Glazyev's efforts to form a different type of coalition did the party more harm than good. "He has quite a burning enthusiasm," Kulikov said.
Kulikov added that Glazyev would likely be running for re-election on the Communist ticket, although a decision on whether he would get one of the coveted top spots on the party's list would be made only in September. However, Glazyev said his party affiliation was not yet set in stone, especially since his May 31 election as a co-chairman of the Russian Regions party.
The solution that seems to be the most promising for both sides is to work in tandem.
"Zyuganov's function is to hold onto the old electorate, the traditional electorate, and Glazyev's function is to enlarge the new one," said Orlov. "I think he can reach an agreement with Zyuganov. And this would be dangerous for the Kremlin."
"[Glazyev] is a very clever person and he knows that if he creates a separatist coalition now, he has little chance of overcoming the 5-percent threshold" necessary to enter the Duma, Pribylovsky said. "Glazyev knows about his promising political future and he is waiting for his chance. I think they will find some kind of agreement."
TITLE: Candidate Declines Offer of Bodyguards
AUTHOR: By Vladimir Kovalev
PUBLISHER: Staff Writer
TEXT: The Northwestern Region Police Administration Office has recommended that the St. Petersburg Police Department provide bodyguards for Vice Governor Anna Markova after she said that she had been threatened with violence.
But Markova, who announced last Thursday that she would run for the post of city governor once Vladimir Yakovlev leaves office, turned down the offer, her office said on Monday, saying that she could take care of herself.
"Markova worked as a police office for 20 years, so she is a pretty good shot herself," Markova's spokesperson, Vladimir Anikeyev, said by telephone on Monday.
During the announcement of her candidacy last Thursday, Markova said that she had told to be careful and that she could "end up in a car accident or be run over by a steam roller." Anikeyev dismissed the threats on Monday.
"Imagine that you are planning something and some people who don't like you say that they're going to pave you into the asphalt. This is not a direct threat. This is a friendly warning and she can deal with it herself," Anikeyev said.
Markova didn't name the people who had made the alleged threats and city police representatives said that they have no information about any particular threats made against her, adding that the comments were "political."
"We provide this type of security only after it is requested by a particular official or if we have specific information that there is a particular danger to the person," Pavel Rayevsky, the spokesperson for the St. Petersburg Police, said by telephone on Monday. "We haven't received any requests from Markova and don't have any information about threats."
Rayevsky also said that candidates in gubernatorial elections here have never been provided with special security protection by state law-enforcement agencies.
At present, only two City Hall officials have special bodyguards: Yakovlev and Vice Governor Valery Nazarov, head of the City Property Committee.
"The police decided on maintaining this level of security for the head of the property committee after his predecessor was killed by a skilled assassin right in the center of the city," Anikeyev said.
Vice Governor Mikhail Manevich, the city's top privatization official, was killed by a rooftop sniper on Aug. 18, 1997 as his car was turning on to Nevsky Prospekt from Ulitsa Rubinshteina. The investigation into the murder is ongoing.
TITLE: Fighting in Chechnya Flares Up Again
PUBLISHER: The Associated Press
TEXT: MOSCOW - Fighting flared in Chechnya over the weekend despite a new amnesty offer for rebels, with a two-day battle in one town leaving at least 20 people dead, including two civilians.
The battle in Argun, east of Grozny, began when a convoy of troops accompanied by pro-Moscow Chechen police was ambushed Friday afternoon, military officials said.
A spokesperson for the military operation in Chechnya, Ilya Shabalkin, told Itar-Tass that the "operation to liquidate armed bands" - a term that military officials often use to describe fighting with rebels - was over by Saturday evening. Shabalkin said that Chechnya's deputy military commandant, Aud Yusupov, was killed along with three other service personnel and two civilians, and that 14 rebels were killed and 10 others escaped.
An official in the Moscow-backed Chechen administration said that federal forces encircled Argun on Sunday, preventing people from entering or leaving.
The fighting came as an amnesty approved in third reading by the State Duma on Friday took effect. The Duma voted 352-25 to pass the amnesty, which pardons rebels who give up their weapons or renounce armed separatism by Sept. 1. It also applies to federal troops, but does not pardon rebels or federal soldiers who have committed grave crimes, or to foreigners. It also denies clemency to rebels found to have tried to kill federal police and service personnel - an exception that critics say could make it meaningless because it could be used to prosecute any insurgent.
Chechnya's pro-Moscow leader, Akhmad Kadyrov, said Saturday that rebels have been handing in arms and predicted they would do so in greater numbers under the amnesty.
The first person to disarm under the amnesty was Sultan Eskikhanov, a resident of Serzhen-Yurt, southeast of Grozny, Shabalkin said Sunday. He said that Eskikhanov contacted authorities through his relatives and surrendered a Kalashnikov assault rifle. Eskikhanov is barred from leaving the region while authorities verify his claim that he was involved in armed rebel groups but did not take part in terrorist acts, Shabalkin said, a process that should take a few days.
Hours before the Duma voted for the amnesty, an explosion ripped through an apartment building in Grozny, killing 11 people. Officials said that the blast was probably caused by a natural-gas leak.
Grozny Prosecutor Igor Samokhin said that there had been no major repairs on the building after fighting in the city over the past decade and that its gas pipes were in bad condition, Itar-Tass reported.
TITLE: Subway Wreck Causes Moscow Panic
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW - A derailed metro car shut down a large stretch of Moscow's busy green line for nine hours on Monday, creating huge traffic jams in northern and central Moscow as hundreds of thousands of frantic passengers tried to get to work or school.
"When I stepped out on Tverskaya this morning, the street reminded me of Moscow on the day of Josef Stalin's funeral," Sergei Sidorov, an Interfax journalist, said in a telephone interview.
Nine people received medical assistance after suffering panic attacks Monday, Interfax reported, citing the city's ambulance service. Two were hospitalized.
But the biggest problem was inconvenience in a subway system that prides itself as being one of the most efficient in the world.
The trouble began at 6:40 a.m. when the chassis supporting the wheels of the first car of a train heading from Novokuznetskaya to Teatralnaya ruptured, metro officials said. The car partially derailed, and a pair of its wheels flew off the tracks, chewing up 200 meters of high-voltage cable in the tunnel.
Several minutes later, metro workers began evacuating passengers, who had to walk along the tunnel to the next station, Teatralnaya. All passengers on the train were evacuated by 7:45, and none complained of any injuries, metro and emergency officials said.
Trains traveling between the southern Avtozavodskaya and northern Belorusskaya metro stations let their passengers off at the nearest stop at the time of the incident. Service between the two stations was then suspended.
By the time the last passengers were evacuated at Teatralnaya, Mosgortrans, the city transportation company, had put 37 shuttle buses in service between the metro stations along the closed section of the green line and the nearest operating stations. By Monday afternoon, the number of the buses had swelled to 153, Interfax reported, citing Mosgortrans.
As morning rush hour neared at 9 a.m., pandemonium broke out at many stations on the traditionally overloaded green line and on parallel lines, which had to deal with an influx of passengers.
Police officers directed the crowds in and outside the metro and, by all accounts, did so amiably.
TITLE: Deripaska Poised To Take Control of TVS
AUTHOR: By Natalia Yefimova
PUBLISHER: Staff Writer
TEXT: MOSCOW - In a deal expected to bring stability to the debt-laden TVS television station, shareholders previously allied with UES chief Anatoly Chubais announced Friday that they are selling their 45 percent stake to a rival group of owners headed by aluminum magnate Oleg Deripaska.
The sale, which has yet to be finalized, would concentrate 90 percent of the station's parent company, Shestoi Telekanal, in the hands of Deripaska and his allies.
"We have decided that the consolidation of Shestoi Telekanal's shares by the group of shareholders led by Oleg Deripaska would maximally foster the development of TVS and decided to sell our shares," Chubais' associates Oleg Kiselyov and Igor Linshits said in a statement.
"We based our decision on the fact that an independent general-interest channel is vital for Russia today [and] the channel will be able to become truly independent only if it becomes successful as a business," Interfax quoted the statement as saying.
Kiselyov, who heads the station's licence-holder Media-Sotsium, and Linshits, the head of Neftyannoi Bank, took control of the 45-percent stake after Chubais announced Thursday that he was bowing out of the shareholder pool. The remaining 10 percent belong to a group of the station's journalists.
TVS, the only countrywide channel that has remained highly critical of federal authorities, has been plagued by poor management and cash shortages, which have led to wage arrears and a switch-off from millions of viewers. Part of the trouble has stemmed from infighting between the Chubais-led group and Deripaska's camp.
State Duma Deputy Konstantin Remchukov, head of the advisory council at Deripaska's Base Element holding, told NTV on Saturday that no major personnel reshuffles were in the works.
"We believe the channel's competitive edge can only be realized if this key asset, the stars and top-notch staff, is used properly," Remchukov said. "There is unquestionably an effort to retain those people who will lead us to success, profits and a rise in capitalization."
TVS staff have expressed concerns that the new owners could slant the station's format toward light-weight entertainment and water down its news coverage, especially ahead of upcoming parliamentary and presidential elections.
But editor-in-chief Yevgeny Kiselyov - who heads a nomadic team of journalists ejected from NTV and TV6 after those opposition-minded stations were shut down - welcomed the latest share sale, saying that even a new format would be better than the constant insecurity TVS staff have been facing.
"Perhaps we will get a new owner who will say that we must make a different channel, that certain programs will disappear, but even that will suit people working on the channel," Kiselyov told Interfax. "That will at least bring some certainty and that's better than waiting for months without knowing what you're waiting for."
Kiselyov added that he would stay at the station for now.
The sale of the 45-percent stake has been estimated at $10 million and Remchukov confirmed that that had been the "initial figure," but he stressed Saturday evening that the deal had not been officially sealed yet.
TITLE: Financier Soros Quits Russia After 15 Years
AUTHOR: By Simon Ostrovsky
PUBLISHER: Staff Writer
TEXT: MOSCOW - After 15 years and $1 billion in charity, international financier and philanthropist George Soros bid an emotional farewell to Russia on Thursday evening, saying it was time to focus his efforts on a country more in need of help - the United States.
"I was led to come to Russia because of my concern for a prospering open society," Soros told students and journalists at the Higher School of Economics, which was created with his funding. "But now I have to concentrate on what goes on in America. The fight for an open society now has to be fought there," he said.
"This is an emotional moment for me. The foundation as you know it is coming to an end, and it is time for reflection."
Soros came to the Soviet Union in 1988 after hearing that Soviet leader Mikhail Gorbachev had asked the dissident scientist Andrei Sakharov to return to Moscow from Gorky, where he had been living in internal exile. He said that he realized "things were starting to change" and he wanted to help.
After rising to prominence as one of the world's richest currency speculators and fund managers - and probably its most famous - the Hungarian-born billionaire set up a program in his native country to stimulate dissent in 1984, and then moved on to Russia, where he said a different approach was needed.
"There was no need to undermine the prevailing Marxist system because it was falling apart by itself; the task was to help to build an alternative."
He said it was obvious that the government was in great need of guidance if it was prepared to "study this crazy idea of mine of creating a free-market segment within the economy. I was a nobody then."
His plan was ultimately discarded, but it marked the beginning of a long involvement in the country.
As he has so often in the past, Soros criticized the West for coming to Russia's aid too late. "They did not want to spend the money so they gave the task to the IMF."
At the time, he proposed that part of the billions of dollars in loans that Russia took from the International Monetary Fund go directly into the pockets of the population in order to kick start economic activity. But it wasn't, he said, and the money "disappeared."
Soros wanted to create an example of how it should be done, so he set up his first project in Russia, the International Science Foundation, and seeded it with $100 million. "We gave each qualified scientist $500, which at that time was enough to survive for a year."
The Soros foundation, formally known as the Open Society Institute, made it possible for roughly half of the country's intelligentsia to survive the rough and tumble years following Perestroika, according to the dean of the Higher School of Economics, Yaroslav Kuzminov.
Today, there are 15 Soros-foundation programs operating in Russia, all of which will now have to learn to operate and attract investment on their own. In December, the Open Society Institute and the U.S. government-funded Eurasia Foundation decided to merge and channel $45 million into various projects in Russia through 2005.
Looking forward, Soros said that he was worried about the state of the U.S. media and the administration of U.S. President George W. Bush for its handling of the situation in Iraq.
"It's quite wonderful to get rid of Saddam Hussein, but you can't do it the way it was done on this occasion, because now what do you do about the Turkmenbashi of Turkmenistan, or [Zimbabwe's Robert] Mugabe?"
But what most of the people in attendance were interested in was Soros' assessment of the fate of the U.S. dollar.
"Tell us what we all want to hear," said former Deputy Prime Minister Alexander Shokhin.
Statements by Soros, known in financial circles as the man who nearly broke the Bank of England, over the past half year that the dollar is worth only a third of its value are considered to have helped precipitate the currency's downward spiral.
"Normally I say that I know exactly where the dollar is going, but I'm not at liberty to disclose it. However, this time I will tell you the truth: I don't know," he said with a chuckle.
The fall of the dollar, which has lost a fifth of its value against the euro this year, is a result of manipulation by an administration interested in stimulating the economy at any cost - including hurting Europe, he said.
"They did not anticipate the violent reaction from the market. They realize they are playing a very dangerous game, [that's why] Bush reassured the markets that a lower dollar is not official policy."
Soros still has a considerable interest in Russia, an investment that many consider philanthropic - a blocking stake in national telephone monopoly Svyazinvest, which his Mustcom consortium paid $1.8 billion for in 1997 in what remains Russia's largest-ever privatization tender.
Soros, who has called that investment the worst he has ever made, said that he was not happy with a proposal to privatize an additional 25 percent minus one share of the company. He said it would make more sense for the government to sell its entire 75 percent stake in one go. "It needs to be broken up into viable regional companies," he said.
TITLE: Finnish Example Shows the Way for Politics' Women
PUBLISHER: Combined Reports
TEXT: HELSINKI - Women in political leadership are a rarity in most of the world, except in Finland, the only country governed by a female president and, since April, a female prime minister.
But the only thing Prime Minister Anneli Jaatteenmaki finds odd about this is why it took so long, especially in Finland, the first country in contemporary Western history where women were simultaneously given the right to vote and run for election, nearly 100 years ago.
"Why only now, in the 21st century?" she asked during an interview last week.
Jaatteenmaki, 48, runs the government from an extremely modest office in the Finnish parliament. A set of shelves and a computer are all she seems to have at her disposal; there is not even a secretary to be seen. Her staff, she said, has another, slightly more impressive office in the government building.
Jaatteenmaki was elected by the parliament on April 17. According to tradition, every new prime minister visits three key neighboring countries shortly after taking office - Estonia, Russia and Sweden. This time, Moscow came last.
On Sunday evening, Jaatteenmaki flew into Moscow for a two-day working meeting with her Russian counterpart, Mikhail Kasyanov.
After a meeting with Jaatteenmaki on Monday, Kasyanov praised the two countries' trade growth over the past three years. He said that bilateral trade had come to $7 billion last year, and that cooperation would only grow.
"We have vast plans for the future in the energy, ecology and trade spheres," Kasyanov was quoted as saying by Interfax.
Jaatteenmaki says that Russia, which is Finland's third-largest trading partner, after Germany and Sweden, deserves more attention, particularly when it comes to investment.
"Just today I discovered that Finnish investment into Estonia is still bigger than that that goes into Russia. So there is a lot of work to be done," she said in an interview with the St. Petersburg Times last week.
Finland invested the equivalent of 458 million euros into post-Soviet Russia from 1991 and 2001, according to the Bank of Finland. Over the same period, Finnish investment into Estonia reached 554 million euros.
Stressing that broad cooperation between Russia and Finland remains the main goal, Jaatteenmaki said that energy imports from Russia are still most important.
Last year alone, Finland purchased 1.226 billion euros worth of crude oil from Russia, or a whopping 34 percent of the Russian import bill of 3.594 billion euros. After oil came 444 million euros worth of natural gas, followed by timber, refined oil products, coal, electricity and metals.
In exchange, Finland sold to Russia goods worth more than 3.123 billion euros, including telecommunications and other hi-tech equipment, and paper and printed materials.
But the large oil exports from Russia are also related to one of the most acute problems souring relations between the two countries - crude-oil transportation.
Last winter, seemingly the whole of Finland was in an uproar over the safety of oil tankers setting sail from the Russian port of Primorsk, the outlet for the Baltic Pipeline System, which went on line in late 2001. Finland argues that most of the tankers Russia uses are not strong enough for the icy waters. Russia insists that they are.
The issue was raised again at the end of May, when Finnish President Tarja Halonen brought it up in a discussion with President Vladimir Putin during St. Petersburg's 300th-anniversary celebrations. Putin said Primorsk was safe.
Jaatteenmaki said that Finland is determined to protect the ecology of the Baltic Sea and is ready to work through the European Union and various maritime transportation organizations to do so.
"Finland's concern over crude oil transportation from Primorsk is based on the ecological threat of such operations," she said. "We are working on the rules to transport oil within the EU, and the specifications for ships transporting crude in the severe icy conditions of the Baltic Sea."
And pushing the issue with the nearly all-male Russian government is unlikely to be a problem, she said.
"Throughout my career I have always worked in places were men have dominated," said Jaatteenmaki, a lawyer and career politician. "And throughout all this time it has not been a problem."
TITLE: IN BRIEF
TEXT: Hang Fire
ST. PETERSBURG (SPT) - The number of fires reported in St. Petersburg during the period of the 300th-anniversary celebrations was 30 percent lower than reported for the same period last year, according to the head of the Federal Fire-Fighting Service.
"During St. Petersburg's jubilee, the fire-prevention service provided proper protection," said Alexander Chupriyan, the acting-head of the Federal Fire-Prevention Service, said at a press conference on Friday, Interfax reported. "During this period there was a 30-percent drop in the number of fires, a five-fold increase in the number of rescues, and half the number of fatalities."
Chupriyan is the former head of the Federal Administration for Fire-prevention Services in St. Petersburg and the Leningrad Oblast.
Vote Shift
ST. PETERSBURG (SPT) - A proposal to move gubernatorial elections in the Leningrad Oblast to coincide with those for the State Duma in December will be examined at the weekly meeting of the oblast on June 24, assembly deputy and former speaker Vitaly Klimov told Interfax on Monday.
"All of the documents related to the postponement of the elections for governor of the Leningrad Oblast from September until December have already been prepared in the Legislative Assembly and the parliamentary committees will examine them," Klimov said.
Klimov had initially circulated a petition calling for a special session on June 10 in order to examine the question, but withdrew the document after the issue was placed on the agenda for the next regular session.
According to Leningrad Oblast law, the elections for governor must take place on the third Sunday in September.
Vote Shift 2
MOSCOW (Reuters) - The State Duma voted on Friday to bring legislative elections forward by one week to Dec. 7 over concerns that a public holiday would keep voters away from the polls.
Changing the polling day to avoid Russia's Dec. 12 Constitution Day holiday will also wedge a bigger gap between the parliamentary vote and the presidential electoral campaign, due to begin in mid-December.
Presidential elections are expected in spring 2004, but no date has been set.
Some 300 deputies in the 450-seat Duma, broadly favourable to the Kremlin, voted in favour of the motion.
The last legislative elections were held in December 1999 and handed pro-Kremlin parties a majority in the lower house. The Communist Party remains the largest single group in the assembly.
Ottawa Bound
MOSCOW (SPT) - President Vladimir Putin has signed a decree appointing Deputy Foreign Minister Georgy Mamedov as Russia's ambassador to Canada, Interfax reported.
Mamedov, who oversaw relations with the United States, Canada and Latin America during his 12-year stint as deputy foreign minister, replaces Vitaly Churkin as the ambassador to Canada.
It was not clear Monday who might replace Mamedov as a deputy foreign minister.
Born in 1947, Mamedov graduated from the prestigious Moscow State Institute of International Relations in 1970 to pursue a diplomatic career. He has worked at the Soviet Embassy in Washington as well as on the Foreign Ministry's United States and Canada desk in Moscow.
TITLE: Arms Export Boom Begins To Lose Steam
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russia's military-industrial complex enjoyed its third consecutive year of growth in 2002 on the back of lucrative arms export deals, according to a report to be released Monday. But the report's authors say the expansion is running out of steam and could fizzle out altogether as early as 2005.
The Center for Analysis of Strategies and Technologies, or CAST, a Moscow-based independent defense think tank, on Monday issued its annual rating of the country's top 20 defense companies, with fighter-jet maker AHC Sukhoi retaining the top spot, despite revenues dropping by roughly a third on the year to $1 billion.
Konstantin Makiyenko, deputy head of CAST, said that the drop in revenue for AHC Sukhoi, which unites the Sukhoi design bureau and two production facilities in Novosibirsk and Komsomolsk-on-Amur, was mainly due to fewer aircraft deliveries to China, its major client.
Makiyenko said that new contracts signed this year with China and Indonesia could see a rise in fighter exports next year, but after that, with China nearly satiated, AHC Sukhoi's revenues will begin to dry up unless new contracts are signed before 2005.
AHC Sukhoi chief Mikhail Pogosyan has said that some 60 Sukhoi fighters were exported last year, but not all were made by his company.
In stark contrast is Sukhoi's main competitor Irkut, which is 14.7-percent owned by AHC Sukhoi and makes its own version of the famous jet. Due mainly to a $3-billion order book from India for its Su-30MKI fighters, the Irkutsk-based company saw its revenues more than double last year to $562 million, making it Russia's No. 2 defense concern.
But it is already No. 1 in several regards. The only defense company to have its books audited to Western accounting standards, Irkut next year plans to tap Western capital markets to the tune of $100 million to $200 million from a eurobond issue and a $100-million initial public offering in London, both of which will be firsts for the industry.
Irkut delivered 10 Su-30MKIs to India and 10 Su-27UBKs to China last year, and earlier this year secured a $900-million deal with Malaysia for 18 Su-30MKMs, which will keep it busy through 2006.
In all, Pogosyan said last week, more than 160 Sukhoi fighters have been sold abroad in the last seven years and a similar number, worth some $8 billion, is expected to be delivered over the next five years. In addition, more than 250 jets will be manufactured under license abroad.
State-owned arms-export agency Rosoboronexport has signed contracts worth some $2 billion for Sukhoi craft alone this year.
In addition to the Malaysian order, China signed up for 24 Su-30MK2s and Indonesia commissioned two Su-27s and two Su-30s and several Mi-35 helicopters.
Sukhoi rival MiG, which delivered a total of 25 jets to Myanmar, Yemen and Eritrea, ranked No. 5 last year, according to the report, netting $27 million on revenues of $281 million.
Helicopter companies in Kazan, Ulan-Ude, Rostov-on-Don and Moscow posted collective revenues of $383.5 million in 2002.
Other major players include aircraft-engine makers Ufa MPO and NPO Saturn, which netted $71 million and $51.5 million on revenues of $341 million and $204.8 million, respectively.
In all, Makiyenko said, aircraft manufacturers accounted for more than half of all arms exports last year, or $2.5 billion.
Russia delivered a total of $4.8-billion worth of arms last year and received revenues of $4.5 billion, a third consecutive post-Soviet record.
Nizhny Tagil-based Uralvagonzavod earned $474 million and netted some $60 million in profit last year, delivering on a 2001 contract with India for 124 T-90C battle tanks. The company also makes railway cars.
Neither Almaz-Antei, which makes the S-300 long-range and shorter range Tor-M1 air-defense systems, nor Tula-based Priborostroyenia design bureau, or KBP, which makes anti-aircraft and anti-tank missile systems, provided CAST with their financials for the year.
The head of the State Committee on Military and Technical Cooperation with Foreign Countries, Mikhail Dmitriyev, said in February that Antei delivered $60 million worth of systems last year, while KBP Tula delivered systems worth $350 million.
Rosoboronexport chief Andrei Belyaninov said early this year that he expects 2003 to be a breakthrough year for producers of naval and air-defense systems.
Arms exporters also said that they expect to export some $4.5 billion in arms in 2003.
CAST's Makiyenko said that the goal seems likely, noting that some $1 billion should be received this year with the delivery of three naval frigates for India. In addition, India and China are scheduled to take delivery of dozens of Sukhoi fighters by the end of the year, he said.
Also, KBP Tula will begin deliveries of Pantsir-S1 air-defense systems to the United Arab Emirates.
If Russia does not intensify its promotion of aircraft carriers and nuclear submarines, as well as bomber aircraft such as the Tu-22M3 Backfire, defense exports will plummet in 2005 or 2006, when most of the current aircraft contracts will come to an end, Makiyenko said.
TITLE: Fed Funds Denied for RCS Plan
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - The government will not allocate any federal funds for the maintenance of housing and communal systems in those towns and cities that have signed contracts with the newly created Russian Communal Systems company, Nikolai Koshman, the head of the State Construction Committee, said Friday.
"In towns that conclude a contract with RCS, let RCS work there," Interfax quoted Koshman as saying. "We will see how these projects will be realized. The government will not allocate budget funds for maintenance in these places."
After being virtually ignored by the government for decades, Russia's so-called communal housing system - the maintenance and repair of buildings and the supply of basic services such as water, electricity, heat, gas, sewage and garbage - is on the verge of collapse in numerous regions.
While public and private expenditures on communal services last year totaled more than $17 billion, the government has neglected the housing services to the tune of about $2 billion per year over the last decade and now says modernization will cost more than $15 billion.
Led by Unified Energy Systems CEO Anatoly Chubais, a consortium of powerful groups - including Gazprom, through its pocket bank Gazprombank, Interros, Renova, Evrofinance bank, YevrazHolding and Kuzbassrazrezugol - have launched a residential housing and utilities venture called RCS that is aimed at putting the sector "in order."
Koshman said that the State Construction Committee is urging the government to allocate 13.47 billion rubles ($440 million) in additional support for the coming winter, but none of the regions where RCS is active will see any of that money.
Chubais said earlier in the week, however, that RCS is not counting on the government's help.
"We have our own resources. If we grab these meager state funds, I don't think it will do any good at all," Chubais said.
"The volumes and tasks in the housing sector are so big that if the State Construction Committee manages to allocate some funds ... it will have plenty of things to spend them on."
RCS was officially registered last week with a charter capital of 1 billion rubles, which is divided into 10 million common shares worth 100 rubles each. UES and Gazprombank each own a 25-percent stake, while the other five members of the consortium each have 10 percent.
RCS expects to spend at least $700 million over the next five years overhauling the sector in the areas it operates in, extending its reach into the country's households.
The list of regions where pilot projects have already been agreed to includes the regions of Udmurtia, Chuvashia, Altai, Kaluga, Nizhny Novgorod, Oryol, Perm, Rostov, Saratov, Tver and Tyumen. RCS is also negotiating with the administrations of several other regions.
TITLE: Building To Continue After Anniversary
AUTHOR: By Katherine Ters
PUBLISHER: Special to The St. Petersburg Times
TEXT: The paint was still wet on some buildings when St. Petersburg's birthday bash kicked off, and frantic, round-the-clock building work continued well after the official opening of the celebrations on May 23, despite that date having been seen as a deadline for the reconstruction of countless public buildings as well as for a large number of private developments.
The city celebrations provided St Petersburg's construction industry with a boost and, now that the party is over and the federal funding has stopped flowing, that the bottom may fall out of the city's over-inflated building industry. Nevertheless, industry experts say that they aren't worried, and that they are expecting further growth in the post-jubilee period.
"There may be a slow-down with the end of jubilee projects, but I doubt it will be significant," said Boris Pugachov, deputy director of the St. Petersburg Union of Construction Companies. "We're not pessimistic. Steady growth is forecast to continue, particularly in residential and retail sectors."
Lindsay Ellwood, managing partner at St. Petersburg's KPMG office, was a little more wary. "It's inevitable that there will be a peak with these kinds of events and then a drop, but I don't know that there will be a substantial drop," he said. "A lot of construction companies have done very well out of the jubilee, but I think that the tercentenary construction boom petered out months ago." Ellwood said that the bulk of the major projects had been finished earlier in the year. And, in fact, federal funding for St. Petersburg was lower for 2003 than it was for 2002, although the city government says that major construction and reconstruction projects will continue post-jubilee.
"City-planning objectives didn't stop with the jubilee," said Viktor Polishuk, the deputy chairperson and deputy chief architect of the city's City Planning and Architecture Committee. "We have long-term development plans in place which will ensure that St. Petersburg's development is ongoing, and which we hope will guard against dramatic fluctuations in local industry sectors."
Dmitry Kunis, president of St. Petersburg's Step Constructions, has been riding high on St. Petersburg's construction boom. He has watched his company's annual turnover double, or more than double, every year since 1996. "The economy is growing, businesses are growing; I see no reason for construction growth to slow," he said. "Eighty percent of our work is in the industrial sector and, at the moment, a lot of foreign manufacturers are looking at establishing manufacturing plants in and around St. Petersburg. It's cheap here and transport and logistics are good."
The total number of new industrial developments in St. Petersburg and in the surrounding region of Leningrad Oblast has been growing each year. Ellwood said that the other main growth areas were in residential development, the construction and reconstruction of business centers, and in retail.
A total of $1 billion was invested in real estate in St. Petersburg in 2001, according to the city government. Commercial and industrial real estate accounted for 55 percent of investment, residential for 27 percent and roads and infrastructure for 18 percent. Foreign investment in real estate totaled $48 million. Between January and September 2002, 40 percent more residential space was built than during the same period in 2001.
The elite-housing sector is booming and there are a number of high-rise apartment blocks going up on the outskirts of the historical center where apartment space is often bought up well before the buildings are completed. Ellwood said that there was an increasing demand for this kind of housing. "There is a growing middle-class who want better apartments, better locations and better shopping facilities," he said.
"And, while we've seen the development of very nice residential buildings further out of town, there are still people who work in the center and want to live there. This, I think, will be the impetus for residential redevelopment in the inner-city too."
The retail sector is also growing fast. Supermarkets and hypermarkets have been popping up all over the city over the past eighteen months, and Kunis said that, unlike Moscow, St. Petersburg's retail market is at present far from saturated.
St. Petersburg is also seeing the gradual demolition of old-style kiosks and open-air markets as consumers with more to spend are demanding more comfortable shopping facilities. New steel-frame kiosks are appearing at inner city metro stations, and several large, indoor shopping centers are being constructed. Sennaya - a $30-million development between Sennaya Ploshchad and the Fontanka River - is one of the biggest. Due to be finished later this year, the new center will house 150 shops, restaurants and parking for 600 cars.
The city government expects the biggest pay-off for the jubilee to be an increase in direct foreign investment. "We're expecting that the attention paid to St. Petersburg from around the world will bring us additional investments," said Alexander Prokhorenko, vice governor and head of the city's External Relations Committee. "We need additional funds for creating and developing our industrial capabilities and our labor force," he said.
However, while the jubilee may provoke investor interest, the lack of available sites, bureaucratic hiccups, poor city infrastructure and heritage constraints are factors likely to deter foreign investors from construction projects.
"When I drive around the city," Ellwood began. "I see sites which could be cleaned up and used as green-field sites, but they already have ownership, and it can be difficult to get access to them."
Many foreign investors have been heading to the Leningrad Oblast, where the administration is said to be easier to deal with and more focused on investor needs than the city government.
Poor infrastructure in St. Petersburg also turns off some investors. Years of neglect of the most basic electrical and plumbing requirements, has meant that the refurbishment of inner-city buildings is now not only extremely expensive, but also technically very difficult.
While St. Petersburg has one of the most impressive old towns in Europe, heritage considerations slow down new developments considerably. Kunis said that development approvals took a minimum of six months, but could take up to two years. He also said that acquiring property in the center was difficult because the ownership of single sites could be split into many different parts. "The costs and headaches associated with redevelopments in the historical center are often not worth the return," he said.
Construction projects require long-term loans and, according to Ellwood, it's almost impossible to find long-term loans at an acceptable interest rate in Russia. "In the West, you'll see loans for 15 to 25 years," he said. "Here, for the same kind of constructions, you'll see them for five, or - at best - ten years."
Tony Scholes, Country Manager at Bovis Lend Lease, said that legislative ambiguity was another area hampering the building industry in Russia. "The rules of the game aren't clear," he said. "Land acquisition and permitting are still extremely difficult areas for potential investors."
Despite these limitations, St. Petersburg - along with Moscow and the oil-rich region of Khanty-Mansysk in Siberia - is one of the few places in Russia where the building industry has been growing over the past two years.
While the jubilee may not attract the huge injection of foreign investment the city government has been hoping for, recent growth in the city's construction industry has been fuelled by more than just jubilee preparations, and that's why, now that the party's over, the growth looks set to continue.
TITLE: State Duma Blocks Vote On Billing Per Minute
AUTHOR: By Larisa Naumenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - The State Duma passed in the crucial second reading Friday a set of amendments to the law on communications that critics say falls short of what it was supposed to do - level the playing field for market players and boost development of the telecommunications sector across the country.
The amended version will replace the 1995 communications law, considered to be outdated by the industry, if it passes a third reading and the Federation Council and then is signed by the president.
A compromise on one of the most controversial measures - allowing fixed-line operators to charge their customers by the minute, a key issue for telephone companies, which struggle to break even in some regions - will give consumers the right to choose their billing method.
"The bill states the right of a citizen to choose between paying a fixed monthly fee and per-minute billing," said Vladimir Katrenko, chairperson of the Duma's energy, transport and communications committee.
The freedom to choose how their bills are calculated may be an election-year victory for consumers, but it will not help struggling operators increase their revenues, said Yevgeny Golosnoi, who tracks the sector for Troika Dialog.
"People who talk a lot will choose to pay a monthly fee and people who talk little will pay by the minute," he said. "As a result, revenues will not grow and companies will lose ... This is a step back, not a step forward."
Another key provision in the legislation is the introduction of the term "universal services" - a set of telecommunications services that every citizen is entitled to. Katrenko said that the provision "will solve the problem of communications nationwide, especially in rural and remote areas."
However, in its current form, the definition of universal services has been narrowed to having at least one payphone with free access to emergency services in every community and at least one public Internet access point for every town with more than 500 people.
"The idea of the universal service is right, but it has been reduced to naught," Golosnoi said.
But the amendments do little to clarify the issue most important to Svyazinvest, the national fixed-line monopoly undergoing a radical restructuring that has so far seen 72 of its subsidiaries grouped into seven super-regional companies - tariffs. Tariffs are capped by the government, whose current policy is to let prices rise by about a third each year. Svyazinvest and other operators, however, say that current policy discourages investment in the sector and that more revenues are needed to modernize antiquated networks.
Golosnoi said that current tariff policy will lower the price the government will be able to charge for its 75-percent stake in Svyazinvest, which may be put up for sale later this year. International financier George Soros' consortium Mustcom paid $1.8 billion for 25 percent of Svyazinvest in 1997 - about what the entire company is now valued at.
"The government should show investors interested in purchasing Svyazinvest that its tariff policy will result in growing revenues," Golosnoi said.
TITLE: Online Bidding for Satellite Reaches for the Sky
AUTHOR: By Alex Nicholson
PUBLISHER: Staff Writer
TEXT: SAN FRANCISCO - An auction to sell a model of the Sputnik satellite that launched the Space Age went sky-high before crashing when the bidding was determined to be a hoax, officials said.
Sovietski Collection offered the satellite for sale on eBay Inc. Bidding started at $25,000.
"When it went to $26,000, we were kind of excited, and then it shot up to $200,000 and we were really excited, and then it went up to $500,000 and we were kind of becoming a little more skeptical," said Rob Fess, an official at Sovietski Collection, a San Diego-based vendor of Soviet collectibles.
"Then it went to $2 million and then it went to $99 million, and we called eBay and asked them to remove it."
TITLE: Oligarch Foxes Begin Hunt for Hens of UES
AUTHOR: By Alexander Branis
TEXT: Unified Energy Systems is at a turning point. The painful restructuring process is at last entering the implementation stage. In one or two months the board is expected to approve the company's strategy for the next five years. By the end of June, representatives of many Russian industrial groups will appear on the boards of UES itself and of many of its regional subsidiaries alongside representatives of portfolio investors in the same companies.
These so-called strategic investors are obviously not interested in being portfolio investors in UES and its energos, the local subsidiary power companies. They want to become controlling owners of UES' assets, enabling them to cut costs and improve efficiency, supply their own operations with cheap electricity or run these assets profitably as stand-alone businesses.
These guys were dreaming of grabbing Russia's generators long before Anatoly Chubais unveiled his first proposal for UES restructuring in early 2000, and these dreams have only become more intense since then. In its first restructuring plan, UES management proposed splitting up the company into hundreds of small entities, which were supposed to be sold at then (and still) very low prices, leaving UES with a small part of its assets in the form of transmission and distribution networks.
These transactions would have represented an unprecedented destruction of shareholder value, undermining government efforts to improve corporate governance and make the country a more attractive place to invest. Luckily, portfolio investors in UES and at least some Russian authorities were stubborn enough to confront this proposal and eventually defeat it. As a result, it was no longer possible to get at large chunks of assets through the back door by making deals with UES management. So Russian industrialists had to buy shares in UES to at least get their foot in the door.
The big question is: What comes next? On the one hand, I am convinced that owning shares alongside other state and non-state shareholders makes people like MDM Group an important ally to these other co-owners. It would simply be against MDM's own interests if they were to use their new influence over UES to force the company to sell a large part of its asset base for cash or investment, as it is highly unlikely that owning UES shares will give them any advantage over cash-rich competitors interested in buying the same assets from UES in an auction. So Russian industrial owners of UES shares will only have an advantage should any potential bidder for underlying assets absolutely need to own UES shares to gain control.
In this case there are two approaches that UES can apply to restructure itself and de-monopolize the sector. One is pro rata distribution of its underlying assets to UES shareholders, the concept first proposed by myself and Vadim Kleiner of Hermitage Capital to the working group established by President Vladimir Putin in spring 2001 and seemingly enshrined in the restructuring laws. Another is allowing potential bidders to use UES' own shares as a means of payment to acquire generators from the company, with UES retiring shares it receives for its assets. The beauty of pro rata distribution is that it is a very straightforward concept. Each UES shareholder will keep his title over all UES assets by receiving direct stakes in each of the consolidated subsidiaries. Its main disadvantage is that it takes a lot of time. Pro rata distribution will have to be packaged as a company reorganization in full accordance with Russian legislation, and will take between one year and 18 months to get to formal completion.
Using UES' own shares to buy the company's assets from itself is a kind of shortcut to the same goal of de-monopolizing the sector. If it is chosen over pro rata distribution, the result will be keen interest in the stock from strategic buyers interested in participating in tenders for UES assets. However, portfolio investors will run a risk of being essentially squeezed between the state, gradually increasing its stake in the residual part of UES (once more assets are sold for shares and those shares are retired, the Russian government will see its part of the remaining outstanding shares go up considerably), and Russian industrialists, actively snapping up the generators.
Accordingly, the government, as UES' largest shareholder, is likely to receive more by subsequently privatizing the stakes in generators it received during pro rata distribution, not by essentially outsourcing privatization of these assets to UES management. Also, much (and, I should say, too much) will depend on the exact details of the process, for instance, who has a right to participate in these UES shares-for-generators shares tenders.
These details, as the history of Russian privatization tells us, can sometimes be quite devilish indeed.
For instance, Chubais is still playing with an idea to attract so-called management companies to run UES-owned generation assets. If this idea is not rejected, as in my view it should be, these management companies will be chosen from a pool of strategic investors. The fox will be taking care of the hens. Strategic investors, running the assets that they are interested in buying, will be able to stave off or outmanoeuver other potential bidders by putting poison pills in the target companies, (mis)using privileged access to information, possibly even diverting cash-flow.
Six months from now, there will be much more clarity on all points. UES strategy will hopefully be in place, the prime minister will sign the resolution outlining a time frame for the entire reform, and we will have a better sense of how quickly things are moving forward and if in the right direction.
Alexander Branis, UES board member and director of Prosperity Capital Management, contributed this comment to The St. Petersburg Times.
TITLE: City's Criminal-Political-Business Elite Takes Hit
AUTHOR: By Yulia Latynina
TEXT: On the eve of the 300th anniversary of St. Petersburg, two things happened. The speaker of the St. Petersburg legislative assembly announced that Governor Vladimir Yakovlev would resign immediately following the festivities. And in Moscow, Konstantin Yakovlev - a reputed organized-crime boss known as Kostya Mogila - was murdered.
Mogila (the nickname means "grave") was a member of the St. Petersburg business elite. He was also believed to have commercial ties to the governor.
Mogila was certainly a colorful figure. From humble beginnings as a gravedigger, he became a St. Petersburg oligarch and a major political player. In 1999, the Fatherland-All Russia party, which was gunning to become the "party of power" at that time, held a congress in St. Petersburg. It later emerged that the congress had been bankrolled through a company called VMTs, which was registered using forged documents. VMTs had received the money from a respected member of the city's business elite, Mogila.
Word has it that the forged documents had been brought to light by Viktor Novosyolov, a member of the city council and no less respectable a figure than Mogila, though his business interests were tied to the Tambov organized crime group. A short time later, Novosyolov had a nasty little accident. On his way to work one day, while his car was stopped at a red light, a young man ran up and dropped a bomb on the roof. The explosion tore Novosyolov's head off.
Amazingly, the killers were caught. If you find it hard to believe that the St. Petersburg police managed to catch the killers, your incredulity is well founded. They were tracked down not by the police but by local journalists working for Andrei Konstantinov's famous Agency for Investigative Journalism. The killers were working for people close to Mogila.
Such was the political debate between the powerful Tambov gang and Kostya Mogila on the subject of transparent financing for political parties.
Keep in mind that when Yakovlev became governor, the entire city bureaucracy split into two camps: Those who deserted Anatoly Sobchak and signed on with the victor, and Vladimir Putin, who slammed the door and vowed revenge.
Everyone thought that, when Putin became president, Yakovlev would either resign or do time. But St. Petersburg is a small town. Too many of Yakovlev's potential accomplices turned out to be accomplices of the president's closest friends. Living in a glass house, Putin chose not to start throwing stones. But the clouds began to gather nonetheless. And Mogila was undoubtedly the most unpleasant place for the lightning of law enforcement to strike.
I'm not saying that Mogila was taken out to keep his mouth shut. He could have been killed by the Tambov clan, which had tried to ice him twice before. His former associate Vladimir Kulibaba could have ordered the hit. Or he could have made enemies in Moscow by sticking his nose into other people's business.
Let's not forget that huge amounts of money were lavished on St. Petersburg's 300th birthday party. Some of that money went missing. In every case where money was moved through companies allied to Mogila, the loss can now be written off and blamed on a dead man.
Yulia Latynina is host of "Yest Mneniye" ("Some Might Say") on TVS.
TITLE: Piter's Birthday Bash And All of That Jazz
TEXT: Editor,
Thank you so very much for your wonderful reports on the 300th anniversary!! They made me feel like I was there ... almost.
I so dearly love St. Petersburg and have been studying about it for 30 years now, but I will probably never get the money to visit.
So thanks again for your reports!!
A. Ristau
Alcoa, Tennessee
Editor,
I am a Canadian of Indian origin. I lived in Leningrad/St. Petersburg from 1987 to 1993 and from 1997 to 1998. I studied at St. Petersburg's Popov Electrotechnical University, and now work as a computer engineer in Toronto.
I watch TV5 from France, the BBC from Britain Television, DW from Germany and North American networks like CNN, Fox etc.
It is a shame in general and should bring shame to those who are mixing city-anniversary celebrations with politics. It seems clear that the fact that Russia has gotten back on its feet, slowly, but surely, is causing certain western countries, like France and the United Kingdom to react hypocritically. For example, French network A2 (Antenne 2) throws dirt on an extremely culturally rich city by showing the poor parts of St. Petersburg and the criticisms from average people of the government, instead of showing the cultural reality. I have been in Paris and in London, where it is easy to find houses that are falling apart and people who are sleeping on the streets. People criticize their governments there as well.
The BBC and A2 should show the problems in their countries, like the illegal immigrants who are forced to work like slaves.
Slinging mud at St. Petersburg is a shame. St. Petersburg has gone from being a rich city, through two revolutions, the blockade, stagnation, and then Perestroika, which is still in an early stage for Russia as a whole. We have to be patient and let Mother Russia show the meaning of social equality to the whole world.
Instead of slinging mud, the French, for example should say "thank you" to the Russians.
Generally, the only media that hasn't had anything negative about St. Petersburg is that in the United States, so maybe it's just a problem with the Western-European networks.
Happy 300th birthday St. Petersburg. See you soon.
Gopala Murday
Toronto, Canada
Editor,
I am a senior journalist with India's best known daily, the Hindu. I am from the southern Indian city of Chennai, formerly Madras, and cherish the memories of my visit to St. Petersburg in November 1996.
The most unforgettable thing was my trip to the cemetery where Dostoyevsky and Tchaikovsky are buried in your lovely city. It was a murky, windswept, rainy afternoon, yet I saw fresh flowers on both of the graves. I realized then why your young capital is hailed as one of Europe's intellectual centers. I had flown in from Helsinki and the contrast was striking.
I only hope that St. Petersburg is better maintained now. I love your city and would do anything to be able to visit it again.
K. V. Krishnaswamy
Chennai, India
A Legitimate Gripe
In response to "President Putin - I Want My Money Back," a column by Vladimir Kovalev on June 6.
Editor,
I am an Australian working here in St. Petersburg and know of many people who were in the same situation over the weekend.
I wonder how many of the delegates who visited had the same kinds of problems with their visas and registration as other foreigners so often do here. It will be interesting to see if all of the hype surrounding the celebrations actually attracts more foreign investment following the delegates' visits.
I think they will find it's a different story for those who return to set up businesses here for the long term - "no green lights all the way through town, etc."
Cam Gibbons,
St. Petersburg
Sight Unseen
In response to "Some Things in Russia Don't Change," a comment By Vladimir Kovalev on May 29.
Editor,
Yes, true, it is a little bit like a Potyomkin Village. Yes, there are dirty courtyards. Yes, many people left the city to avoid the constraints. To criticize is easy.
But what should the alternative be? People from all over the world came to St. Petersburg for this time (as I did, from Hamburg). What does Kovalev want them to experience - to see? And with what result?
Dr. Roland Salchow
State Secretary
Hamburg, Germany.
The Reticent Rails
In response to "Vox Populi" on June 3.
Editor,
The irony of the situation was that the people who wanted to go to their dachas could not do it in a normal way. The departure of commuter trains from Baltiisky Voksal was a mess during the entire weekend. Crowds of people had to wait for 3 to 4 hours for their trains.
So, all of the assurances on the part of city management in this respect came across as just talk and nothing more.
The same situation occurred with the people returning home from their dachas. A number of trains to St. Petersburg were canceled last Sunday without any reasonable explanations.
In general, one could say that nothing has changed in Russia.
Andrey Petrovsky
St. Petersburg
Editor,
I am the great, great, great grandson of Grand Duke Konstantin, for whom the Konstantinovsky Palace is named.
Our branch of the Romanov family does not contend for the right of succession, but accepts the responsibility of our Boyar inheritance of our family name to be of service to the people of the Motherland.
I congratulate you, the people of St. Petersburg, for the completion of the massive project of restoring the Konstantinovsky Palace for the glory of Russia.
It is exciting that it has been restored for the purpose for which it was built - as a working palace for the purposes of state and international affairs and, most importantly, for the prosperity of the Motherland.
I watch in anticipation as you, the people of St. Petersburg, prosper from its restored status, as the Palace of Congress complex, for the benefit of the people.
Happy Anniversary St. Petersburg, my heart is with you.
Nikolai Petr Konstantin Tuskkin Cyrilovich-Iskander Romanov.
Auckland, New Zealand
Other Capitals
In response to "Hermitage Through the Ages," on May 23.
Editor,
On my father's side, I am of Russian heritage. My wife and I have visited St. Petersburg and the birthplace of my late father, near Kursk.
I do miss the lack of Russian films in the cultural life of Ottawa and I wish that it would be possible of bringing films like "Russky Kovcheg" to this city.
My wife and I are members of the Canadian Film Institute and there are opportunities to view alternative films from Europe, Latin America and Asia. These films are very popular with audiences that are tired of the "Hollywood" diet from the United States.
I would be delighted to get in contact with someone who might be interested in developing a basis for showing Russian language films with English/French subtitles.
Kirill Alexandrovitch
Ottawa, Canada
Balking at Benefits
In response to "Copycat Killers." a Global Eye Column by Chris Floyd on June 3.
Editor,
First, it is wrong to say that Indonesia "incessantly" praises U.S. President George W. Bush for his "War on Terrorism." Perhaps Chris Floyd doesn't know it, but Indonesia is a predominantly Muslim country, where everyone hates Bush and has been hating America's hostile foreign policy toward the Muslim world. I am sure that everyone has heard of the recent polls that found that most Indonesians think of Osama bin Laden as someone they can trust.
Second, the Indonesian government has been more than patient with the rebels who have indecisive in arranging meetings with them. The rebels used the cease-fire to extort a "tax" from the civilians, most often by intimidating and threatening them. Just as in East Timor, the rebels are also responsible for human-rights abuses. We had to give them an ultimatum as it was clear that the rebels were trying to prolong the dialogue.
Whether or not there have been any executions has yet to be determined. Several soldiers are currently on trial for abusing civilians. The question of whether there have been boys as young as 12 years old killed cannot be argued. That women have been killed is also a fact. But these are not (for the most of the part) civilians. Once women and children point guns at soldiers, they are threatening the soldiers' lives and are, thus, combatants.
But, of course, after they have been killed, all the media sees are women and children in normal civilian clothes. Perhaps the horror of such sights is so overwhelming that the weapons are not noticed.
The so-called "concentration camps" are merely refugee camps. The people there are not "herded," they came to avoid the dangerous zone that has used to be where they lived. They are given temporary identification documents to distinguish them from the rebels, because the rebels have taken their identification. The rebels have even kidnapped some local officials because they complied with the central government by issuing the temporary identification documents (but this, of course, we do not hear in the Western media).
I do realize the Indonesian military's history is of the worst in the world. The military is still brutal and will still take a long time to change. But, with regard to the government's decision to put an end to calls for independence, I have to agree. Not because I am one of those lucky enough to be from the capital, where all of the profits from across the archipelago go, but because I personally believe that it is in their best interest.
We are moving closer and closer to a democratic society. This transition should not be viewed as an opportunity to break away. It should be given a chance.
The East Timorese were irrational in grabbing at the opportunity, and now they are suffering the consequences - not the consequences of their country being destroyed by militias, but the economic consequences. They no longer benefit from all of the subsidies and other goodies that come from being part of a bigger country that now has a strong economic potential.
The Australians' primary interest was the oil in the Timor sea, which they were immediately able to start siphoning after East Timor's independence. They were not interested in the well-being of the East Timorese.
The only reason that the government has been maintaining the military in Aceh, leading to human-rights abuses, is the existence of these rebels. Once the rebels have been put down, the only reason to maintain the military there would only be to protect against threats to the country's sovereignty from abroad, not from the people within. And once the rebels has been put down, the lives of the Acehnese can be as normal as anywhere else.
Hasan Di Tiro (the leader of the rebels) is only interested in keeping his family throne - he wishes to be the Sultan of Aceh. We all know what monarchy in an undeveloped country will lead to: dictatorship.
Jedut Sutoyo
Binghamton, New York
Sky's Not Falling
In response to "Russia's Rosy Present Hides Uncertain Future," a comment by Boris Kagarlitsky on June 3.
Editor,
After a string of positive pieces of economic news - accelerating growth, a strong jump in investments, the successful celebration of St. Petersburg's tercentennial - what is a perpetual detractor and a prophet of doom to do? Just keep up the volume and frequency of his "The end is coming!" pronouncements. Reading the recent article by Boris Kagarlitsky, it seems to me that we have an uncertain future - a bear market - for doomsday pundits and Chicken Littles instead.
The one particular bear they are apparently trying to imitate is the mischievous Winnie the Pooh, who, while trying to get some honey, was running around with an umbrella to distract the bees with his "prediction" - "The rain is coming! The rain is coming!" Kagarlitsky and his fellow pundits are overly eager to "get" Putin and are running around with their prophecies: "The collapse is coming! The sky is falling!"
He starts with the usual pessimist's excuse: "The Russian economy depends entirely on the export of oil and gas." Not so. Crude oil, refined products and gas together amount to about 55 percent of all exports - a significant, but not overwhelming share, when compared to typical 80 to 95-percent share in oil-rich OPEC countries.
If all of the positive changes in the last few years can be attributed to high oil price, as often claimed, I propose a simple test. Can Kagarlitsky name a single OPEC country that, in the last four years, enjoyed even half of Russia's improvement in economic performance? I can't.
In fact, the average oil price in the period 1999 to 2002 was just $5 higher than in 1994-1997. Adjusting for inflation, the difference is negligible. Yet, from 1994 to 1997, the government borrowed tens of billions of dollars from abroad and still could not balance the budget. In contrast, from 1999 to 2002, it paid off almost $60 billion of foreign debt without refinancing, added $50 billion to its hard-currency reserves and, even after all that, ran about a $6-billion budget surplus (this year, it is likely to be much higher), while the economy grew at an average 6-percent annual rate. The difference between these two periods is absolutely striking.
Remember the much touted "Year 2003 Problem," when the Russian economy was supposed to collapse because of the peak in foreign-debt payments and catastrophically failing infrastructure? Forget it. The foreign-debt problem is practically non-existent now (the amount of foreign debt minus reserves today is one third of what it was 1999, its ratio to the dollar-denominated GDP value is about one tenth of what is was then. And serious infrastructural disruptions were actually less frequent last winter than in the preceding few years.
The driving force of today's expansion is not oil, but long-term structural changes - an increase in consumption and investment, rapid development of a modern retail and service sector, explosive growth in mortgage and consumer credit (almost nonexistent before 2002). It is sustainable because it depends on self-reinforcing internal factors, not on an external financing boom or a dangerous-asset bubble.
This in not a cause for complacency but, in planning and debating economic policy, one should coolly and objectively evaluate both growing problems and positive changes (even if the latter does not seem possible for the likes of Boris Kagarlitsky) and try to understand what is working and why.
Kirill Pankratov, Ph.D
Boston, Massachusetts
TITLE: Patching Things Up at Putin's Northern Picnic
AUTHOR: By Grigory Yavlinsky
TEXT: The top-level meetings held in St. Petersburg last week produced positive results for Russia, Europe and the entire world. Common Russian and European interests were spelled out, and some progress was made toward the creation of a greater Europe. Russian cooperation with the European Union took a step forward, and Russian-U.S. relations, strained by the crisis in Iraq, were mended. While their meetings had a certain theatrical flair, President Vladimir Putin and other world leaders demonstrated a sound understanding of military and geopolitical developments around the globe.
The 300th anniversary of Russia's northern capital provided a fitting backdrop for the talks, as the participants came to realize that the standoff over Iraq had gone too far, and that the way forward involved restoring relations without losing face. The celebrations gave the leaders a reason to put on a smile and adopt a positive outlook, to offer words of praise rather than criticism. The bonhomie in St. Petersburg undoubtedly eased tensions and paved the way for more productive talks at the G-8 summit in Evian later last week.
The meetings in St. Petersburg were more than pomp and circumstance. During the tercentennial of Russia's "window to Europe," Putin used the occasion to point out major obstacles in the way of Russian integration into Europe. One of the biggest is the "new Schengen wall" which divides Europe today as the Berlin Wall did in the Soviet era. Putin's forceful call for visa-free travel between Russia and Europe, removing the visa barrier that most Russians cannot overcome, was almost unprecedented in talks at this level.
After the Russia-EU summit in St. Petersburg, the removal of the visa barrier can no longer be left on the back burner. It is a pressing problem that must be tackled immediately, first by creating a working group, and then by drafting concrete proposals for the next Russia-EU summit meeting in Rome this November.
It would have been more productive, and more logical, to discuss the nuts and bolts of visa-free travel during the meetings at the Konstantinovsky Palace southwest of St. Petersburg. More progress could have been made if the issue had been raised a year or so ago, during the negotiations on Kaliningrad. It was not raised, however, and for obvious reasons. Russian and European officials simply don't take the issue seriously because, simply, they don't believe that Russia can become part of Europe not only in the cultural, historical and political sense, but also in practical terms.
In St. Petersburg, the eurocrats responded to Putin's call with resounding silence. Then again, discussion of Chechnya at the Russia-EU summit was restricted to the war on terrorism. From the European point of view, the lack of criticism of human rights violations in Chechnya could be seen as compensation for the EU's unwillingness even to consider opening its borders to Russians.
So long as Russia runs roughshod over human rights in Chechnya and authoritarianism continues to raise its ugly head in domestic politics, the Europeans will feel justified in maintaining a defensive wall and refusing to talk about a "greater Europe." It is much easier for European officials to punish all Russian citizens for the actions of the Kremlin (while making nice with the Kremlin at every opportunity) than it would be to roll up their sleeves and help settle the conflict in Chechnya, or to sweat the details of a visa-free regime with Russia. At this point, all the Europeans have to do is to admit the possibility of open borders and to present a list of their conditions. This is precisely what they won't do, and their refusal has turned this into an increasingly political issue - hence the analogy with the Berlin Wall.
Much will depend on the future political and economic evolution of the EU as well. A number of fundamental transformations in the EU are still needed, but its member states have been unable to establish common priorities. The role of the euro in the world economy, as well as in Russia's economy, remains an open question.
And yet there can be no question that the overwhelming majority of obstacles to visa-free travel lie on the Russian side of the border. We must begin today to demand action from the Interior Ministry, law enforcement agencies and lawmakers to tackle the problems of illegal migration and the drug trade, as well as passage of a law on readmission.
The meetings in St. Petersburg have also freed us of illusions about triangular alliances, or alliances of any other configuration, pitting Russia and Europe against the United States. All of the erstwhile Frondeurs demonstrated their desire to patch up relations with the U.S. in advance of the G-8 summit in Evian. U.S. President George W. Bush came to France graciously to accept their surrender, which they had previously declared by backing a UN resolution establishing the postwar order in Iraq as dictated from Washington.
The most important result of Putin's meeting with Bush was the return to the principles of the Declaration on Strategic Partnership, signed one year ago during the summit in Moscow. Politicians and journalists paid scant attention to the declaration at the time, focusing instead on the treaty on reducing strategic nuclear arsenals, a topic more in line with stereotypical political thinking. Today it is clear, however, that the Declaration on Strategic Partnership is the founding document in U.S.-Russian relations, the "road map" of future development, and the only legal basis now in place for such development.
Another key issue of both the Russian-EU summit and Putin's meeting with Bush was the nonproliferation of weapons of mass destruction. As Putin remarked, Russia and the U.S. are closer than they seem even on the thorny issue of Iran's nuclear program. Another important result was the joint Russian-American declaration on the North Korean nuclear program, which once again assigns Russia an active role in defusing the situation after it was sidelined for its opposition to U.S. intervention in Iraq.
It was very heartening to see world leaders in St. Petersburg recognize that bickering over approaches to our common problems, such as the proliferation of weapons of mass destruction, gets us nowhere. Concerted action is what is needed.
The reaction of the Russian public to the meetings in St. Petersburg is another issue. I think it was positive on the whole. But we must understand that public opinion is fractured, and focuses more on who's talking than what they're talking about. When Putin talks about strategic partnership with the United States and intergration with Europe, the public supports him. Yet his anti-American statements and his appeals to rely on no one but ourselves garner just as much support.
There was a sense in St. Petersburg that Russia's leaders were taking care of their business while the people were taking care of theirs. That the only way politics affects everyday life is by blocking off the streets and creating other assorted inconveniences. My point here is not about security measures, but about the lack of a feedback mechanism between the rulers and the ruled. There is no point talking about stable development in one direction or another in a country where the rulers set the agenda for society, rather than the other way around. This point should be factored into the assessment of any top-level meeting involving Russian politicians.
Grigory Yavlinsky is leader of the Yabloko party. He contributed this comment to The St. Petersburg Times.
TITLE: U.S. Dialogue on Iran With the Wrong Guy
AUTHOR: By Pavel Felgenhauer
TEXT: In the 1980s, the Soviet Union was the main supplier of arms and military technology to Iraq, providing Saddam Hussein's military with some 80 percent of all its equipment. While we were Iraq's best friends, we could not sell arms to Hussein's arch rival - Iran. Only after 1991, when Russia supported UN sanctions on Iraq and lost its major money-paying client in the Gulf, did our arms traders begin active business with Iran.
From 1991 until 1996, Russia supplied Iran with more than $5 billion worth of military equipment, including jet fighters, modern submarines and some 2,000 T-72 tanks. Moscow also agreed to build a nuclear power station in Bushehr for more than $800 million.
In 1995, under pressure from Washington, Moscow agreed to terminate its military cooperation with Iran in exchange for the United States allowing Russia to net a number of lucrative contracts to launch into space Western communication satellites that use American technology. But the construction at Bushehr continued.
After 1995, Russian arms traders actively participated in illegal sanction breaking in Iraq, supplying Hussein with some new weapons and spare parts for those he already had. But this illicit trade was too small to compensate for the loss of the Iranian market. The satellite launch business - brisk in the 1990s - began to dry up, as the IT industry "new economy" crashed in 2000.
The same year Russia officially scrapped a secret 1995 memorandum with the United States that ended its arms trade with Iran and resumed full cooperation. Today, after the U.S.-led occupation of Iraq, relations between Washington and Tehran are worsening day by day, and Russia has found itself in the middle of the fray.
The Shiite theocracy that rules Iran did not like Hussein's secular regime and was glad to see it go. But Tehran also does not want the U.S. to rebuild Iraq into a secular pro-Western democracy with a market economy: Successes in Iraq could strengthen desire for regime change within the Iranian population.
The Iranians want the American military to leave at once, leaving Iraq in the hands of the Shiite clerics who would build a repressive Islamic republic, like the one in Iran. Pro-Iranian agents are actively promoting anti-American unrest in Iraq, and a full-blown insurgency may follow.
The United States, in turn, has forged an alliance with an anti-clerical Iranian opposition group based in Iraq: the People's Mujahedin. The group was financed and armed with tanks and armor by Hussein and based on the border with Iran, in all respects integrated into the Iraqi military machine. The U.S. State Department officially lists the People's Mujahedin as a terrorist organization, and indeed, in the past, it has carried out terrorist bombing attacks against Iranian government buildings.
While the Americans fully disbanded the Iraqi military, the Mujahedin, who stayed neutral during the invasion, were not attacked, not disarmed or disbanded. U.S. forces did not even go close to their military bases or camps. It's obvious that Washington is retaining the Mujahedin as a hit force to spearhead a future anti-government insurgency in Iran - a possible counter act to the Iranian-led anti-American insurgency in Iraq.
The agents of the Mujahedin have produced information about an Iranian project to enrich uranium for possible military use. It turned out that a large gas centrifuge facility was almost completed in Natanz in central Iran and two smaller secret uranium enrichment laboratories may have been built west of Tehran.
Natanz may provide Iran with material to make usable nuclear uranium bombs within two years. It also turned out that Natanz can also provide Bushehr with nuclear fuel and that it was built in secret from the Russians, who have a contract to provide the fuel to Bushehr themselves.
Russia is today under growing U.S. pressure to stop military and nuclear cooperation with Iran. At the same time, the fact that Iran (unlike Iraq) may indeed go nuclear soon is scaring the Kremlin, but not the people who are making money in Iran.
In the last year, the building of the Bushehr reactor has been legally taken over by one of Russia's oligarchs, and the Nuclear Power Ministry is not in charge anymore. The Iranians are paying very generously, in cash, for work done.
If the U.S. wants to stop the nuclear cooperation promptly, it should talk compensation with the real people in charge, not irrelevant government officials, including President Vladimir Putin.
Pavel Felgenhauer is an independent defense
analyst.
TITLE: Chris Floyd's Global Eye
TEXT: Revise and Conquer
Holocaust revisionism took decades to rear its ugly head, but the whitewashers of war crimes in the Bush regime are trying to pervert the facts of history mere weeks after their leader triumphantly declared "mission accomplished" in the war on Iraq. "Weapons of mass destruction?" Never heard of 'em. Never mentioned 'em. Maybe we'll find some. Not that important. Time to move on. Hey, how about a tax cut?
But even as revisionist-in-chief George W. Bush was staging his somber photo-op in Auschwitz last week, the web of lies he and his little buddy Tony Blair concocted to "justify" launching an act of military aggression - on the very Hitlerian grounds of "preventive war" - was being shredded by their own intelligence services. In an unprecedented move, U.S and British spies went public to denounce the cartoonish manipulation of professional intelligence data by the war-hungry leaders. Reports of Saddam Hussein's "imminent threat" were "sexed up" on Blair's order, said U.K. spooks, while American agents said that Bush was spoon-fed a stew of uncorroborated confabulation by a "special team" of ideological hatchet-men overseen by Pentagon honcho Don Rumsfeld. U.S. Congress and U.K. Parliament probes are now afoot.
In the end, the "weapons of mass destruction" that the Christian coalition had sworn were "armed and ready" to unleash unspeakable carnage on the world turned out to be - by Bush's own admission - a couple of trucks, which contained not a speck of hazardous material. Not exactly the fearsome arsenal the Dear Leader had invoked, in ever-increasing detail, throughout the long buildup to aggression. The actual CIA report that Bush cited was even more - or rather, less - revealing, noting that the trucks' designs were in fact consistent with their stated purpose: the production of hydrogen for weather balloons, Slate.com reports.
Thus revisionism - panicky, cynical, maladroit - was the order of the day. Rumsfeld - whose smirking rictus of iron certainty was a mainstay of the drive to war - began backing off big-time. Maybe there weren't any WMD, he shrugged; maybe Hussein destroyed them before the war. Unfortunately, the U.K. press dug up a quote from St. Tony himself on the subject: "We are asked to accept Saddam decided to destroy those weapons. I say that such a claim is palpably absurd." But to be fair, Blair's broadside was fired long ago, practically in caveman times: March 18, 2003, to be exact. It's certainly irrelevant in our go-go modern world, where history is written with water and each day is a new blank page.
So it was most apt that the only question Bush was heard to ask during his Auschwitz tour actually dealt with Holocaust revisionism: "Do people challenge the accuracy of what you present?" he asked his guide, The New York Times reports. This might seem a rather bizarre question at first glance - but then, Bush has a personal stake in the cultivation of historical amnesia. His own family fortune was built in part by a long and profitable collusion with the Nazis - an ugly story oft told here, and raked up again by Newsweek Poland during the presidential visit.
Bush's grandfather, Prescott Bush, and Prescott's father-in-law, George Herbert Walker, helped finance the rise of the Nazi Party through their intimate entanglements with Nazi industrial, shipping and banking interests. This long (and well-documented) collaboration continued even after the United States was at war with Nazi Germany. It seems that the blood money was just too good to pass up - even if it had to be dug out of the corpses of young U.S. soldiers and innocent civilians throughout Europe and North Africa. The Walker-Bush cabal's Nazi partners also helped finance - then profited from - the Auschwitz camp. Finally, in 1942, the U.S. government seized the Walker-Bush Nazi assets under the Trading With the Enemy Act. But the well-connected clan managed to bury the news in the back pages - brief mentions of the companies involved, but no names of the Establishment grandees behind them. They also pulled strings to keep their American assets from being seized as well, even though the profits from these enterprises were inextricably mixed with their Nazi loot. Prescott later cashed in these tainted assets for millions, a nest egg that helped launch him into the Senate and his son and grandson into the White House.
So perhaps George Walker Bush felt uneasy treading on the bone-ash that lies beneath the soft, green grass of Auschwitz. Or perhaps not. For quietly buried in the back pages last week was news that the Walker-Bush tradition of war profiteering carries on. A small brief in the Financial Times revealed that Bush-connected "reconstruction" firms Halliburton and Bechtel, now in control of Iraq's oil fields, want to raise massive bank loans using future oil profits as collateral. In other words, these Establishment grandees will pocket billions in free money that will have to be paid back later by the Iraqi people, if and when their oil fields are returned.
Both companies made millions with Hussein during the dictator's murderous heyday: Bechtel helped build Hussein's mustard-gas plants, while Halliburton, under Cheney, pocketed $73 million working with Hussein's UN-sanctioned regime after the first Gulf War. Meanwhile, Halliburton - which still pays Cheney a tidy annual sum - was handed yet another no-bid Iraq contract last week: $400 million in government grease this time.
That's the way of the war profiteers, these men of "honor and integrity" who build their family fortunes, their corporate treasuries and their political dynasties on bone-ash. The grass they tread is always soft.
For annotational references, see the "Opinion" section at www.sptimesrussia.com
TITLE: Palestinian PM Calls For Peace
AUTHOR: By Lara Sukhtian
PUBLISHER: The Associated Press
TEXT: RAMALLAH, West Bank - The Palestinian prime minister said on Monday that he will not use force against militant groups under any circumstances, despite their stated determination to derail a U.S.-backed peace plan with attacks on Israelis, including two weekend shootings that killed five soldiers.
The prime minister, Mahmoud Abbas, also defended himself against complaints at home that he has been too conciliatory to Israel, including in a speech at a Mideast summit last week, and that Israel has given little in return.
Abbas said that he has coordinated every move with Palestinian President Yasser Arafat - a barb at the veteran leader who said in public last week that the summit yielded no achievements.
Israel, meanwhile, appeared to be making a first small step toward meeting part of its obligation under the peace plan, the so-called "road map" to Palestinian statehood by 2005. Media reports said that the military has drawn up a list of 15 settlement outposts, nearly all uninhabited, that are to be removed in coming days.
Under the road map, Israel has to dismantle dozens of outposts established since Israeli Prime Minister Ariel Sharon came to power in March 2001. According to the Israeli settlement watchdog group Peace Now, there are 102 outposts with about 1,000 residents, including 62 outposts built since Sharon took office.
Sharon, a major settlement builder in his career, never promised explicitly to remove all 62 outposts, and has acknowledged that he has differences with the United States on the issue. His aides have said that a distinction would be made between outposts considered legal and illegal, suggesting there would be less than full compliance.
Radio and TV reports said that the military would ask settlers to remove the outposts voluntarily, but that troops would begin dismantling clusters of trailers on West Bank hilltops as early as Monday evening if settlers refuse to do so.
Pinchas Wallerstein, a settler leader, said that he and his supporters would turn down the offer. "In no shape or form will we cooperate with this evacuation, and we will even fight against this with all our might," Wallerstein told Israel Army Radio before the meeting with the military.
The degree of resistance to the removal of isolated outposts will show how much of a fight settlers will put up in the event of a final peace deal, in which Israel would have to remove larger settlements.
About 220,000 settlers live in 150 settlements in the West Bank and Gaza, the lands occupied by Israel in the 1967 war and claimed by the Palestinians for their future state.
In the first stage of the peace plan, the Palestinians are required to disarm and dismantle militant groups that have killed hundreds of Israelis in the past 32 months of fighting.
Palestinian militias have said that they will not halt attacks on Israelis, and last week announced they are stopping contacts with Abbas on a cease-fire.
The militants said Sunday's shootings, including a rare joint attack by three militias on an army outpost in Gaza, are meant to underscore their determination to derail the peace plan. Four soldiers were killed in the Gaza attack, and a fifth in an ambush in the West Bank city of Hebron later Sunday.
Abbas said Monday that he will not order a crackdown on the militias under any circumstances because he wants to avoid civil war. "There is absolutely no substitute for dialogue," Abbas said at his first news conference since taking office April 30, adding he still believes the armed groups would change their minds.
Abbas did not elaborate. However, Palestinian officials, speaking on condition of anonymity, said that the Egyptian intelligence chief, Omar Suleiman, is working to restart cease-fire talks. Suleiman presided over previous truce efforts earlier this year.
In his speech at the Mideast summit, Abbas denounced violence against Israelis and called for an end to the "armed intefadeh."
Abbas said Monday that he is pressing ahead with the peace plan. In veiled criticism of the militants, Abbas said: "The suffering of the Palestinians should not be dealt with by incitement. It needs real solutions."
TITLE: UN Strives For Release of Thai Democratic Leader
AUTHOR: By Aye Aye Win
PUBLISHER: The Associated Press
TEXT: YANGON, Myanmar - A UN envoy said that he was "encouraged" by his meeting Monday with Myanmar's two top generals in a bid to secure the release of pro-democracy leader Aung San Suu Kyi.
The UN special envoy, Razali Ismail, told reporters that he held a one-hour meeting with Deputy Senior General Maung Aye, the regime's No. 2 general, in the presence of the junta's No. 3, General Khin Nyunt, at a Defense Ministry guesthouse.
"I am encouraged by my meeting today with deputy Senior General Maung Aye in the presence of General Khin Nyunt," Razali said.
"I hope I will be able to fulfill one or two of my objectives of my visit here," he said, but refused to confirm if he was given assurances on Suu Kyi's release.
Asked if he will be allowed to see her, Razali said: "That's all I can say."
He said that he will meet ambassadors of some countries later on Monday before his scheduled departure on Tuesday at the end of his five-day mission.
Suu Kyi was detained on May 30 following a bloody clash that left at least four people dead and prompted a crackdown on her National League for Democracy party. The Nobel peace laureate's whereabouts remain unknown with the junta refusing to produce her in public.
Exiled opposition figures in Thailand say Suu Kyi may have received head injuries in the May 30 violence, which they say left up to 70 people dead.
The government, however, says she is unhurt and is in custody in a "safe place."
Before Razali's meeting with Maung Aye, it was expected that he would get a clear answer from the junta on Suu Kyi, according to Hkun Tun Oo, a leader of Myanmar's Shan minority.
The U.S. State Department says that the May 30 violence appears to have been an ambush orchestrated by junta supporters, and that the events suggest the junta has ended efforts at national reconciliation, launched most recently in late 2000 and brokered by Razali in a series of visits.
Offices of her NLD party have been shut and other opposition members detained. Other party leaders are under house arrest.
Suu Kyi's detention has drawn sharp criticism from around the world and threats of more economic sanctions from the United States.
However, the junta has remained defiant. Khin Nyunt said over the weekend that Myanmar will continue to strive to become a "peaceful, developed and democratic nation" with or without foreign assistance.
Since the crackdown, Washington has tightened visa restrictions against the Myanmar regime, to cover all officials of the government-linked social organization, the Union Solidarity Development Association, said to have orchestrated rallies against Suu Kyi.
The government of U.S. President George W. Bush also said that it wants Congress to impose more economic sanctions against Myanmar and was reviewing legislation to prohibit imports from the impoverished country. The United States already bans new investments by U.S. companies.
Suu Kyi, who won the Nobel Peace Prize for her nonviolent struggle for democracy, spent six years under house arrest between 1989-95. Her party won general elections in 1990 but was blocked by the military from taking power.
TITLE: Pope Completes Pilgrimage in Croatia
AUTHOR: By Eugene Brcic
PUBLISHER: The Associated Press
TEXT: ZADAR, Croatia - Pope John Paul II wrapped up his 100th foreign pilgrimage on Monday with a stop in this hotbed of nationalism, where locals revere a fugitive general wanted on war crimes charges.
John Paul's motorcade took him past a giant poster of Army General Ante Gotovina with the words, "A hero, not a war criminal." Although Gotovina is sought by the U.N. war crimes tribunal for 1990s atrocities, many here hail him as a hero.
More than 100,000 people packed a pine-dotted seaside promenade, clogged Zadar's narrow marble alleyways and watched from hundreds of boats bobbing in the harbor.
The 83-year-old pontiff waved repeatedly to the crowd, but he looked drawn and fatigued after enduring withering heat in his taxing five-day, five-city tour of Croatia. John Paul suffers from Parkinson's disease and crippling knee and hip ailments, and uses a special hydraulic chair so he can celebrate Mass while seated.
Vatican officials have suggested that a proposed visit to Mongolia in August could be dropped.
TITLE: Ferrero Downs Verkerk for First Slam Title
AUTHOR: By Steven Wine
PUBLISHER: The Associated Press
TEXT: PARIS - Maybe Juan Carlos Ferrero was joking. Maybe he was giddy from winning the French Open. Or maybe he was putting the rest of the men's tour on alert.
When asked about his plans for the coming weeks, Ferrero grinned and said, "I'm going to win the tournament at Wimbledon, no?"
No one can begrudge Ferrero a little hubris in the wake of his performance Sunday. The stylish Spaniard won the most lopsided French Open men's final in 25 years, beating Martin Verkerk 6-1, 6-3, 6-2.
Wimbledon might be a reach for Ferrero, given that he has yet to advance beyond the third round there. Spaniards traditionally have an aversion to playing on grass, and their last Wimbledon champion was Manuel Santana in 1966.
But now that Ferrero has gotten over the hump on clay, his first major title might not be his last.
He was a French Open semifinalist in 2000 and 2001, then played poorly in the final last year and lost to Albert Costa. He became labeled a clay-court underachiever.
No more. Ferrero outplayed Verkerk from the start, stayed cool at the end and sank to his knees in relief after hitting one last winner for the title.
"This is a tournament I always wanted to win," Ferrero told the crowd in Spanish during the trophy ceremony. "Now I have it in my pocket."
Ferrero made it two first-time champions in one weekend. Justine Henin-Hardenne won her first major title Saturday, beating Kim Clijsters 6-0, 6-4 in the most one-sided French Open women's final in 15 years.
Now that Ferrero has a Grand Slam trophy, he said, the No. 1 ranking is his No. 1 goal. He's third behind Lleyton Hewitt and Andre Agassi, two former Wimbledon champions gearing up for another run there.
"I think Hewitt is my main rival," Ferrero said. "Agassi is getting older. Maybe in two years he'll think about retiring. There are other players you have to take into account also."
One potential threat on grass will be Verkerk, a late-blooming Dutchman with a 200-kilometer-per-hour serve.
When he arrived to play at Roland Garros for the first time, he had never won a Grand Slam match. He departed with a check for $491,000, more than doubling his career earnings in seven years as a pro.
"It has been an amazing week for me," Verkerk said. "It's more than a dream. To be in the final of a Grand Slam, there are no words for that."
Verkerk, who was ranked No. 170 at the start of last year, is projected to reach a career-best No. 15 in the new rankings this week.
He looked more like No. 170 in the final, playing without the verve he showed while winning six consecutive matches at Roland Garros.
Afterward, a chagrinned Verkerk shook his head when told that a Dutch supermodel cheered for him from the front row. He never noticed her.
"Something good about today," Verkerk said, "and I don't see it."
A lot of Verkerk's troubles had to do with Ferrero, who won with steady, patient play from the backcourt and occasional flashes of brilliance.
Standing up to 4 meters behind the baseline, Ferrero ripped several of Verkerk's serves for return winners, including one lunging shot that he made from near the courtside geraniums. More than happy to play long points, Ferrero kept the 195-centimeter Dutchman pinned deep in extended rallies.
Ferrero acknowledged being annoyed by a streaker who ran onto the court during a changeover wearing only three tennis balls, but it was a temporary distraction. By the third set, Ferrero was so relaxed he even played serve-and-volley on one point - and won it.
He also won 10 of the final 11 points to complete the most lopsided men's final at Roland Garros since Bjorn Borg beat Guillermo Vilas 6-1, 6-1, 6-3 in 1978.
"I believed always that I can win Roland Garros - if not last year, maybe this year or next year," Ferrero said. "Right now I think I can win more times."
And maybe Wimbledon, no?
TITLE: Spurs Take 2-1 Lead in NBA Finals
AUTHOR: By Chris Sheridan
PUBLISHER: The Associated Press
TEXT: EAST RUTHERFORD, New Jersey - For the San Antonio Spurs, this wasn't a horror show. No matter how ugly it looked, they'll take the result.
In a game that was low-scoring for three quarters before the pace picked up in the fourth, the Spurs emerged with a 2-1 lead in the best-of-seven NBA Finals by defeating the New Jersey Nets 84-79 on Sunday night.
"You think we'd rather go flamboyant and lose?" Bruce Bowen asked.
Obviously not. But basketball fans can only hope for something a little more aesthetically pleasing than the gruesome offensive display that included the lowest-scoring first half in the history of the NBA Finals.
Led by Tony Parker, Malik Rose and Tim Duncan, the Spurs took control with a 14-3 run to open the fourth quarter and held off the Nets down the stretch.
How unsightly was it? The winning team committed 17 turnovers, missed 12 foul shots, tossed up numerous airballs and even had players bickering at each other after a series of botched plays in the first quarter.
"That's what it takes to set basketball back 20 years," Rose said.
Added David Robinson: "It was really, really ugly. We had a rhythm for about 5 minutes, that's it."
Duncan, the league MVP, had a night that was nothing too special by his standards, scoring 21 points with 16 rebounds - the 15th of which was most crucial. Parker added 26 points - two off his career playoff high - to make up for San Antonio's lack of any other double-digit scorers.
San Antonio improved to 7-3 on the road in this year's playoffs with its fifth consecutive victory away from home.
Game 4 is Wednesday night.
The final score didn't accurately indicate how bad the offenses were for three quarters. The teams combined to score 55 points in the fourth quarter after totaling only 111 through the first three periods.
"It was like a European game. Everybody was struggling," Parker said.
The Nets had the lowest-scoring second quarter - nine points - in NBA Finals history.
Kenyon Martin scored 23 and Kerry Kittles 21 for the Nets. Jason Kidd struggled with his shot all night - just as a lot of players did- and finished 6-for-19 for 12 points with 11 assists. He also had four of the Nets' 20 turnovers, and Martin had five.
"It's not a major setback. It's a minor setback right now," Nets coach Byron Scott said.
San Antonio again made heavy use of a zone defense to fluster the Nets, whose half-court offense was pathetic for most of the second quarter.
When Martin made a foul shot with 1:46 left in the third, the teams had finally combined for 100 points. New Jersey led 57-54 entering the fourth.
"It was our offense against their zone. It kind of stagnated and slowed us down. It is frustrating out there. You beat the first guy and you still got two 7-footers [213-centimeter players] back there," Nets guard Lucious Harris said.
Rose had three momentum-altering baskets in the first five minutes of the fourth. The first was a ferocious dunk over Dikembe Mutombo for the first points of the quarter.
"It was my first time to get him. I forgot to wave the finger afterward," Rose said. "I'm after a poster of that one."
Rose's second was another dunk that started the Spurs' 8-0 run, the third was a 2-footer from the lane after Rose faked out three defenders.
The last one gave the Spurs a 68-60 lead - their largest - and forced the Nets to call timeout.
Parker scored San Antonio's next five points by following up his own miss and converting a layup, then hitting his fourth 3-pointer in as many attempts. The 3 gave San Antonio a 73-62 edge with 5:21 left.
A 9-2 run got the Nets back in it, pulling them to 77-71. Two free throws by Harris, an airball by Parker and a dunk by Williams made it a two-point game.
The Nets never shot for the tie as Manu Ginobili stripped the ball from Harris, but Parker missed two free throws.
Duncan grabbed the offensive rebound, and Parker drove baseline and found Ginobili open in the corner. He took one dribble in and made a 12-footer - the biggest shot of the game - for an 80-75 lead with 0:43 left.
Kittles missed a runner and Williams missed a putback, leading to Duncan's 16th rebound with 31 seconds left. The Spurs wrapped it up from there at the free-throw line, with Duncan calmly hitting two for an 82-75 lead.
"We played the game the whole way through, which was a difference from the game before," Duncan said. "We have the opportunity to go into Game 4, get another one and really put them on their backs."
The Nets actually had their fast break working for a while - the first six minutes of the first quarter. Kittles had a dunk on the break for the game's first basket, and the game's first 3 also came from Kittles - and also on the fast break.
But that shot only made the score 9-6 at the midpoint of the first quarter - a hint of the slow pace to come.
A 12-2 run early in the second quarter gave the Spurs a 30-25 lead, and New Jersey scored only five points over the final 7:02 of the quarter to go into intermission trailing 33-30.
The teams broke the first-half record of 66 points set by Utah and Chicago in 1998.
TITLE: Ducks Out To Make History In Game Seven of Cup Finals
AUTHOR: By Ira Podell
PUBLISHER: The Associated Press
TEXT: EAST RUTHERFORD, New Jersey - Mike Babcock entered the interview room carrying his luggage and sporting a 5-o'clock shadow. The Anaheim Mighty Ducks' rookie coach was happy to be back in New Jersey, even after a tiring cross-country flight.
After six games against the Devils, all won by the home team, Babcock's players have one more chance to be the first road team to break through. If they were to do it Monday night in Game 7, the 10-year-old Ducks would win the Stanley Cup.
"I can't express it enough how exciting it is to be with a group of guys that have tried this hard and come this far and been this impressive. I'm honored to be sitting here talking about them," Babcock said Sunday.
After Babcock left the podium, three of his top players followed him. They were all dressed casually with room keys in hand. Resting before the final game of the season seemed to be soon on the agenda.
"I've been dreaming my whole life of winning the Stanley Cup," forward Rob Niedermayer said. "You pretend you're playing in Game 7 on the pond when you're growing up. This is a position that you look to reach throughout the career."
It's also one the Devils have become quite accustomed to over the past nine years. In that time, they've won two Cups and squandered a 3-2 series lead when it appeared the 2001 title would be theirs as well.
That was the only time since 1971 a team has blown a 3-2 lead. New Jersey and Anaheim are playing the 12th Game 7 in Stanley Cup finals history. Home teams are 9-2; the last road winner also was in 1971, Montreal at Chicago.
"Whatever happened in the past doesn't count," Anaheim goalie Jean-Sebastien Giguere said. "It's about what's going to happen [on Monday] that's going to count."
Anaheim is bucking the odds since so few teams have recovered from such holes to win the Cup. New Jersey is 11-1 at home in these playoffs, and only once since 1971 has a team rallied to win from a 3-2 deficit.
And the Ducks believe they have one more surprise in store when they take the ice at Continental Airlines Arena. They have already erased 2-0 and 3-2 deficits to New Jersey.
The Ducks lost the first two games of the finals in New Jersey, before getting even with two home wins. A trip back East didn't turn out well, as the Devils won Game 5 in a rout.
Facing elimination for the first time in this postseason, the Ducks responded again on home ice to tie the series 3-3.
"We've emotionally been a disaster," Babcock said. "Not that we don't have emotion. Keeping it under control has been the biggest challenge for us."
The big inspiration in Game 6 came when Anaheim captain Paul Kariya was leveled by a hit from New Jersey defenseman Scott Stevens. Kariya was flat on his back and appeared to have added a chapter to his already serious concussion history.
He was wobbly as he was helped to the dressing room, but was back shortly after. Then, he scored to give the Ducks a 4-1 lead and a trip back East. On Sunday, Kariya smiled and said he felt great.
"When the hit happened, everybody thought we wouldn't be seeing Paul for that game or maybe not the next game," Niedermayer said. "When he came back onto the bench, it was a big lift."
TITLE: Funny Cide Still Fan Favorite Despite Loss
AUTHOR: By Beth Harris
PUBLISHER: The Associated Press
TEXT: NEW YORK - The cheering never stopped for Funny Cide, the unlikely champion who proved as popular in defeat in the Belmont Stakes as he did winning the Kentucky Derby and Preakness.
Rain-soaked fans cheered and chanted the gelding's name while he walked on the track Saturday with a chance to win the Triple Crown.
"It gave you goose bumps, probably gave everyone goose bumps, even people that had other horses in the race," said Robin Smullen, Funny Cide's assistant trainer.
The favorite on the toteboard and with the fans, Funny Cide finished third in the mud, beaten by Empire Maker and Ten Most Wanted.
His defeat leaves racing without a Triple Crown winner for a record 26th consecutive year.
"I wish I could have won. I feel absolutely terrible for all the people that have been behind me so much and behind this horse," said Barclay Tagg, Funny Cide's trainer.
Both Tagg and winning trainer Bobby Frankel received positive reaction after the race, although Tagg's reception was much more boisterous.
He stopped in at a usually quiet Italian restaurant near the track, and the diners "went crazy, cheering, whistling clapping, shaking his hand and giving him hugs," Smullen said.
Tagg said: "I thought it was very nice."
Frankel stopped for his morning tea Sunday, and said: "The people in the deli recognized me. They all congratulated me."
Empire Maker held off a late charge by Ten Most Wanted to win by three-quarters of a length. Funny Cide was beaten by 4 1/4 lengths. Empire Maker finished second to Funny Cide in the Derby, but skipped the Preakness because of a foot injury.
"It's a good feeling to be right," Frankel said. "Finally, you hit it and everything worked out great. You end up being proud of yourself and the horse."
Despite his obvious satisfaction, Frankel wasn't immune to Funny Cide's appeal.
The story of the $75,000 New York-bred gelding, his 10 small-time owners, his obscure trainer and his hard-luck jockey proved irresistible even to non-racing fans.
"They did a really good job with their horse, and he ran great, but they had theirs," Frankel said. "It was somebody else's turn."
Tagg was content with how he had prepared Funny Cide.
"All you can do is get them there," he said. "At least we got them to all three races. A lot of people didn't."
Like Empire Maker, Ten Most Wanted gained some redemption by finishing second in the Belmont. The colt got bumped and hurt his back in the Derby, so trainer Wally Dollase held him out of the Preakness.
"Because of the Derby, everybody said he's not much, but he had a good excuse," Dollase said. "We've proved we got a very nice horse."
TITLE: Belgium Goes Ballistic After French Success
AUTHOR: By Paul Ames
PUBLISHER: The Associated Press
TEXT: BRUSSELS, Belgium - The revelry surrounding Justine Henin-Hardenne moved from center court in Paris to the historic Grand Place at home.
"It's hard to find words to tell you how much this means to me," Henin-Hardenne told a cheering crowd Sunday from the balcony of the capital's 15th-century city hall.
Henin-Hardenne gave Belgium its first Grand Slam champion on Saturday, beating Kim Clijsters 6-0, 6-4 in an all-Belgian final.
She is the first sports star to receive such a city hall welcome since the Belgian soccer team - including Clijsters' father, Leo - returned from the semifinals of the 1986 World Cup.
"Yesterday you saw two girls fighting for their country," Henin-Hardenne told the thousands packing Grand Place. "I promise you I won't change. I'll always try to represent Belgium as best I can around the world."
Her words repeatedly were interrupted by cheers and chants of "Juju, Juju." The crowd's loudest roar came when Pierre-Yves Hardenne, the player's husband of six months, grabbed her for a lingering kiss.
"You're fantastic," she told the crowd. "Thanks from the depths of my heart."
Clijsters and Henin-Hardenne are hugely popular in this country of 10 million where sports successes are rare. Several newspapers rushed out special Sunday editions to celebrate the moment.
"Justine Queen of Paris," ran a headline in the daily La Derniere Heure.
The paper covered its front and back pages with a giant picture of King Albert II flanked by Henin-Hardenne and Clijsters against a backdrop of the country's black-yellow-and-red flag.
Friends since tennis brought them together as children, French-speaking Henin-Hardenne and Dutch-speaking Clijsters have become symbols of unity in a country where linguistic divisions run deep.
"And the winner is? Belgium!" ran a headline in Het Laatste Nieuws, a Dutch-language daily.
"A national party," proclaimed Francophone paper Le Soir.
Clijsters enjoyed widespread praise for her gracious words and warm embrace for Henin-Hardenne after the match. She did not return to Belgium, remaining in Paris to celebrate her 20th birthday by winning the women's doubles final with Japan's Ai Sugiyama.
King Albert led a Belgian delegation in Paris on Saturday with most of the royal family with almost all government ministers and opposition leaders.
Foreign Minister Louis Michel said Henin-Hardenne and Clijsters had done more for Belgium's image than a dozen ambassadors.
"These two young women have achieved so much through their example, words just cannot express it," Michel told Le Soir.
TITLE: Mariners, Phillies Cruise To Doubleheader Sweeps
PUBLISHER: The Associated Press
TEXT: NEW YORK - The Seattle Mariners and Philadelphia Phillies made winning twice in one day look about as easy as possible.
Jamie Moyer became the first 10-game winner in the majors and the visiting Mariners outscored the New York Mets 20-1 in two games Sunday.
Kevin Millwood and Randy Wolf pitched the Phillies to a pair of impressive home victories against the Oakland Athletics.
"It was a long day and it will be a longer night, but I'll take it," Philadelphia manager Larry Bowa said before his team traveled across the country to play at Anaheim on Monday night.
Moyer (10-2) won his seventh straight start, pitching two-hit ball for seven innings as Seattle completed the sweep with a 7-0 victory. Ichiro Suzuki had four hits and Freddy Garcia (6-6) threw a six-hitter in the opener, a 13-1 rout.
Despite waking up with flu-like symptoms, Millwood (8-3) outpitched Mark Mulder (8-4) and Pat Burrell hit a three-run homer to help Philadelphia snap a four-game losing streak with a 7-1 win in the first game. Jim Thome and Bobby Abreu each homered and drove in two runs for an 8-3 victory in the nightcap.
Wolf (7-3) also went seven innings in the second game as Philadelphia completed its longest homestand of the year with a 6-6 record, including two doubleheader sweeps. The Phillies swept the Expos on June 1.
Seattle improved to 17-0 in day games and outhit the Mets 31-9. Both games were played in just 2 hours, 26 minutes.
The Mariners set a team record for wins on a road trip, going 11-1 during stops in Kansas City, Minnesota, Philadelphia and Shea Stadium. They were 10-0 in April 2002.
"This is our longest trip of the year," Suzuki said through a translator. "This result is not a small result."
In the opener, Seattle built an 8-0 lead against Al Leiter (6-3), who lasted only two innings. The Mets have played three doubleheaders this year and been swept each time, all at home - Milwaukee did it last Thursday and Arizona on April 27.
"We have to find a formula to win one game in there," manager Art Howe said.
There was more bad news for New York, too. Tom Glavine will miss a scheduled start for the first time in 11 years (Wednesday night at Texas) with a soreelbow and is not sure when he'll pitch again.
Chicago Cubs 8, N.Y. Yankees 7. In Chicago, Sammy Sosa got his 2,000th hit, Mark Prior struck out 10 in six innings and Moises Alou and Ramon Martinez homered as the Cubs held on to beat the New York Yankees to take two of three in the teams' first meeting since the 1938 World Series.
Prior (7-2) allowed three runs and seven hits, including Jason Giambi's 15th homer and Raul Mondesi's 11th.
Yankees starter Andy Pettitte (5-6) went just 1 2-3 innings, the shortest outing in a non-injury situation since he lasted just 1 1-3 innings against the Orioles on Sept. 29, 2000. The veteran left-hander, who has lost five of his last six decisions, gave up six hits and six runs.
Cubs first baseman Hee Seop Choi was resting at home, one day after a collision that sent him to the hospital with a concussion. Choi was placed on the 15-day disabled list and has been ordered to rest for the next week.
Montreal 3, Texas 2. San Juan, Puerto Rico, Brad Wilkerson's second run-scoring double broke a tie in the eighth and helped Montreal send Texas to its ninth straight loss.
Carl Everett and Juan Gonzalez hit consecutive homers for the Rangers, who were held to just two runs over their final 16 innings at cozy Hiram Bithorn Stadium.
The Expos finished their second Puerto Rican homestand with four straight wins and are 10-6 in their first two trips to San Juan, with the final six games coming in September. They averaged 14,216 fans, up from 11,338 at Olympic Stadium.
Alex Rodriguez was out of Texas' starting lineup for the second straight game with a bruised left knee, but struck out as a pinch-hitter, ending the game. He extended his consecutive-games streak to 447.
Anaheim 8, Florida 5. In Miami, Adam Kennedy and Garret Anderson hit run-scoring singles in a three-run fifth as Anaheim took advantage of an error by first baseman Derrek Lee to rally from a four-run deficit.
Ramon Ortiz (6-5) won his second straight start after going 0-3 in his previous five. Troy Percival, who came off the disabled list Saturday, got his eighth save.
(For other results, see Scorecard.)