SOURCE: The St. Petersburg Times
DATE: Issue #894 (62), Tuesday, August 19, 2003
**************************************************************************


TITLE: Candidates Complain of Dirty Tricks
AUTHOR: By Vladimir Kovalev
PUBLISHER: Staff Writer
TEXT: Amid allegations of dirty tricks, five candidates for the post of St. Petersburg governor on Monday challenged Valentina Matviyenko, the frontrunner in the race, to add more obligations on candidates to those in the charter she circulated last week calling for fair elections.
 
A revised version of Matviyenko's charter, drawn up by candidate Konstantin Sukhenko, includes a clause that reads: "Candidates are obliged not to use illegal surveillance methods and bug their competitors' telephones."
 The move followed allegations by other candidates that supporters of Matviyenko, the presidential representative to the Northwest Region and widely seen as the Kremlin's preferred candidate, have been tapping telephones used by other candidates.
 "They record absolutely everyone," candidate Alexei Timofeyev, a Legislative Assembly deputy with the Sport Russia faction, said in a telephone interview on Monday.
 "When I call someone Moscow - and I must say that I have conversations with quite influential people - a couple of hours later, they say representatives of the presidential administration call them with a request not to do as I ask," Timofeyev said. "How did they know?"
 "And, on a plane recently, people told me they came under pressure from certain quarters after having [telephone] conversations with me," he added.
 "I can't say that Matviyenko is directly involved," Timofeyev said. "She doesn't sit there with the headphones on herself, of course, but it's quite clear that she is talking about violations of election law while breaking the law herself. It's in her interests [to bug conversations], and I think she is told that this is going on."
 The charter drawn up by Sukhenko was supported at an open discussion at the Angleterre Hotel on Monday by four other candidates: Mikhail Amosov, head of the Yabloko faction in the Legislative Assembly; Vice Governor Anna Markova; erotic-movie producer Sergei Pryanishnikov; and Timofeyev.
 It repeats much of Matviyenko's charter, which was circulated to other candidates on Aug. 8 and was widely criticized for failing to mention dirty tricks such as media manipulation, of which Matviyenko has been accused. The new clauses include a call for the Northwest Region Presidential Representative's office to maintain strict control over what are known as black election technologies, an obligation for candidates not to use fake ratings in their campaign leaflets and a call for all candidates to work together to prevent any violations of election law.
 Sukhenko also offered to publish all examples of election-law violation in local media outlets. On Monday, he circulated six examples of what he claimed were violations by Matviyenko of the federal law guaranteeing the electoral rights of Russian citizens.
 The examples included articles pushing Matviyenko for governor that appeared between July 29 and Aug. 6 in local newspapers Nevskoye Vremya, Metro, Vesti and Smena, as well as what Sukhenko labeled attempts to abuse administrative resources. Nevskoye Vremya is edited by Alla Manilova, allegedly one of Matviyenko's image makers.
 Calls and emails to Matviyenko's campaign headquarters requesting comment on the accusations went unanswered on Monday. Matviyenko did not show at Monday's meeting in the Angleterre Hotel, although Sukhenko said he had invited her.
 "All of these candidates [Amosov, Markova, Pryanishnikov and Timofeyev] are ready to sign the agreement today," Markova said at the meeting, according to Interfax. "However, Matviyenko did not come, and instead sent her representative Sergei Tarasov, who heads her election headquarters in the Admiralteisky District."
 Sukhenko said that Tarasov had promised to hand over the new charter to Matviyenko and advise her to analyze it. However, Sukhenko said he was outraged by Matviyenko's behavior.
 "Tarasov didn't answer our questions as we would have liked," he said in a telephone interview on Monday. "If [Matviyenko] had showed up herself and apologized for what she had done, we would likely have complained a bit, just to show we are in opposition, but then agreed anyway."
 "She should have come over and looked us in the eyes," Sukhenko said. "We're not animals, we don't want enmity, and if someone treats us as humans, we would answer in the same way. But, if not, that's O.K., there are ten of us, so we'll find ways to resist."
 A press release sent out Monday by Matviyenko's headquarters said that her original charter garnered support from three candidates: Sergei Belyayev, former head of Moscow's Sheremetyevo Airport; Pyotr Sheleshch, a State Duma deputy with the All-Russia faction; and Viktor Yefimov, head of the First Pasta Factory.
 It also called on city residents to be aware of cases of dirty tricks, citing an incident at an unnamed technical school on the Petrograd Side. According to the press release, unknown people unrelated to Matviyenko's campaign paid a group of voters 100 rubles (about $3) each to participate in a pro-Matviyenko rally.
 The press release also cited a case of "illegitimate campagning in apartments," alleging that unknown people had been going to apartments of pro-Matviyenko voters and offering them the opportunity to vote immediately, rather than having to wait for election day, scheduled for Sept. 21.
 Eleven candidates are registered for the elections, called June 26 after President Vladimir Putin appointed former incumbent Vladimir Yakovlev as deputy prime minister in charge of communal-services reform in the government of Prime Minister Mikhail Kasyanov.

TITLE: U.S. Visa Mess Hits Students' Summers
AUTHOR: By Robin Munro
PUBLISHER: Staff Writer
TEXT: MOSCOW - For Alina Ibraimova, 21, this summer was supposed to be the fulfillment of a childhood dream to visit the United States.
 
The Ulyanovsk State University ecological-science student had wanted to work at a summer camp in Maine, meet new people and perfect her English.
 "When I was still in grade school, I always dreamed of going to America," she said in a recent interview. "When I started attending the university, I learned of the Camp America program for students. Many of my friends have gone for the summer and came back impressed. ... I prepared for it for a whole year and hoped the summer would come quickly."
 She raised the $700 needed to apply for a summer program and was assigned a job at the Walton camp in the north of Maine, where she was supposed to start work at the end of May.
 "I had to pass tests, which I did very well, but then there were delays," she said. "I was finally told to expect my visa on July 15, but they didn't give me it."
 The reason given by the U.S. Embassy was that she had not signed her visa-application form.
 "I could not believe it. My plans and expectations were ruined. I don't know if I'll ever get to the United States now," Ibraimova said.
 Instead, she found herself among at least 3,600 students who never made it to their summer jobs in the United States due to new visa policies at the U.S. Embassy. The visa mess - which comes amid new, post-Sept. 11, 2001, security measures at the embassy - has led to a war of words between the embassy and the agencies that arrange summer work.
 The embassy says it has processed a record 10,550 summer work and travel applications and that more than half were approved. Student agencies accounting for 8,500 of the applications said, however, that only 4,915 have been approved and another 650 students were only asked to come in for interviews this month - meaning that they would not be able to travel to the United States since studies begin in about three weeks.
 The outcome is a far cry from the 10,000 students that the embassy in May predicted would be granted visas this summer. A record 8,000 students went to the United States last summer.
 The United States this year introduced new security measures intended to fight terrorism and illegal immigration, and this clearly had an impact on the Moscow embassy's ability to cope with applications for the summer programs.
 But student agencies said the reasons that the embassy gave for rejecting applications - usually the lack of signatures or signatures being signed in capital letters - were purely bureaucratic and had nothing to do with security or illegal immigration concerns.
 Armen Karapetyan, director of the Moscow office of IEC, one of the largest student agencies and the one used by Ibraimova, said the embassy rejected 2,400 applications from IEC, 99 percent because of a lack of signatures.
 The DS2019 application does not clearly state whether students should sign before submitting the form or when entering the United States.
 "We never - and we have been in this business for years - had our students sign them prior to submitting to the embassy," Karapetyan said. "The IEC students who were granted visas this year also had not signed the form."
 He said when he first approached the embassy about delays in May, when some of the first students were supposed to leave, he was told that the embassy staff was overwhelmed with applications.
 "I think it [the missing signature] was just an excuse to avoid processing a large bunch of people," he said.
 The embassy insists that the blame lies with the student agencies - but has nevertheless agreed to process at no charge next year the applications of those who missed out this year. Every student had to pay a nonrefundable $100 application fee.
 "Problems with fraudulent applications and a number of students failing to return in previous years led to the requirement by the embassy that all students sign the form prior to visa issuance, signifying that the students accepted the terms of the summer exchange programs," the embassy said in a written response to questions.
 The embassy said its offer to next year process at no charge applications of those who missed out was not an admission that they had not processed this year's applications.
 "Every application we received was processed," the statement said. "Our decision to allow many of the students to reapply next year without repaying the fee was an attempt by us to avoid punishing the students because their program organizers failed to properly advise them."
 Earlier, the embassy blamed student agencies of failing to submit applications by an April 1 deadline, saying none had filed by that date and the deadline had been extended to June 17.
 Many agencies said they had no knowledge of any April 1 deadline, were not able to submit applications for much of May because of holidays, and that they only learned of the embassy's decision to stop accepting applications on June 17 after that date.
 Karapetyan said the snafu cost IEC "several hundreds of thousands of dollars" and U.S. sponsors suffered even larger losses. "We as a Russian agency are not keeping any of the students' money," he said. "A few U.S. partners are keeping some small sums of money, but this is much less than they are entitled to."
 Paul Christianson, head of U.S. sponsor organization Interexchange, said he has had to dole out refunds to the tune of $1 million.
 "We are not that large an organization, and it was pretty impactful on us," he said.
 This year's problems have cast the work program into doubt, said Elizabeth O'Neill, vice president of work-exchange programs for the Council on International Educational Exchange, or CIEE.
 "This was a very difficult year in Moscow and, unless there is increased transparency and greater throughput, which other embassies around the world achieved, we [are] concerned for the future of the programs in Russia," she said.
 The CIEE is the largest international agency involved with the summer work program and has long worked with the U.S. State Department as a member of the umbrella group the Alliance for International Educational and Cultural Exchange.
 Christianson, whose agency is also a member of the alliance, said the number of rejections this summer were higher in Russia than most anywhere else in the world. He said the embassy could have helped matters by opening lines of communication with sponsors and student agencies.
 "We did not know that they had not processed 1,930 applications until July 15, when they handed them back to us," he said.
 Agencies said they had no interest in assisting illegal immigrants or ineligible candidates get to the United States as they would go out of business if they were found doing this. Twenty-four agencies in Russia are accredited with the embassy and their U.S. partners are accredited with the State Department. 
 In the meantime, the agencies and the embassy are planning to discuss this year's results and look for a way to make sure matters improve next year.
 Asked how this year's performance can be improved, Karapetyan said: "Students will have to make their applications earlier, U.S. sponsors have to provide DS2019 forms earlier and local organizations are going to have to screen the students to make sure they are really going to universities. And the embassy will have to hire extra staff."

TITLE: Anarchists Go to Tver for Holidays in the Sun
AUTHOR: By Yulia Solovyova
PUBLISHER: Special to The St. Petersburg Times
TEXT: PRYAMUKHINO, Tver Region - Pavel Glazkov is fed up with people who hear the word anarchy and instantly conjure up thoughts of debauched sailors wreaking havoc and chaos. 
 
Anarchism is, above all, a moral matter, Glazkov says, and it hinges on order, self-discipline and mutual assistance.
 A graduate student from Tambov, Glazkov is in the process of writing a thesis on Mikhail Bakunin, the 19th-century philosopher whose ideas laid the foundation for modern anarchism.
 And he is active in spreading the gospel of anarchy. Glazkov posts leaflets at his university urging students to take action. At a children's summer camp where he works as an educator, he tells kids stories about anarchism before bedtime. The Tambov bar where he once worked as a bartender turned into a sort of a revolutionary circle full of conversation and debate, not unlike one of Bakunin's many secret societies.
 "I'm trying to educate people," says Glazkov, 24, a gentle giant who wears black-rimmed glasses and two earrings in his left ear. "When I was a kid with an anarchy badge on my chest listening to Sex Pistols, no one told me what I was supposed to do as an anarchist."
 Late last month, Glazkov traveled 10 hours by train and bus to Pryamukhino, Bakunin family's estate in the Tver region, in search of like-minded people. What he found was an improbable mix: white-bearded intellectuals studying Russian-gentry culture alongside pierced and tattooed 20-somethings in black T-shirts and ragged jeans who were doing little more than frolicking in nature away from their parents' control.
 Glazkov spent a weekend in Pryamukhino. He took part in a scientific conference and civic duties like picking up trash in a park. At night he listened to romances - lyrical, sentimental songs - and drank vodka with the academics. Then it was time for a drunken rendition of the Mother Anarchy song by the kids, who described themselves as anarcho-Communists, Marxists, Maoists, hippies and antifascist skinheads.
 "It was great," enthuzed Glazkov. "I met young people who are into ideas, and they don't just stick to some stiff outdated beliefs, but take them further."
 The Pryamukhino Free Co-Op was created in 1995, when a group of students from Moscow decided that Bakunin's birthplace, which was formally protected by the state, actually needed protection from the state. Since then, a few dozen anarchists from central Russia and, occasionally, from abroad, have come here every summer to work in the park, scandalize the locals by skinny-dipping in the creek and debate anarchism around the campfire. They live in a cramped log house with a black anarchy flag flying from the roof and a sign over the door that reads, "Work is the best hangover treatment."
 The anarchist movement can encompass certain elements of other ideologies, such as Maoism and Communism, while rejecting those components relating to authoritarian political control. The anarchist movement is not uniform, but this doesn't appear to present a problem.
 "What's important is the rejection of the state, hierarchy, clericalism, dominance, all dogmas, everything that's dead and rotten," says Vassily Prytkov, who helped organize this summer's co-op. "People who come here share these ideals.
 Pryamukhino's mixed appeal is the result of its rich heritage. In the 19th century, this traditional noble nest was a nationwide cultural magnet. Mikhail Bakunin's parents and 10 siblings were well-educated people known for their various talents, bonvivant habits and a taste for sophisticated company. Leading lights of the times, such as literary critic Vissarion Belinsky, novelists Ivan Turgenev and Leo Tolstoi and thinker Nikolai Stankevich, walked among the exotic plants that grew in the estate's sumptuous park. 
 All in all, the Pryamukhino harmony, as the contemporaries described life on the estate, shared little of the rebellious spirit of its most famous resident - the man who was all passion and bustle and pure will, the prototype of Richard Wagner's Siegfried and the very model of a thunderbolt-hurling revolutionary.
 Mikhail Bakunin believed that the state and capitalism are evil and must be destroyed. He fought for a society based upon justice, equality and freedom. More of a doer than a writer, he threw himself into the insurrections that burst across Europe like thunderstorms in his day. Bakunin is often contrasted with Karl Marx, and credited with forecasting the inevitable connection between state communism and the Gulag.
 Bakunin's prophecies came true in the Soviet Union, and although streets across the country were named after him, his legacy was forgotten or distorted, and anarchy became a swearword. Similarly, his family's country estate was plundered and destroyed. The great park, with fish ponds, artificial waterfalls and Alpine hills, became neglected and overgrown.
 Today, Bakunin's followers include the ragtag members of the international New Left movement, who share the values of anti-globalism, pacifism, environmentalism and human rights. In Russia, they are few and have little formal organization, with few exceptions, including the groups Avtonomnoye Deistviye, or Autonomous Action, and the Russian branch of the Rainbow Keepers, a radical eco-anarchist group.
 "Collective social activity is much more important than setting up formal organizations," said Mikhail, 31, one of the founders of the Pryamukhino Free Co-Op, who asked that his last name not to be used. "In Russia, people don't have faith left in collective action and social change. But it's necessary to keep trying." 
 The anarchists occasionally participate in syndicalist actions and social protests like the annual Anti-Capitalism rally in Moscow. Otherwise, they are largely invisible on Russia's political landscape.
 On a recent Sunday morning, a group of anarchists, looking slightly woozy from the night before, trickled into a garden. While some camp goers are serious about anarchism, others are clearly there for the lifestyle that the relaxed environment provides - especially given the fact that the Bakunin Foundation covers all transportation and food costs. Drinking poses a problem, and every year a few people have been asked to leave the camp for alcohol-related problems.
 The anarchists settled on the grass among flowers and buzzing bees, where they conducted a meeting concerning the areas of the camp that needed the most work. Soon, armed with a variety of garden tools, they began trimming plants in the park and cleaning up Mother's pond under the supervision of Sergei Kornilov.
 Kornilov is a director of the Bakunin Foundation, which was created to promote the legacy of the Bakunin family and restore the estate. A former theater director who says he was too brainwashed to care about anarchism in the Soviet times, Kornilov, 65, has dedicated his life to the Pryamukhino estate since he moved there from Moscow in 1998. A tanned and energetic man who looks like a 19th-century aristocrat, Kornilov mapped out Pryamukhino's future as an artist would.
 Tourists were to stay in the recreated interiors of the Bakunin house, and church services, grand balls and theater plays would be staged in the vaulted basement of the remaining south wing of the estate.
 "I looked up plays about Mikhail Bakunin, and there weren't any," Kornilov said. "So I decided to write one myself." 
 Kornilov eventually wrote a trilogy of plays about Bakunin - one about Bakunin himself and two others about his circle of family and friends.
 Meanwhile, Glazkov, the Bakunin scholar from Tambov, wrestles with applying his ideas to contemporary realities.
 "Go tell a Muscovite whose relative was killed in a terrorist act that Russia needs anarchism and they'll tell you, 'What are you, crazy?'" he said. "People are tired of terrorism, Marxism, and other isms. What they want is stability and strong leadership."

TITLE: First Jury Trial Brings Acquittal
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW - The first jury trial at the Moscow City Court landed a not-guilty verdict for a 25-year-old murder suspect last week, as the constitutionally guaranteed right of citizens to be tried by a jury was introduced in the capital. 
 
After five hours of heated deliberation, the jury of 12 Muscovites, most of whom were homemakers and pensioners, ruled that there was not enough evidence to convict Igor Bortnikov of the death of Andrei Shepenkov, 26, who was found strangled near his garage in October 2001. The jury, however, did find Bortnikov guilty of robbing Shepenkov, and handed him 10 years in prison.
 The trial was a completely new experience for Judge Pyotr Shtunder, the defense council and the entire personnel of the Moscow City Court. Three rooms in the city court were recently redesigned to accommodate jury boxes.
 "You have done everything right," Shtunder told the jury after the seven-day trial. "This was a good example of ordinary citizens participating in justice." 
 The trial also served as a model for the Moscow City Court; many judges attended the hearings as spectators.
 To the surprise of those accustomed to the sedentary nature of courts inherited from the Soviet times, both prosecutor and defense councils walked and gestured around the courtroom during the hearing. They addressed the jurors and urged them to use their life experiences when making their decision.
 "I am deeply satisfied that the jurors managed to get to the bottom line of the case and did not bend under the pressure they experienced from the judge," said defense counsel Vladimir Zherebyonkov, who insisted that Bortnikov be tried by jurors since his case was complicated.
 Russian courts are often criticized for being biased, and incidences of judges handing down guilty verdicts against defendants under pressure from prosecutors are widespread.
 Zherebyonkov said that the responsibility placed on the jurors was enormous and that in a regular court, Bortnikov would have been all but assured of being convicted. 
 Bortnikov was charged with robbing and murdering Shepenkov. Shepenkov's Mercedes 124-200E sedan and two cellphones were missing.
 Bortnikov admitted to participating in the robbery with three other men, but he insisted that he did not kill Shepenkov. Two of his accomplices earlier were convicted of robbery, while a fourth suspect remains at large. 
 Prosecutors said that Bortnikov strangled Shepenkov to get hold of the keys to his car, but Zherebyonkov maintained there was no solid evidence against his client. Zherebyonkov also argued that Bortnikov had no murder motive since, unlike his accomplices in the robbery, he received none of the stolen items. 
 Prosecutors refused to comment after the trial other than to say that they would appeal.
 Before the trial, 45 jury candidates were picked randomly by computer from a list of registered voters in Moscow. By law, jurors must be older than 25, have no previous criminal record and be mentally sound. Each jurist receives 100 rubles per day plus public-transportation expenses. 
 The judge, prosecutors and defense council spent several days selecting the board of 12 main jurors and four alternates. The youngest juror was 34; the oldest 61. 
 Zherebyonkov said that 15 of the 45 candidates told the court when they showed up Aug. 1 that they couldn't serve because they had to be at work. One candidate said that he had been mugged himself and could not guarantee his objectivity. Several other candidates were let go after they said they had relatives who worked in law enforcement.
 The judge ordered the jurors to keep a low profile throughout the trial to avoid any pressure while deliberating on a verdict. The verdict was announced late Wednesday and the sentence on Thursday.
 After the trial, some jurors acknowledged that they felt relieved.
 Juror No. 2, Natalya, 48, a doctor with a Moscow ambulance service, was initially reluctant to discuss the trial. She said that the process had left her physically and mentally exhausted. A mother of three, she had to skip three days of work to attend the trial.
 "Persuading several of our jurors was the hardest," she said. "They were very stubborn and spiteful. I am so glad that we saved the boy from a murder conviction. It was so obvious that there was no direct evidence that he was the person who killed the man." 
 Juror No. 4, a 34-year-old homemaker who declined to give her name, said that she agreed to jury duty out of curiosity. But she came out of the trial with mixed feelings. 
 "There was a moment when I thought that I was about to collapse," she said, explaining her shock at hearing the description of the murder in the courtroom. "I wanted to participate because I wanted a fair decision."
 Unlike Natalya, Juror No. 4 left the proceedings unconvinced that Bortnikov was innocent of the charge. But she agreed that there was no solid evidence against him.
 The two jurors suggested that the overall acquittal rate would increase now that defendants have the right to be tried by a jury. 
 The acquittal rate in jury trials is around 18 percent, NTV television reported. Courts usually acquit less than 1 percent of all defendants.
 "This is a type of court that cannot be corrupted," Sergei Vitsin, the presidential adviser on improving the justice system, told NTV. "I personally do not see any way to bribe 12 jurors and their substitutes."
 The 1993 Constitution provides for jury trials, which have been employed on an experimental basis over the past decade in nine regions, including the Moscow region. Boris Lokteonov, a prosecutor in Bortnikov's case, said that he has taken part in 90 jury trials in the Moscow region.
 The law on jury trials came into effect on July 1. They are to be introduced throughout the country by 2007.

TITLE: Robbers Hit Local Memorial Office
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: An office of the St. Petersburg branch of human-rights organization Memorial was broken into and robbed Thursday.
 
Two men, one of whom was masked, entered the office on Razyezzhaya Ulitsa at 2:45 p.m. on Thursday afternoon. Claiming to be representatives of an organization supporting Yury Budanov, the Army colonel jailed recently for the murder of a young Chechen woman, they demanded that staff hand over two office computers containing databases.
 "They were armed with hammers and looked rather frightening," Memorial office head Vladimir Shnidtke, who was present at the time, said in a telephone interview on Friday.
 According to Shnidtke, the two men tied up a Memorial duty officer who reached for the telephone when they entered, taped up her mouth with scotch tape and locked her in a storeroom.
 They then entered the room in which Shnditke was sitting and took two computers, after which they tied up Shnidtke and the office accountant and locked them in the storeroom.
 The three employees were freed by a visitor to the office soon after the robbers left.
 The police on Friday launched an investigation under article 164, which covers robbery, of the Criminal Code.
 They also made computer-generated likenesses of the attackers, who had spent much of the morning of the attack loitering near the entrance to the building that houses the Memorial office. A Memorial employee was able to give a detailed description of the men.
 The robbers had yet to be detained as of Monday afternoon.
 Moscow-based Memorial is a nonprofit organization that aims to promote human-rights issues in Russia. It runs active campaigns in areas including the country's prisons, the anti-fascism movement and Chechnya.
 Shnidtke said that Thursday's attack was likely premeditated and related to the group's work.
 "It was uncomfortable precisely because it didn't seem like a straightforward robbery," he said. "They took only the two most important computers, which hold our most valuable information, the lack of which is now interfering with our work."

TITLE: Journalist in Chelyabinsk Gets Year in Jail for Libel
AUTHOR: By Anna Dolgov
PUBLISHER: Staff Writer
TEXT: MOSCOW - In an unprecedented case that media-rights advocates say may open the way for a barrage of criminal cases against independent journalists, a Chelyabinsk journalist has been sentenced to one year in jail on libel charges filed by the regional administration. 
 
German Galkin, publisher of Rabochaya Gazeta newspaper and deputy chief editor of Vecherny Chelyabinsk daily, was tried in connection with articles that accused the regional administration of misspending budget funds and suggested that Deputy Governor Konstantin Bochkaryov had pedophiliac tendencies. 
 Galkin denied he was the author of the non-bylined articles, and Vecherny Chelyabisnk's politics editor, Andrei Koretsky, said Monday that the style of writing was quite different from Galkin's. But the court decided otherwise. 
 The articles, published in Rabochaya Gazeta in July 2002, said the Chelyabinsk administration spent millions of dollars - or about 10 percent of the local budget - over the past few years on the creation of a regional television channel that would promote the adminstration's views, Koretsky said. 
 Considerable funds also were used to buy Mercedes, Volvos and jeeps for local officials, the articles said. Koretsky insisted that the reports were accurate. 
 The articles also hinted that Bochkaryov had a predilection for young boys. But "nobody has directly accused him of pedophilia," Koretsky said in a telephone interview from Chelyabinsk. 
 The Rabochaya Gazeta issue that the articles appeared in never reached the streets because all copies of the newspaper were seized shortly after leaving the printing house. The criminal case against Galkin was opened in July 2002 on a request from Bochkaryov and another deputy governor, Andrei Kosilov. 
 After a trial lasting several weeks, Galkin was sentenced Friday. He plans to appeal.
 Galkin, who is also a local leader of the Liberal Russia party, said in his closing statement Thursday that the case was clearly politically motivated. 
 "This would explain the fact that throughout the investigation prosecutors tried to present their conclusions in place of evidence and in the absence of evidence," Galkin told the closed-door court session in his speech, a copy of which was obtained by The St. Petersburg Times. 
 Since the start of President Vladimir Putin's tenure, authorities have opened scores of actions against independent media, and in one of the most high-profile examples, the country's last privately owned national television channel was shut down in June. 
 But the case against Galkin is the first time a journalist has been actually sentenced to a prison term for criticizing government officials. 
 "What we had been warning about has happened," said Oleg Panfilov, head of the Center for Journalism in Extreme Situations. "If [supporters] fail to get Galkin freed, then other governors will start jailing local journalists."
 In cases that stirred international protests over the past few years, military journalist Grigory Pasko and former naval officer Alexander Nikitin have been sentenced to prison terms for allegedly revealing state secrets in their reports about the armed forces. 
 Galkin said in his closing statement that a sign that the charges against him were politically motivated was the fact that his indictment begins with a statement accusing him of being motivated by personal objections to the regional administration's financial policies.
 He said that Kosilov, the deputy governor, also sent a letter to prosecutors accusing him of engaging in "anti-Putin propaganda." 
 Alexei Simonov, the head of the Glasnost Defense Foundation, said the trial at a Chelyabinsk district court was tarnished by procedural violations, and he doubted the outcome was fair.
 Panfilov described the provision in the Criminal Code envisaging jail terms for libel as "a Soviet-era atavism" and a "Stone Age" relic. Some European countries have similar laws, but they have not been applied for several decades, Panfilov said. In the United States, only civil suits can be filed in libel cases. 
 Koretsky said that after the verdict was handed down, two deputy governors came out of the courthouse and warned reporters that similar charges would be filed in the future. They wanted to "make other journalists understand who is the boss," Koretsky said. 
 Bochkaryov and Kosilov could not be reached for comment Monday. 
 The telephones at the office of Galkin's lawyer rang unanswered and his cellphone was turned off.

TITLE: Ice-Cream Boom Has Regional Character
AUTHOR: By Rinat Sagdiyev, Maxim Trapeznikov and Anton Saraikin
PUBLISHER: Vedomosti
TEXT: MOSCOW - Along with waistlines everywhere, the domestic ice-cream market has been growing steadily. But the country's 360 ice-cream makers are not satisfied.
 
Having sunk millions of dollars into production and a flurry of advertising, large ice creameries were hoping for a boom.
 Analysts see three headline events for the market this year: the sale of the Ice-Fili ice cream plant in Moscow to portfolio investors, the strengthening of large Siberian producers' position and the return of Anglo-Dutch company Unilever in April.
 By the end of the year, the ice cream market may reach 395,000 tons, or $1 billion in retail prices - a hefty sum, of which imported ice cream accounts for only 2 percent, according to the Union of Ice Cream Producers.
 Analysts at GfK Russia estimate that the ice-cream market in Russia is currently dominated by 10 companies: Inmarko in Novosibirsk, Sam-Po in Samara, Perspektiva in Vladimir, Belgorod Khladokombinat, Russky Kholod in Barnaul, Kholod in Naberezhnye Chelny, Kholod in Kazan, Petrokholod and Talosto in St. Petersburg and Ice-Fili in Moscow.
 Together, these companies control 39 percent of the market.
 The producers' union said that ice cream production grew by 4.6 percent in the first half of this year to reach a total of 194,730 tons.
 But growth rates ranged wildly, from negative growth in St. Petersburg due to an unusually cold June, to 12-percent growth in the Moscow market to a whopping 119 percent increase in the Siberian federal district, mostly due to booming business at Russky Kholod and Inmarko.
 At Talosto in St. Petersburg, marketing director Nikolai Likhachyov said that his company scaled back its annual ice cream production by 800 tons in order to compensate for falling demand.
 And he said small and medium-sized producers were the most likely to suffer and the loss in profits would severely limit their ability to expand next season.
 "Some of them may go bankrupt," Likhachyov said, adding that this would pave the way for market consolidation as early as this year.
 "While bigger companies are likely to swallow smaller ones, it is also possible that a number of large regional producers will merge," he said.
 Valery Yelkhov, the executive director of the ice cream producers' union, said that if August and September turn out to be scorchers, it could help the market compensate for a cold June.
 "For the last three years, the market has been growing by 3 percent to 4 percent annually," he said. "If the weather remains warm until the end of the season, the market will grow by 5 percent."
 Vyacheslav Klimentov at Ramzai, a retailer that sells ice cream at 600 kiosks throughout Moscow, was less optimistic.
 In the capital, June sales were 30 percent lower than last year's, making this month crucial for ice-cream sales in the city, he said.
 "July and August are dead season in Moscow, because most people are out of town for vacation. We can only hope that late August is hot," he said.
 An advertising juggernaut somewhat countered the effects of a chilly June.
 Inmarko general director Dmitry Dokin said major advertising campaigns by Talosto, Inmarko, Nestle and Unilever helped buoy the market. An increase in beer excise duties this year helped make ice cream relatively appealing as well, he said. Also, consumers have grown increasingly weary of <i>sukhariki</i> and other &quot;low-quality snacks.&quot;
 Dokin said that Unilever was the first to launch its aggressive advertising campaign, helping ice cream to win back ground lost to snacks and beer.
 Domestic producers have anticipated the return of Unilever ever since the multinational heavyweight left the market two years ago. The company announced in February 2001 that it was halting production of its Algida ice cream in Russia, saying it had only been studying the market.
 Market researchers at Gallup AdFact said Unilever spent almost $6.2 million on Algida advertising in 1999-2000 before it pulled out.
 But in March 2003, the company announced it would invest 5 billion euros ($5.68 billion) into its worldwide ice-cream business. Part of its global strategy included Algida's return to Russia in April, though as an importer, not a producer.
 Unilever-CIS corporate manager Yulia Goshko said the company is planning to import five lines of ice cream - Magnum, Cornetto, Twister, Viennetta and Carte d'Or - under the Algida umbrella brand.
 &quot;There are 42 Algida kiosks owned by InterIce in Moscow that sell our products,&quot; she said. &quot;Algida ice cream is also sold by most retail networks in Moscow and other large cities.&quot;
 Domestic producers say Unilever's return is too late.
 Alexander Saulin, who heads the marketing department at Russky Kholod, labeled Unilever sales as &quot;stagnant.&quot;
 &quot;They cannot compete with us,&quot; he said. &quot;The quality here is just as good, while the prices are much cheaper. Until Russian ice cream costs $2 per piece, they won't make any money here. A Unilever cone retails for 25 rubles. In the regions, domestically-made cones sell for 3 rubles to 5 rubles.&quot;
 Inmarko's Dokin said Unilever is experimenting with how much Magnum ice cream it can sell for $1 per piece when paired with a television-advertising campaign.
 &quot;This is their first cautious step. Only time will tell what strategy they will pick for the following years,&quot; he said. He said Unilever would likely snap up a Russian producer with about 30 percent market share.
 Unilever-CIS refused to comment on any possible plans to acquire Russian assets.
 Goshko said that Unilever has consciously entered the premium segment of the market, which is still relatively insignificant, but also has great growth potential.
 Yelkhov of the producers' union said he thought Unilever may acquire Ice-Fili next year. Other analysts have suggested that Unilever may be interested in retailer Ramzai.
 Klimentov said Ramzai is not up for sale, while Vladimir Ryskin, executive director of the NIKoil corporation which holds an equity stake in Ice-Fili, believes no stake in the ice-cream maker will change hands next year.
 &quot;Its shares are undervalued at the moment,&quot; Ryskin said. 
 Apart from Unilever and Ice-Fili's shareholders - Guta Bank, Russky Generalny Bank and NIKoil - it is unlikely other major investors, or major assets, will appear on the market, Yelkhov said.
 More new market players may yet emerge.
 Sergey Anopriyenko, deputy general director of Smile, based in the Moscow region, says his company is negotiating with a U.S. ice-cream producer, whose name he would not disclose.
 Anopriyenko said the U.S. side would invest $5 million to $8 million in building a new premium ice-cream plant.

TITLE: Regulations Spark New Growth in Fund Sector
AUTHOR: By Angelina Davydova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Russia's stock market had been outperforming most of its Western counterparts until the storm broke over Mikhail Khodorkovsky and Yukos, and investment-management firms are waiting for the government to release a list of companies that will be allowed to run pension funds, but mutual funds are also gaining a place in the investment market here.
 
The total of investment in Russian mutual funds, according to financial-analysis firm Collective Investment Research, has reached $900 million and experts predict that recent growth will continue. The strength of the trend has been demonstrated recently with the number of mutual funds, including CIT-Funds, AVK Funds, NIKoil and Pallada, that opened retail offices in St. Petersburg.
 Pension-fund reform has long been touted as a necessary step in the country to boost opportunities for investors, but analysts say that mutual funds are becoming a strong draw as well.
 &quot;Mutual funds do not and will not compete with pension funds, because they are mainly aimed at private investors who are focusing on the market,&quot; Olga Petrova, the spokesperson for the Web-Invest bank and Creative Investment Technologies (CIT) management company, said in a telephone interview on Monday.
 The mutual-funds sector had been stagnant for a long time, chiefly due to the lack of legal regulation and a general uncertainty about the health of the stock market. But a law on mutual funds was introduced in 2002, which stimulated growth in both the number of mutual funds available and the total assets being tied up in them.
 According to Vladimir Kirillov, the general director of CIT, the number of mutual funds in Russia doubled during the first quarter of 2003, with 1.13 million private investors presently having at least some mutuals as part of their portfolios. Not all of these investors have ended up with their money in mutual funds purposely, however, as the vast majority were shifted to them from funds that had been set up to hold privatization vouchers in the 1990s. Analysts estimate that less than 15,000 investors chose mutual funds voluntarily.
 There are 102 mutual funds registered in Russia at present, with 97 of them actually active, according to Collective Investment Research. The $900 million in assets controlled by the funds today is a 108-percent jump from the figure at the start of the year.
 &quot;Private investors have become significantly more active because they realized that mutual funds are becoming more and more profitable,&quot; Petrova said.
 Anna Barkhatova, the spokesperson for the AVK management company, which operates four mutual funds with assets totaling 155 million rubles ($5.1 million), said in a telephone interview on Monday that returns from mutual funds in Russia during the first half of the year were between 25 to 40 percent, depending on the type of fund.
 Barkhatova also said that mutual funds are developing in two directions at the moment. One segment consists of fast-growing market-oriented funds comprising shares and/or bonds and is targeted at mass investors, while the other is made up of so called &quot;closed-end funds&quot;, which are targeted at specific investment projects, mainly real estate and venture capital. While the closed-end funds are generally the most profitable for management companies, fewer than 10 are operating in Russia at present.

TITLE: Brokers: Lessons From 1998 Crash Make Repeat Unlikely
AUTHOR: By Igor Semenenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - Any investor who dared to put his money into UES shares amid the 1998 financial crisis would have seen his portfolio skyrocket 15-fold by now.
 
But few did.
 In October 1998, 102 companies that had failed to pay quarterly fees lost their membership on the benchmark RTS stock index. Many brokerages were killed in action shortly thereafter.
 Among the casualties were Deutsche Morgan Grenfell, Flemings-UCB, Rinaco, Yukos-Invest, Raiffeisen Bank Austria and Regent European Securities. Credit Suisse, which accounted for 80 percent of equity trading with foreigners in the mid-1990s, quickly downsized and transferred the remains of its brokerage business to London. The bank made its last deal on the RTS in January this year.
 Amid the turmoil, Adam Elstein, the head of Bankers Trust in Moscow, coined the immortal phrase, &quot;After this, Western investors would rather eat nuclear waste than buy Russian debt,&quot; in an interview with The Wall Street Journal.
 Now, five years after the start of the Aug. 17, 1998, crisis, two key questions remain: Why were brokers and bankers so blissfully unaware of the dangers looming on the horizon, and could they end up on the wrong side of the judgment call again?
 &quot;People underestimated the nature of dysfunction in the government and they were making a great deal of money,&quot; Alfa Bank chief strategist Chris Weafer said. &quot;There was no reason to rock the boat.&quot;
 Weafer arrived in Moscow three weeks before the crisis, which was sparked by economic turmoil in Southeast Asia. He had observed the fall of the Thai baht as the head of research for NatWest's regional office.
 At that time, Russian margins were thick - a broker easily made a profit of 1 percent to 2 percent selling second-tier stocks in 1997 and even more before that.
 Apart from a failure to understand the macroeconomic risks and greed, a lack of experience also weighed in.
 &quot;I was just a kid out of college at the time,&quot; said Nick Betsky, 35, senior equity sales manager at the Aton brokerage.
 Betsky, who was then selling equities for Pioneer Securities, said that since then he has started looking at the numbers much more closely and become a better adviser.
 &quot;I had never experienced a bear market before, only the bull market,&quot; he said.
 Betsky moved to Canada in 1998 before deciding to come back to Moscow in 2001 to participate in another bull run on the RTS.
 Bankers said that the crisis changed the face of the industry forever.
 &quot;Before the crisis, there was a great deal of guesswork,&quot; Weafer said. &quot;It was a momentum investment.&quot;
 Before August 1998, foreigners accounted for three-quarters of the average brokerage's client list, whereas now they represent about a quarter of the market, said Dan Rapoport, who recently returned to become chief executive of a revamped CentreInvest Securities after a two-year break from Russia in the south of France.
 &quot;People are very much aware of the Russian risk now,&quot; said Richard Hainsworth, head of the RusRating agency and a banking analyst with Renaissance Capital.
 Hainsworth, who in 1998 was the local representative for Thomson BankWatch, said that he advised a friend to take his money out of Inkombank on Aug. 10, just two days before the bank stopped processing payments.
 &quot;It was clear that something was happening,&quot; Hainsworth said.
 Thomson BankWatch saw its money frozen in Dialog Bank in 1998 but later used it to offset taxes.
 This August, brokers and bankers are once again bullish on the market - and they have good reason. The RTS, which hit the floor at 37 after the crisis, ended at 510.84 on Friday, up 8 percent on the week. Unified Energy Systems, which fell below 2 cents per share in October 1998, was trading at 29.5 cents.
 &quot;We are talking about macroeconomic risks - inflation, rates of growth and other normal issues,&quot; Weafer said. &quot;But it is a question of whether the RTS index goes to 400 or 600, not whether it goes to 37.&quot;
 Coast Sullenger, who manages two funds for Lombard Odier Bank in Geneva and who was head of sales at Pioneer Securities in 1998, is also upbeat.
 &quot;Resource stocks are gaining momentum after years of underinvestment and neglect,&quot; Sullenger said. &quot;Russia is perfectly positioned to benefit from this.&quot;
 Pioneer sold its brokerage business in the wake of the crisis.
 Market insiders say that no matter what happens, there will be no return to the pre-1998 stone age.
 &quot;Before the RTS was introduced in 1995, prices were written in chalk on the blackboard, and traders went back and forth to put fresh quotes when the market moved,&quot; Sullenger recalled. &quot;When you look at it in retrospective, it is like going from the abacus to using a calculator.&quot;
 In 1994, about half of all trades were never closed because sellers refused to deliver securities when prices increased after the deal was made.
 &quot;I decided to retire in 2001, but I could not resist the temptation to come back,&quot; Rapoport said. &quot;This is why I want to build an investment boutique focusing on second-tier stocks. There is no way one can make money in blue chips unless you have large turnovers.&quot;
 He said that when foreign money starts pouring in from mutual funds, local brokers will not be in position to serve them.
 &quot;They will deal with brokers from the top 10 approved list,&quot; he said, referring to lists drawn up by mutual funds themselves.
 He added that the industry remains oversaturated with brokers, as it was in 1997.

TITLE: Kasyanov Adviser Leaves Post
AUTHOR: by Denis Maternovsky
PUBLISHER: Staff Writer
TEXT: MOSCOW - Mikhail Delyagin, economic aid to Prime Minister Mikhail Kasyanov and an outspoken critic of the government's bid for accession to the World Trade Organization, quit the government Monday in favor of a career in academia.
 
The decision was by no means &quot;political&quot;, Delyagin told The St. Petersburg Times in a telephone interview.
 Kasyanov's selection of Delyagin, 35, as his advisor on macroeconomics and natural monopolies in March 2002 came as a surprise to many. Delyagin had developed a reputation as a doomsayer, a protectionist and a staunch critic of the government's reforms efforts, referring to 2001 as a &quot;the year in which hopes were crushed.&quot;
 Delyagin's economic views contradicted those of ultra-liberal presidential advisor Andrei Illarionov and Economic Development and Trade Minister German Gref on many issues, including WTO accession, energy tariffs and debt repayment.
 Observers and local media speculated that this opposition may have been precisely the reason Kasyanov hired Delyagin.
 &quot;The government declares its commitment to market liberalism, but Delyagin is your classical Keynesian,&quot; said Boris Kagarlitsky, who replaced Delyagin as the director of the Institute of Globalization Problems when he left for the government last year.
 &quot;It is not strange that he is leaving the government. What is strange is that he managed to stay there for such a long period of time&quot;, Kagarlitsky said.
 It was not Delyagin's first foray among the ruling elite. Previously, he served as an advisor to then-President Boris Yeltsin and then-deputy prime ministers Anatoly Kulikov and Boris Nemtsov. Following the financial crisis of August 1998, he advised then-First Deputy Prime Minister Yury Maslyukov, a Communist.
 The Kommersant daily newspaper suggested on Monday that Delyagin was leaving the government to head an &quot;independent research center sponsored by Roman Abramovich and Oleg Deripaska.&quot;
 Delyagin denied this.
 &quot;I have been dreaming for something like this to happen, but apparently the oligarchs forgot to tell me&quot;, he joked. &quot;The only thing that is true in this article is that I am indeed quitting my job.&quot;
 His position made it difficult for him to state his personal views publicly. &quot;For someone as outspoken as Delyagin this was a tragedy,&quot; Kagarlitsky said.
 Delyagin, who was still at his post Monday, plans to return to the Institute of Globalization Problems, which he ran prior to his appointment as Kasyanov's advisor and where he is currently the chairperson of the board, in order to concentrate on research.

TITLE: Eastern Bloc Shows Penchant for Old Europe
AUTHOR: By Quentin Peel
TEXT: 
 
The United States is having a terrible time trying to find large numbers of international peacekeepers to replace its war-weary soldiers in Iraq. But at least it has got Poland and Ukraine.
 
The first significant airlifts of troops from those two countries started arriving in the Persian Gulf last week - more than 2,000 from Poland and 1,800 from Ukraine.
 They will soon be backed up by further troops and police from Romania, Bulgaria, the Czech Republic and Lithuania. Admittedly, several of the countries are expecting substantial U.S. financial contributions toward their costs. But that is all. They have positively rushed to demonstrate their credentials as good allies.
 This all seems to confirm the confidence in Washington about the emergence of a &quot;new&quot; Europe from the ruins of the old Warsaw Pact, dedicated to stronger transatlantic ties. When Donald Rumsfeld, the U.S. defense secretary, coined the expression &quot;new&quot; Europe, he was contrasting it with what he saw as the tired old anti-Americanism in France and Germany. The balance was shifting, he suggested, in America's favour.
 But it is not quite so simple. Feelings are more mixed in Central Europe than is instantly apparent.
 Take the story of Vaclav Klaus, the prickly Czech president. He never backed the war. When he gave an audience to Craig Stapleton, the U.S. ambassador, last April, he made it clear that he did not like the U.S. &quot;exporting democracy&quot; any more than the U.S.S.R. &quot;exporting revolution.&quot;
 Klaus warned the envoy - related by marriage to President George W. Bush - that if the U.S. found weapons of mass destruction after the war was over, everyone would assume they had been planted.
 At that point, by all accounts, Stapleton walked out. Relations between Washington and the Czech president have not quite recovered.
 But the sensitivity is more than merely personal. The emerging democracies of Central Europe have been sorely embarrassed by any attempt to divide them from their western neighbors just as they are set to join the European Union.
 &quot;We lived on the political periphery of Europe for years, while geographically we were at the heart of Europe,&quot; says a senior Czech diplomat. &quot;Now we have the opportunity to join, we don't want to be back on the periphery again.&quot;
 Prague describes its own policy as &quot;constructive ambiguity.&quot; In Warsaw, the view is similar.
 &quot;We don't want to be called new Europe, or the American Trojan horse,&quot; says a Polish government official. &quot;We don't want the West to be split.&quot;
 While these former Soviet satellites want to remain friends with the United States, they already share more in attitudes and interests with the rest of Europe.
 This is a clear conclusion that emerges from the most comprehensive recent survey of opinions in the countries set to join, or hoping to join, the EU. They are perhaps more pro-American than the old EU member states, but they are pro-European above all.
 The Eurobarometer survey contrasts the views in 13 candidate countries with the 15 existing EU members. It seeks to compare the performance of the U.S. and EU on five questions: their contributions to world peace, the fight against terrorism, economic growth, the fight against poverty and environmental protection.
 The authors admit that their interviewees may not be well informed on such questions, but they do give a good general indication of the respective images of the United States and the EU. And on each one of the five questions, &quot;new&quot; Europe rates &quot;old&quot; Europe far above the U.S.
 On promoting peace in the world, for example, 45 percent of &quot;new&quot; Europeans see the U.S. playing a negative role, against 34 percent who see it as positive. The EU, however, is viewed positively by 65 percent, and negatively by only 13 percent.
 The one question on which Eastern Europe sees the U.S. as more positive than negative is in the fight against terrorism: 48 percent say its role is positive, and 35 percent negative. But even on that, the EU comes out better: 61 percent positive and 14 percent negative.
 As for the fight against poverty, economic growth and protecting the environment, again the EU scores far better than the U.S. One might question the conclusions - particularly on economic growth - but the perception is clear.
 In a separate series of questions, people in the new and would-be EU-member states showed overwhelming support for common EU foreign and security policies. They were interviewed in the immediate aftermath of the war in Iraq. By 65 percent to 14, they favored a common EU policy in the future.
 They showed an even larger majority in favor of a common defense policy - by 73 percent to just 10 percent against. On both questions, there were fewer opponents to such common policies than in &quot;old&quot; Europe - a striking endorsement of EU common policymaking.
 There is no doubt that the new enlarged EU, up from 15 to 25 members next May, will differ from the old. There will be a wider range of views and decision-making will be more cumbersome. But it is not going to split - at least, not if the new members can help it.
 
 <i>Quentin Peel is international-affairs editor of the Financial Times, where this comment first appeared. </i>

TITLE: Russia Unlikely To Win Again by Playing Anti-U.S. Hand
TEXT: The United States is facing increasing difficulties in Iraq. It is probably too early to use the word &quot;failure,&quot; yet it is clear that the original expectations have turned out to be wrong. While it hasn't turned out to match any of the worst-case scenarios, normalization of the political situation has clearly stalled, the pace of economic recovery is painfully slow, public security is a constant problem and American soldiers are being killed in increasing numbers than during the invasion itself. A war that Washington promoted as an act of liberation has turned into a costly occupation that is likely to last many years. A U.S. soldier summed it up best in an interview published in &quot;The Economist&quot;: &quot;It sucks. We promised freedom. They got martial law.&quot;
 
A report monitoring reconstruction published last month by the Center for Strategic International Studies highlights an alarming issue - the failure of the occupying authority, the Coalition Provisional Administration, to effectively communicate its message to the Iraqi population. In other words, ordinary Iraqis do not see the Americans and their Western allies as liberators. The entire project lacks public support. Washington wants to establish a viable government and economy in the country, preferably modeled on Western democracy and a market economy, that are expected to bring not only freedom and welfare to Iraqi people, but also to set a positive example in the entire region and trigger a systemic change in the Middle East. When such a politically daunting project lacks public support, the efforts risks leading to a simple waste of time and resources. Unfortunately for the U.S., those resources are already overtaxed.
 The relatively small force that won the military victory appears to be insufficient for maintaining security in a vast country with a population of 24 million. Economic and political reconstruction is expensive and pre-war hopes that Iraq's huge oil reserves, estimated as second only to those of Saudi Arabia, would provide the funds for reconstruction have proven to be unrealistic. A decade of sanctions severely undermined Iraq's oil-export capacity, and the oil industry will require $30 billion to $40 billion of investment before it will be able to cover the country's needs.
 The gap between the funds needed and those available appears to be growing. The figure reported for this year is $5 billion and one of $16 billion is being cited for 2004. Washington hopes to cover this gap by raising the money from other countries and announced a donor conference to be convened this October. It also hopes to eventually replace its troops with international contingents. This effectively means that the administration of President George W. Bush is looking for acceptable ways to internationalize the issue. This is good news for all of those countries who feel that they were abused by American unilateralism, but it also poses a big challenge - how to respond?
 A number of key U.S. allies and partners who are now being invited for consultations had their criticism of the war ignored by Washington. Revelations that the United States and Great Britain used less-than-reliable evidence to support the invasion, coupled with the fact that no &quot;smoking gun&quot;evidence of weapons of mass destruction programs has been found, haven't provided much impetus for other countries, including Russia, to try to help Bush out of his predicament. To secure broader international support, Washington will need to acknowledge that it made a mistake and apologize to its partners. Realistically, this is unlikely to happen.
 But the destabilization of the Middle East situation that would accompany a U.S. failure in post-war Iraq would threaten all kinds of problems - turmoil on the world oil market, increased confidence among radical Islamic circles, a rise in anti-Western sentiment, etc. This outcome would not be in Europe's or Russia's interest. It would be a nightmare scenario for a Russia that already has significant problems with its own radical Islamic and separatist groups.
 Russia may find that the costs of not helping the U.S. in Iraq are even higher than those of refusing to help during the invasion. It may not get off as easily as it did in accordance with U.S. National Security Advisor Condoleeza Rice's prescription to &quot;punish France, ignore Germany and forgive Russia.&quot;
 For critics of the war, Washington's emerging interest in the internationalization of the Iraq situation creates a window of opportunity. But the task is tricky. Opportunities to try to get Washington to be more attentive to the interests of other countries are rare, while choosing a policy of non-engagement with the United States is not a realistic option. The most promising path to achieving a satisfactory outcome would be one that would see Moscow and other European capitals - ideally, Russia in concert with the European Union - develop a constructive common approach toward reconstruction in Iraq. Unfortunately, there are no indications that any serious proposals have been made in this direction.
 In retrospect, the axis that Moscow formed against the war with Paris and Berlin appears to have been based more on anti-American sentiment and a frustrated sense of national pride than the establishment of a responsible coalition with Europe based on a commonality of interests between Russia and Europe.
 
 <i>

TITLE: Disinflation Policy a Tough War With Numbers
AUTHOR: By Peter Westin
TEXT: Earlier in August, the State Statistics Committee announced that July inflation amounted to 0.7 percent, which means that consumer prices in the first seven months of this year increased by 8.7 percent. Inflation has been falling on a trailing basis, however it is too early to celebrate. The 12-month trailing rate of 13.9 percent in July was down from 14.8 percent in March and more than 15 percent in December of last year, but it is increasingly looking as if the official target of 10 percent to 12 percent will, once again, be missed.
 
Oil prices remain the key swing factor for inflation. We estimate that a $1 change in the average oil price changes Russia's annual inflation by 0.3 percent. For instance, at an average for Urals Mediterranean Blend of $27 per barrel for the year - which equals the average in the first seven months of this year - inflation would finish at 13.3 percent. Similarly, a lower average oil price would relieve inflationary pressure; for example, a $17-per-barrel price level would produce inflation of 10.3 percent. Our current forecast of 12.7 percent for the year is based on an estimated average price of $25 per barrel.
 It is clear at this stage that the main culprit for inflation pressure is the high oil price. The inflow of capital, mainly in the form of export revenues, has increased liquidity in the economy. The strong build-up of international reserves is caused by the Central Bank soaking up dollars by printing rubles. The monetary base has so far this year increased by almost 24 percent and is up 43 percent over the last 12 months.
 However, the inflationary impact of the current oil-driven monetary expansion is mitigated somewhat by unorthodox sterilization mechanisms, including increased ruble demand among the population and an increased willingness to hold rubles as a store of value. In addition, there is paradoxically one positive aspect of Russia having an underdeveloped banking system, namely that the system takes money out of the economy but fails to channel liquidity back into the economy, which is reflected by the low level of bank lending to the private sector. It has to be said, however, that this positive aspect is far outweighed by all the negative aspects associated with the lack of financial sector reform. 
 Russia is still in the process of adjusting its relative price-and-wage structure. The price of essential services, which include housing and natural-monopoly tariffs, has been the major inflationary driver outside of oil. The government is seeking to control these by limiting natural-monopoly tariff hikes to a few percentage points above the forecast consumer-price index. Concerning wages, officially they have risen 129 percent in the last three years compared to 74 percent CPI growth, which has increased demand-driven inflationary pressure. The pending State Duma elections in December, as well as the presidential election in March, means that wages are set to continue to increase this year and next. So far this year, wages are up 25 percent year-on-year and, in October, state-sector workers are looking to get a 33-percent wage hike, and next year the administration faces the task of honoring election promises, increasing the likelihood of further wage increases in 2004.
 The Central Bank, as well as the government, remains sure that it will be able to meet the inflation target of 10 percent to 12 percent for 2003. For the last five years, the Central Bank and government have set an annual inflation target and then missed it, although they have consistently reduced inflation since 1998. These constant misses hurt the Central Bank's credibility, and it also remains unclear just who is responsible, the government or the Central Bank, for ensuring that inflation comes within the target. Therefore, a policy set to reduce inflation, without a specific target, may be a preferable strategy in the short run. In other countries, a zealous inflation target has been more successful in keeping inflation low when there is single-digit inflation, and has been less successful when inflation is in the double digits. According to a recent study by the IMF, 40 countries are currently aiming for lower and stable inflation but only 18 are classified as fully fledged inflation targeters (which does not include Russia), all of which adopted inflation targeting after inflation had been brought down to single digits.
 Nevertheless, an annual inflation rate slightly above the Central Bank and government target of 12 percent does not necessarily stifle growth. Although it is clear that galloping inflation is harmful, research has not convincingly proven that mild inflation is damaging. In fact, several Central and East European countries (including Russia in the last couple of years) have managed to produce strong growth under conditions of mild inflation.
 To bring inflation down, the factors of luck, timing (initial conditions), and political institutions have proven to be most important in determining a successful deflationary policy. Current conditions, with a fiscal surplus and high international reserves, do provide Russia with a good economic situation. However, keeping in mind that Russia is still confronted with a need for structural changes, it is likely that inflation will fall at a slow pace in the next couple of years. In fact, current policies seem to be unable to accommodate an inflation-target policy. The main deflation-policy mechanism is the limitation of natural-monopoly tariff increases. However, a relatively loose monetary policy is set to continue in the current climate of high oil prices (and reserves build-up), in combination with the continuing process of re-monetizing the economy. If an inflation-target policy were to be pursued, it would be more appropriate to set a long-term, realistic target, instead of the current short-term fudge the Central Bank and the government insist on setting.
 
 <i>
Peter Westin is a senior economist at Aton Capital. He contributed this comment to The St. Petersburg Times. </i>

TITLE: Former Ugandan Dictator Idi Amin Dies
AUTHOR: By Henry Wasswa,
PUBLISHER: The Associated Press
TEXT: KAMPALA, Uganda - For many Ugandans, the death of former dictator Idi Amin on Saturday severed the last link to an era best forgotten: eight years of brutal rule defined by the deaths of up to 300,000 people and the memory of thousands of hastily disposed bodies collecting in Lake Victoria.
 
But 25 years after he went into exile, some found it galling that Amin was never punished for bringing so much misery to what had been a prosperous country. He never expressed remorse and whiled away his later years fishing and taking strolls on the beach in Saudi Arabia.
 &quot;He should have lived longer to repent. He's now gone, he's dead, and it's beyond our human control; but he's going to face eternal judgment,&quot; said the Rev. Alfred Ocur, an Anglican priest in the central town of Lira.
 Amin died at 8:20 a.m. on Saturday in Jiddah, Saudi Arabia, where he sought exile after his government was ousted in 1979. He had been on life support since July 18 and had suffered kidney failure. He was believed to be 80.
 Amin was buried in Jiddah's Ruwais cemetery after sunset prayers Saturday, said a person close to the family in the Red Sea port city. The source, who spoke on condition of anonymity, was told that few people attended the funeral.
 Amin was a convert to Islam, which encourages burial on the day of death, if possible.
 Although the front pages of Uganda papers were splashed with headlines proclaiming &quot;Idi Amin is Dead,&quot; reaction was muted. The last 25 years saw a generation of Ugandans grow up with no memory of Amin.
 President Yoweri Museveni, elected in 1996, has tried in recent years to promote unity and stability by encouraging the country to condemn Amin's violent era. Last year, Uganda officially celebrated his downfall for the first time, and the government has welcomed back those he expelled.
 &quot;We have no grudges against Amin because his era has ended,&quot; said Dalal Murtaza, the 44-year-old chairman of Uganda's 15,000-member Indian Association. &quot;Now, it's history, because he is dead, and there's no point having grudges against a dead man.&quot;
 A former boxing champion and British-trained soldier, Amin rose rapidly to the top of the Ugandan army after independence in 1962 and seized power on Jan. 25, 1971, ousting President Milton Obote. Ugandans initially welcomed him as a relief from Obote's dictatorship, and Amin's frequent taunting of Britain, the former colonial power, played well at home and across the continent.
 But his name soon became synonymous with brutality and misrule. In 1972, Amin expelled tens of thousands of ethnic Indians who dominated the country's economy. While the move was initially popular, the eviction of most of its entrepreneurs plunged Uganda into economic chaos.
 &quot;His body should be brought back to Uganda and put on display for people to view somebody who killed so many people,&quot; said Michael Mademaga, 41, an office messenger who said Amin's agents killed his uncle in 1974 and dumped him in the Nile River east of Kampala.
 Amin declared himself president-for-life and ran the country with an iron fist, killing real and imagined enemies. Former U.S. President Jimmy Carter once said Amin's rule of the east African country &quot;disgusted the entire civilized world.&quot;
 There are no official records, but rights groups say his regime killed from 100,000 to 300,000 people. Bodies were dumped into Lake Victoria and Nile because graves couldn't be dug fast enough.
 &quot;Even Amin does not know how many people he has ordered to be executed ... The country is littered with bodies,&quot; said Henry Kyemba, a former health minister who defected to Britain in 1977.
 Still, Amin was tough to read. Some saw him as outright crazy, others believed he was a shrewd operator; he may have been both. Defenders of white racist governments in South Africa and Rhodesia, now Zimbabwe, often pointed to him as a reason to keep denying blacks the vote because they could elect another Idi Amin.
 He was known for outlandish statements, once saying Hitler had been right to exterminate the Jews. His flair for self-aggrandizement and penchant for humiliating gestures was just as keen: He once got four white men to carry him on a chair into an Organization of African Unity meeting in a teasing reversal of colonial grandeur.
 But he was deeply embarrassed in 1976 after an Air France jet with many Israeli passengers was hijacked and flown to Entebbe. Amin took charge of negotiations but made little progress. Israeli commandos flew in and rescued the captives, and though Amin claimed he had been trying to negotiate a peaceful resolution, there was evidence he was in league with the hijackers.
 Amin's overreaching designs led to his downfall. After long-running tension with Tanzania, Ugandan troops tried to annex part of the country in 1978. Tanzanian troops counterattacked and invaded Uganda, capturing Kampala in April 1979.
 Obote won elections in 1980 and his second administration was considered as bloody as Amin's. He was overthrown in 1986.
 In exile, Amin lived in a luxury Jiddah house with cars and domestic servants paid by the Saudi government. He would occasionally telephone journalists to talk of plans to retake Uganda or to protest cuts in his gasoline allowance.
 In a rare interview in 1999, Amin told a Ugandan newspaper he liked to play the accordion, fish, swim, recite from the Quran and read. 
 In Kampala, one of his sons, Ali Amin Ramadhan, 40, said: &quot;I am very sad and confused.&quot;

TITLE: America, Canada, Recovering From Power Failure
AUTHOR: By Michael Hill
PUBLISHER: The Associated Press
TEXT: ALBANY, New York - Power plants knocked out by the blackout were coming back online, increasing the electricity flow in time for Monday's start of the work week and all of the power demands that millions of workers bring with them.
 Energy experts with the North American Electric Reliability Council announced late Sunday that the power grid was operating reliably again, with all but one transmission line back in service.
 However, utilities in the eight-state region hit by the Thursday blackout - the largest in U.S. history - still warned states they weren't out of the woods yet. In New York, Consolidated Edison asked its customers to conserve power when demand spiked again on Monday.
 &quot;We're still stabilizing our system,&quot; spokesperson Joy Faber said.
 In Canada, where a large part of Ontario also lost power, officials pleaded with businesses, industry and the public to reduce electricity use by 50 percent. The NERC said it didn't foresee any need for similar public appeals in the United States, though it said New York would re-evaluate whether to issue an appeal Monday, the first full business day since the blackout.
 Over the weekend, many offices were shut down and factories slowed. Officials were bracing for air conditioners, computers, lights and machinery to be running full force again Monday.
 The forecast usage for Sunday in New York was 22,300 megawatts; for Monday it was 25,000 megawatts, a 12 percent increase.
 &quot;It is basically business as usual,&quot; New York Mayor Michael Bloomberg said Sunday. &quot;We expect no problems ... other than the normal stuff.&quot;
 Still, the power system remains &quot;a little delicate,&quot; said Long Island Power Authority chairperson Richard Kessel. &quot;We ask that people don't go crazy using electricity on Monday, because that could create a lot of problems,&quot; he said.
 Ken Klapp of the New York Independent System Operator said the restarting of New York's nuclear plants, which at full capacity can provide 5 megawatts of power, would be a &quot;big help&quot; in meeting the increasing demand. Six of the nine plants U.S. nuclear plants that shut down in the blackout are in New York. All but one were scheduled to be up and running by Tuesday night.
 &quot;We want to go into the week with more generation available,&quot; Klapp said, &quot;and that's going to come from those nuclear units that are due to come back online.&quot;
 The massive blackout that hit Thursday afternoon and lingered into Saturday in some areas cost the economy of New York alone hundreds of millions of dollars and disrupted emergency systems in both Detroit and New York.
 &quot;It's serious,&quot; said Pando Andonopulo, who has run the Ninth Avenue Cheese Market in New York for 30 years and said he lost hundreds of pounds of cheese, prepared salads and sandwiches. &quot;Maybe I'm not going to be able to pay my rent.&quot;
 Patrick Anderson, a consultant and principal at Anderson Economic Group in Lansing, estimated that the blackout cost Michigan employers about $700 million in net output. About 80 percent of that amount translates into lost earnings for workers and investors.
 Transportation officials in New York said airlines, subways and commuter trains were back on schedule. The sanitation department said it also had resumed normal operations after dealing with overflowing trash cans and mounds of bags filled with spoiled food.
 Concerns about water safety continued, though, from New Jersey's Raritan Bay to Detroit, where residents were urged to boil their tap water at least through Wednesday.
 In New Jersey, untreated sewage flowed into the bay during the power outage, forcing a ban on shellfishing in the bay until unacceptably high coliform levels fall. In Detroit, the outage shut down treatment plants, allowing for the possibility that bacteria could make it through the pipes. A water-boil order in Cleveland was lifted Sunday evening.
 Investigations into the origin of the blackout, its effects and the cities' responses will continue for some time. Analysts at the NERC, the quasi-governmental body that overseas the grid, said Sunday they believe the massive outage may have started with problems in three power lines in Ohio, then quickly spread across the power grid.

TITLE: Micheel Caps Unknowns' Year
AUTHOR: By Doug Ferguson
PUBLISHER: The Associated Press
TEXT: ROCHESTER, New York - Shaun Micheel's name on the trophy looks out of place alongside Tiger Woods, Jack Nicklaus and Walter Hagen. None of those guys ever won a PGA Championship with a shot like this one. 
 
His heart pounding, his lead down to a single stroke, Micheel stood in the first cut of rough on the 18th hole at Oak Hill with everything riding on his 7-iron from 165 meters.
 &quot;When that ball was in the air, all I was asking for was just to carry to the front of the green,&quot; Micheel said Sunday. 
 The roar of the crowd told him it was better than that. Only when Micheel jogged up the steep slope of shaggy rough to the green did he realize it was almost perfect. 
 The ball hopped three times and trickled to 5 centimeters, a spectacular finish to the most surprising season of majors in 34 years. 
 The tap-in birdie was the easiest shot he had all day. 
 It gave him an even-par 70, a two-stroke victory over Chad Campbell and his first PGA Tour victory in 164 tries - at a major championship, no less. 
 &quot;I can't believe this is happening to me,&quot; he said. 
 It should come as no surprise to anyone who has followed the majors this year. Micheel's victory made it a clean sweep of first-time major winners for the first time since 1969 - Mike Weir at the Masters, Jim Furyk at the U.S. Open and Ben Curtis at the British Open, the 396th-ranked player in his first major. 
 Micheel was nearly as obscure. 
 &quot;I was trying to win the B.C. Open a year ago this time,&quot; Micheel said. &quot;A month or two ago, I was trying to keep my card. To have my name on that trophy, I don't know what I'm thinking right now.&quot; 
 Micheel, who finished at 4-under 276, was playing in only his third major. At times it showed, but not when it mattered. 
 &quot;Be right!&quot; Micheel's caddie shouted as his 7-iron took flight, then descended from the blue skies over Oak Hill. 
 Campbell, who rallied from a three-stroke deficit with four holes to play, was in the fairway and poised to make a run at birdie to force a playoff. 
 &quot;I knew I had to hit a good shot,&quot; Campbell said. &quot;That was obviously before he hit his ... His shot on 18 was just phenomenal.&quot; 
 Tim Clark of South Africa, tied for the lead as he made the turn, made four bogeys on the back nine and had to settle for a 69, three shots behind. 
 Alex Cejka of Germany, filling out the foursome of no-name players who contended for the fourth major of the year, had a 69 and was at even-par 280. 
 Micheel became the first player since John Daly in 1991 to make the PGA Championship his first victory, and he is the 13th winner in the last 16 years to make the PGA his first major. 
 He walked off the green and into the arms of his pregnant wife, Stephanie, hugging her and then kissing her belly. 
 &quot;I was so nervous I didn't know if it was the baby or just butterflies,&quot; Stephanie Micheel said. 
 With Rich Beem winning the PGA Championship last year at Hazeltine, the last five majors have gone to guys who had never captured golf's biggest tournaments. That's the longest streak since 1959. 
 Along with the $1.08 million prize, Micheel gets a five-year exemption on the PGA Tour and into the other three majors. He gets to play the PGA Championship as long as he likes. 
 Oak Hill lived up its reputation in at least one aspect: In four previous majors, a total of seven players finished under par. 
 Everyone knew the champions, though - Cary Middlecoff in the 1956 U.S. Open; Lee Trevino in the 1968 U.S. Open; Nicklaus in the 1980 PGA Championship; and Curtis Strange winning his second straight U.S. Open in 1989. 
 Add Micheel to the roll. 
 He sat next to the Wanamaker Trophy and studied the names, still amazed. 
 &quot;I look down that list right there and see all the names ... I just hope that maybe I can produce a career like a lot of those guys.&quot;

TITLE: A's Tie Red Sox at Top of Race for Wildcard in AL
PUBLISHER: The Associated Press
TEXT: OAKLAND, California - Barry Zito won his second straight start after a career-worst five-game losing streak, and Terrence Long drove in three runs as the Oakland Athletics beat the visiting Toronto Blue Jays 7-3 on Sunday to move into a tie with the Boston Red Sox atop the AL wild-card race
 
With the bases loaded in the second inning, Long hit a high chopper that just eluded second baseman Orlando Hudson. Long ended up on second with a two-run double on a ball that barely made the outfield grass. 
 In Seattle, the Mariners maintained a four-game lead in the West behind Freddy Garcia's second win in a row and light-hitting John Mabry's RBI double in a 3-1 victory over the Red Sox.
 After taking two of three from the Yankees last week, the Mariners won a three-game series from Boston, sending them into a tie with the A's for the wild card. The A's and Red Sox begin a three-game series at Fenway Park on Tuesday. 
 Zito (10-10) allowed three runs on four hits with three walks and six strikeouts in seven innings. After Carlos Delgado singled home Mike Bordick in the first, Zito didn't allow another hit until Bobby Kielty's RBI double in the seventh. 
 Halladay (16-5), trying to become the AL's first 17-game winner, lasted a season-low three innings. He gave up seven runs - five earned - and 10 hits, including nine singles. 
 
 <strong>
Arizona 2, Atlanta 0.</strong> Curt Schilling beat Greg Maddux and the Atlanta Braves in a classic confrontation Sunday, leading the visiting Arizona Diamondbacks to a 2-0 victory. 
 
&quot;You've got to tip your hat,&quot; Maddux said. &quot;I just got outpitched.&quot; 
 No shame in that, especially against Schilling. The Arizona ace threw one-hit ball for eight innings and struck out 12 in an old-fashioned matchup of All-Stars. 
 Alex Cintron broke up a scoreless game with a home run in the seventh off Maddux. Cintron scored an insurance run in the ninth, when he doubled against Kent Mercker and came home on an RBI single by Rod Barajas. 
 Schilling (7-6) won the power-vs.-finesse matchup with a dominating performance against the NL's best-hitting team. Marcus Giles had the only hit off Schilling, a double in the first that nearly cleared the wall. 
 The right-hander hasn't allowed a run in his last two starts, covering 15 innings. He had 23 strikeouts in those two games. 
 In other games, it was: Cleveland 5, Tampa Bay 4, 12 innings; New York 8, Baltimore 0; Kansas City 5, Minnesota 4; Anaheim 11, Detroit 6; Texas 6, Chicago 4; Philadelphia 6, St. Louis 4; Montreal 4, San Francisco 2; New York 6, Colorado 4; Cincinnati 4, Houston 3; Florida 11, San Diego 7; Los Angeles 3, Chicago 0; and Pittsburgh 5, Milwaukee 2.

TITLE: SPORTS WATCH
TEXT: <b>Moscow Breakthrough
 </b>

SOUTH WILLIAMSPORT, Pennsylvania (AP) - Anton Chekalin scored the go-ahead run in Russia's first-ever Little League World Series win as Khovrino Little League of Moscow beat Central Little League of Agana, Guam, 2-0 in pool play Sunday night. 
 With two out in the sixth, Chekalin hit a single to left, ruining what would have been the first perfect game in the Little League World Series since 1976. After advancing on Alexey Kozin's single, Chekalin scored the game's first run on Kirill Starodubov's RBI single to center. Kozin later scored on an error. 
 Evgeny Vorotyntsev (1-0) earned the win for Russia, striking out 12. Peter Perez (0-1), who had nine strikeouts, got the loss and was pulled after giving up three consecutive hits in the sixth. 
 
 
<b>Brooks Buried
 </b>

ST. PAUL, Minnesota (AP) - About 2,500 people filled the Cathedral of St. Paul on Saturday to pay their final respects to Herb Brooks, the man best known for coaching the 1980 U.S. Olympic hockey team dubbed "The Miracle on Ice."
 Brooks was killed Monday in a car accident just north of the Twin Cities. 
 Pittsburgh Penguins great Mario Lemieux and Toronto Maple Leafs coach Pat Quinn were among the attendees, along with former NHL stars Nick Fotiu and Neal Broten. 
 Former U.S. Olympic team captain Mike Eruzione said that Brooks was not afraid to speak his mind to anyone.
 "Right now, he's saying to God: 'I don't like the style of your team. We should change it,'" Eruzione said, drawing laughter from the crowd. 
 
 
<b>Henin-Hardenne Wins
 </b>

TORONTO (AP) - Justine Henin-Hardenne beat Russian teenager Lina Krasnoroutskaya 6-1, 6-0 Sunday in the final of the Rogers AT&amp;T Cup for her 12th career title. 
 Henin-Hardenne, the French Open champion ranked No. 3, made quick work of the unseeded 19-year-old Krasnoroutskaya, winning in 54 minutes. 
 Krasnoroutskaya defeated top-ranked Kim Clijsters in the third round, but had no answers against the other Belgian in the field. Henin-Hardenne finished with 11 aces, and her returns often left Krasnoroutskaya standing still.