SOURCE: The St. Petersburg Times
DATE: Issue #886 (54), Tuesday, July 22, 2003
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TITLE: Khodorkovsky Playing Political Hand
AUTHOR: By Catherine Belton
PUBLISHER: Staff Writer
TEXT: MOSCOW - Yukos chief Mikhail Khodorkovsky is openly raising the political stakes in his fight against snowballing investigations into his company, warning that the state risks turning back the clocks to totalitarianism and defending his moves to fund opposition parties as being key for maintaining stability.
 
"For me, the situation is clear - the law-enforcement structures decided that this was the best moment to show they could come to power," Khodorkovsky said in an interview broadcast on TV Center late Sunday.
 "Today we must definitely decide if our country's future will be totalitarian. If we hold strong, this will be resolved once and for all," he said. "However, there is a risk that we will once again return to this stagnant swamp."
 But as President Vladimir Putin returned from a five-day trip to northwest Russia Monday, there was still no sign of a clear resolution to the conflict that has rocked investor confidence. The whole affair, which began July 2 with the arrest of Khodorkovsky's right-hand man Platon Lebedev on embezzlement charges and has since escalated to include an investigation into possible tax evasion, accusations of murder and an armed raid on Yukos offices, has knocked billions of dollars off the stock market as concern mounted it could herald a new attack on Russia's fragile property rights.
 Economic Development and Trade Minister German Gref, in an interview published on Monday in the Profil weekly magazine, called on law-enforcement officials to bring the case to a swift end to make sure that the market calmed down. But political analyst Gleb Pavlovsky, seen by some as a Kremlin spin doctor from one of its many factions, said the dispute had already wrought disastrous results.
 "There is no private property in Russia - this is the conclusive result of an analysis of this situation," Pavlovsky said in comments published in Monday's Nezavisimaya Gazeta.
 Analysts have said that the case against Yukos comes as a result of an attack by former KGB men who moved into the Kremlin with Putin against the old oligarchic elite that made their fortunes and wielded immense political influence in the Yeltsin era. Khodorkovsky's remarks on Sunday refer to what has been seen as a battle for the heart and mind of Putin as he heads for a second term after elections next March.
 "At stake behind this struggle is the question of who has power in the next term. Who is going to run the government, parliament and the Kremlin," said Christopher Granville, chief strategist at United Financial Group.
 But Khodorkovsky's attempt to portray himself in this fight as the defender of democracy runs the risk of backfiring, analysts said Monday.
 If, just days after Lebedev was arrested, Khodorkovsky in his first interview on the affair to a Siberian TV station sought to strike a conciliatory note, saying that he would not finance political parties if the Kremlin did not approve, now he is defending his involvement in politics.
 "The country's stability cannot be obtained unless the left balances out the right," he said in the TV Center interview.
 Many analysts have seen the campaign against Yukos as punishment for Khodorkovsky's attempts to buy his own political backing in the State Duma. Putin himself last week lashed out at big business for using its clout in parliament to block reforms.
 "Khodorkovsky is now being less cautious than he was a few weeks ago," Granville said.
 Kremlin-connected political analyst Sergei Markov warned that Khodorkovsky risks antagonizing Putin.
 "Putin can handle criticism of policies as long as it does not turn into an attack on the country. Then he loses his cool," he said. "It's not gone that far yet, but it could do."
 Markov said that Khodorkovsky would have been better to stick to the more conciliatory tone struck by fellow oligarch Vladimir Potanin in an interview with ORT television on Sunday. In his first comments on the affair, Potanin warned that a new carve-up of property could undermine Putin's goal of trying to double GDP and overcome poverty.
 "I prefer the recipe that the president proposed: We will overcome poverty on the basis of economic growth and doubling GDP. That means that we have to create new things and not carve up what has already been done," Potanin said, Interfax reported.
 "It is not possible to consolidate when people are trying to overcome social injustice by taking something away from one person and then dividing it up between everyone else. That way you would achieve justice by making everyone equally poor," he said.
 At a Kremlin meeting on July 11 attended by the heads of political factions, Putin called for society to consolidate and not split into what he called " groups with their own narrow interests" in order to rid the country of poverty.
 On Monday, a big part of society responded to the call and rallied in defense of Yukos. The heads of the Russian Union of Entrepreneurs and Industrialists, the small business lobbying group OPORA Russia, and of human-rights organizations such as Helsinki Human Rights Watch and the Glasnost Defense Foundation are due to sign off on a letter to Putin calling on him to support their initiative "to bring an end to lawlessness and scare tactics, and restore stability."
 A copy of the draft letter obtained by The St. Petersburg Times says that representatives of small, medium and big business and civil-society organizations have joined together to defend the country against what they see as an attack on stability.
 It calls for the state to create a new social contract. The letter calls on the state to protect the results of past privatizations, and in return business is to take on social and moral responsibilities, such as ensuring transparency, bringing an end to corrupt schemes and taking part in social programs.
 The trouble is, analysts say, it's still not clear which way Putin wants to go. He has slammed business for trying to lobby in its interests and at the same time has said jailing businessspeople is not an appropriate way to deal with economic crime.
 But with the Moscow City Court due to hold hearings on Lebedev's detention Wednesday, investors and the country are expecting the first steps in some sort of resolution to come soon.

TITLE: Seleznyov Rumored To Grab Matviyenko's Job
AUTHOR: By Vladimir Kovalev
PUBLISHER: Staff Writer
TEXT: Should Presidential Representative in the Northwest Region Valentina Matviyenko win the race to become St. Petersburg's next governor, sources within the Russian Renaissance Party say that it's leader, State Duma Speaker Gennady Seleznyov, would be interested in replacing her.
 
Twenty nine potential candidates had filed to be registered to participate in the gubernatorial elections as of Monday evening.
 The news came as a surprise to some analysts, in view of Seleznyov's earlier comments questioning the need for the presidential-representative positions.
 Interfax quoted anonymous sources within the party last week as saying that Selznyov is one of the people in line for the post.
 "In the event that Valentina Matviyenko won the gubernatorial elections in St. Petersburg, Seleznyov could be offered to take the vacancy," the source said. "If such an offer was made, Seleznyov would accept the post, but still run as a candidate in [December's] State Duma elections as the head of the Party of Russia's Renaissance list."
 "If the party succeed in getting over the 5-percent-support barrier, he will hand over his mandate to the next candidate on the list," the source added.
 Half of the Stated Duma's 450 deputies are elected from single-mandate constituencies, while the other half are distributed between parties on the basis of overall percentage of the vote received. Parties must garner at least five percent of the vote in order for candidates from their lists to qualify.
 The presidential administration, contacted on Monday, refused to comment on the report.
 "We don't comment on announcements made by other people, even they were made by the president," an official at the presidential press service said. "We don't have any information about this question."
 Seleznyov, who won his current Duma seat as the No. 2 candidate on the Communist party list in 1999, left the Communist Party after and set up the Russia's Renaissance Party in June 2000. He said that the party would support president Vladimir Putin.
 One party representative said on Monday that the report came as a surprise to him as well.
 "The only thing I can say at the moment is that we've decided to support Matviyenko in the gubernatorial elections," said Yevgeny Nikiforov, the first deputy head of the Russian Renaissance Party's St. Petersburg branch. "As for the possible appointment, we have not discussed this so far."
 "Personally, I don't think that it's a very good idea, because Seleznyov had repeatedly said that the post of presidential representative office is temporary and that it would been better just to abolish it," he added.
 Despite the surprise the story meant for some analysts, others said that the move would make sense for Seleznyov after the Duma elections.
 "This is a question of time. I think that, as speaker, Seleznyov will run for the State Duma,, because he is third on the list of senior political posts in the country, a level of power not comparable to those of the regional presidential representatives," Yevgeny Volk, a political analyst at the Heritage foundation, said in a telephone interview on Monday. "But it is very likely that he will be elected from a single-mandate district and will have no prospects to land a managing position [in the Duma]."
 "In this case, the position of presidential representative could be given to him as a reward for his loyalty [to the Kremlin], " Volk explained, "Seleznyov is a St. Petersburg native and was a newspaper editor ... He's the type of person that would be acceptable to everyone in the city."
 Ruslan Linkov, the head of the St. Petersburg branch of the Democratic Russia party, said that, if Seleznyov does have his eye on Matviyenko's job, the most likely explanation is financial.
 "His allies have begun talks on the topic with the presidential administration. They are looking at this as a project that could generate significant income by lobbying for certain economic interests in the region," Linkov said in a telephone interview on Monday. "[His] people understand that the influence Seleznyov had during his eight years working as State Duma speaker is coming to an end, so now they are looking for a way out."
 According to Linkov, among his other business connections, Seleznyov is linked with Gosznak and Spetsznak, two companies that hold the exclusive rights to provide holographic stickers used to identify alcohol and Tobacco products after excise taxes had been paid. The companies received government contracts as a result of a 1997 federal decree requiring that the companies providing the stickers had to be in private hands, Linkov said.
 "The governmental decree was lobbied by Seleznyov himself," Linkov said. "His relatives or allies are among the shareholders of these companies, which have annual revenues of about $1 billion."
 One local political analyst. Leonid Kesselman of the Sociology Department at the State Academy of Science, is against the idea of Seleznyov as the presidential representative, but said that he could understand why the Duma speaker might be an attractive option for the Kremlin.
 "I really hope that this is not going to happen. Seleznyov is a person of the past and, although he tries to compare himself with [the Polish president] Alexander Kvasnevsky, who has the same [Communist party] background, it doesn't work," Kesselman said in a telephone interview on Monday. "[On the other hand] he is a very manageable person, as his experience in the State Duma shows. I don't remember him coming out with any bright initiatives. The Kremlin likes this type of person in its vertical of power."

TITLE: Liberians Call On America For Help
PUBLISHER: The Associated Press
TEXT: MONROVIA, Liberia - A thundering barrage of mortars shook Liberia's capital Monday, hitting two U.S. Embassy compounds and residential neighborhoods, and killing more than 90 people, as government and rebel forces fought over President Charles Taylor's last stronghold.
 
Wailing with grief, Liberians lined up bloodied, mangled bodies outside the U.S. Embassy, demanding to know why Washington has not sent troops to end more than a decade of strife in the country founded by freed American slaves.
 With more than 360 people injured, it appeared to be the bloodiest single day of fighting in three rebel attempts to take Monrovia in the past two months.
 Helicopters swept into the embassy Monday, bringing in a Marine contingent to protect the facility and evacuating some foreigners.
 In Washington, officials announced that some 4,500 more American sailors and Marines have been ordered to position themselves closer to Liberia to be ready for possible duty in the embattled West African nation.
 "We're concerned about our people," U.S. President George W. Bush told a press conference in Crawford, Texas.
 But he indicated that he had not yet decided the size of a U.S. force that might be sent to help a promised West African peacekeeping mission in Liberia. "We continue to monitor the situation very closely," Bush said.
 During more than two hours of sustained mortar fire, a shell slammed into a U.S. Embassy residential compound where some 10,000 terrified Liberians had taken refuge, killing 25 people, aid workers said. Many more were wounded in the strike, including two Liberian embassy guards.
 Across the street, in the sprawling embassy complex overlooking the Atlantic Ocean, a shell hit the commissary building. There were no reports of injuries there.
 After the blasts, enraged Liberians dragged bodies from the residential compound and lined them up in front of the embassy, next to a wall emblazoned with the American seal.
 "We're dying here," screamed some in the crowd, as two American service personnel in camouflage watched from behind bulletproof glass.
 One man held up a hastily scrawled sign: "Today G. Bush kill[ed] Liberia people."
 Down the hill from the Embassy, a small boy lay face-down in the grass - victim of another blast just meters away. Leaves of greens he was collecting for food lay scattered around his body. Neighborhood residents used a mat to carry away a man bleeding from the leg.
 In a densely populated residential neighborhood, a shell hit a house, killing 18 people in one strike, emergency workers at the scene said.
 At least 47 Liberians were killed in other strikes Monday, officials at Monrovia's main John F. Kennedy hospital and aid groups said.
 More than 200 injured people arrived at the hospital in pickup-trucks, police cars and wheelbarrows. About 50 others were being treated at an International Committee of the Red Cross trauma center and 112 at two clinics set up by French medical group Medecins Sans Frontieres, or Doctors Without Borders.
 Tom Masland, an American who is Newsweek's African regional editor, was hit in the arm by shrapnel in Monrovia's port area, scene of fierce fighting since Saturday.
 Before the shelling started, American HH-60 Pave Hawk helicopters landed in U.S. Embassy compound in driving rain, dropping off about half of a 41-member Marine security team. Dressed in green camouflage, body armor and helmets, they jumped out and ran up a hill.
 About 23 foreign humanitarian workers and journalists clutching bags and backpacks then ran down to the spinning aircraft as Marines and embassy officials shouted: "Go, go." Among them were the United Nation's last seven foreign staffers, who had returned to Monrovia just two weeks before during a lull in fighting
 Many expressed frustration at having to leave.
 "We came in to do a job. We have the ability and resources to do the job. But we don't have the security," said Eleanor Monbiot, of World Vision.
 Hundreds of disappointed Liberians stood in the street outside, many asking when Marines would come to help them.
 "What we need aren't those that are just coming to mind American properties, but those who will be deployed on the ground to give us the feeling that peace is really coming," said Moses Smith, 32, who stood in a cluster of people following events on a hand-held radio.
 West African countries have promised to send more than 1,500 troops to enforce a repeatedly violated June 17 cease-fire. But many here won't be satisfied that stability is possible unless U.S. peacekeepers land in the country.
 "The international community has once again let the people of Liberia down," Information Minister Reginald Goodrich said.
 He accused the Liberians United for Reconciliation and Democracy rebel movement of a "very vicious, very murderous" attack.
 But Joe Wylie, a LURD delegate at peace talks in nearby Ghana, said the government was also firing shells.
 "LURD was not responsible for shooting mortars into the embassy," Wylie said. "We have our backs to the U.S. Embassy... They (government forces) were shooting at us."
 He threatened to capture Taylor if he did not leave voluntarily.
 Bush has said any deployment of U.S. troops is conditional on the departure of Taylor, a former warlord indicted for war crimes in Sierra Leone, where he supported a notoriously brutal rebel movement.
 Taylor has pledged to resign and accept an offer of asylum in Nigeria - but only after peacekeepers arrive to ensure an orderly transition.
 Until then, Taylor has vowed to fight to the last man in Monrovia, his last remaining stronghold after three years of civil war. LURD controls most of the north of the country and a smaller rebel faction is in the southeast.
 Fierce fighting continued Monday in the port area, where government and rebel fighters in jeans and T-shirts traded machine gun and grenade fire along two bridges.
 Taylor launched Liberian's last civil war in 1989, emerging in 1996 as the country's strongest warlord. He was elected president the following year, and now faces rebels who include former rivals from the earlier war.

TITLE: Moscow Police Pan Serial-Killer Theory
AUTHOR: By Simon Saradzhyan
PUBLISHER: Staff Writer
TEXT: MOSCOW - At least seven young women have been strangled to death this month in Moscow, prompting fears that a serial killer is on the loose. 
 
But investigators said Monday that they doubt that the murders are the work of one or even two different serial killers because they have little in common with one another.
 "Not yet, " said police spokesperson Alexei Vakhromeyev, when asked whether the police had collected evidence connecting the murders.
 The most recent two murders took place over the weekend. The first victim was found at 1:10 p.m. on Saturday near an apartment building in eastern Moscow. She had bruises on her neck where she had been strangled and she had been struck on the head, the police said. She was wearing a bangle on her left arm.
 The police refused to release her age or name.
 The second woman was found several hours later, lying in bushes near a pond on the outskirts of northwestern Moscow. The 17-year-old girl was a student of the Temiryazev Agricultural Academy, the police said.
 The Zhizn daily identified the victim as Tatyana Nikishina and said that she had been strangled with her own bra.
 Investigators believe that the girl was killed over a personal dispute, Gazeta.ru reported, citing a police spokesperson. Suspects have already been identified, and the police are looking for them, the spokesperson said.
 Two more young women were murdered on Saturday, but both died after being struck on the head, not from being strangled, the police said.
 The killings came after at least five young women were found strangled in northeastern Moscow in the first two weeks of July. Some of them were tortured and sexually assaulted before being killed, the police said.
 Still, investigators believe that it is highly unlikely that the crimes are all connected. 
 "There are too many differences," said Vakhromeyev, who represents the police's elite Criminal Investigations Directorate.
 For instance, the killer or killers strangled some of the victims with their bare hands and others with clothing or ropes, Vakhromeyev said. Serial killers usually kill all of their victims in an identical manner, he said.
 No arrests have been made in any of the seven cases, she said.
 Deputy City Prosecutor Yury Sinelshchikov has ordered a team of criminologists to examine all of cases for possible similarities, she added.
 "We are not ruling out the idea of serial murders, but this is not the main lead given the differences in their markings," said Svetlana Petrenko, a spokesperson for the city prosecutor's office.
 Vladislav Polikarkin, the investigator at the northeastern branch of the city prosecutor's office who is investigating his district's murders, could not be reached for comment on Monday.
 The first of woman reported to have been strangled this month was a 28-year old graduate of the Culture Institute. She was beaten, sexually assaulted and then strangled, the police said. Police found her body on the afternoon of July 1. Police have only identified her by her first name, Yulia.
 The next day, the body of an 18-year-old woman was found. The victim, identified as Ksenia, had been beaten, raped and strangled.
 The body of the third victim, Irina Gera, 28, an employee of the City Duma, was found near railroad tracks on July 4. She had been sexually assaulted and strangled with the strap of her purse.
 On July 8, the fourth victim was found hanging on the belt of her robe attached to a door handle in her apartment. The 25-year old woman worked at an outdoor market and might have moonlighted as a prostitute, the police said. They suspect she was killed by a client or by her boyfriend, who works at the same market.
 The fifth victim, 32-year-old grade school teacher Yelena Tolokonnikova, was killed late July 10 or early July 11, and her body was found behind a row of garages.

TITLE: Car-Bomb Found Near Earlier Blast Site
AUTHOR: By Jim Heintz
PUBLISHER: The Associated Press
TEXT: MOSCOW - Security agents discovered a car wired with explosives near the headquarters of the Kremlin-backed Chechen administration, less than two weeks after the building was reopened following a truck-bombing, an official said Monday.
 
The discovery of the car bomb in Grozny on Sunday underlined the violence and disorder that afflict the city despite a large military presence.
 Elsewhere in Chechnya, six federal soldiers and six rebels died in a shootout in the mountain hamlet of Dyshne-Vedeno that began when rebels attacked a military patrol, said Colonel Ilya Shabalkin, a spokesperson for the military in Chechnya. 
 Shabalkin told news media that agents of the Federal Security Service had found an automobile containing a bomb about 70 meters outside the perimeter of the administration complex. The bomb, consisting of about 120 kilograms of plastic explosive, was disarmed, he said.
 The Chechen-administration complex was heavily damaged in December when suicide attackers drove two truck bombs through the security cordons and detonated them, killing 72 people. Chechnya's Moscow-appointed acting president, Akhmad Kadyrov, hailed the building's July 10 reopening as a sign of determination to bring stability to the region.
 Meanwhile, an envoy of Chechen rebel leader Aslan Maskhadov said that he discussed prospects for peace in Chechnya with State Department and Pentagon officials and members of Congress during a five-day trip to Washington last week.
 Salambek Maigov said that he went at the invitation of the American Committee for Peace in Chechnya, co-chaired by former National Security Adviser Zbigniew Brzezinski.
 Maskhadov appointed Maigov this year to kick-start negotiations with Russian officials. However, the Kremlin has rejected the idea of talks with Maskhadov, calling him a terrorist.
 "The very fact that I was received within the Pentagon" proves that U.S. officials do not believe Maskhadov's government is a terrorist group, Maigov said by telephone from London, where he is holding more meetings.
 Maigov said that he told U.S. officials that Maskhadov supported the anti-terrorist coalition and that recent suicide bombings in Moscow were the work of "a very small, marginal group."
 He said he appealed to the United States "to act as a political guarantor" of a peace process.
 The Kremlin has called an Oct. 5 election for the Chechen presidency - with Maskhadov excluded from the ballot - which it hopes will serve as a political solution and help end the daily attacks on federal forces. Maigov said that the vote would solve nothing.

TITLE: IN BRIEF
TEXT: <b>Dirty Cops
 </b>

ST. PETERSBURG (SPT) - At a meeting with journalists Monday, Vladimir Zubrin, the deputy general prosecutor for the Northwest Region, said that last week's arrests of two St. Petersburg police employees "will have larger repercussions," Interfax reported.
 "We became involved with the issue in June and, on July 17th, the captain and lieutenant were arrested according to our orders," Zubrin said.
 While stressing the severity of the case, Zubrin added that the two suspects would ultimately face criminal trials.
 "This question is very important and serious," Interfax quoted him as saying. "Police employees cannot be permitted to act like bandits, and it is even worse when they themselves commit extremely serious crimes."
 Zubrin said that charges against the two would likely include murder and that the organization of their crimes had been interregional in character, the Interfax report said.
 
 
<b>Who's Next?
 </b>

ST. PETERSBURG (SPT) - Former St. Petersburg Governor Vladimir Yakovlev, who left the office in June to become a deputy prime minister in Mikhail Kasyanov's government, said in an interview that he believed that Valentina Matviyenko would likely win the Sept. 21 vote to fill the post that he vacated in City Hall, Interfax reported on Monday.
 Yakovlev made his comments about the election chances of the presidential representative in the Northwest Region on Echo Moskvy radio station.
 "My belief is that the odds in the election are [Matvienko's] favor," Yakovlev said.
 While commenting on Matviyenko's chances, Yakovlev would not say who he would support in the campaign, saying that he didn't want anyone to be put in "an uncomfortable position," Interfax reported.
 
 
<b>Minsking Words
 </b>

MOSCOW (Reuters) - Belarussian President Alexander Lukashenko, who has been widely criticized for stifling the media, went live on NTV on Saturday to defend a decision this month to kick the TV station out of his country.
 Speaking on a satellite link from Minsk, Lukashenko said that NTV had no one to blame but itself. Belarus has said that NTV's Minsk correspondent was expelled for "slandering the government".
 "If NTV is guilty, and that is a fact - we can give you the facts once again - you should have apologized, as decent people do," Lukashenko thundered in a 20-minute prime-time appearance.
 "[You should have] apologized before the country, not before me. And the issue would have been settled. You started piling up pressure instead. So we acted according to the law," he said.
 Five minutes earlier Lukashenko had praised NTV as the most independent and objective of Russia's three main TV channels.
 NTV's expulsion from Belarus, with which Russia has long-standing plans to form a "union state", was sparked by an interview with opposition figure Stanislav Shushkevich during a report on the funeral of writer Vasil Bykov.
 Tens of thousands of people attended services for Bykov, a key figure in Soviet literature, who had denounced Lukashenko and spent his last years outside Belarus. 



TITLE: Report: Putin Target To Be Within Reach
AUTHOR: By Boris Grozovsky
PUBLISHER: Vedomosti
TEXT: The size of the country's economy can be doubled much sooner than the deadline set by President Vladimir Putin, according to the Interactive Research Group, or IRG. 
 
According to IRG, the State Statistics Committee greatly underestimates the shadow economy and all that is needed to see gross domestic product rise is to cut taxes and calculate GDP in dollars rather than rubles.
 Russia's real GDP last year wasn't $347 billion, but $500 billion, IRG said, and predicted that it could reach $1 trillion in five years.
 Based on surveys of Russian companies and its own research into the consumer market, IRG demonstrated that the State Statistics Committee is greatly underestimating real incomes and consumer spending in Russia.
 Of the official $347 billion, $175 billion was domestic spending, $60 billion was state spending, $74 billion was savings or investments and $37 billion was net exports. But according to Alexander Utochkin, an economist with IRG, official statistics are only accurate for state spending. 
 In his opinion, consumer spending and the consumer goods market was worth between $290 and $310 billion in 2002, while investments were around $100 billion. 
 Meanwhile, net exports were actually lower than the committee's figures, due to hidden imports of about $25 billion. Therefore, says Utochkin, real GDP last year was between $490 and $500 billion.
 The State Statistics Committee estimates that the shadow economy accounts for 20 percent to 25 percent of GDP, while IRG puts the figure at between 45 percent and 50 percent.
 &quot;These figures are possible,&quot; said Peter Westin of Aton. 
 Based on Westin's own research the shadow economy is gradually contracting and in 2002 accounted for 37 percent of GDP, though this, he emphasized, was &quot;the minimum value.&quot;
 Westin compared the rising GDP to the increased use of electricity, transport services, and other indicators. The committee's figures for industry can generally be believed, he said, but added that it underestimates the services sector and especially small businesses.
 Utochkin agreed: &quot;Small business accounts for around 25 percent of GDP, not 10 percent.&quot; About 60 percent of the $150 billion IRG is adding to GDP comes from small business activity that falls below the committee's radar, he said.
 &quot;Small business is about 100 percent in the shadow economy,&quot; said Stanislav Voskresensky, deputy head of the tax committee of the Russian Union of Industrialists and Entrepreneurs.
 &quot;If GDP grows at 7 percent to 8 percent per year in real ruble terms, and the real exchange rate sees the ruble rising against the dollar by 7 percent to 8 percent a year as well, GDP could exceed $1 trillion as soon as 2007,&quot; said Utochkin.
 Utochkin said that the real rate of income tax paid by Russian citizens in 2002 was 3.5 percent, and the real rate of social security tax was 10.8 percent.

TITLE: Retail Rings Up $11.7 Bln Per Month
AUTHOR: By Guy Faulconbridge
PUBLISHER: Bloomberg
TEXT: MOSCOW - Retail sales rose for a fourth month in June, as almost five years of growth put extra wages in consumers' pockets to pay for such goods as mobile phones, cosmetics and electronics.
 
Retail sales in June grew an annual 8.8 percent to 356.5 billion rubles ($11.7 billion), the largest volume since December 2002, when spending rose before the New Year holiday and Russian Orthodox Christmas in January.
 &quot;The consumer-goods market is doing extremely well,&quot; said Pascal Clement, chief executive officer of PPE Group, one of the country's biggest mail-order companies. &quot;The future is here. We are seeing big demand in the regions, and that is very important.&quot;
 Russia raised its growth forecast for the fifth time this year to 5.9 percent. The economy grew 6.4 percent in 1999, 10 percent in 2000, 5 percent in 2001 and 4.3 percent in 2002.

TITLE: IN BRIEF
TEXT: <b>Sibur Ups Tire Output
 </b>

MOSCOW (Prime-Tass) - The country's top petrochemical company Sibur saw its tire production increase by 9.5 percent on the year in January-June to 8.7 million units, the company's press service said Monday.
 In 2002, the company produced 17 million tires, up from 15.5 million in 2001.
 Sibur's tire-producing plants are Omsk-based Omskshina, the Yaroslavl Tire Plant, Volgograd region-based Voltire, Yekaterinburg's Uralshina and the Dneproshina plant, based in the Ukrainian city of Dnepropetrovsk.
 Gazprom holds a 50.67 stake percent in Sibur.
 
 
<b>Revisiting Oracle Deal 
 </b>

MOSCOW (Prime-Tass) - The board of directors of national telecoms holding Svyazinvest on July 31 will consider the $153 million purchase of U.S.-based Oracle's enterprise resource planning software system, a spokesperson with the country's Investor Protection Association said Monday.
 Earlier, the Soros Foundation, on behalf of George Soros' Mustcom Ltd., a Svyazinvest shareholder, demanded that the board justify the large price tag and its reason for not holding a tender for the contract.
 Mustcom has a 25 percent plus one share stake in Svyazinvest.
 Svyazinvest's other shareholders are the Property Ministry, which holds 50 percent plus one share, and the State Property Fund, which has a stake of 25 percent minus two shares.
 On May 28, the Investor Protection Association held a meeting with Svyazinvest's general director Valery Yashin to discuss the purchase.
 As part of its planned privatization, Svyazinvest will be broken into seven regional subsidiaries.
 On June 3, all of the seven subsidiaries of Svyazinvest approved the Oracle deal.
 
 
<b>Beer Boom Subsides
 </b>

MOSCOW (Bloomberg) - The country's beer market, one of the world's fastest-growing over the last two years, should see output climb this year by 4 percent as a colder first half and an excise tax imposed at the start of the year crimp demand, Renaissance Capital said. The forecast was below its prior estimate.
 The Moscow-based investment bank also cut its recommendation for Baltika Brewery, the country's largest beer producer with about 24 percent of the market in 2002, to hold from buy.
 Renaissance lowered its forecast for growth this year in beer output from 7 percent after the State Statistic Committee said last week first-half production grew 2 percent to 359.5 million decaliters. The market expanded by 18 percent in 2001 and 12 percent in 2002, attracting companies such as Heineken NV, the world's third-largest brewer, which paid about $400 million to acquire the Bravo brewery in St. Petersburg in 2002.
 
 
 
<b>Gas Exports Up
 </b>

MOSCOW (Reuters) - Gazprom said Monday that its exports to Western and Central Europe rose 8.29 percent between January and June 2003.
 The world's largest gas firm, which supplies a quarter of Europe's gas, said it exported 71.76 billion cubic meters of gas in the first six months of 2003, compared with 65.81 bcm in January-June 2002.
 Gazprom's exports started rising from February, as clients asked for more supplies because of a long, cold winter.
 
 
<b>Debt Equal by 2008
 </b>

MOSCOW (Bloomberg) - Russia plans to have the same amount of foreign and domestic debt by 2008, Interfax reported, citing Deputy Finance Minister Bella Zlatkis at a conference in Moscow.
 Foreign debt makes up about 82.3 percent of the country's total debt and domestic debt makes up about 17.7 percent, Zlatkis said, Interfax reported. In three years, Russia wants to reduce foreign debt to 75 percent, she said.
 By 2008, Russia wants to have an equal amount of foreign and domestic debt, she said, the news service reported.
 Russia, which is running a budget surplus for the fourth year in a row, has so far used the extra revenue to reduce its outstanding debt, partly by paying back some obligations ahead of schedule. As of the next year, the country plans to put its budget surplus into a fund created to help the economy weather declines in oil prices or other external shocks. 



TITLE: Piracy Peddlers Feel the Pinch
AUTHOR: By Alex Nicholson
PUBLISHER: Staff Writer
TEXT: According to amendments to regulations on the sale of goods that were signed by Prime Minister Mikhail Kasyanov on Tuesday, every CD, DVD and cassette must now display the name and location of its manufacturer and that manufacturer's license number.
 &quot;I think the Press Ministry has done a great job to push this legislation through,&quot; said Chris Abel-Smith, a film industry veteran and a founding member of the Russian Video Association and Russian Anti-Piracy Organization.
 &quot;The key here is enforcement, and the big question mark is if the police are going to enforce this legislation satisfactorily or not - or if it is just going to [produce] more corruption,&quot; he added.
 Moscow police spokesperson Lidia Lagutkina said that it was too early to tell if any noticeable changes will result from the decree because &quot;we haven't yet received this document.&quot;
 Russia's burgeoning pirate industry is second only to China's.
 The counterfeit-music market alone swelled year on year by 25 percent to $311 million, according to the International Federation of the Phonographic Industry.
 And Reuters reported last week that Hollywood's top lobbyist, Jack Valenti, is due in Moscow in September for high-level talks on movie piracy.
 Konstantin Zemchenkov, director of the Russian Anti-Piracy Organization, said that while the resolution will most likely just push counterfeit goods under the counter, the new amendments were welcome news.
 &quot;It will improve the situation,&quot; he said. He said that he expected that police activity would intensify in the run-up to a meeting with enforcement bodies at the Press Ministry later this month.
 Kasyanov signed the resolution a day before Interpol Secretary-General Ronald Noble was due to address members of the U.S. Congress in Washington on the links between piracy and terrorism.
 The Associated Press reported that Noble was expected to present evidence that a range of terrorist groups had profited from the production or sale of counterfeit goods, including paramilitaries in Northern Ireland and Chechen rebels.

TITLE: Russia Offers Iran $1Bln to Carve up Caspian Sea
PUBLISHER: Bloomberg
TEXT: MOSCOW - Russia is offering Iran half of a $1-billion investment project to develop offshore oil and natural gas fields in an area of the Caspian Sea claimed by both Iran and Turkmenistan, Moscow's special envoy to the region, Viktor Kalyuzhny, said Friday.
 
Turkmenistan would own the other half of the four fields, Kalyuzhny said at a news conference in Moscow.
 The fields contain 2.9 billion barrels of oil and 300 billion cubic meters of gas, enough to meet British gas consumption for three years, according to estimates by Itera, a participant in the project.
 &quot;There is no final decision yet on Iran, as to whether it will join the project as an equal partner,&quot; Kalyuzhny told reporters.
 &quot;We made a presentation for Iran and it's necessary to sign an agreement,&quot; he said.
 Russian and Western oil and gas companies are competing to develop the Caspian region.
 The area's proven reserves of 220 billion barrels are enough to supply the world for eight years.
 Disputes over dividing up the oil-rich Caspian seabed have delayed projects to explore the region.
 Of five Caspian states, Turkmenistan and Iran have not agreed on dividing the seabed.
 Two Russian state-owned companies, Rosneft and Zarubezhneft, together with privately owned Itera, Russia's second-largest natural-gas producer last year, set up a venture called Zarit to operate Turkmenistan's part of the project, Kalyuzhny said. The partners had planned to extract about 9 bcm of gas per year, according to Itera.
 Itera and Rosneft are holding 37 percent each of Zarit, with the remaining 26 percent held by Zarubezhneft.
 The partners plan to start exploring the fields in the second half of this year, Zarubezhneft said in a statement posted on its Web site.
 Iran has said that it is opposed to the division of the Caspian and supports using the sea's resources together, which was the approach followed before the fall of the Soviet Union.

TITLE: Two Former Officials Convicted of Bribery
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW - Two former high-ranking Economic Development and Trade Ministry officials were convicted of bribery Friday by the Moscow City Court.
 
Anatoly Lifanchikov served as head of the ministry's agriculture-industry department from 1992 to 2000. He and his former deputy, Vladimir Korneyev, had been under investigation for extortion by the Federal Security Service's economic security division since May 2000.
 Lifanchikov, 66, received a suspended sentence of 8 1/2 years, with a five-year probation period. Korneyev, 63, received a suspended sentence of seven years with a three-year probation period.
 Neither man pleaded guilty to bribery but Lifanchikov pleaded guilty to illegal arms possession, the court said.
 Investigators documented more than 70 cases where Lifanchikov and Korneyev used their position to influence decisions on providing state subsidies to agricultural producers.
 Besides monetary bribes, the two were accused of accepting expensive gifts and free vacations.

TITLE: Dow Falls 93, NASDAQ Loses 28 as Rally U-Turns
AUTHOR: By Amy Baldwin
PUBLISHER: The Associated Press
TEXT: NEW YORK - Uneasy following downbeat earnings from Merck and Lexmark International, investors sold off stocks Monday to lock in profits from Friday's rally. Prices on Wall Street fell sharply.
 
The downward pressure came despite better-than-expected earnings and an encouraging outlook from 3M, indicating that investors on the whole are less impressed with second-quarter results than they were with those of the first quarter, which prompted huge rallies.
 Analysts also attributed the declines to the market having advanced too far, too fast.
 &quot;All this is about is the fact that the market has gone very far over the last 16 weeks, specifically the NASDAQ. It has to pull back ... I think all that has happened here is that the market is just pooped out,&quot; said Gary Kaltbaum, president of Investors' Edge Partners, a money-management firm in Orlando, Florida.
 In midafternoon trading, the Dow Jones industrial average was down 92.58, or 1 percent, at 9,095.57, wiping out much of Friday's gain of 137.33.
 The broader market also retreated. The NASDAQ dropped 28.10, or 1.6 percent, to 1,680.40. The Standard &amp; Poor's 500 index declined 14.80, or 1.5 percent, to 978.52, following a weekly loss of 0.5 percent.
 Monday's economic data met economists' expectations. The Conference Board reported that its Index of Leading Economic Indicators advanced for a third month, rising by 0.1 percent in June. The index gauges what economic conditions are likely to be like in the upcoming three to six months.
 Earnings reports Monday were mixed, but investors seemed to focus on those that were disappointing.
 &quot;There is this feeling that because of the great run we have already had that some of the good news has been built into the market,&quot; said Robert Froelich, chief investment strategist for Deutsche Asset Management in Chicago.
 The Dow's biggest loser was Merck, which dropped $2.15 to $59.62 after missing earnings expectations by a penny a share. Merck's news had a negative effect on other drug makers, with Lilly falling $0.97 to $66.21 and Pfizer declining $0.84 to $32.55.
 Printer maker Lexmark slid $13.60, or 18.5 percent, to $59.30, having also missed earnings estimates by a penny and having cut its third-quarter outlook. Rival Canon also traded lower, declining $1.45 to $45.70.
 3M climbed $5.67 to $135.85 after reporting second-quarter profits beat analysts' forecast by 5 cents a share and raising its estimates for the year. It was easily the Dow's biggest gainer.
 As companies report second-quarter earnings, the market hasn't seen the large rallies that followed the release of first-quarter results. Some analysts say that's because there haven't been enough companies raising their earnings estimates for the third and fourth quarter, even though most of them have been meeting or beating second-quarter expectations.

TITLE: Group: Oil Eyed By Task Force
AUTHOR: By Josef Hebert
PUBLISHER: The Associated Press
TEXT: WASHINGTON - Vice President Dick Cheney's energy task force appeared to have some interest in early 2001 in Iraq's oil industry, including which foreign companies were pursuing business there, according to documents released Friday by a private watchdog group.
 
Judicial Watch, a conservative legal group, obtained a batch of task force-related Commerce Department papers that included a detailed map of Iraq's oil fields, terminals and pipelines as well as a list entitled &quot;Foreign Suitors of Iraqi Oilfield Contracts.&quot;
 The papers also included a detailed map of oil fields and pipelines in Saudi Arabia and in the United Arab Emirates and a list of oil and gas development projects in those two countries.
 The papers were dated early March 2001, about two months before the Cheney energy-task force completed and announced its report on the administration's energy needs and future energy agenda.
 Judicial Watch obtained the papers as part of a lawsuit by it and the Sierra Club to open to the public information used by the task force in developing U.S. President George W. Bush's energy plan.
 Tom Fitton, the group's president, said that he had no way to guess what interest the task force had in the information, but &quot;it shows why it is important that we learn what was going on in the task force.&quot;
 &quot;Opponents of the war are going to point to the documents as evidence that oil was on the minds of the Bush administration in the run-up to the war in Iraq,&quot; said Fitton. &quot;Supporters will say they were only evaluating oil reserves in the Mideast, and the likelihood of future oil production.&quot;
 The task-force report was released in May 2001. In it, a chapter titled &quot;Strengthening Global Alliances&quot; calls the Middle East &quot;central to world oil security&quot; and urges support to be given to initiatives by the region's oil producers to open their energy sectors to foreign investment. The chapter does not mention Iraq, which has the world's second largest oil reserves after Saudi Arabia.
 Commerce Department spokesperson Trevor Francis said: &quot;It is the responsibility of the Commerce Department to serve as a commercial liaison for U.S. companies doing business around the world, including those that develop and utilize energy resources. The Energy Task Force evaluated regions of the world that are vital to global energy supply. The final report, released in May of 2001, contains maps of key energy-producing regions in the world, including Russia, North America, the Middle East and the Caspian region.&quot;
 A spokesperson for the vice president did not immediately return a phone call seeking comment Friday.
 A two-page document obtained with the map and released by Judicial Watch lists, as of March 2001, companies in 30 countries that had an interest in contracts to help then-President Saddam Hussein develop Iraq's oil wealth.
 The involvement of Russia and France has been documented. 
 Also on the list were companies from Canada, Australia, China, Germany, Indonesia, Ireland, India and Mexico. 
 Even Vietnam had interest in a service contract and, according to the paper, was close to signing an agreement in October 1999.

TITLE: If Not Hussein or Bin Laden, Then Who Is It?
AUTHOR: By Daniel Benjamin and Steven Simon
TEXT: In all of the debate over the disputed claims in U.S. President George W. Bush's State of the Union address, we must not forget to scrutinize an equally important, and equally suspect, reason given by his administration for toppling Saddam Hussein: Iraq's supposed links to terrorists.
 
The invasion of Iraq, after all, was billed as Phase II in the war on terror that began after the attacks of Sept. 11, 2001. But was there ever a credible basis for carrying that battle to Iraq?
 Don't misunderstand - we should all be glad to see the Iraqi people freed from Hussein's tyranny, and the defeat of Iraq did spell the demise of the world's No. 4 state sponsor of international terrorism (Iran, Syria and Sudan all have more blood on their hands in the last decade). But the connection the administration asserted between Iraq and al-Qaida seems more uncertain than ever.
 In making its case for war, the administration dismissed the arguments of experts who noted that, despite some contacts between Baghdad and Osama bin Laden's followers over the years, there was no strong evidence of a substantive relationship. As members of the National Security Council staff from 1994 to 1999, we closely examined nearly a decade's worth of intelligence and we became convinced, like many of our colleagues in the intelligence community, that the religious radicals of al-Qaida and the secularists of Baathist Iraq simply did not trust one another or share sufficiently compelling interests to work together.
 But U.S. Secretary of Defense Donald Rumsfeld promised that the Bush administration had &quot;bulletproof evidence&quot; of a Qaida-Iraq link, and Secretary of State Colin Powell made a similar case to the United Nations. Such claims now look as questionable as the allegation that Iraq was buying uranium in Niger.
 In the 14 weeks since the fall of Baghdad, coalition forces have not brought to light any significant evidence demonstrating the bond between Iraq and al-Qaida. Uncovering such a link should be much easier than finding weapons of mass destruction. Instead of having to inspect hundreds of suspected weapons sites around the country, military and intelligence officials need only comb through the files of Iraq's intelligence agency and a handful of other government ministries.
 Our intelligence experts have been doing exactly that since April and so far there has been no report of any proof. Of the more than 3,000 Qaida operatives arrested around the world, only a handful of prisoners in Guantanamo - all with an incentive to please their captors - have claimed there was cooperation between Osama bin Laden's organization and Hussein's regime, and their remarks have yet to be confirmed by any of the high-ranking Iraqi officials now in American hands.
 Indeed, most new reports concerning al-Qaida and Iraq have been of another nature. Khalid Sheikh Mohammed and Abu Zubaydah, the two highest-ranking Qaida operatives in custody, have told investigators that bin Laden shunned cooperation with Hussein. A UN team investigating global ties of the bin Laden group reported last month that they found no evidence of a Qaida-Iraq connection.
 The U.S. congressional oversight committees evaluating the administration's use of intelligence on Iraq's weapons of mass destruction have said that they will also examine whether the administration manipulated information regarding Iraq's involvement in terrorism. The terrorism issue must not be given short shrift because of the current controversy over claims of Iraq's unconventional weapons. The truth is, we knew for decades that Iraq had nuclear, chemical and biological-weapons programs - yet it was only after 9/11 that these programs were viewed as an intolerable threat that necessitated a regime change.
 U.S. policy changed dramatically when the Bush administration, lacking compelling evidence of an Iraq-Qaida link, decided to base the Qaida part of its pro-war argument on a hypothetical situation. &quot;Iraq could decide on any given day to provide a biological or chemical weapon to a terrorist group or individual terrorists,&quot; Bush said in October. &quot;Alliance with terrorists could allow the Iraqi regime to attack America without leaving any fingerprints.&quot;
 But this scenario is extremely unlikely. For years now the world's leading state sponsors of terrorism have had no confidence that they could carry out attacks against the United States undetected. That is why this brand of terrorism has been on the wane.
 After it became clear to Libya that the United States could prove its responsibility for the 1988 attack on Pan Am 103 - and UN sanctions were imposed - it got out of the business of supporting attacks on Americans. After American and Kuwaiti intelligence traced a plot to kill former President George Bush in 1993 to Baghdad, the Iraqi regime also stopped trying to carry out terrorist attacks against America. And when the Clinton administration made clear that it knew Iran was behind the 1996 bombing of Khobar Towers in Saudi Arabia, Tehran ceased plotting terrorist strikes against American interests.
 Because of America's intelligence and law-enforcement capacities, the world's outlaw states know that they will pay a high price for sponsoring terrorist acts against us - and an overwhelming one should they assist in attacks involving weapons of mass destruction. That is why Iraq, Iran, Libya, Syria and some 20 other countries with chemical and biological weapons have never, as far as we know, given one to terrorists.
 Of course, the return of state-backed terror against America cannot be ruled out. And we are right to be concerned that North Korea might sell a nuclear weapon to terrorists. But this much is clear: All states, even rogue ones, have a strong conservative impulse for self-preservation.
 U.S. policy must recognize this clear division between the old state-sponsored terrorism, which we have shown we can deter, and the new, religiously motivated attacks. First, we should think long and hard before seeking regime change as a means of behavior modification. Those who chafe to topple the mullahs in Iran, for example, court unforeseen consequences that may ultimately damage U.S. interests.
 Second and most important, the Bush administration should focus more on al-Qaida, the only terrorist group that poses an imminent, undeterrable danger. New instability in Afghanistan and the continued spread of jihadist ideology in the Islamic world mean that the prospects for another 9/11 are growing.
 Rogue regimes are bad for the world and worse for the people forced to live under them. Over time, we can use diplomacy - including coercion - and deterrence to bring about change. For now, however, the direst threat to Americans comes not from the mullahs of Tehran, but from the mass-murderers of al-Qaida.
 
 <i>Daniel Benjamin, a fellow at the Center for Strategic and International Studies, and Steven Simon, an analyst at the Rand Corp., are authors of &quot;The Age of Sacred Terror.&quot; They contributed this comment to The New York Times. </i>

TITLE: Putin Falling Short in Emulating Examples
TEXT: With an eye toward December's State Duma and May's Presidential elections, President Vladimir Putin used his annual address to the nation to put forward a new national goal - to double Russia's GDP in the space of only ten years. Russia's citizens, many of whom live on incomes below subsistence level, should applaud their President for setting out economic growth as his top priority, especially considering the unrivaled power of the president in a Russian political system that is tuned to deliver whatever he desires. They should applaud him, that is, if he really is serious about achieving the goal.
 
During his first presidential term (few analysts doubt that he will win a second), Putin created high expectations through his outspoken demand for further economic reforms and deregulation, yet progress remains painfully slow on these fronts. Many economics experts and business leaders say that, so far, tax reforms have been insufficient, administrative reform has yet to really start at all and corruption remains on unacceptably high levels. Accession to the WTO, initially expected to take place at some point this year, has been delayed and, even according to an optimistic scenario, shouldn't be expected to come about before 2006.
 On the positive side, the economy has been slowly, but steadily recovering following the 1998 financial crisis, with high world-oil prices providing for monetary stability and budget surpluses. Russia's debt ratings have improved remarkably, but the deadlocked situation with respect to banking reform has buried hopes that international rating agencies would raise the country to an investment-grade mark after next May's presidential elections.
 Making doubling GDP the driving idea at the base of government policy could, theoretically, generate the type of political backing needed to gear up for the pending reforms.
 Some of Putin's actions appear to have been designed to demonstrate that this goal is not merely rhetoric, including the recent appointment of Igor Shuvalov, Prime Minister Mikhail Kasyanov's former chief of staff, to chair a special group mandated with guiding and enforcing the implementation measures designed to help achieve the objective set out by the president.
 But other events raise serious concern and questions about the real agenda being pursued by the president and his administration. In particular, the campaign launched at the beginning of the month against Yukos, Russia's second largest oil company and one of the acknowledged leaders of the country's economy, is a troubling development. Although Putin has given the impression that he would prefer to remain uninvolved with the prosecutor general's investigations at Yukos, no one seriously believes that the prosecutor general's office would have launched itself on such a course without at least the informal assent of the president himself.
 The attack has already cost Yukos billions of dollars in market capitalization and dealt a serious blow to Russian stock prices, involving heavy losses for all major Russian businesses.
 The investors who had almost begun to feel confident again about the Russian market have been dealt a strong warning. The BP-Access Renova deal that was so gloriously advertised early this year and finally signed a few weeks ago had inspired many to believe that this might be a watershed event leading to even larger investment pouring into the country's economy. But, even if the situation around Yukos is normalized quickly, it will be long time before investor confidence in the country recovers.
 It is clear, therefore, that either the right hand doesn't know what the left hand is doing in Putin's administration or that the president's real agenda is different from the one he has declared.
 Vladimir Putin's moves represent a curious mixture of the emulation of the approaches of two Soviet leaders.
 On one hand, he is following the lead of Mikhail Gorbachev, particularly in his emphasis on turning Russia into a civilized state and member of the Western Community. On the other, he is looking to Joseph Stalin in his mission to develop and demonstrate Russia's national might while maintaining a strong hand internally.
 Not surprisingly, a history that begins as a drama often repeats itself as a farce. With tragedy of Chechnya, his KGB background and the curtailing of media freedoms, Putin will be never able to match the cordial welcome and respected place in history that Gorbachev has earned for himself, particularly outside Russia. Ironically, for those more interested in maintaining order and Russia's imperial might at all costs, he will remain in the shadow of Stalin's ruthless determination and bloodthirsty rule.
 The real problem is that, while the leader of the state is following two different paths in the unlikely attempt to secure himself a place in history beside his most famous predecessors, the country is left to muddle through without any consistent or sound policies.

TITLE: Oil Major Treated as a Traitor
AUTHOR: By Pavel Felgenhauer
TEXT: Yukos CEO Mikhail Khodorkovsky, officially Russia's richest man, has been financing opposition parties and has expressed ambitions to leave business in 2007, which has been read as an intention to enter politics and perhaps one day run for president.
 
So the Kremlin decided to curtail Khodorkovsky's ambitions by arresting his long-time associate Platon Lebedev and searching Yukos offices.
 Many in Moscow believe that the situation will be resolved somehow, that Khodorkovsky will strike some deal with the Kremlin and downgrade his political ambitions in return for Lebedev's release from the dungeon.
 The alternative scenario - a legal assault to dismantle Yukos - is seen as too dangerous. This would send the wrong signal to potential foreign investors, lead to increased capital flight and destroy President Vladimir Putin's stated strategic aim of building a &quot;competitive&quot; market economy. Putin has been warned of the possible consequences, but the assault on Yukos continues. 
 Actually, all of the oligarchs meddle in politics, all give money to political parties, all actively lobby the government and parliament. Unified Energy Systems CEO Anatoly Chubais is one of the leaders of the Union of Right Forces - a party that recently has been loudly criticizing the authorities on military reform, Chechnya and so on. But still Chubais seems to continue to enjoy cordial relations with Putin.
 There is one feature, however, that makes Khodorkovsky a special case: He spends money promoting pro-Western ideas and closer relations with the U.S. 
 While Khodorkovsky was promoting a pro-U.S. stand on Iraq, the Russian intelligence community was pressing Putin to support Iraqi President Saddam Hussein. I was told that one Russian government-owned oil company that, unlike Yukos, did make money in Iraq bankrolled this lobbying.
 Lebedev is being held in Lefortovo prison, which belonged to the KGB in Soviet times and is now run by the FSB. This institution is specifically reserved for people accused of terrorism, spying, treason and other political crimes. 
 Lebedev's lawyers complain that they are denied access to their client - again a feature more reminiscent of a treason or spy case. Putin is a former KGB officer and a former director of the FSB. It has been reported that his Kremlin associates from the FSB, and the FSB itself, are behind the attack on Yukos. This campaign may be partially motivated by personal greed, but it also may be aimed at eliminating a powerful company that is presumed to be an agent of foreign influence.
 The nature of the all-out assault seems to indicate that its true objective is to destroy Yukos and seize its oil wealth. At least in a number of previous such &quot;legal&quot; assaults on big business during Putin's presidency, confiscation of assets (the Sibur gas company, the business empires of Boris Berezovsky and Vladimir Gusinsky) was the end result.
 It was often stated during previous Kremlin-led attacks on oligarchs that heavy-handed confiscation of assets accumulated through shady privatization deals would destroy business confidence and rupture relations with the West.
 Nothing of the sort has happened: The economy is growing, and Putin is still the West's darling. Nevertheless, a destruction of Khodorkovsky's empire would be popular in Russia, where many believe that &quot;the rich Jews&quot; have stolen Russia's wealth, destroyed its military might, and sold it out to the West. Disgruntled officers may again (as in 2000) see Putin as a possible redeemer of Russia.
 Western oil majors will not stop seeking opportunities to invest. Multinationals that are pumping oil in Nigeria, Venezuela and the Congo will hardly shy away from Putin's Russia. The immediate economic effects of Yukos' possible dismantling will also be not serious: While the price of oil is well over $20 per barrel, even a nontransparent chekist-run oil company can earn a profit.
 A chekist-run Russia will never truly integrate into the West. But who said that the chekists want that to happen?
 
 <i>
Pavel Felgenhauer is an independent defense analyst. </i>

TITLE: Time To Turn West and To Start Playing by Rules
AUTHOR: By Stephen Schmida
TEXT: It is a sight that a few years ago would have been unthinkable: liberal human-rights and civil-society activists publicly defending a Russian oligarch against attacks on his business empire. On Wednesday, more than a dozen prominent NGO leaders and journalists issued a public statement regarding the Yukos scandal, reminding the government that &quot;independence of business and freedom of information&quot; are fundamental principles of democracy. In Russia, this is the equivalent of Amnesty International and Human Rights Watch coming to the defense of Bill Gates and Microsoft during the U.S. anti-trust trial in the 1990s. So why are human-rights and NGO activists taking such an interest in the fate of Russia's most successful company - an entity that hardly needs the meager protection that these groups can provide?
 
A cynic might point to self-interest. Many NGOs, including Eurasia Foundation where I work, receive support from Yukos or its foundation, Open Russia. However, most of the groups that signed the appeal do not receive any funding from Yukos and many that do receive support from Yukos are absent. Thus, there must be more to this than protecting a source of funding.
 Although few would defend the corrupt privatization processes of the mid-1990s that created Yukos, it seems that many in the liberal elite feel an allegiance toward Yukos and similar companies that have become successful by the adoption of Western, transparent practices. The rise in Yukos stock value shows that if institutions truly adopted international standards instead of merely mimicking them, then Russia could grow at a rapid pace and join the West.
 Thus, on a societal level, the current crisis surrounding Yukos and those elements attacking it is really only the latest iteration of Russia's age-old dilemma: Is Russia part of the West or not? On the one hand, there are the elements attacking Yukos. They clearly believe in the arbitrary use of state power, including the judiciary, as an instrument for achieving political goals. This is historically how power has been used and abused in Russia. On the other hand, there is Yukos, arguing for fair and equal enforcement of the law. This is how state power is used in the West. Viewed in this context, it is only natural that NGO leaders and other members of the liberal elite ally themselves with Yukos.
 The irony of this conflict is that President Vladimir Putin and Yukos CEO Mikhail Khodorkovsky appear to share similar dreams for Russia. Both have articulated visions for Russia as a Western country, integrated into the world economy and playing an important and constructive role in world affairs. Since they are working toward the same important goal, Putin should heed the appeal of the NGOs and move to stop the arbitrary attack on Yukos. Such a decisive act will send a strong signal that Russia is taking firm steps toward the community of Western nations where it belongs.
 
 <i>
Stephen Schmida is the Moscow regional director of the Eurasia Foundation. </i>

TITLE: U.S. Starts Wild Goose Chase for Hussein
AUTHOR: By D'arcy Doran
PUBLISHER: The Associated Press
TEXT: ISHAKY, Iraq - U.S. soldiers raided the home of a wealthy auto dealer on Monday after a man claiming to be Saddam Hussein's mechanic said the ousted dictator was hiding there.
 
Four Bradley fighting vehicles smashed through the front walls of the compound in Ishaky, on the banks of the Tigris about 75 kilometers north of Baghdad, said Captain Karl Pfuetze, whose 4th Infantry 3rd Brigade unit led the raid.
 Dozens of soldiers stormed the compound, which consisted of three interconnected houses with an estimated 50 rooms, he said.
 Hussein was not in the house, and soldiers found no escape tunnels on the property. They detained the house's owner and the man who provided the tip.
 Although sporadic Hussein sightings have been reported, specific information is rare and acted on quickly, said Colonel Frederick Rudesheim, the brigade commander.
 &quot;We don't have the luxury of waiting for near perfect intelligence,&quot; he said. &quot;We can't afford not to pay attention to that kind of information.&quot;
 The compound's pillars and size made it stand out from farmers' homes nearby and made the information seem plausible, said Sergeant 1st Class Ken Somier. The area is near Tikrit, Hussein's hometown.
 Hussein isn't the type to hide somewhere humble, Somier said. &quot;His ego can't allow it.&quot;
 Soldiers had noticed up to 40 people milling outside the house last week, but only a dozen were there during the raid.
 The informant described the house in detail and was very nervous when he first showed the soldiers the house, calling out: &quot;No! No! There are people watching us now,&quot; Pfuetze said.
 &quot;He was convinced beyond a doubt,&quot; the captain said.
 Hours after the raid, Kalaf H. Hamad, who said his brother Mansur owns the targeted house, denied that his family had any connection to Hussein's Baath party.
 Mansur Hamad, a car dealer, lived in the three houses in the compound with his two wives and 15 children, his brother said.
 &quot;My brother and I were sitting out until 2 a.m. watching the helicopters overhead. We were not expecting to be attacked,&quot; he added.
 The U.S. administrator for Iraq, L. Paul Bremer, told Fox News on Sunday that he believed Hussein was hiding in an area north and west of Baghdad called the &quot;Sunni Triangle,&quot; a hotbed of pro-Hussein resistance and scene of many attacks on U.S. forces. Ishaky lies within that region.
 A $25 million reward has been offered for information leading to Hussein's capture.
 The Army will compensate Mansur Hamad for damage if an investigation proves the raid was a mistake, Rudesheim said.

TITLE: Amin in Coma in Saudi Arabian Hospital
PUBLISHER: The Associated Press
TEXT: JIDDAH, Saudi Arabia - Former Ugandan President Idi Amin, exiled in Saudi Arabia after an eight-year rule marked by extreme brutality, was in a coma and in deteriorating condition on Monday, a hospital official said.
 
The official said late Sunday that Amin's condition had stabilized. But Monday morning, the official said &quot;his condition has deteriorated again.&quot; He would not elaborate.
 Amin, believed to be 80, was on a respirator at the King Faisal Specialist Hospital in the Red Sea port city of Jiddah, where Amin and relatives have lived for years. He was admitted to the hospital on Friday suffering from high blood pressure, medical staff said.
 Amin has been in a coma since his admission.
 In Uganda, the independent Sunday Monitor quoted Nalongo Madina Amin - &quot;Amin's favorite wife&quot; - as saying that she had approached Ugandan President Yoweri Museveni some time ago and asked that her husband be allowed to return to the East African country to die. But she was told that the man who ruled Uganda from 1971 to 1979 would have to &quot;answer for his sins.&quot;
 In Dar es Salaam, Tanzania, Museveni's press assistant, Oonapito Ekonioloit, said that Amin's that relatives &quot;are free to bring him back to Uganda.&quot;
 Amin rose to chief of staff of Uganda's army and air force in 1966.
 He clashed with Ugandan leader Milton Obote and ousted him on Jan. 25, 1971, when Obote was attending an African summit.
 Ugandans initially welcomed Amin, but his popularity plummeted after the East African country descended into economic chaos and he declared himself president-for-life.
 Amin grew increasingly authoritarian, violent and subject to mood swings. It is estimated that more than 200,000 Ugandans were tortured and murdered during his regime, which ended April 11, 1979, when he was ousted by a combined force of Ugandan exiles and the Tanzanian army.
 Human rights groups say as many as 500,000 people were killed during Amin's rule. Bodies were dumped into the Nile River after it became impossible to dig graves fast enough.

TITLE: Curtis the Unlikeliest of Winners at British Open
AUTHOR: By Paul Newberry
PUBLISHER: The Associated Press
TEXT: SANDWICH, England - Ben Curtis was hitting a wedge on the practice range at Royal St. George's when the caddie he had known all of a week delivered the news.
 
&quot;Ben, you're the Open champion.&quot;
 How appropriate.
 The most unpredictable links in golf. A wacky week at the game's oldest championship. And, finally, the unlikeliest of major winners: A PGA Tour rookie ranked No. 396 in the world.
 Even Andrew Sutton, the looper hired last Sunday to provide some local knowledge, had never heard of his new boss.
 Told Ben Curtis was looking for a caddie, Sutton asked, &quot;Ben who?&quot;
 With the claret judge sitting at his fingertips, golf's newest major champion acknowledged the obvious.
 &quot;I'm in great company,&quot; Curtis said. &quot;Right now, many people are probably saying, 'Well, he really doesn't belong there.' But I know I do.&quot;
 Not even Tiger Woods and an All-Star cast of challengers could sort out the humps and hollows along Sandwich Bay any better.
 Curtis earned his spot in golfing lore by closing with a 2-under 69, leaving him the only player to break par at 1-under 283.
 He got plenty of help from Thomas Bjorn, who took three shots to escape a pot bunker, dropped four shots on the final four holes and finished as the hard-luck runner-up with Vijay Singh.
 &quot;It is going to be a tough few days,&quot; Bjorn said. &quot;But it's only a game.&quot;
 A crazy game at that.
 The Open took a zany turn right from the start when Woods, the world's most watched player, lost his opening tee shot in the rough.
 It ended with a player hardly anyone knew holding the prize, his name engraved alongside the likes of Nicklaus, Palmer and Hogan.
 Curtis, who spent the last two years on the Hooters Tour and qualified for the British with a 13th-place finish in the Western Open, was just two strokes behind coming into the final round, but hardly anyone gave him a chance to win. Not against a lineup like this: Woods, Bjorn, Davis Love III, Vijay Singh, Sergio Garcia and Kenny Perry.
 But hardly anything went according to plan at this tournament:
 
 
. Woods opened with a triple bogey when two dozen marshals and 2,000 fans couldn't figure out where his ball was hiding.
 
 . Bjorn was penalized two strokes on Thursday for slamming his club into a bunker after failing to get out - a no-no when the ball is still in the sand.
 
 . Love hit a tee shot that was going out of bounds Friday until it ricocheted off a white boundary stake only six centimeters wide.
 
 . Local hero Mark Roe, who would have been paired with Woods in the final round, two shots behind, was disqualified on Saturday for putting his score on Jesper Parnevik's card.
 
&quot;When I went to bed last night, I really thought I was going to win this thing,&quot; Curtis said. &quot;You've got to have that feeling.&quot;
 He is believed to be the first player since Francis Ouimet at the 1913 U.S. Open to win a major championship in his first try.
 For Bjorn, it ended with the worst four holes of his life.
 The Dane surrendered the lead in a hurry by going bogey-double bogey-bogey, leaving himself in the position of needing to chip in for birdie at No. 18 to force a playoff.
 But the ball curled right of the cup.
 &quot;I stood at 15 with hand on the trophy,&quot; Bjorn said, &quot;and I let it go.&quot;
 Even Curtis' fiancee was sympathetic.
 &quot;I'm so happy for Ben,&quot; said Candace Beatty, a former college golfer. &quot;But I feel so bad for Thomas.&quot;

TITLE: Barichello Wins in 'Protested' Grand Prix
PUBLISHER: The Associated Press
TEXT: SILVERSTONE, England - Rubens Barrichello's first victory of the season had a familiar and bizarre twist.
 
The Ferrari driver started from the pole, fell back, and rallied to win the British Grand Prix on Sunday, ending the recent dominance of Williams-BMW in a race that was disrupted on the 12th lap when a man ran onto the track.
 Barrichello, who three years ago won German Grand Prix after a protester walked on the track, finished 5.4 seconds ahead of Juan Pablo Montoya of Williams-BMW.
 On Sunday, drivers were forced to swerve around the unidentified man, who was wearing a kilt and carrying a sign.
 The man jogged toward a high-speed corner and was on the track for approximately 20 seconds before being dragged off by security guards.
 Police said the 56-year-old man from County Kerry, Ireland, would be charged with aggravated trespass.
 Barrichello became the seventh winner in 11 Formula One races this season. The win was the sixth of his career and first since the U. S. Grand Prix in September when teammate Michael Schumacher slowed to give him the victory.

TITLE: SPORT WATCH
TEXT: <b>Armstrong Again
 </b>

LUZ-ARDIDEN, France (Reuters) - Lance Armstrong showed extraordinary determination to recover from a fall on the final climb of the 15th stage of the Tour de France on Monday and seize back control of the race.
 The American, bidding for a record-equalling fifth Tour victory after dominating the last four years, appeared to get his brake lever snagged on a young spectator's bag as he duelled with German rival Jan Ullrich.
 Armstrong, and fellow faller Iban Mayo of Spain, quickly got back on their bikes as the peloton, in keeping with tradition, did not attack.
 It was the U.S. Postal rider's second fall of the Tour after he was involved in a mass pile-up on the first weekend of the three-week race.
 Long-term stage leader Sylvain Chavanel was eventually overhauled near the finish of the 159.5-km stage, Armstrong graciously shaking hands with the exhausted Frenchman as he accelerated past.
 
 
<b>Television Plea
 </b>

LOS ANGELES (Reuters) - Basketball superstar Kobe Bryant, facing rape charges that could send him to prison for life, broke into tears and clutched his wife's hand on Friday as he repeatedly proclaimed his innocence while admitting to adultery with his 19-year-old accuser.
 In a remarkably emotional press conference that was beamed live on television across the United States, the 24-year-old Los Angeles Lakers guard said: "I'm innocent, you know. I didn't force her to do anything against her will. I'm innocent."
 Bryant walked into the press conference tightly gripping the left hand of his 21-year-old wife of two years, Vanessa.
 "You know, I sit here in front of you guys (in the press), furious at myself, disgusted at myself for making the mistake of adultery. And I love my wife with all my heart," he said.
 Bryant surprised many of the assembled reporters by turning up at the press conference, which began just four hours after an Eagle County prosecutor announced the charges.
 Attorneys for the five-time NBA all-star said he had made the decision to attend that afternoon.
 
 
<b>Belgium, Russia Advance
 </b>

LONDON (Reuters) - Kim Clijsters and Justine Henin-Hardenne earned Belgium a semifinal showdown with the U.S. after propelling their country to a 5-0 rout of defending champion Slovakia in the Fed Cup Sunday.
 Despite the absence of their top four players, a depleted American team whitewashed Italy 5-0.
 An impressive France trounced five-times champions Spain 4-1 to set up a last-four date with Russia, who blanked Slovenia 5-0.
 Slovakia limped out of the tournament after world number two Clijsters thrashed Janette Husarova 6-0, 6-1 in 40 minutes in Charleroi.
 Elena Bovina stepped in for Russian number one Anastasia Myskina to overcome Slovenia's Katarina Srebotnik 7-6, 6-2 in the day's opening rubber in Portoroz, giving the Russians an unbeatable 3-0 lead.
 The semifinals and final will be played at one venue during the week starting November 17.