SOURCE: The St. Petersburg Times DATE: Issue #908 (76), Tuesday, October 7, 2003 ************************************************************************** TITLE: City Chooses Putin's Envoy AUTHOR: By Vladimir Kovalev PUBLISHER: Staff Writer TEXT: Valentina Matviyenko presented herself to the city as the next governor on Monday, promising to raise city spending to Moscow levels, and also that some of the capital's functions will be shifted to St. Petersburg. "I can't tell you exactly what offices will be moved from Moscow but I guarantee I will make it happen," she said at her first news conference after Sunday's election. "I just need to discuss it with higher authorities. But I have enough resources to do that." "We need about 170 billion rubles if we are to fulfill our needs at the level of Moscow," she added. "In Moscow, there are twice as many people, but the budget is six times bigger. I will work on making things more proportionate." She suggested that one way of doing this may be to raise rent and make those using city property pay a proper price for it. Revenues could be raised after a review of city-owned property and rent prices is completed, she said. Matviyenko's mandate came from 63.16 percent of about a quarter of St. Petersburg's 3.7 million eligible voters. The final results issued by the city election commission of the second-round runoff gave City Hall candidate Anna Markova 24.18 percent of votes, with the "against all" category attracting 11.75 percent. The turnout was estimated to be 28.24 percent. "The city is the winner," Matviyenko said at a briefing at her election headquarters Monday early morning. "St. Petersburg residents have won. They voted for reconciliation of our great city as a center of national and world significance. They voted for a better life." "Don't worry about those image makers who tried to wreck the elections and used dirty election tactics; they shouldn't come to St. Petersburg," she added. Matviyenko herself was the butt of widespread criticism for enlisting police and others to disrupt and destroy the campaigns of other candidates for her own benefit. Acting Governor Alexander Beglov said Monday that the inauguration might take place Oct. 15. Matviyenko said she will speak to President Vladimir Putin soon about a possible successor to replace her as presidential envoy to the Northwest Region. Putin is due to arrive in St. Petersburg on Tuesday with Deputy Prime Minister Vladimir Yakovlev to discuss goals for the new governor, according to anonymous sources within local political circles. At the end of the Monday morning briefing, Matviyenko was slapped several times in her face with flowers by a member of the audience later identified as Natalya Lukovnikova, 23, a member of the St. Petersburg Nationalistic Bolshevik movement. "We don't need a governor like you," Lukovnikova screamed as she struck Matviyenko. Lukovnikova's ally, Sergei Grebnyov, 26, was throwing leaflets with "Go back to Moscow" on them at the time of the attack. Grebnyov and Lukovnikova were both detained and sentenced to 15 days in prison, the Agency of Journalistic Investigations reported Monday. At a briefing Monday afternoon, Matviyenko said that her first goals are to examine the city budget for next year and to form her administrative team. "I am against creating a post for the head of City Hall," she said. "It is not wrong to split political and executive power. I am used to responsibility and I don't run away from it." St. Petersburg residents opted for Matviyenko mainly because of her ties to the Kremlin, which they think will let the city solve many of its problems through access to federal financial funds. "I voted for Matviyenko because she promised to get rid of communal apartments in the city," Lyudmila Kuzmina, 65, said Sunday at a polling station in the Admiralteisky District. "None of the [city] deputies remember about the communal apartments and we have lived in them from generation to generation." "I knew what I was doing when I voted for her," Galina Vasilyeva, 55, said Sunday. "Markova doesn't know anything and Matviyenko knows all Russia and has an access to the federal structures." "This will help to resolve the city's problems, such as yards in the city, for instance, which are filled with people of dark [skin] and Chinese. It smells like a Chinese restaurant everywhere," she said. Markova said Sunday night she would have participated in the elections even if she had known in advance that she would lose. "I'm happy I expressed my point of view, despite the result of the vote," Interfax quoted her as saying. "This is not a loss. If I was offered to repeat everything, I would have done the same, but a bit earlier." Markova was banned from voting Sunday afternoon on grounds that she did not have the right documents to vote at a polling station located outside her polling district. Nevertheless, her name and passport data were on the list of eligible voters when she arrived to vote. But at about 5 p.m., the election commission relented and let her cast her ballot. Tatyana Protasenko, a senior researcher in the sociology department of the Russian Academy of Sciences, said Matviyenko's support came mainly from old people. Those looking for a real alternative did not show up at the polling stations in the second round because of their disappointment at the dominating presence of the presidential envoy in the campaign. "It was clear that most middle-aged men who voted for candidates who were placed third, fourth and fifth in the first round [on Sept. 21] would not come and vote again," Protasenko said at briefing Sunday night. "They are not at all happy with what has been going on." Although turnout was about the same in both the first and second rounds, the mix of voters was different "In the first round it was above all old people," said Valery Zharekhin, head of a polling station in Admiralteisky District. "This time I saw young people showing up," he said. "I don't really understand where the old people disappeared. Maybe they went mushroom picking." Valentina Belova, 50, walked past the polling station on election day with no intention of voting. When asked why she was not participating in the election, she expressed disappointment. "What's the point if Matviyenko has been forced into St. Petersburg whether we like it or not?" Belova said. "We can't change anything, so why should I go?" Nina Zhulapo, 34, came to the polling station to protest against the way the campaign had been orchestrated. "If there is a possibility to say no, I have to come and say no," she said Sunday. "I can't stand it; the order of society in Russia has changed completely, but the same people - communists - still sit and will sit in City Hall. They impose themselves on us." But Oksana Dmitriyeva, a State Duma deputy in the Small Business Development party, said that Matviyenko's success means St. Petersburg is going to be more politically stable. "With the elections over, a period of temporary administrative changes has come to an end," she said Sunday evening at a round-table discussion. "The new governor is bringing her own team. The political situation in the city is going to stabilize for the next year or a year and a half." "I expect the [city] government will be formed according to principles of professionalism," she said. Valery Ostrovsky, a former Legislative Assembly deputy, was also upbeat about the likely face of the new government. "Vladimir Yakovlev made big promises in 1996 so that he could set himself apart from former mayor Anatoly Sobchak. But Matviyenko has made no such promises and her hands are untied. She should not underestimate her victory," Ostrovsky said. "This is big victory for the party of power and for Putin himself, rather then for Matviyenko. This has strengthened his position in the city and prepared the ground for the State Duma and presidential elections [in the region]," said Yevgeny Volk, head of the Moscow-based Heritage Foundation. "It will be easier for Matviyenko to get [federal] money to complete city projects, such as the water protection barrier, for instance. But taking into account that many clerks from the former administration will still be working in her government there is the question of how this money will be spent." TITLE: A Tale of Two Cities' Attitudes AUTHOR: By Galina Stolyarova PUBLISHER: Staff Writer TEXT: Moscow's cynicism clashed with St. Petersburg's idealism during the gubernatorial elections, analysts say. Moscow-based politicians pull faces when asked to comment on St. Petersburg's election style. The most recent campaign has been branded as no better than the others. "I don't know why it is, but every time you have elections in St. Petersburg, there is always a huge wave of dirty tricks and tactics," said Irina Khakamada, co-chairman of the Union of Right Forces, who represents the northern capital in the Duma. "You have apparently monopolized the country's market of black PR and underhand campaigning." But many locals say that the latest campaign offered something new, and indeed, the perception of the campaign and its winner Valentina Matviyenko is very different in the two cities. A number of St. Petersburg politicians and analysts said suppression of the media - and not dirty tactics - was the most memorable feature of the election. "The mass media were paralyzed," said St. Petersburg lawmaker Mikhail Amosov, himself an former gubernatorial candidate for the Yabloko party. "In the past few months I have really been wondering if some kind of censorship has been introduced on local TV channels. It was tacit consent; they put all their efforts to promote one candidate and ignored the others." Political analyst Daniil Kotsubinsky concurred. "As a voter, I am utterly unhappy with the campaign," he said. "The average voter was unable to draw an clear picture of what candidates other than Valentina Matviyenko had to offer. Their abilities to reach their audiences was limited." One Moscow-based analyst, Yevgeny Volk, head of the Heritage Foundation, compared the election to George Orwell's "Animal Farm." "We clearly have a situation where one candidate is more equal than the others, while it is presumed that everyone had a fair chance," he said. But Moscow-based Kremlin insider and campaign specialist Gleb Pavlovsky said Matviyenko was by far the strongest candidate, suggesting her dominating coverage was based on her merits alone. Neither did the low turnout not concern him. "I don't see any catastrophe that nearly three quarters of St. Petersburgers ignored the elections," Pavlovsky said. "The candidate did all that was necessary to take the governor's seat." Khakamada said that for pragmatic reasons her party did not enter the campaign. "The governor of St.Petersburg needs the support of the president. Valentina Matviyenko received it. Supporting her is the most honest way," she said. But where Moscow sees the need for pragmatism, St. Petersburg felt it was cornered. Even former governor Vladimir Yakovlev, who publicly supported Matviyenko, said the pressure from the Kremlin on the locals was enough to make most people stay home. "Perhaps the promotion was excessive," he said Monday. "The people felt everything was decided without them, and there was no need to go to polling stations." Yakovlev's deputy Anna Markova, who received nearly 25 percent in the second-round run-off on Sunday, said the low turnout was clearly a form of protest from the citizens. Had the Kremlin been more subtle, the turnout would have been higher, she said. "People protest differently: some went to the polling station and put a mark in "against all candidates" field, while others preferred to stay away all together," she said Monday. For Markova, the campaign was memorable for the new strategy applied. "It had nothing to do with dirty tactics, it was a tremendous, titanic use of administrative resource," she said. "The entire government was working against me." Markova said it was a mistake to think the campaign started when Matviyenko was appointed presidential representative of the Northwest Region. "Everything was decided three years ago," she said. "That appointment was the last step in a three-years construct." Markova's spokeswoman Alyona Bolgarova offered her own version why Matviyenko was supported by nearly every political party. "In the context of the new election law, all parties feel like guilty schoolchildren afraid of the headmaster," she said. "They don't want to provoke Putin." Matviyenko's is also perceived differently in Russia's two capitals. Amosov said she doesn't produce an impression of a politician with democratic views, but Pavlovsky said a forceful and responsible governor would only do good for the city - and cited Moscow as an example. "She suits Moscow as a pushy executive, who does things fast with not many questions asked," said Leonid Kesselman, a political analyst with the St. Petersburg-based sociology department of the Russian Academy of Sciences. Talking to reporters, Matviyenko continuously denied using administrative resource. "Things like that don't work in city like St. Petersburg: the need for the second round is the brightest illustration. I simply returned to my town, that is it," said the new governor, originally from Shepetovka, Ukraine, at a news conference Monday. Matviyenko's political career started in Leningrad. Upon graduation from the city's Chemical Pharmaceutical Institute, she worked in the Komsomol and, subsequently, in Communist party structures. Sergei Markov, director of Moscow's National Democratic Institute, said Matvienko's not being originally from St. Petersburg and having most of her career in Moscow played against her, but wasn't a major contributing factor. "The intelligentsia [who are well represented in St. Petersburg] felt alien to her because they were offended by the Kremlin's tough backing of the frontier candidate," he said. TITLE: Kadyrov Wins, But Future Is Uncertain AUTHOR: By Yevgenia Borisova PUBLISHER: Staff Writer TEXT: MOSCOW - Akhmad Kadyrov's election as president of Chechnya was declared official on Monday, leaving only the question of what this means for the future of the republic that he has administered for the Kremlin for the past three years. Kadyrov is likely to consolidate his power by purging the Chechen government and rewarding his loyalists with political posts, some independent observers said. He also is likely to use the economic spoils to firm up his base, they said; thus with property issues still unresolved in Chechnya, it would not be surprising to see land and enterprises ending up in the hands of Kadyrov's closest allies. But Kadyrov is likely to have little success in uniting the republic or stopping the war, the observers said. He had little popular support before his election, and the manipulation of the vote to ensure his election may only have made his position worse. All potential strong challengers to Kadyrov were either disqualified from the race on technical grounds or persuaded by the Kremlin not to run. As a result, Kadyrov won an overwhelming victory. With more than 77 percent of the votes counted, Kadyrov had 81 percent, regional election commission chairman Abdul-Kerim Arsakhanov told reporters in Grozny, The Associated Press reported. He said 85 percent of Chechnya's 561,000 eligible voters cast ballots. Some Chechens who voted in Sunday's election, however, said they feared repercussions if they did not show up. President Vladimir Putin praised the election. "The very fact of such a high turnout shows that people have hope - hope for a better life, for positive changes in the life of the republic," he said at a Cabinet meeting. His opinion was not widely shared. Emil Pain, general director of the Moscow-based Center for Ethnic and Political Research, said the way the election was handled has denied Kadyrov the authority to reconcile a republic effectively waging a civil war. "These elections are not going to give him any added legitimacy, because legitimacy is rightfulness in the eyes of the people," Pain said. "He will get more authority to deal with the Kremlin, but does it matter? Even now his official status is quite high, at least judging by how often he is visits the president. No other regional leader can boast such frequent visits to the Kremin." Alexander Iskandaryan, deputy director of the Yerevan-based Caucasus Media Institute, agreed. "His authority as the nationally elected president is false. He will not be supported by the people, because in reality, he is not a president elected by his nation," he said by telephone from Yerevan. Timur Muzayev of the Democracy and Social Progress Support Foundation said the Kremlin missed its chance to win over the Chechen people. "In the spring [after the referendum on the Chechen constitution], many people really believed that their nightmare-like life would be over, especially after Putin made them such promises in a television speech. Then, a real political process could have started, even without the rebels, and it could have been approved by the people," Muzayev said. "But it never did. And elections like the current ones have killed off the last hopes. The number of people who are frustrated and see no way out will grow." What little hope remained that Moscow wanted to put an end to the war will now vanish, he said. Pain said he believes that Moscow needs Kadyrov in Grozny because it has no strategy regarding Chechnya. "They only have very ordinary bureaucratic logic: This man is known, and the mechanisms to manipulate him are clear. He is convenient and predictable. And the others are pies in the sky." Kadyrov is incapable of ending the war, he said. "I can't say how long it will last. Clearly nothing is going to change until Russia's presidential elections [in March]. Then, everything will depend on Putin's position, on how much he wants to stop it," Pain said. "The war could be stopped by the Kremlin, but I can't see how. So far, we don't have any examples in the world of positive outcomes of such sorts of conflicts." Ivan Safranchuk, director of the Moscow office of the Washington-based Center for Defense Information, also predicted that the war in Chechnya will continue to simmer. But Kommersant-Vlast magazine, in an unsigned article published Sept. 29, questioned the general thinking that the level of unrest is unlikely to change. The article predicted that Kadyrov will dismiss all administration officials who are not completely loyal to him and try to take full power in the republic. Imran Ezheyev of the Russian-Chechen Friendship Society, based in Nizhny Novgorod, said before Sunday's election that this process was already under way. "He is already sacking disloyal people. And those close to him are getting all the economic advantages. Land is already being sold in large allotments to his allies, and enterprises, too. Very soon, Chechnya will physically belong to him and his men." Kommersant-Vlast predicted that as Kadyrov's power grows, relations between his administration and the federal armed forces will deteriorate. "It should not be forgotten that the so-called Kadyrov guard consists of several thousand well-armed former rebels who, at Kadyrov's call, sort of put their arms down, but in reality just moved under his umbrella. These people will not hesitate, at the order of a Chechen president, to take up arms against the federal authorities," the article said. The Moscow Helsinki Group, a union of human rights associations, estimates that the security force headed by Kadyrov's son Ramzan is able to deploy about 3,000 men, many of whom are amnestied rebels. But most doubt that Kadyrov would challenge Moscow and become a second Dzhokhar Dudayev, the separatist leader whose independence drive led to the first Chechen war in 1994, or Aslan Maskhadov, who was elected president of a de facto independent Chechnya in 1997. "He is not an idiot," Safranchuk said. "He knows perfectly well the fate of both Dudayev and Maskhadov. Dudayev is dead and Maskhadov is still dashing around somewhere in the mountains. It is hard to say their lives were a success." However, he said Kadyrov changing sides could not completely be ruled out, since he has done so before. Kadyrov, a former imam, declared a jihad against the Russians in the 1994-96 war. Safranchuk said much depends on the federal center. Kadyrov, he said, is siding with Moscow because it is stronger at the moment. "This is part of the Chechen mentality - they respect strength," he said. "I am sure that a problem may develop only if Moscow shows weakness. Say, loses control over the cash streams to Chechnya. Moscow must exercise its power over him non-stop, including summoning him there whenever he is needed and he must turn up immediately." Oleg Orlov, head of the Memorial human rights group, also questioned the prospects of a Kadyrov rebellion. "First, he is not that popular and would not be supported by the people like Dudayev. Dudayev had a strong idea - the drive for independence - lots of arms and men, and masses of supporters throughout the nation. Kadyrov has none of this. He would not rebel." q NATO Secretary-General designate Jaap de Hoop Scheffer criticized the Chechen presidential election on Monday, Reuters reported. "It is regrettable that in the run-up to the elections there was a lack of real pluralism among candidates," de Hoop Scheffer, the Dutch foreign minister designated to become NATO secretary-general in December, said in Warsaw. "The absence of independent media as well as a continued climate of violence gives reasons for concern," he said. TITLE: Yukos Boss Pledges To Fight to the End AUTHOR: By Catherine Belton PUBLISHER: Staff Writer TEXT: MOSCOW - Yukos founder Mikhail Khodorkovsky said Monday he would rather go to jail than leave the country as a political emigre and abandon a bitter fight with state authorities that began in July with the arrest of key Yukos shareholder Platon Lebedev on fraud charges. At a hastily called news conference at Yukos headquarters, he decried a raid by prosecutors on Friday on a Yukos-funded children's home just outside Moscow as having "crossed the line." Prosecutors seized a computer. "I don't have a high opinion of our respected prosecutors' ... readiness to follow the law. But even I did not expect this of them," he said. "It was not just a raid, but a raid conducted with a show of force, with machine guns and with all the theatricals we see in Moscow - in a place where 120 children live and study. "Why would we keep something in an old server that we have given to children?" he said. "This makes no sense. We understand this very well and so do the prosecutors. There was no need for this raid. It was a clear attempt to intimidate. But I don't understand why they needed to do this through children. "It's just not fair," he added. Khodorkovsky appeared to bend over in shame as the home's deputy director Natalia Kobetskaya described to journalists how some of the children living there were in shock after the raids. When asked whether he would try to negotiate with the authorities to defuse the crisis, Khodorkovsky said he was at a loss to understand what they wanted. "What do they want?" he said. "If they want me to go into exile, I'm not going to. If they want to put me in prison, then under the current circumstances, be my guest, go ahead." In a series of raids Friday, prosecutors stepped up a widescale probe into Yukos that includes accusations of murder, attempted murder, tax evasion and the theft of state property in a 1994 privatization deal. Khodorkovsky has been reviled as one of the biggest sharks in Russia's chaotic transition from a planned economy. But with most of the nation's leading businessmen having just as controversial climbs to wealth and power during the 1990s, analysts have said the legal attack on Khodorkovsky now appears to come in response to his moves to finance opposition parties for upcoming elections. They also have pointed to a fight for power between members of the old political and economic elite, which includes Khodorkovsky, and a group of hardliners that climbed the Kremlin ladder along with President Vladimir Putin. Friday's raids also targeted a Yukos-owned business center in the wealthy Moscow suburb of Zhukovka. Prosecutors there searched the office of core Yukos shareholder and State Duma Deputy Vladimir Dubov and the nearby homes of Lebedev, Yukos vice president Mikhail Brudno and Khodorkovsky's childhood friend Vladimir Moiseyev, who, according to prosecutors, controls Yukos' financial flows abroad. And, for the first time, they reached Khodorkovsky's own doorstep. Khodorkovsky said Monday that he left the World Economic Forum's Russia Meeting on Friday before Putin addressed a packed hall of investors because his wife called to tell him that his house was surrounded by armed police. He said about 80 law enforcers, including investigators and police carrying machine guns and wearing combat fatigues, roamed the territory that surrounds his house but stopped short of going in to conduct a search because they lacked the necessary papers. Prosecutors said that during the Zhukovka raids they confiscated financials documents on transfers of funds abroad by Yukos and individuals. They countered Khodorkovsky's complaints of unfair play at the children's home with a statement saying they had expected to find missing documents on Bank Menatep that had been reported to have disappeared in a truck crash into a river during the bank's bankruptcy following the August 1998 crisis. Instead, they said, investigators found and confiscated the old computer belonging to Menatep. Investors had expected Khodorkovsky to back down in this struggle and, like Interros owner Vladimir Potanin and other oligarchs, find some way to toe the Kremlin line. However, Khodorkovsky instead has openly raised the stakes, buying up liberal weekly Moskovskiye Novosti and hiring a leading Putin critic to run it, while stepping up his own criticism of the Kremlin's totalitarian leanings. TITLE: Report: Spats Are Hurting Russia-U.S. Relationship AUTHOR: By Simon Saradzhyan PUBLISHER: Staff Writer TEXT: MOSCOW - Despite public fence-mending between the United States and Russia, the relationship between the two countries continues to suffer from conflicts, partially caused by a lack of communication between decision-makers, a group of senior U.S. experts warn in a newly published report. "The public reconciliation of Presidents [George W.] Bush and [Vladimir] Putin ... has fostered the impression that all is well in the U.S.-Russian relationship. This is a dangerous misimpression," warns a report released by the Commission on America's National Interests and Russia. "[Iraq] exposed conflicts in the U.S.-Russian relationship and even cracks in its foundation that must be addressed to advance vital American interests." The communication problems are partially rooted in the Russian leadership's failure to "fully accommodate very real asymmetries" in its relations with the United States, the report argues, but adds that Washington officials also appear to spend more time communicating with their counterparts in Paris and Berlin than Moscow. Russia's position on Iraq was not "predetermined" and could have been modified had the United States courted Russia more aggressively, the report states. The authors of the report, released Sept. 22, include Dimitri K. Simes, the president of the Nixon Center, and Graham Allison, director of Harvard University's Belfer Center for Science and International Affairs. But the report acknowledges that improved communications are not a panacea and calls for institutionalizing U.S.-Russian relations, rather than relying on good personal relations between presidents. The Camp David summit, which yielded no substantial agreements, demonstrates the lack of substance in relations, Allison said in a written reply to questions on the report. "Resentments and suspicions in bureaucracies on both sides" hinder cooperation on counterterrorism in Central Asia, and the two countries should also take a lead in creating a global alliance against nuclear terrorism, he said. Such an alliance would require its members to cooperate in preventing proliferation of nuclear arms by "all available means, beginning with diplomacy and sanctions, but explicitly including joint covert action and, ultimately, military force," Allison said. The report also suggests that Washington repeal the Jackson-Vanik amendment, support Russia's bid to join the WTO and honor Russia's interests in Iraq as long as Moscow "cooperates in stabilizing" the country. As well as being the world's largest supplier of oil and gas, Russia is also a "reservoir of extraordinary scientific and technical talent" that, if tapped by the United States, would help to build a "positive constituency," the report says. Ivan Safranchuk, the Moscow representative of the Washington-based Center for Defense Information, said that a lack of contacts between mid-level officials has led to relatively minor problems, such as the alleged provision of Russian-made night vision goggles to Iraq, being discussed by Bush and Putin. "Such issues need to be resolved at the level of department. ... The presidents need to focus on strategic issues," he said. TITLE: IN BRIEF TEXT: Birdstrikes at Pulkovo ST. PETERSBURG (SPT) - Birds have become a real headache for Pulkovo Airport personnel, who in 2003 had to at least twice repair planes that had suffered from collisions with birds, Interfax reported Monday. For the nine months of 2003, Pulkovo registered four birdstrikes on planes. In two cases, the aircraft required repairs after birds got stuck in the engines. Pulkovo has recorded an average of 6.6 such incidents per year for the last decade. The St. Petersburg airport faces much more complicated ornithological conditions than other airports in the country because it is located on the Belomoro-Baltiisky bird migration route. In addition, it is also surrounded by numerous swamps, where many birds that present a danger to planes live. The migration is at its height in May to October, but a big city dump and farms near the airport attract birds year round. Pulkovo uses noise machines and fireworks to deter the birds and intends to buy several more acoustic and laser units that make birds panic. Meanwhile, Pulkovo ornithologists will participate in a seminar on the ecological and ornithological problems of airports in St. Petersburg on Oct. 13-17. Non-smoking Contest ST. PETERSBURG (SPT) - A competition between smoke-free classes will start in St. Petersburg schools on Oct. 15, Fontanka.ru reported Monday. The competition will target 12- to 13-year-old students who experience "an explosion" of interest in smoking, representatives of the Northwest Public Council to Fight Underage Smoking said. Under the rules of the competition, every student in a class must sign an obligation that he or she will not smoke for six months. If the dropout rate ex ceeds 10 percent of students in a class, the class is disqualified. Classes that stay smoke-free will be able to participate in a lottery with prizes ranging from 3,000 to 30,000 rubles ($99 to $990), the agency reported. Mariinsky Restarts ST. PETERSBURG (SPT) - The Mariinsky Theater will open its 221st season with Tchaikovsky's "Mazeppa" on Oct. 10. "The theater is taking an unprecedented step. Instead of opening with the previously planned 'The Golden Cockerel,' it will feature a jewel of Russian opera - Tchaikovsky's 'Mazepa' with new sets that replaced those destroyed in a fire in the Mariinsky workshops," Interfax quoted Mariinsky press secretary Oksana Tokranova as saying. Tokranova said the September fire caused serious damage to the Mariinsky company, but staff had done everything possible to present a restored performance for the season's opening. Mariinsky Artistic Director Valery Gergiev will be conducting on the opening night. He will especially come to St. Petersburg from New York, where he was opening seasons in Metropolitan Opera and Carnegie Hall. TITLE: New Pill Targets the Effects of Alcohol AUTHOR: By Alex Nicholson PUBLISHER: Staff Writer TEXT: MOSCOW - James Bond may have had X-ray sunglasses and rocket-firing cigarettes, but for years his counterparts from behind the Iron Curtain were popping pills that made them impervious to ... hangovers. This is the kind of hype the so-called KGB Pill - marketed as RU-21 in the United States - has generated over the past month, fueled in part by a devoted clientele of actors, models and their managers on the Hollywood party circuit who swear by the drug to escape the aftereffects of a night on the town. "I went to this big event and had a little too much wine," said Leo Rossi, a veteran of some 60 movies but perhaps best-known for his role as the tattooed redneck who incited a rape in the Oscar-winning "The Accused." "I thought, whatever, I figure I'll pay the price. After all, we don't get any younger," he said by telephone from Los Angeles. He said he did not have a hangover and now puts out a bowl of pills for guests at parties. While the Russian origins of the pill have been well publicized, little attention has been given to the fact that RU-21 - a dietary supplement that regulates the process by which alcohol is broken down in the body - has been on sale in Moscow supermarkets for the past three years under the name Antipokhmelin, or Anti-Hangover. SKS-Alyans, the company that produces and markets the pills in Russia, works with scientists and medical consultants at the Zdorovye Institute to develop long-forgotten Soviet-era medical inventions. In the pipeline are a caffeine-free energy drink and drugs to help smokers quit. "Finally these scientists can implement the projects that they have been working on for the past 20 years," SKS-Alyans President Alexander Kashlinsky said. But he is a bit worried about the attention being paid to the alleged KGB origins of the hangover pills. In a society where the fruits of scientific research were applied almost exclusively to the defense and security sectors, there is little doubt that KGB agents had access to pills similar to Antipokhmelin, Kashlinsky said. But its use by the nomenklatura was much better documented, even earning it the nickname obkomovskaya tabletka, or "the pill for the regional committee." "It wasn't widely available," he said. "They didn't want the broader public to use it so they could show they were always working and always fresh, though they drank more than anyone else." This is exactly the image that SKS-Alyans' U.S. affiliate, Spirit Science, is trying to sell in Hollywood. "This whole KGB thing - you'd think it would be negative," said Emil Chiaberi, a U.S. national of Georgian descent who runs Spirit Science out of offices in Beverly Hills. "But everybody says that it adds credibility to the product, so apparently they trust the KGB, which, certainly for me, is surprising," he said. The pill's fans in Hollywood said the benefits of the pill go far beyond easing a heavy head. "I take two tablets a day regardless of whether I drink or not," independent producer Warren Kohler said by telephone. "I use the supplement with my daily vitamins." Model Beverly Peele, who was photographed in an RU-21 T-shirt for Chiaberi's web site and first tried the pills on New Year's Eve, warned that they would not give heavy drinkers carte blanche for excess. "It's not for people who want an interesting cure for alcoholism. If you're drinking like an alcoholic then just go to a drug clinic or alcoholics anonymous," she said. While in Russia the marketing has been low-key and the emphasis is placed on the pill's hangover-tempering effect, RU-21 is being promoted overseas as a product that not only protects the liver but regulates cell metabolism and even improves the complexion. Given Russians' legendary love of drinking, the local market could offer huge opportunities. "The use of this product could be much broader. We hope eventually to sell under the RU-21 brand here," Kashlinksy said. Currently, Antipokhmelin is selling steadily in stores across the country at 24 rubles (about 75 cents) for a six-pill pack. Over in Beverly Hills, Chiaberi said his team of four is working round the clock to handle the 12,000 to 15,000 inquiries it receives every day. His www.ru21.com site offers 12 20-pill packs for $60. Research into the key ingredient in the pills, succinic, a colorless, crystalline dibasic acid found in amber and many plants, has been going on since the 1960s at the Russian Academy of Sciences' Institute of Theoretical and Experimental Biophysics in Pushshino in the Moscow region. In developing the pills, scientists found that rats injected with lethal doses of alcohol survived or stayed alive longer when treated with succinic acid. Spirit Science's web site explains the process like this: "RU-21 balances alcohol metabolism by slowing down the process of ethanol oxidation into acetaldehyde [which causes hangover symptoms], so less acetaldehyde occurs in the first place, and then speeding up the process of acetaldehyde decomposition into acetic acid and then water and carbon dioxide." As a dietary supplement, the pill does not require FDA approval in the United States. Its fans said this does not bother them in the slightest. "None of the vitamins on the shelves here in the U.S. go through that testing either," Kohler said. Informal research conducted by The St. Petersburg Times found that six tablets effectively annulled the aftereffects of 2.5 liters of beer. TITLE: Supreme Court Upholds Budanov's 10-Year Term PUBLISHER: The Associated Press TEXT: MOSCOW - The Supreme Court on Monday upheld a 10-year prison sentence handed down to Colonel Yury Budanov for killing a Chechen woman. The court rejected an appeal by Budanov, who fought in the war against Chechen separatists and was convicted of murdering 18-year-old Heda Kungayava, the court's military department said. Budanov had admitted to strangling Kungayeva in 2000, but said he did it in a fit of rage while interrogating her. He said he believed she was a rebel sniper. In December 2002, a Rostov-Na-Donu military court ruled that Budanov was temporarily insane at the time of the killing and not criminally responsible. The Supreme Court overturned that ruling and ordered a new trial. In July, the lower court found Budanov guilty on the basis of a new psychiatric evaluation and sentenced him to 10 years in a maximum-security prison. Budanov's trial was closely watched as a litmus test for Moscow's willingness to prosecute human rights abuses in Chechnya. Rights organizations claim such killings are common and say the investigations should not stop after Budanov's trial. TITLE: Thousands Mark Standoff Anniversary PUBLISHER: The Associated Press TEXT: MOSCOW - Thousands of people rallied around a statue of Vladimir Lenin on Saturday to mark the 10th anniversary of a bloody standoff between then-President Boris Yeltsin and his opponents in parliament. Anniversary events, which began Friday, resumed with an early morning memorial service outside the White House, the building that used to house parliament and today serves as the Cabinet's headquarters. Tanks manned by troops loyal to Yeltsin fired at the building on Oct. 4, 1993, after legislators barricaded themselves inside in opposition to Yeltsin's decree disbanding the parliament, which capped a months-long struggle over economic reforms and political power. A total of 123 people were killed in the fighting, according to the official death count, which has been disputed. Later Saturday, a crowd of mostly communist protesters gathered around a statue of Lenin. Many waved red flags. About 2,000 people attended the rally, Interfax said, citing police. TITLE: Abramovich Sells Off 25% Share in RusAl AUTHOR: By Valeria Korchagina PUBLISHER: Staff Writer TEXT: MOSCOW - Metals mogul Oleg Deripaska on Friday confirmed earlier media reports that he had gained majority control of Russian Aluminum, or RusAl, by partially buying out his partner, Roman Abramovich, as the latter continues a multibillion-dollar liquidation of Russian assets Base Element, Deripaska's holding company, said it had bought 25 percent of the 50 percent of RusAl owned by Abramovich's Millhouse Capital. The value of the transaction was not disclosed, but the Financial Times said it was around $2 billion, suggesting Deripaska paid a 30 percent to 40 percent premium for a quarter of an unlisted company that produces three-quarters of Russia's aluminum and one-tenth of the world's. "It was a fair deal," Deripaska told the FT. "It will finally allow us to invest and grow our business with an aim of doubling the value of the company in 10 years." Media reports have quoted insiders as saying that Abramovich intends to eventually sell the other 25 percent to Deripaska, but neither side would comment on those reports Friday. For Abram-ovich, the deal is the clearest indication yet that he is fully in a profit-taking phase. In addition to the huge sum he is to receive for his stake in RusAl, he has received or will receive billions more from the merger of his oil company Sibneft with Yukos. The tie-up creating YukosSibneft, which now ranks among the world's top oil producers, was finalized Friday. The flurry of sell-offs by Abramovich, including more than a quarter of flagship carrier Aeroflot and reportedly 100 percent of leading sausage producer Omsk Bacon, has fueled media speculation that the Chukotka governor, a key member of former President Boris Yeltsin's inner circle, intends to leave Russia altogether. The ongoing legal assault on Yukos and its founder Mikhail Khodorkovsky, Russia's richest man, has raised concerns that the new Kremlin elite, the hawks surrounding President Vladimir Putin, want to right what they see as Yeltsin-era privatization wrongs. However, "core Millhouse shareholders," mainly Abramovich, still control blocking stakes in both YukosSibneft and RusAl, suggesting his departure may not be a complete one. "I think he is just selling out mature industries. The games in the oil sector have already been played, and pretty much the same goes for the aluminum industry," said Roland Nash of Renaissance Capital. Deripaska, despite literally being a member of the Yeltsin family, has much less to fear from Kremlin chekists thought to be intent on dredging up the privatizations of the mid-1990s, analysts said. For one thing, Ryabov said, his loyalty to Russia is growing alongside his economic powers. Also, "he has kept well away from the front page of politics, [unlike Khodorkovsky]," Nash said. Most important, perhaps, for Deripaska, is that he did not gain personally from rigged loans-for-shares privatizations under Yeltsin, unlike most of today's oligarchs. "I am very happy I didn't buy anything from the state," he told the FT. TITLE: $7.7 Billion Net Capital Flight AUTHOR: By Alex Fak PUBLISHER: Staff Writer TEXT: MOSCOW - The Central Bank confirmed Friday what many economists have been warning for months: Cash has been leaving the country at a fast and furious pace since July. Private-sector net capital outflow from July through September totaled $7.7 billion, according to preliminary balance of payment figures posted on the Central Bank's web site - an $11.4 billion turnaround from much-hyped net inflow of $3.7 billion in the last quarter. The size of the outflow even surprised those economists who had said early in the quarter that capital flight was back, driven by pre-election jitters and the ongoing legal assault on Yukos, which began with the arrest of one of the oil major's top shareholders, Platon Lebedev, on July 2. "This is really big, and a drastic contrast [to the second quarter]," said Troika Dialog's Anton Struchenevsky. "Russians are choosing to keep their money outside of the country. The most obvious reason is the arrest of Lebedev," said Roland Nash, chief strategist at Renaissance Capital. "Net errors and omissions," a clause in the balance of payments that normally implies undocumented money taken out of the country, stood at negative $2.8 billion, Struchenevsky said. Coupled with the insignificant decrease in net inflows, the numbers suggest that "Russians [not foreigners] were the ones reacting [to the political uncertainty]," he said. About half of the $7.7 billion in outflows in the third quarter came from the banking sector and about half from the non-financial sector. Chris Weafer, chief strategist at Alfa Bank, said there is evidence that capital flight is "actually a lot higher" than the Central Bank figures suggest. Some of the net outflow has been due to seasonal variations that tend to be especially pronounced in Russia, such as vacationers spending hard currency on trips abroad. But the $11.4 billion turnaround is too big to be explained by seasonal factors alone, economists said. The first quarter saw a net private capital outflow of just $100 million, while more than $8 billion left the country in the whole of 2002. Peter Westin, chief economist at Aton, said a large part of the outflows were exporters taking a wait-and-see attitude, postponing repatriating revenues until the political situation clears up ahead of the State Duma elections scheduled to take place in two months, on Dec. 7. The Central Bank gave no explanation for the figures. TITLE: IN BRIEF TEXT: Ford Sales Triple MOSCOW (SPT) - Ford Motor Company saw sales through official dealers more than triple during the period from January to September 2003, as compared to the same period last year, Interfax reported. Ford sold 9,412 Focus models and 1,985 Mondeo models so far this year. All Ford Focus cars sold in Russia from January to September were manufactured at the Ford Vsevolozhsk plant in the Leningrad Oblast. Ford Motors spokesman Henrik Hensen named financing and car insurance options as keys to Ford's popularity in Russia. There are 72 Ford dealerships in Russia. Cranes Coming ST. PETERSBURG (SPT) - First Container Terminal, the largest container freight processing terminal, has acquired two new dockside cranes from Konecranes, according to a press release issued on Monday by the St. Petersburg Sea Port. The first crane has already been delivered, with the second crane expected next week, and four more expected in the near future. With the six new cranes the processing terminal will increase output to 800,000 TEUs - a unit equivalent to a 20-foot container - per year. Each crane can lift 50 tons and operate under winds of up to 20 meters per second and in temperatures ranging from minus 40 degrees Celsius to plus 40 degrees Celsius. Cruise Traffic Up ST. PETERSBURG (SPT) - The number of cruise-ship passengers who visited St. Petersburg during the passenger navigation season from May 2 to Sept. 30 of this year rose by 40 percent over last year, with a total of 200,000 passengers, the city's Port Authority told Interfax Monday. Two hundred and fifty cruise ships called in St. Petersburg during navigation season, or 20 percent more than during the same period in 2002. The Port Authority cited the city's 300th anniversary celebrations as the main reason for increased cruise-ship traffic. TITLE: New Book Poses Question of Putin's Links with Underworld AUTHOR: By Catherine Belton PUBLISHER: Staff Writer TEXT: How involved was President Vladimir Putin in the activities of a decade-old German company now at the center of a pan-European probe into St. Petersburg mobsters, Colombian cocaine and transcontinental money laundering? The question has intrigued investigators and journalists since a German foreign intelligence report was leaked to the press during Putin's rise to power. The report alleged that SPAG, a company set up ostensibly to invest in St. Petersburg real estate, was actually laundering funds for Russian criminal gangs and Colombian drug lords. The French daily Le Monde was first out of the gate with the story, raising some uncomfortable questions about Putin's tenure on SPAG's supervisory board, which lasted from when he was deputy mayor of St. Petersburg in the early 1990s until he entered the Kremlin. Newsweek magazine followed a year later with a report that raised even more questions, but despite contradictory denials and clarifications from Putin's press service, the story quietly went away. Until this May, that is, when German police launched a nationwide raid on the homes and offices of more than 200 people connected with the company. Now, as prosecutors in Germany and Liechtenstein tighten the noose and move closer to the courts, a new book has hit German bookstores offering the most in-depth look yet at SPAG, its ties with Putin, and into Rudolf Ritter, a co-founder of the company who is now awaiting trial in Liechtenstein for allegedly laundering cocaine cash for the Cali cartel. Thumbing its nose at attempts by Vladimir Kumarin, the reputed head of the St. Petersburg-based Tambov mafia ring, to quash the book, called "Die Gangster aus dem Osten" or "Gangsters From the East," the publisher, Europa Verlag, is actually touting it to other international publishers at the ongoing Frankfurt book fair, the world's largest. In his 305-page work, Juergen Roth details how German investigators - with little or no help from their Russian counterparts - uncovered a complex web of relationships and transactions that link SPAG to St. Petersburg's criminal underworld and beyond. The book fails to tie Putin directly to any criminal activity, but does paint a convincing argument that he was more involved with SPAG's activities than previously acknowledged. Like the Le Monde and Newsweek articles, "Gangsters From the East" links Putin to alleged mobster Kumarin (who has since changed his name to Barsukov) through Vladimir Smirnov, the former head of SPAG's St. Petersburg operations and an old associate of the president. In 1994, as deputy mayor of St. Petersburg, Putin awarded the St. Petersburg Fuel Company, or PTK, the highly prized right to be the sole supplier of gasoline to the city. At the time, Smirnov was a major shareholder in PTK and local media reported that the company was controlled by the Tambov. What followed could aptly be described as a gang war, as high-profile killings of major players in the fuel market rocked the city, contributing to its reputation as Russia's version of 1930s Chicago. In 1998, Smirnov took over PTK and appointed Kumarin/Barsukov as his deputy. Since Putin came to power, Smirnov has vaulted from relative professional obscurity in Russia's second city to influential positions in the capital. First he was given a post in the powerful Kremlin Property Department - where Putin once worked - and now he heads the lucrative trading arm of the Nuclear Power Ministry, Tekhsnabexport. Aside from SPAG co-founder Ritter, no arrests have been made to date and no criminal investigation has been opened in Russia, but a senior German prosecutor said that he expects to bring laundering charges within the next few months against either SPAG or people related to SPAG, which is officially known as St. Petersburg Immobilien und Beteiligungs AG, or St. Petersburg Real Estate Holding Co. Meanwhile, in Liechtenstein, Robert Walner, the chief prosecutor in the capital city Valduz, said by telephone that Ritter's trial is expected to open this month. Adding to the increased attention SPAG is receiving is Roth's book, the subject of which has already irritated the Kremlin. A spokesman in the presidential administration called the book's allegations of Putin's close ties to SPAG "slanderous lies" - but the Kremlin has taken no legal action against either Roth or Europa Verlag. THE KUCHMA TAPES One of the most tantalizing new pieces of evidence that Roth has come up with suggests Putin's links with SPAG and Ritter go deeper and are more worrisome to the Kremlin than previously thought. A transcript of taped conversations between Ukrainian President Leonid Kuchma and his security chief Leonid Derkach on June 2 and June 4, 2000 suggests the Kremlin had been doing its utmost to cover up any and all information linking Putin to SPAG and/or Ritter. Derkach is cited as saying that his security service has managed to get a hold of one of the few remaining documents potentially damaging to Putin and suggests some kind of trade with the FSB, Russia's Federal Security Service. "Yes, and about that affair, the drug smuggling. Here are the documents. They gave them all out. Here's Vova Putin too," Derkach tells Kuchma. "The Russians have already been buying everything up. Here are all the documents. We're the only ones that still have them now. I think that [FSB chief] Nikolai Patrushev is coming from the 15th to the 17th. This will give him something to work with. They want to shove the whole affair under the carpet." The conversation was taped by former presidential bodyguard Nikolai Melnichenko, who later fled to the United States - just before the publication of the conversations he bugged had, among other things, unveiled Kuchma's possible involvement in the murder of opposition journalist Georgy Gongadze. The head of Ukraine's parliamentary commission on corruption, Grigory Omelchenko, said by telephone from Kiev that the tapes, including the conversations about Putin, had been judged to be authentic by a U.S.-based company run by a leading former FBI specialist. U.S. government investigators have also declared as authentic at least one part of the tapes - the part where Kuchma is heard approving the sale of radar systems to Iraq. (The transcript published in Roth's book is an exact translation of a transcript of the conversation posted on a web site dedicated to the tapes called www.5element.net.) A spokeswoman for Kuchma, however, said the Ukrainian president had repeatedly said that the tapes were fabricated. The Kremlin has also refuted them. Roth's unearthing of the tapes, however, is just one fragment of his exhaustive investigative account of the probes into Ritter and SPAG in Liechtenstein and Germany, which is based on the work of top-level law enforcement officials in both countries. Roth cites anonymous sources in German law enforcement as saying they believe SPAG was a conduit to launder funds for the powerful St. Petersburg-based Tambov crime group. Company documents are cited as showing the alleged head of the group, Kumarin-Barsukov, to be a partner in Znamenskaya, one of SPAG's St. Petersburg subsidiaries. A senior German prosecutor contacted by The St. Petersburg Times refused to comment on any of the allegations in Roth's book, citing ongoing investigations. Nor would he comment on any possible links between the case and Putin. Kumarin/Barsukov, who has denied running the Tambov group, could not be reached for comment. PUTINGATE? In his book, Roth attempts to delve into every possible tie between SPAG and Putin, but ultimately, despite investigating the matter for nearly three years, comes up with only fragments of a potentially damning picture. Indeed, Roth believes the whole story will never be known. The German government, he says, does not want the extent of Putin's involvement in the affair revealed because it does not want to sour burgeoning ties with Russia. "There was a cover-up in 2001," he said. "[German Chancellor Gerhardt] Schroeder was very afraid that there were direct links between the Liechtenstein investigations and Putin. This was a time when Russia and Germany had good relations for the first time," he said. "But the connection between Putin, Kumarin and Smirnov cannot be part of investigations in Germany. Only prosecutors in St. Petersburg can do this." What is known about Putin's involvement in SPAG is this: Company officials acknowledge that Putin took a place on the company's supervisory board in his capacity as deputy mayor in charge of St. Petersburg's foreign economic relations in the early 1990s. But they have downplayed the post as an "honorary position" that did not involve participating in the company's day-to-day operations. However, citing documents from the company's first prospectus in December 1992, which have been obtained by The St. Petersburg Times, Roth's book alleges that Putin played a more active role as deputy chairman of SPAG's advisory board, representing the city's stake in the company. Major shareholders of the company, including Ritter and Smirnov, were also on the advisory board, which SPAG officials say had more powers than the supervisory board, but deny that Putin was ever on it. A further sign of Putin's relationship with Smirnov and his participation in company decisions is a copy of a December 1994 affidavit that Putin signed giving Smirnov "voting rights in our absence" to 200 SPAG shares, or about 20 percent of the company at the time. A copy of that document, cited in the book, has also been made available to The St. Petersburg Times. Roth quotes an unnamed German accountant as saying he met with Putin, Smirnov and then St. Petersburg Mayor Anatoly Sobchak during a visit by city officials to Frankfurt in 1992, around the time SPAG was founded. During that visit, they met with another co-founder of SPAG, Klaus Peter Sauer, who at the time was head of corporate finance at KPMG Peat Marwick Treuhand GmBH, the German branch of the international consultancy firm. But despite the welter of detail in the book, the links it charts between Putin and SPAG, although tantalizing, remain uncertain. Roth cites Liechtenstein's Justice Minister Heinz Frommelt, who was a key player in the Ritter investigation, as saying "the role of Putin in connection with SPAG was at first larger, but was then made ever smaller." Frommelt, however, is also cited as saying "I think [the Germans] had information about the ties between Putin and the Tambov crime group - estimations, but no hard proof." SPAG co-founder Sauer, however, believes these ties are being cooked up and exaggerated. "I think that a certain faction of the German government is trying to find something against Putin in order to blackmail the Russian government," he said in a recent telephone interview from Germany. "I think that the objective is to bring Putin into relations with Kumarin/Barsukov and blackmail him in relation to that." However, Sauer said he had met with Putin five or six times in both Frankfurt and St. Petersburg, sometimes over dinner, to discuss SPAG's St. Petersburg subsidiaries. "I contacted him a couple of times to do with the business of Inform Future and Znamenskaya," he said. CONFLICTING STORIES The Kremlin has at times denied that Putin ever worked for SPAG. At other times it has said that Putin's role as Sobchak's deputy in charge of foreign economic affairs meant that he held many "honorary" positions on the supervisory boards of joint ventures in the city. The Kremlin press service, however, could not provide a breakdown of how many such posts Putin held. While the questions about Putin's role may never be answered, Roth traces the German investigators' probe to two individuals, Boris Grinshtein and Peter Haberlach, both of whom are under suspicion of being the Tambov group's pointmen in Germany, according to his sources in German law enforcement. Investigators believe that one of the ways funds were laundered through SPAG was via share issues in the company. At least two companies connected to Grinshtein and Haberlach are pinpointed by Roth as having taken part in such deals. In December 1994, a firm called E.C. Experts Ltd., which was then headed by Grinshtein, bought shares in SPAG for 500,000 German marks (about $1.6 million at the time). Then in July 1995, it took part in another share issue, buying up 13,000 shares for 110 marks each, for a total of about $1 million. In October of that year, again according to Roth, Ritter signed off on the sale of 10,000 shares for 140 marks each to a firm called ICI International Consulting Investment. Haberlach is a director of E.C. Experts and is also under investigation in Hamburg on allegations of human trafficking and running a prostitution ring. Haberlach's brother, Roth writes, is married to the former wife of Kumarin/Barsukov. Roth cites the BundesKriminalAmt (BKA), or German police, as saying it suspects "ICI International Consulting Investment to have played a central role in founding SPAG and its affiliated companies and that through this company certain people also wielded influence over the chain of money flows into SPAG." "The firm Euro-Finanz also appears to have played a similar role," BKA is quoted as saying. In what could be a vital link between the SPAG case and the case against Ritter for laundering Colombian drug money, Euro-Finanz is also identified in a Liechtenstein prosecutors' indictment against Ritter, a copy of which has been obtained by The Moscow Times. The indictment identifies it as being a key part of the I.C. Gruppe, which, it alleges, created a series of shell companies for a Colombian national named Juan Carlos Saavedra Molina. The companies, Liechtenstein prosecutors allege, "attempted to disguise the origin" of funds transferred by Saavedra. The indictment says the U.S. government considers Saavedra a money launderer for the Cali cartel. Ritter, according to the indictment, was the director of both Euro-Finanz and I.C. Gruppe. Ritter denies the charges. AIRING LAUNDRY SPAG co-founder Sauer said Grinshtein and Haberlach had helped SPAG establish contacts in St. Petersburg and that he knew them as "associates of Smirnov." He said Grinshtein sat on the supervisory board of SPAG for half a year and helped translate. Referring to ICI Investments and E.C. Experts as "peanuts companies," he said he did not remember whether either of these companies had taken part in the share issues alleged by Roth. However, he did say it was "possible" that they were ownership vehicles for Smirnov or his relatives. Officials at Tekhsnabexport, also known as Tenex, said on several occasions that Smirnov was away on business and not available for comment. Sauer denied Kumarin/Barsukov played any role in SPAG. Conceding that he met with him on several occasions during trips to St. Petersburg, he said he asked him personally whether he was a shareholder in SPAG or its subsidiaries and he said "no." "He expressed at a certain time his interest in acquiring SPAG shares. For that reason I had discussions with him," Sauer said. "We only discussed this in very general terms. He did not become a shareholder. He never owned SPAG, nor Znamenskaya, nor Inform Future." SPAG's current managing director, Markus Rese, said that he, too, had met with Kumarin/Barsukov several times in St. Petersburg. "He was a partner of Mr. Smirnov," he said. "But he did not say 'Hi, I'm Mr. Barsukov. I'm a murderer and a money launderer.' What the heck." Rese said Kumarin/Barsukov had also offered to sell land and real estate in St. Petersburg to SPAG, but that the company had turned him down because the price was too high. Both Sauer and Rese denied that SPAG had ever engaged in money laundering. "We are the cleanest company in the world. We have no fake balances. There is no money washed in our company. All this is absolutely boring. It is always the same shit," Rese said. "The true story of SPAG is how a normal, good-working company is getting ruined by rubbish, by shitty investigations." Rese said Sauer is pressing slander charges against Roth. "Mr. Roth is a liar," he said. Sauer said SPAG had been forced to postpone construction in St. Petersburg because media reports of the money-laundering investigations had frightened away investors. "We already had commitments from two large banks. But all of a sudden they refused to honor their commitments [after the May raids in Germany]," he said. DASHED DREAMS Sauer's links with the St. Petersburg city government go back a long way. In 1992, during the St. Petersburg delegation's visit to Frankfurt, Sauer said that he was introduced to Sobchak at a dinner organized by Deutsche Bank and that Sobchak later invited him to visit St. Petersburg. He said he could not remember whether or not he met Putin at that dinner, but before Sobchak left Frankfurt, Sauer said the mayor asked him to come to St. Petersburg and run the city's privatization program. At that time, Sauer said, he had taken part in many privatization deals in the former East Germany in his capacity as head of corporate finance at KPMG Peat Marwick Treuhand. He said he had not known Putin during Putin's KGB posting in Dresden. A report by Dow Jones from March 1992 said that KPMG Peat Marwick Treuhand had been named adviser to the St. Petersburg city government, and that a coordination committee would meet later that month in Frankfurt to discuss possible privatization projects with German banks and companies. The committee included Sobchak, Putin and Sauer. Sauer, however, said that major German banks, including Deutsche and Dresdner, later lost interest in investing in St. Petersburg. He said he decided to go ahead with his own venture to invest in infrastructure and real estate first before embarking on privatization projects. "There was no place to work in St. Petersburg that corresponded to Western standards," he said. "We decided to invest in office buildings." More than 10 years later, however, only one of SPAG's construction projects, the Inform Future office building on the aptly named Tambovskaya Ulitsa, has been completed. The other, Znamenskaya, a project set up to create a major international office center on a prime piece of real estate downtown, stands idle. The building, one of the few buildings on Nevsky Prospekt, the city's major thoroughfare, that has yet to be renovated, is covered with fabric advertising Western fare. Sauer claimed it had taken time and $26 million to buy up all the leases to the building. Now, he said, the company needs another $40 million to $50 million to begin construction - but he can't find anyone willing to invest. He said he met SPAG co-founder Ritter "by coincidence" through a business associate in Frankfurt about six months before SPAG was established. "Ritter showed an interest. He said he was prepared to invest. We were very happy," he said. "I never knew about his activities in Liechtenstein. He was seen with someone from a Colombian drug cartel in Madrid. That's how it started. But he's not been prosecuted yet." "It would have been a wonderful business, had we received financing for reconstruction," he said. "The banks were not ready to make investments in St. Petersburg, so we did it on a private, individual basis. And for that we are being punished by Germany." "Someone doesn't like it and in my view this all comes down to politics." Nor has he found support from his former colleagues who have since moved on to powerful positions in Moscow. "Mr. Smirnov has cut all contacts with us. I have not seen him for years," he said. As for Putin, "unfortunately I don't meet him anymore," Sauer said. "I'd like to. I'd like to discuss world politics with him." THE KUCHMA TAPES June 2, 2000 Derkach: Leonid Danilovich. We've got some interesting material here from the Germans. One of them has been arrested. Kuchma (reading aloud): Ritter, Rudolf Ritter. Derkach: Yes, and about that affair, the drug smuggling. Here are the documents. They gave them all out. Here's Vova Putin, too. Kuchma: There's something about Putin there? Derkach: The Russians have already been buying everything up. Here are all the documents. We're the only ones that still have them now. I think that [FSB chief] Nikolai Patrushev is coming from the 15th to the 17th. This will give him something to work with. This is what we'll keep. They want to shove the whole affair under the carpet. June 4, 2000 Kuchma: The handover should only take place with the signature of Patrushev. This really is valuable material, isn't it? Derkach: About Putin? Kuchma: About Putin. Derkach: Yes. There is some really valuable stuff. This really is a firm, which... Kuchma: No, tell me, should we give this to Putin, or should we just tell him that we have this material? Derkach: Yes, we could. But he's going to be able to tell where we got the material from. Kuchma: I will say the security services, and... I will say that our security service has some interesting material. Derkach: And we should say that we got it from Germany, and that everything that there was is now in our hands. Otherwise no one else has it, yes? Now, I got all the documents about Putin prepared and gave them to you. Kuchma: Probably, if that's necessary. I'm not saying that I will personally hand them over. Maybe you'll give them to Patrushev? Derkach: No. I'll just... when we make a decision we'll have to hand them over anyhow because they've bought up all these documents throughout Europe and only the rest are in our hands. Kuchma: Or perhaps I will say that we have documents, genuine facts from Germany. I won't go into details. Derkach: Hmm. Kuchma: I will say, 'Give your people the order to connect with our security service.' And when they get in touch with you, you say, 'I gave it to the president, damn it. And I can't get it from him now.' Derkach: Good. Kuchma: We need to play with this one. TITLE: Expat Blazes Trail for Small Business AUTHOR: By Sandra Upson PUBLISHER: Special to The St. Petersburg Times TEXT: This is the first in a series of profiles to be published by The St. Petersburg Times. General director of Westpost Christian Courbois intersperses life as the top mailman in St. Petersburg with climbing mountains, biking across Africa, chairing the St. Petersburg International Business Association and fighting for the rights of small businesses. Engaging in what he terms "cowboy capitalism" and speaking no Russian, the 23-year-old Courbois and a number of other young expats - mostly from the United States and Germany - came to St. Petersburg in the early 1990s to take advantage of the frenetic investment climate and start their own companies. Half-American and half-French, Courbois left small-town life in North Carolina on a traveling spree that, on a whim, landed him in St. Petersburg. After deciding to stick around rather than wander back to the United States, in 1994 he started a now-defunct club called ISBA, the International Small Business Association, specifically to help these young hopefuls network and learn the ropes of life in Russia. Out of this organization sprang the idea for Westpost, "to solve the problem of why we weren't getting our mail," Courbois said. Westpost, which serves businesses of all sizes as well as private citizens, provides postal and express courier services. In addition to offering services within Russia, businesses and private individuals can, through Westpost, open mailboxes in Finland to both send and receive international mail. During Russia's awakening and in a brief era of near-lawlessness and a completely open playing field, foreign businessmen, regardless of previous experience, were eager to throw themselves into the fray. Courbois, who was trained as a photographer and video producer, adapted himself to the new climate and cheerfully changed his career path. "That time was in some sense better [than now] because everybody was operating under the idea that everything that isn't expressly forbidden is possible," Courbois said. At SPIBA, Courbois's work is as negotiator and liaison between the administration and foreign businesses. In addition to being a lobbying tool, SPIBA allows for companies with foreign investments to make contacts within the local governments, and its members spend their time building up relationships with legislators. "As the head of SPIBA, he is on the forefront of many issues that affect businesses in St. Petersburg," said Kurt Stahl, a fellow entrepreneur who founded the British-American Clinic in St. Petersburg, the only clinic in the city to have foreign physicians. "Right now, he is helping to push forward the new three-year visa for expatriate residents of the city." Now, while acting both as chairman of SPIBA and head of Westpost, Courbois also actively engages in small- to medium-sized business advocacy as well as in supporting cyclists' rights in St. Petersburg. An avid cyclist himself, Courbois has been fighting to introduce bicycle safety education and bike lanes on Nevsky, in addition to protective laws to normalize the relationship between drivers and cyclists in the city. "Drivers seem to have a real hatred for bikers here, they seem to be really angry to see us," he said. "In 1995 I was the only one riding my bike around town, mostly because of the impossibility to buy nice bikes here, but in 1999 it really became quite a fad." With his new set of bicycling colleagues, Courbois and company started lobbying to introduce legislation to protect bicyclists. "Back in [Governor Vladimir] Yakovlev's time, he tried to introduce legislation that would make biking in the center illegal," he said. So Courbois and a group of St. Petersburg cyclists biked down to Smolny to protest. Though the law was never enforced, further rights for bicyclists have yet to develop in St. Petersburg, so Courbois isn't done. His love of bicycling has taken him around the globe on tours through Israel and Africa, the latter culminating in a jaunt to the summit of Kilimanjaro. "The best way to see a country is on a bicycle. On a bike you can stop in a village and have direct contact with the local people. You're not looked at by the locals as an alien being in a Land Cruiser plowing through their national parks." A similar enthusiasm and energy prevails in Courbois's approach to supporting and lobbying for small businesses before the city legislature and in his efforts to establish a branch of the Young Entrepreneurs' Association in St. Petersburg. Basing his campaign for fair treatment of SMEs on his own experiences at a fledgling small business in Russia, Courbois has been trying to educate local legislators about reducing bureaucracy and controls on small businesses. Despite having had to learn Russian from scratch and wage his fair share of battles with the local authorities to see his Russian business thrive, Courbois has managed to carve himself a comfortable niche in St Petersburg. Here he met his wife, a St. Petersburg local, and over the years has gotten used to what he cites as the perpetual barrier between Russians and foreigners. "My relationship with Russia - and I think this holds for most expats here - is a love-hate relationship. It seems to us as outsiders that the local people are purposefully shooting themselves in the head, and it's so unnecessary that it drives us crazy because we're not able to have that Russian soul and say, well, that's how it is, you can't do anything about it and so you live with it." According to Stahl, Courbois has been doing a pretty good job of "living with it." "Christian Courbois is one of those people that everyone likes. It is a real rarity to see Christian without a smile on his face," Stahl said in a recent email. Though by choosing to live in St Petersburg he may have sacrificed a better climate, higher income and a more comfortable life in the West, the dynamism of the business world here has kept him fascinated in a less Western way of life. "I don't want the two-car garage suburban life. I don't want to commute to work everyday. Keeping up with the Joneses is not what I want. Back in the early nineties things were more exciting and that's how I ended up here." So dynamic is life in Russia and the business world that, says Courbois, "I crack and go insane at least once a month, and my poor wife has to deal with it." But somehow he patches himself up again, gets on his bicycle, and sallies forth to deliver mail and raise hell in Smolny. TITLE: Expert Opinion: Don't Believe the Hype-sky AUTHOR: By James Fenkner TEXT: Do not be hoodwinked by the current wave of self-serving hype masquerading as fundamental analysis: while select opportunities remain, the Russian equity market is not cheap. Should the equity market flutter higher, it will only be on an ephemeral updraft of hot air, generated by too much money chasing too few assets. There is no denying that Russia has changed for the better, but that change is already priced in. Since 1999, the RTS index has gained 830 percent in dollar terms, a rate of growth nearly twice that posted by Nasdaq during its hyped-up dot.com climb. The valuation of some Russian companies, such as Yukos, Severstal and Norilsk Nickel, has already risen more than 100 times off their lows. Such a pace cannot be maintained for long, particularly in a cyclical, commodity-driven market. While the best gains are behind us, a band of hypesters just do not want the music to end. Like DJs presiding over an overcrowded dance floor, they have turned up the volume on everyone's favorite tunes: economic growth, high oil futures, cheap assets and low earnings multiples. To the critical ear, these ditties now sound atrociously off key. Misconception No. 1: The economy is growing, therefore the equity market must rise. This is classic bait and switch. Yes, the Russian economy is expected to grow by 6 percent or even more this year, one of the highest growth rates in the world. But, so what? The fastest growing sectors, like real estate, construction and retail trade (whose conspicuous expansion dazzles investors on their rides to and from the airport and their tours around town), are hardly represented in the Russian equity marketplace. The equity marketplace is the preserve of exporters, whose profits primarily depend on international commodity prices, not local growth. In fact, strong domestic growth is more likely to hinder than help an exporter-dominated equity market. Should the Russian economy overheat, domestic inflation and / or a stronger ruble could raise exporters' real costs, thereby reducing their profitability. Misconception No. 2: High oil futures imply high future oil prices. A sophomoric error. Analysts who confuse "futures" with "future" are well advised to consult a dictionary or a basic finance textbook before making any more investment recommendations. High oil futures prices do not mean that the future price of oil will be high. Over the past decade, the difference between the futures price of oil and the actual price of oil just one year out has been a whopping 23 percent. And the greater the time span, the greater the discrepancy. Honest and credible differences of opinion over the future of long-term oil prices do exist, but using futures prices is pure bunk. Misconception No. 3: Russian oil reserves are cheap. This is a timeworn argument regarding the market's largest sector. However, Russian oil shares have risen so dramatically that they have closed the undervaluation gap. Moreover, Russian and foreign reserve numbers are not apple-to-apple comparisons. When BP acquired a stake in TNK-BP, TNK's reserve figures had to be nearly halved to meet SEC requirements. Second, Russian oil companies are hobbled by low domestic oil prices, global majors are not. Third, Russian companies' assets are less diversified geographically, and therefore riskier, than their foreign peers.' Fourth, Russian oil assets are pure crude oil plays, whereas their foreign peers are more diversified in refining, marketing and petrochemicals. That's good for Russia when crude prices are high, but what if they fall? Misconception No. 4: Russian oil companies are cheap on a price/earnings basis. Price/earnings, or P/E, ratio - the price of a company relative to its annual earnings - is a standard benchmark for assessing whether a stock is cheap or not. In general, the lower the P/E ratio, the cheaper the company. However, seasoned analysts recognize that earnings calculations are notoriously susceptible to manipulation, and Russian oil companies are no exception. Due to the low value of Russian oil companies' fixed assets, they write off less due to wear and tear (referred to as "depreciation"). While global oil majors depreciate more than two-thirds of their capital expenditures, Russian oils depreciate about half as much, primarily due to their low fixed asset base. Less depreciation results in high earnings, and a lower price-to-earnings multiple. Once Russian oil companies' depreciation rates are adjusted toward international levels, their seemingly low P/E ratio becomes much higher. On this basis, the expected P/E ratio of the Russian oil sector in 2004 is just under 12, way above the seven posted for other emerging market oil companies and extremely high relative to the 16 expected for mature, stable, diversified companies like ExxonMobil and BP. Other Russian shares such as UES remain extraordinarily expensive on a current P/E basis. UES's P/E ratio is more than 110, many times that of Western utilities, which tend to trade around 12 times earnings. Next year, we expect UES's earnings to fall and the P/E to rise even further. The company is anything but cheap. So if Russia is not cheap, why all the hype? Conflicted research is near the root of the problem. Upgrades are breadwinners. Even when not justified fundamentally, they are justified, or so the myopic pragmatism goes, in terms of winning bond deals and building investment-banking relationships. And there are also private banking relations to consider. But a downgrade is as bad as quarreling with one's bread and butter, and with equity salespersons and fund managers into the bargain. Who wants to hear an independent analyst downgrade a stock that is being sold to an eager client or, worse yet, is already tucked away in their portfolio? As at the top of the Nasdaq market, highly rated, highly paid analysts tell people what they want to hear, chase momentum, and stifle unpalatable, unprofitable words of warning. For a little time hype may still have room to prosper. As the oligarchs take cash out of their companies, some of the spare change is likely to be recycled back into the market. Over the past month, core Yukos shareholders sold back 10 percent of their shares to the company, netting around $2.8 billion, which is required to be paid out by this October. Minority shareholders who also participated in the buyback will receive approximately $933 million, some of which will probably find its way back onto the equity market in the form of further purchases. Indeed, based upon our estimates of massive dividend payments and the Yukos buyback, an enormous $7.75 billion in cash will hit Russian equity holders' accounts through the end of this year. While we expect the Russian market eventually to broaden into non-exporting sectors, most of the large and exciting new IPOs are not yet ready. Based on our IPO calendar, significant new equity issuance is not expected until next year. Consequently, a wave of freed-up funds could very well end up chasing existing fully valued shares and pushing the equity market even higher. While this is a recipe for heady equity gains over the short term, without a strong platform of fundamental attractiveness, it is a tried and tested formula for headaches once the last buyer is in. James Fenkner, director of research at Troika Dialog, contributed this comment to The St. Petersburg Times. TITLE: Oligarchs Know That Shchit Happens AUTHOR: By Yulia Latynina TEXT: The main character of Viktor Pelevin's new book "Numbers," after swapping his Chechen krysha for an FSB one, has billboard posters put up on Rublyovskoye Shosse depicting a shield and a sword (the emblem of the FSB) with the bilingual caption: "Shchit happens" (a pun on the fact that the Russian word for a shield sounds like the word "shit"). Real-life oligarchs are smarter than their fictional counterparts. They don't hang around until it's too late. And so that shit doesn't happen to them, they bail out to the West, having swapped RusAl and Sibneft for Chelsea. That's why people are asking completely the wrong question when they inquire why Roman Abramovich is selling his stake in Rusal. What they should be asking is why Oleg Deripaska is buying Abramovich's stake in RusAl. The thing is, all the "shield" considerations that concern Abramovich also hold true for Deripaska. I think the real reason is that RusAl is the fulfillment of Deripaska's childhood dream. Indeed, when Russian oligarchs were making their fortunes on the GKO market and billionaires were being appointed in the loans-for-shares auctions, RusAl didn't even exist. What did exist was the great TransWorld Group empire and one part of it, Sayansk Aluminum Plant, or SaAZ, where Deripaska was working himself into the ground to get the plant up and running again. He wouldn't leave the shopfloor. They say that he even slept next to electrolytic furnaces, losing his hair and some teeth in the process. Vladimir Tatarenkov, the former owner, would call the young director with promises to bump him off; once, as Deripaska was returning from Achinsk to Sayanogorsk, they were waiting for him in the mountains with a grenade launcher. It is quite possible that Tatarenkov had his reasons for being unhappy with TWG. I've heard it said that they promised him $2 million for buying up shares in the plant, and that when the new owners received the shares, the young director of SaAZ went to the organized crime police, or RUBOP, and said: "I have decided I want to fight crime." TWG was not rated among the oligarchs because it was considered a class alien. The capital's financial beau monde at the time was squeamishly discussing the Izmailovo mafia, aluminum wars and banker Oleg Kantor, who had been stabbed to death at his dacha. Time passed and the TWG empire crumbled due to a managerial rebellion led by the very same Deripaska. In 1999, he also attempted to gain control of what remained of the empire - Krasnoyarsk Aluminum Plant (KrAZ) and Bratsk Aluminum Plant (BrAZ). The plants were caught in a pincer and cut off from their supplies of alumina, while UES retroactively tried to declare the electricity rates the aluminum plants had been paying invalid and sought to bankrupt them. The fall of the besieged plants looked inevitable, when, at the very last moment, "white knight" Abramovich came to the rescue. So they had to make peace. And now, finally, the war, begun all the way back in 1997, has reached its conclusion: Abramovich is selling his stake. Deripaska, dispatched to distant Khakassia in 1995, is now in charge of the whole empire. Just like Decius, who was dispatched to Moesia to pacify the legions and returned as Roman emperor. But what will be the fate of Deripaska's empire now, when Russian oligarchs are a dying breed, like the dinosaurs? Some have been booted out to the West; some are paying the chekists; others are fighting against the chekists; yet others are sitting tight and keeping quiet. Everyone now understands that the state is a highly risky financial instrument. Only Base Element, or so it seems, considers it nothing but a high-yield instrument. Base Element buys up Gorky Auto Plant, or GAZ, and the government introduces higher tariffs on the import of foreign cars. Khakassia Governor Alexei Lebed is trying to take Sayano-Shushenskaya hydroelectric power plant away from UES, but, nonetheless, is ready to make peace if the power plant will sell energy to SaAZ at Soviet prices. While the battle between Yukos and the prosecutor's office was raging, prosecutors paid a visit to Ilim Pulp, one of BasEl's old foes. Everyone is desperately trying to save their empire. Deripaska alone is still in conquer-and-expand mode. Decius only ruled the Roman Empire for two years. Shchit happens. Yulia Latynina is a presenter of "24" on REN-TV. TITLE: In Putin, Populace Sees What It Wants To See AUTHOR: By Olga Kryshtanovskaya TEXT: Russia's love affair with President Vladimir Putin has lasted for almost four years now. His popularity ratings must be the envy of many a head of state. But what exactly has he done to deserve all this love and popularity? What has he done for the country that it should forgive him for Chechnya, for sinking submarines and terrorist attacks? Why does a majority of the population trust the president, again and again falling under the spell of his charm? Who are Putin's admirers and who are his critics? As part of its research on the Putin elite, the department for the study of elites of the Institute of Sociology conducted a survey with the aim of finding answers to these questions. The survey was conducted between Sept. 8 and Sept. 24. The sample consisted of 560 people from eight different social or professional categories: state officials, politicians, businessmen, officers, intelligentsia, young people, housewives and pensioners. During the survey, respondents were asked the open-ended question: "What do you think about Putin and his policies?" Of those polled, 58 percent were critical, while 42 percent were supportive. In 2000, when Putin came to power, it seemed that the one thing the public found profoundly appealing about him was that he was "normal." Unlike his predecessor Boris Yeltsin, he did not dance, sing or take up the conductor's baton when on foreign trips. Putin started to "make friends" among foreign heads of state, and Russians took pride in this. Here was a "normal president" in a country which had grown accustomed to considering itself "abnormal." It is this quality that the overwhelming majority of those polled (80 percent) liked - and still like - about Putin. The president's main group of supporters are state officials - 76 percent of whom speak favorably of him. Above all, they value his caution and ability to work with people. Housewives are another group of admirers. They are charmed by this "ordinary, good guy," who became president by a stroke of luck. Like a male version of Cinderella: Putin is the modest toiler who becomes a prince. If some people consider Putin's slight bashfulness a shortcoming, then it is certainly not the fair sex. On the contrary, they see it as part of his charm, and admire that he is neither impudent nor a chatter box. Putin enjoys a certain amount of support among young people, who are above all impressed by his honesty, decency and incorruptibility. However, the president also has serious critics. Putin's chief critics are businessmen and those in the military or security services. It is fairly clear why businessmen are not the president's greatest fans: They believe that the economy is being held back; that the influx of people from a military or security service background to key positions poses a serious threat to property rights; and that there is a danger of property being redistributed in favor of those oligarchs close to the president. Businessmen fear that Putin has lost his independence and that his actions are dictated by the security services. Paradoxical as it might seem, security service/law enforcement officials are even more critical of the president. Our survey shows that of the eight groups, they have the longest list of grievances against Putin. Their disappointment can be explained by the fact that they had the highest expectations when Putin came to power. Slowly their initial euphoria gave way to skepticism and then to a bitter feeling of having been deceived. While in 1999-2000 many such officers, after long vacillation, switched their allegiances from the Communists to the new president, these days, the trend is in the opposite direction. Below is a synthesized list of their grievances: 1. Putin's personnel policy is disastrous. Interior Minister Boris Gryzlov and Defense Minister Sergei Ivanov come in for particular criticism - according to those polled, they are running their respective ministries into the ground. Gryzlov is blamed for cracking down on his own subordinates, while Ivanov is criticized for his poorly thought-out military reform plans. Security service officials believe that Putin values loyalty above professional competence, and view his entourage as a "team of incompetents and yes-men." While those outside the security services believe that there are too many chekists in the president's entourage, those working in the security services believe there are too few. 2. Security issues do not get the attention they deserve. There is plenty of talk and PR, but no real action and the military continue to live in poverty. According to officers, if Putin does not do something to improve things, the armed forces and security services will turn their back on him. 3. Security service officials are extremely disturbed that a proper war on corruption has still not been launched. Security and law enforcement personnel say that Putin knows all about the economic crimes of the 1990s (and the evidence gathered by the FSB), but refuses to give the "green light" for widespread criminal prosecutions. Chekists sat out the Yeltsin years in the hopes that retribution for the bespredel and theft would one day be meted out. They believe that the state cannot forgive the nouveau riche and bandits their crimes; and that just when victory finally seemed close at hand, the president tied their hands. It is not exactly surprising that having been in power for almost four years the president has made some enemies. What is surprising is that the same people who until recently were a key source of support are now his critics. This criticism from the security and law enforcement establishment raises a question: Is it not the case that the more people from a security or law enforcement background who come to power, the more pressure they exert on the president? They are only prepared to pledge allegiance to the president if he promotes their interests. These interests are quite simple: returning to Russia its status as a great military power (which means reviving the military-industrial complex); giving the security services carte blanche to fight corruption and economic crime; conducting genuine military reform, raising the wages of military personnel, and returning to them their privileged status in society. However, despite all this criticism, the public continues to be fond of its young and energetic president. He has, after all, restored stability in the country and promises to restore order. Moreover, he is not a source of embarrassment. Putin is charged with lacking any ideology, but ordinary people themselves tend not to be adhere to an ideology. The country is still trying to work out whether Putin is on the left or the right. The Communists are convinced that Putin is a democrat, while the democrats are convinced that he is a covert communist who has adopted fashionable liberal terminology in order to make a good impression on the West. One politician who took part in the survey said the following: "Putin is neither red nor blue. He is colorless." And that is what so many people like about the president. Being politically amorphous is one of the keys to Putin's success. The moment he ties himself to a concrete ideology, all those who do not share that ideology will cease to support him. As things stand, the president can be all things to all people. Those who dream of a "strong hand" see in him a second Yury Andropov. Those who want Russia to regain its status as a world power are happy with his achievements in the international arena. For the West, Putin is a democrat and a free-market advocate. To the poor, he is a man who is prepared to take on the oligarchs. For the chekists, he is "their man." Putin is nobody - he is the man in the mask. He is a mirror, in which everyone sees a reflection of themselves. Olga Kryshtanovskaya is head of the department for the study of elites of the Institute of Sociology under the Russian Academy of Sciences. This comment first appeared in Vedomosti. TITLE: Jaded Voters Want Matviyenko To Deliver TEXT: In 1996, the nation held its nose and voted for Boris Yeltsin, not because it liked him, but because they didn't want to see Communist leader Gennady Zyuganov in the Kremlin. In 2003, Petersburgers voted for Valentina Matviyenko, not neccesarily because they like her, but because they had had enough of living with a leader at loggerheads with the Kremlin. They hope that several large infrastructure projects, including the ring road and repairs to the Kirovsko-Vyborgskaya metro line, may finally be completed. The city is apparently incapable of financing these projects on its own, and Matviyenko's close ties to the Kremlin are seen as the best guarantee that a good chunk of federal funds will come the city's way. Elections are supposed to be about choice, and St. Petersburg, with its sophisticated electorate and above-average share of liberal voters, is quite capable of making up its own mind. But the Kremlin didn't want to leave anything to chance in the northern capital, treating the gubernatorial election not too differently to the presidential election in Chechnya, where its candidate, Akhmad Kadyrov, also won at the weekend. Former Governor Vladimir Yakovlev was kicked upstairs before serving out his term. Having proved ill-suited to resolving the city's complex problems, he was elevated to deputy prime minister and given responsibility for dealing with decaying housing infrastructure at the national level. Just before this, Matviyenko was parachuted in as presidential envoy to the Northest Federal District, after her predecessor, bully-boy Viktor Cherkesov, had done his best to clear the way for her gubernatorial bid. Nevertheless, the blatant overuse of so-called administrative resources - police harassment of anyone not campaigning for Matviyenko; saturation advertising of her name and image; and President Vladimir Putin personally endorsing her candidacy on national television - did not quite produce the outright, first-round victory the Kremlin was looking for. Matviyenko was clearly troubled that she had fallen just short of the 50 percent mark in the first round on Sept. 21. But the Kremlin, apparently wising up to the fact that its heavy-handedness had been counterproductive, opted for a slightly more low-profile approach in the weeks before the run-off Matviyenko's victory was clearly achieved by dubious means, but that does not mean she should be written off as "damaged goods." On the contrary, she should be given a chance to prove herself. We will be watching to see how she fulfills her campaign promises, one of the main ones being her pledge to get to grips with the city's ailing housing sector. Let's hope there is more to her election than Putin getting even with Yakovlev - the man who defeated Putin's mentor, Anatoly Sobchak, back in 1996. TITLE: Chris Floyd's Global Eye TEXT: The defining issue of modernity is control of women's fertility. It is this question - more than religion, politics, economics or the "clash of civilizations" - that forms the deepest dividing line in the world today. It is a line that cuts through every nation, every people, from the highest level of organized society down to, in many cases, the divided minds and emotions of individual men and women. Control of fertility - and its active principle, sexuality - has always been an organizing principle of human society, of course, but modernity has presented the world with a revolutionary concept that overthrows millennia of received wisdom and tradition: namely, that an individual woman should control her own fertility. This notion destabilizes state structures and religious dogmas; it uproots cultural mores whose origins reach back to prehistoric times. It is a profoundly disturbing development in the life of humankind. Little wonder, then, that anxieties over fertility and sexuality are the chief engines driving the frenzied and increasingly violent fundamentalist movements now sweeping through the world. It is here that extremists of every stripe make common cause against modernity. Almost every other aspect of "the modern" - science and technology, high finance, industrialization, etc. - has been absorbed, in one form or another, by the most "traditionalist" societies. But what today's fundamentalists - from Osama bin Laden to George W. Bush to Pope John Paul II, from the American-backed warlords of Afghanistan to the anti-American mullahs of Iran - cannot accept, at any cost, is the freedom of a woman's body. This frenzy, this primitive fear - understandable perhaps in the face of such a wrenching upheaval - does not in itself make a fundamentalist an evil person. But it can - and does - lead them into evil: sometimes blindly, in ignorance and panic; but sometimes knowingly, with eyes wide open, a willing embrace of primitive emotions to serve selfish and cynical ends. And so: last month, George W. Bush quietly cut off funding for a highly praised AIDS program for refugees from Africa and Asia. Why? Obviously, to keep his helots on the Christian Right frothing with passion to do battle for him in 2004. He has already given them control of American social policy, particularly in international negotiations, where they routinely form alliances with Iran, Sudan, Saudi Arabia and other repressive states to derail treaties on women's rights. But what was his public reason? Bush says he gutted the program because one member of the non-profit consortium running the project is also working with a UN program that was falsely accused of colluding with China's policy of forced abortions. That charge was investigated not once but twice by Bush's own State Department, as well as by the UN, and was shown each time to be completely untrue. The only "evidence" produced to support the slander was an allegation that in a single office in a rural Chinese province a few years ago, the desk of a UN official touched the desk of a Chinese Health Ministry official. That's it. The truth, of course, is that the UN program, and all the non-profit organizations associated with it, are trying to end China's forced abortions. Of course, this heinous practice that has never stopped Bush from granting massive trade benefits to the baby-killing Communists. Nor has it ever disturbed the orgy of investment in China's repressive regime by the corporate barons of the U.S.-Chinese Chamber of Commerce, headed by that genial old aristocrat, Prescott Bush Junior - known as "Uncle Prescott" to the current president. Naturally, any punishment for China's forced abortions must not fall on the Beijing government itself - not when Uncle Press has choice deals on the line. No, instead it must land - like a ravening cruise missile - on the poorest of the poor, in Angola, Congo, Rwanda, Somalia, Eritrea, and other poverty-stricken areas where the Bush family has no investments. Not content with slapping AIDS-stricken refugees around, Bush also cut off all U.S. funding to countless family planning services in the poorest regions of the world. This ban applies to any clinic that so much as mentions abortion as an option to its clients, even if it doesn't provide abortions or referrals itself - and even if the woman has been raped (perhaps by the goons of a Bush-backed warlord), even if she will die in childbirth. A clinic will also be cut off if its workers take part in lobbying campaigns to secure legal abortion in their countries. Such rights, hard-won by Western women, are to be denied to the world's poor. (Meanwhile, Bush's helots are scheming to roll them back in America as well). Many of these clinics provide the only maternal and post-natal care available for millions of destitute women and their children. They are the only place where the world's most downtrodden and uneducated women can receive information about reproduction and birth control, or treatment for AIDS, genital mutilation and rape. All across Africa and Asia, these clinics - including many run by Bush's beloved "faith-based organizations" - are closing up as they lose their American funding. Yet this funding itself is a mere pittance from the war-fattened federal purse - less than one day's spending on Bush's rape of Iraq. It is simply a fact that thousands of women and infant children will die needless deaths in the coming year because of Bush's edicts. He could have saved them; instead he has killed them. He has chosen to stand with terrorists and tyrants in the fundamentalists' war against women. For annotational references, see the Opinion section at www.sptimesrussia.com TITLE: Arms Searcher Says New Leads in Iraq AUTHOR: By Davis Ho PUBLISHER: The Associated Press TEXT: WASHINGTON - Weapons hunters in Iraq are pursuing tips that point to the possible presence of anthrax and Scud missiles still hidden in the country, the chief searcher said Sunday. David Kay told Congress last week that his survey team had not found nuclear, biological or chemical weapons so far. But he argued against drawing conclusions, saying he expects to provide a full picture on Iraq's weapons programs in six months to nine months. While lacking physical evidence for the presence anthrax or Scuds, Kay said tips from Iraqis are motivating the search for them. Critics, including many in Congress, say Kay's findings do not support most of the U.S. administration's prewar assertions that the United States faced an imminent, serious threat from Iraq's Saddam Hussein because of widespread and advanced Iraqi weapons programs. President George W. Bush has said the U.S.-led war on Iraq was justified despite the failure to find weapons. Kay reported that searchers found a vial of live botulinum bacteria that had been stored since 1993 in an Iraqi scientist's refrigerator. The bacteria make botulinum toxin, which can be used as a biological weapon, but Kay has offered no evidence that the bacteria had been used in a weapons program. The live bacteria was among a collection of "reference strains" of biological organisms that could not be used to produce biological warfare agents. Kay said Sunday the same scientist told investigators that he was asked to hide another much larger cache of strains, but "after a couple of days he turned them back because he said they were too dangerous. He has small children in the house." Kay said the cache "contains anthrax and that's one reason we're actively interested in getting it." Kay, speaking on "Fox News Sunday," did not say whether the anthrax was live or a strain used only for anthrax research. Before the war, Iraqis said they had destroyed their supply of anthrax. Inspectors haven't found any and Iraqis haven't been able to provide evidence to satisfy investigators that they did destroy it. Experts note that old supplies of anthrax would have degraded by now. While the Bush administration argued before taking the country to war that Iraq's arsenal posed an imminent threat, much of what Kay discovered is that Iraq had interest in such weapons and was researching some agents. Senator Joe Lieberman said Kay's report shows Saddam's clear intent to develop chemical and biological weapons and the missiles to deliver them. He said, however, that the administration didn't tell the public the whole truth. "There is some evidence that the Bush administration exaggerated unnecessarily," he told "Fox News Sunday." Lieberman, a presidential candidate, said the exaggeration "did discredit what was otherwise a very just cause of fighting tyranny and terrorism. TITLE: Blair Knew Iraq Harmless, Says Cook PUBLISHER: The Associated Press TEXT: LONDON - Former Foreign Secretary Robin Cook said in diary excerpts published Sunday that he believes Prime Minister Tony Blair knew two weeks before the war that Iraq probably didn't possess usable weapons of mass destruction. The claim by Cook - who resigned from the government over the U.S.-led war - renewed calls for an investigation into why Britain joined the invasion despite questions about the threat posed by Saddam Hussein. "I think this vindicates those of us who have been calling for an independent judicial inquiry into the reasons why we went to war," said Alice Mahon, a lawmaker in Blair's ruling Labor Party and a leading opponent of military action in Iraq. Blair's office shrugged off Cook's claims. "The idea that the prime minister ever said that Saddam Hussein didn't have weapons of mass destruction is absurd," a spokesman said on condition of anonymity. "His views have been consistent throughout, both publicly and privately, as his cabinet colleagues know." TITLE: Embattled Arafat Names Emergency Cabinet PUBLISHER: The Associated Press TEXT: RAMALLAH, West Bank - Yasser Arafat installed a small Cabinet by decree, with Ahmed Qureia as prime minister, and declared a state of emergency in the Palestinian areas in an apparent attempt to block Israeli action against him following a suicide bombing. Qureia and his eight-member emergency Cabinet are to be sworn in Tuesday and will serve for a limited term of up to two months. Qureia, tapped by Arafat for the job last month, had initially planned to present a larger government to parliament for approval later in the week. Israel threatened last month to "remove" Arafat, without setting a time, and there were new demands for his expulsion after Saturday's attack by Islamic Jihad. Nineteen Israelis were killed in a crowded beachfront restaurant in the northern port city of Haifa. Aides to the Palestinian leader have said he was clearly concerned about possible Israeli action after the bombing. There was no direct move against Arafat after the suicide bombing; instead, Israel bombed a target inside Syria striking deep inside its neighbor's territory Sunday for the first time in three decades. In installing an emergency Cabinet, Arafat makes it more difficult for Israel to move against him. The United States appears willing to give Qureia a chance, and any Israeli action against Arafat could force Qureia's immediate resignation and cause chaos in Palestinian areas. TITLE: IN BRIEF TEXT: China Close to Launch BEIJING (Reuters) - China on Saturday announced plans to launch a satellite to monitor the Earth but made no mention of its top-secret first manned space flight expected any day now. State television said China would launch a satellite at the end of 2003 in line with a Sino-European surveying project. China is expected in the next few days to become only the third country to put a person into orbit after the former Soviet Union and the United States. Official media have been secretive about the launch date, but speculation is widespread it would be during or near the week-long National Day holiday, which started on Oct. 1. Pope Canonizes 3 VATICAN CITY (AP) - Days after some cardinals gave dire descriptions of his health, Pope John Paul II led a long and lively ceremony Sunday to give the Church three new saints, capping the appearance with a spin in a "popemobile" around St. Peter's Square to wave to tens of thousands of cheering well-wishers. The 83-year-old Pontiff, who suffers from Parkinson's disease, held up rather well throughout his 2 1/2 hours in the public's eye. John Paul declared three missionaries to be saints: Daniele Comboni, an Italian; Arnold Janssen, a German; and Josef Freinademetz, an Austrian. Fish Demand to Rise WASHINGTON (AFP) - World fish demand will soar by 2020, with supplies straining to meet a growing hunger for seafood in China and other developing countries, a report warned. The world will eat 127.8 million metric tons of fish in 2020, up from 91 million tons in 1997 and 45 million tons in 1973, predicted the International Food Policy Research Institute report. Consumption in developing countries including China would jump 57 percent to 98.6 million tons by 2020, while edging up only 4 percent to 29.2 milliontons in the developed world. "The seemingly inexhaustible oceans have proved to be finite after all," the report said. Oldest American Dies TRENTON, New Jersey (AP) - Elena Slough, documented as the United States' oldest person, died Sunday at the nursing home where her daughter died three days before. She was 114 or 115, according to different sources. Slough died in her sleep at the Victoria Manor Nursing Home, where she and her 90-year-old daughter, Wanda Allen, lived, according to Judy Moudy, a supervisor at the Lower Township facility. The Gerontology Research Group, said Sunday that Slough was the third-oldest living person in the world. Tiger Found in Flat NEW YORK (AP) - A tiger and an alligator found in a Manhattan apartment were sent to wildlife sanctuaries in Ohio and Indiana on Sunday while their owner recovered from bite wounds inflicted by the more than 180-kilogram cat. A team of animal control officers, police and Bronx Zoo workers removed the animals on Saturday. TITLE: Syria Urges UN To Condemn Israeli Raid AUTHOR: By Priscilla Cheung PUBLISHER: The Associated Press TEXT: UNITED NATIONS - Syria has demanded that the UN Security Council condemn Israel's airstrike against a purported terrorist training camp near Damascus, but the United States said it would not support any resolution that does not also criticize attacks against Israel. At an emergency meeting called at Syria's request Sunday, most council diplomats spoke out against both the airstrike and the suicide bombing in the Israeli port city of Haifa that killed 19 people and prompted Israel's retaliation. However, U.S. Ambassador John Negroponte focused his condemnation on the Haifa attack, while blaming Syria for harboring terrorists. "The United States believes that Syria is on the wrong of the side of the war on terrorism," he said. "We believe it is in Syria's interest, and in the broader interest of Middle East peace, for Syria to stop harboring and supporting the groups that perpetrate acts such as the one that occurred yesterday." The attack on Sunday was the first Israeli strike deep within Syria since the 1973 Yom Kippur War, and it alarmed other Middle Eastern nations. The Arab League said the bombing "exposes the deteriorating situation in the region to uncontrollable consequences, which could drag the whole region into violent whirlpool." The Islamic militant group Hamas said it fired 16 mortar shells at Israeli settlements in the Gaza Strip overnight in retaliation for the Israeli airstrike. The Israeli army said it was checking the claim. There were no immediate reports of injuries. Hamas also said it would also carry out more attacks in Israel. "Any aggression against an Arab or Islamic country is an aggression against the Palestinian people and, God willing, our response to this aggression will be decisive," read a statement on a Hamas web site. "We call on our fighters ... to respond quickly, and in the heart of the Zionist entity, to this serious escalation," it said. The Bush administration urged restraint in the Middle East. President Bush telephoned Israeli Prime Minister Ariel Sharon to offer condolences for the Haifa bombing and the two agreed on a need to continue fighting terrorism and "on the need to avoid heightened tension in the region at this time," said Ken Lesius, a White House spokesman. It seemed unlikely Syria would retaliate. It has 380,000 active duty soldiers, but Israel holds a commanding technological edge. Israel is more worried about Syria's growing missile program and its ability to launch chemical and poison weapons into Israel's cities. Leaders of Islamic Jihad and other militant groups are based in Syria, but Jihad on Sunday denied having any training bases there. Syrian villagers near the targeted site in Ein Saheb, 14 miles northwest of Damascus, said the camp had been used by Palestinian gunmen in the 1970s but was later abandoned - and was now only used by picnickers and other visitors to its spring and olive groves. Ambassador Fayssal Mekdad of Syria, the council's only Arab member, urged his colleagues to adopt the resolution condemning the "military aggression carried by Israel against the sovereignty and territory" of Syria. The document also demands that Israel stop acts "which might lead to a dangerous deterioration that threatens regional and international peace and security." TITLE: California Survey Sees Close Finish AUTHOR: By Don Thompson PUBLISHER: The Associated Press TEXT: SACRAMENTO, California - Arnold Schwarzenegger entered the last full day of campaigning for the governorship as a poll showed his support slipping and more women surfaced to accuse the actor of groping them. Governor Gray Davis said Schwarzenegger owes a full explanation before voters decide Tuesday whether to recall a sitting governor for the second time in the nation's history. Schwarzenegger, who continued to blame the widening scandal on political dirty tricks, said he wouldn't say anything more about sexual harassment claims, now made by a total of 15 women, until after the election. "I can get into all of the specifics and find out what is really going on," he told "Dateline NBC" Sunday night. "But right now I'm just really occupied with the campaign." Davis told CNN's "Larry King Live" Sunday that Schwarzenegger "is in sort of a free fall" and could be overtaken in the closing hours of the campaign. Davis also used the power of incumbency to create news Sunday, signing a law making California the largest state to require employer-paid health care for an estimated nearly 1.1 million working Californians without job-based coverage. The Los Angeles Times said that four additional women said Schwarzenegger touched them inappropriately. Schwarzenegger spokesman Sean Walsh dismissed the allegations. A Knight Ridder poll released late Saturday found support for recalling Davis might be slipping, although 54 percent favored removing him while 41 percent were opposed. The poll, conducted Wednesday through Saturday, found the percentage of people saying they would definitely vote to oust Davis dropped in the last days, from 52 percent Wednesday to 44 percent Saturday. TITLE: Museveni Mistrusts Doctors PUBLISHER: The Associated Press TEXT: KAMPALA, Uganda - Ugandan President Yoweri Museveni said Sunday he and his family travel abroad for medical treatment because he fears "hostile doctors" who could try to kill him. In a letter to the independent Sunday Monitor and government-owned Sunday Vision newspapers, Museveni said that the problem with the Ugandan medical system is "that some of the doctors are partisan." "I regard myself and my immediate family as a principal target for the criminal forces," he said. The letter was in response to an article published by The Monitor newspaper two weeks ago that criticized Museveni for using his presidential jet to fly one of his daughters, Natasha, to Germany to give birth. His daughter-in-law, who was also pregnant, also went on the trip. The Monitor article alleged that the flight to Germany cost Uganda $90,000, and that the women's medical expenses were paid for by the government. Museveni, however, said he paid for all the medical expenses and said the flight cost the state $27,000. Museveni said getting medical treatment abroad was part of "our survival strategy in still hostile circumstances." "The issue is about security given some of the hostile doctors we have in the medical system here Museveni said in the letter. "Even abroad, we take precautions," he added. TITLE: Creator of Shrek, Cartoonist William Steig, Dies Aged 95 AUTHOR: By Greg Sukienik PUBLISHER: The Associated Press TEXT: BOSTON - William Steig, an illustrator for The New Yorker who was known as the "King of Cartoons" for his award-winning, best-selling children's books including "Shrek," has died. He was 95. Steig died of natural causes Friday night at his home in Boston, said his agent, Holly McGhee. Steig combined a child's innocent eye with idiosyncratic line to create a wonderful world of animal characters for his books and Edwardian-era dandies in his drawings. "I carry on a lot of the functions of an adult but I have to force myself," he said in a 1984 interview with People. "For some reason I've never felt grown up." His 1990 book about a green monster, "Shrek!", was made into the hit film that in 2002 became the first winner of an Oscar in the new category of best animated feature. In a 1997 Boston Globe interview, he said he gave the filmmakers ideas for the script. Steig sold his first cartoon to New Yorker editor Harold Ross in 1930 and was hired as a staff cartoonist. Over the following seven decades, he produced more than 1,600 drawings and 117 covers for the magazine. He also wrote more than 30 children's books, inducing Newsweek to dub him the "King of Cartoons." His cartoon style evolved from the straightforward worldly children he called "Small Fry" in the 1930s to the expressionist drawings of his later years that illuminated a word or phrase. In the latter, clowns and princes and lovers came to life from Steig's imagination. It was a pastoral place "where you hear plenty of laughter and only an occasional shriek of pain," Lillian Ross once wrote. Steig told the Globe he loved Rembrandt and Picasso and was "nuts about van Gogh." And he said his own drawings have a light, feathery line "because I'm having fun." He began writing children's books when he was 60. His third, "Sylvester and the Magic Pebble," received the prestigious Caldecott Medal in 1970. Steig was born Nov. 14, 1907, in New York, the son of a house painter and a seamstress. He began drawing cartoons for his high school newspaper and attended the National Academy of Design. In the '30s he became fascinated with Freud and psychoanalysis. His 1942 book "The Lonely Ones" was hailed for its symbolic drawings of human neuroses. It was in print for 25 years. "I find it hard ...to do a job on order, even if the order comes from myself," he once said. "I go to my desk without any plans or ideas and wait there for inspiration. Which comes if you get in the right frame of mind." TITLE: Germans Shock U.S. To Move Into Final PUBLISHER: The Associated Press TEXT: PORTLAND, Oregon - Four years after Brandi Chastain ripped her jersey off in celebration, Mia Hamm pulled hers over her face to hide the tears. Hamm, idolized by countless young girls and the dominant force in U.S. women's soccer, was shut out in her last World Cup semifinal. The U.S. defense of its World Cup title ended in a 3-0 loss Sunday to a German team that was simply too good. The defeat was even more painful because it came on home turf, where the Americans had been invincible. The capacity crowd of 27,623 in cozy but raucous PGE Park - many of them youngsters wearing No. 9 jerseys with the name "Hamm" on the back - chanted "USA, USA, USA" to the finish and then after the game ended. Hamm hugged her teammates, tears streaming down her cheeks, then gamely clapped along with the crowd. "All those girls in the stands, that's the legacy," Hamm said. Time after time, Hamm and her teammates threatened only to be thwarted by the spectacular play of goalkeeper Silke Rottenberg and the rest of the German defenders. "We brought our 'A' game in terms of the attacking," U.S. coach April Heinrichs said. "That's a great team we played. I've got to think that maybe this was the greatest game ever played in women's soccer." Hamm and the rest of the aging core of U.S. players had wanted so badly to go out with another Cup triumph this year and then Olympic gold in 2004. Now only the games in Athens provide an attainable goal. After that, Hamm will retire. "It was a hard loss because of the way it went down," U.S. goalkeeper Briana Scurry said. "They were bending and bending, but they didn't break." Kerstin Garefrekes' header off Renate Lingor's corner kick glanced off the crossbar and into the net in the 15th minute, then the Germans withstood one U.S. threat after another. Two goals in the final two minutes sealed the win. Fittingly enough, they came from German stars Maren Meinert and Birgit Prinz. Meinert, the MVP of the WUSA professional soccer league this year in its final season, had planned to retire but was coaxed back to the national team. Prinz scored seven of Germany's 23 goals in its five World Cup matches. "Everybody had a chance," Prinz said, "and I think in the end we were lucky and we finished our chances. We were totally excited to beat the U.S. We usually lose important games to them." Germany will play Sweden for the World Cup title next Sunday in Carson, California. The United States will face Canada, which lost 2-1 to Sweden in the other semifinal, for third place. "I said to the German coach after the game 'Go and win it,"' Heinrichs said, "because that certainly is one of the best teams I've seen in a long time." It was the second World Cup loss ever for the United States and first since it was beaten by Norway in the 1995 semifinals. The Norwegians went on to beat Germany for the championship. The United States is 19-2-2 in World Cup competition. The tournament was originally scheduled to be held in China, but was moved to the United States because of a SARS epidemic. The stage seemed set for a U.S. repeat as the Americans advanced through a tough group and a difficult 1-0 quarterfinal victory over Norway. Germany, meanwhile, rolled through its preliminary competition, outscoring its opponents 20-3 going into the semis. Hamm sent a perfect feed to Tiffeny Milbrett in the 74th minute, leaving the American forward one-on-one with the German goalkeeper. But her shot sailed high over the net. The last gasp came on Hamm's corner kick in the 89th minute. It fell harmlessly to the ground and the Germans kicked the ball out of danger. "We had opportunities, but it's one thing to create them, it's another to finish them," Hamm said. Sweden 2, Canada 1. Josefine Oeqvist came into the game late, scored the winning goal and then burst into tears. The score by the late-game substitute gave Sweden a 2-1 win over Canada on Sunday night and its first-ever trip to the World Cup finals. Oeqvist had just come into the game in the 70th minute, with Sweden hoping to make that final push in a tie game with Canada. Her shot 16 minutes later hit the post then caromed in to give Sweden the victory. "We've been working hard for this for many and we are through - finally," Sweden coach Marika Domanski Lyfors said. Kara Lang's kick from 10 meters in the 65th minute couldn't be grasped by Sweden goalkeeper Caroline Jonsson, who was returning after missing the quarterfinal match against Brazil. But Sweden, ranked fifth in the world, came right back when Victoria Svensson fed the ball to onrushing teammate Malin Mostroem, who just beat diving Canadian goalkeeper Taryn Swiatek to tie it 1-1. Then came Oeqvist. "We pushed and pushed trying to get a goal. We changed our organization with our players in back. We scored once, we scored twice and we had to calm down a little bit and try to stop them from scoring," Domanski Lyfors said. TITLE: Cubs Beat Braves, Will Face Florida PUBLISHER: The Associated Press TEXT: ATLANTA - Sammy Sosa sprinted across the outfield, high-fiving his teammates along the way. Thousands of Cubs fans sang "Take Me Out To The Ball Game" over and over. Mike Remlinger strolled toward home plate - a beer in one hand, a cigar in the other - and simply shook his head in disbelief. Ron Santo and Ernie Banks, College of Coaches and the curse of the goat, Harry Caray and Jack Brickhouse - this one's for you. In one magical evening, the Chicago Cubs ended 95 years of frustration. Kerry Wood pitched another dominating game and Aramis Ramirez began the celebration with a mammoth home run, pushing the Cubs past Atlanta 5-1 in the decisive Game 5 Sunday night for their first postseason series victory since the 1908 World Series. The Cubs move on to play Florida in the NL championship series. Game 1 is Tuesday night at Wrigley Field. "We heard a lot of negatives from people, and they have reason to be negative," first-year manager Dusty Baker said. "They haven't had any reasons to be positive for a long time." They do now. When Andruw Jones struck out swinging on the final pitch, flashbulbs went off around the stadium. Catcher Damian Miller threw his arms in the air, then charged the mound to embrace closer Joe Borowski. Sosa tore across the grass with his arm in the air. Wood, sitting in the dugout, pumped his fist before heading to the field to join the celebration. In the stands, Chicago's fans shouted, hugged and derisively performed the "Tomahawk Chop" - the Braves' signature cheer. Back in Chicago, thousands of Cubs fans streamed into the streets surrounding Wrigley Field when the game ended. Police had to shut down the streets surrounding the ballpark, and fans danced, cheered and hugged each other in an impromptu victory celebration. The old, red marquee board outside the ballpark read simply, "Cubs Win!" "I lived 'til next year," said an elated Norma Rolfsen of Chicago, a die-hard Cubs fan. "It's here! It's here! Thank God for Dusty Baker." The Braves suffered another heartbreaking loss in the postseason, going down for the second year in a row in Game 5 of the division series. Twelve straight division titles have produced only one World Series championship, and the Braves face an uncertain future. Gary Sheffield, Greg Maddux, Javy Lopez and Vinny Castilla are all in the last year of their contracts. "We just didn't make any adjustments," Braves closer John Smoltz said. "They pitched the same way the whole series. But they dominated. It's not like they were throwing slop up there." The Braves were a dominant hitting team during the regular season, leading the NL in all major categories. But the lineup that produced six 20-homer players and four guys with 100 RBIs couldn't do anything against Chicago's young guns. Twenty-three-year-old Mark Prior pitched a two-hitter in Game 3, a 3-1 win for the Cubs. Wood, 26, gave up seven hits and three runs in 15 1/3 innings. Once again, thousands of Cubs fans were on hand to cheer their beloved team, ignoring years of heartache to provide some Chicago hope. The crowd of 54,357 was a Braves franchise record, eclipsing the turnout of 53,775 that watched Hank Aaron break Babe Ruth's home-run record in 1974. N.Y. Yankees 8, Minnesota 1. The Yankees hit four doubles in a six-run fourth inning Sunday, breezing behind David Wells into the AL championship series with an 8-1 victory over Minnesota. After a sloppy loss in Game 1 Tuesday that brought back memories of last year's first-round flop against Anaheim, New York beat the Twins three straight times to win the division series 3-1. "We fought our way through it," manager Joe Torre said. "We know there are a lot of distractions in New York. In the postseason, they're magnified." Wells improved to 9-2 lifetime in the postseason by going 7 2-3 innings for the Yankees. New York made it easy for him, sending 12 batters to the plate in the fourth and chasing Twins starter Johan Santana. Bernie Williams and Hideki Matsui each hit an RBI double, and Nick Johnson added a two-run double. Alfonso Soriano's bloop two-run single made it 6-0. "Six-nothing in the playoffs is like 12-nothing in the regular season," Minnesota's Torii Hunter said. Boston 5, Oakland 4. Red Sox designated hitter David Ortiz snapped out of his slump and saved the season with a two-run double off closer Keith Foulke in the eighth inning Sunday as Boston rallied to beat the Athletics 5-4 and send the series to a decisive fifth game. "David was holding his head down quite a bit, but we were telling him he has a great shot of being MVP," said Boston outfielder Johnny Damon, who homered and threw out a runner at third. "Zero-for-16 doesn't make or break a year, but that one hit you got certainly does." It was the eighth consecutive elimination game Oakland has lost - the longest slump of its sort in major league history. Despite making the playoffs each of the last four seasons, the A's have yet to advance past the first round. "This is this year. We're worried about this year," Oakland second baseman Mark Ellis said. "We're trying to make some new history and win that Game 5." TITLE: Myskina Wins in Moscow as Sharapova Takes Japan Title PUBLISHER: The Associated Press TEXT: MOSCOW - Anastasia Myskina and Taylor Dent won finals Sunday at the Kremlin Cup, the second straight titles for both players. Myskina, the first Russian woman to win this event, defeated Amelie Mauresmo of France 6-2, 6-4. Former President Boris Yeltsin was in the stands and was one of the first to congratulate her. Dent defeated Sargis Sargsian of Armenia 7-6 (7-5), 6-4 to become the first American to capture the Kremlin Cup. Last week, Dent upset top-ranked Juan Carlos Ferrero to win the Thailand Open. A week ago, Myskina downed U.S. Open and French Open champion Justine Henin-Hardenne in the final in Leipzig, Germany. The Kremlin Cup was Myskina's sixth career title. "With every tournament title, a win at the Grand Slams is becoming more and more realistic," Myskina said. Dent, a serve-and-volley player, extended his winning streak to 10 matches. He won the first-set tiebreaker after Sargsian double faulted at 5-5. In the second set, Dent converted a break point in the third game to go up 3-1. He won when Sargsian netted a volley. "I was serving well the whole match and that helped keep me out in front," said Dent, who earned $133,000 to bring his career winnings to $1 million. Myskina, seeded fourth and ranked No. 10, is 4-for-4 in finals this season. This time, she beat an opponent who struggled with almost every element of her game. A faltering Mauresmo served two double faults in the sixth game to give Myskina a 4-2 lead in the first set. The Russian capitalized on Mauresmo's double fault in the fourth game of the second set to go up 3-1. "I made too many mistakes to hope to win," Mauresmo said. "I was trying to be aggressive ... but to make that many mistakes at this level - you can't, you know, play like that." Myskina was the fourth Russian to reach the Kremlin finals but the only one to win. The others were Yelena Makarova in 1995, Anna Kournikova in 2000 and yelena Dementieva in 2001. Also Sunday, Maria Sharapova won the Japan Open, marking the first time two Russian women won WTA titles on one day. Sharapova rallied from a 5-2 deficit in a third-set tiebreaker to defeat Aniko Kapros of Hungary 2-6, 6-2, 7-6 (7-5) for her first WTA Tour singles title. Sharapova, 16, became the tour's youngest winner this year. A day earlier, won the doubles title at the $860,000 tournament. Sharapova has been compared to Anna Kournikova. Now she has something Kournikova does not - a title. "I really hope I'm not going to get all those Anna Kournikova questions anymore," she said. Sharapova, seeded fifth, was broken by Kapros in the opening game to set the tone for the set. She regrouped in the second set, breaking three times. In the third set, Kapros rallied to force a tiebreaker. The Russian fell behind 5-2 but won the next five points, sealing the match when Kapros' return sailed wide. "Even when I was down, I still felt I would come back and win the match," Sharapova said. "I've worked very hard and now it's all paying off." Top seed Rainer Schuettler of Germany won the men's title, beating second-seeded Sebastien Grosjean of France 7-6 (7-5), 6-2. Schuettler, ranked No. 8 entering the tournament, didn't lose a set all week. He is trying to qualify for the season-ending Masters Cup in Houston featuring the top eight players. "It's something I've always dreamed of. Making a Grand Slam final [the Australian Open] was a dream, and making the Masters Cup would be another dream come true." TITLE: Milan Downs Inter, Valencia Drops Barca PUBLISHER: Combined Reports TEXT: LONDON - Defending European champion AC Milan joined Juventus at the top of Serie A as Valencia stayed ahead in the Primera Liga with a 1-0 win at Barcelona over the weekend. England's big three all won to move five points clear of the chasing pack. Arsenal stayed top following a battling 2-1 victory at Liverpool. Goals from Filippo Inzaghi, Kaka and Andriy Shevchenko helped Milan to a comfortable victory over city rival Inter at the San Siro, while Juve needed an 80th-minute penalty by David Trezeguet to seal a 2-1 home win over Bologna. Ricardo Oliveira scored with a stunning volley in the 15th minute to give Valencia its second major scalp in succession following last week's victory over Real Madrid. Italy. Milan went ahead in the 39th minute when an Andrea Pirlo freekick struck Inzaghi's head and flew past helpless Inter keeper Francesco Toldo. Just 29 seconds after the restart, Carlo Ancelotti's team doubled its advantage when Brazilian Kaka headed in a cross from Gennaro Gattuso. Shevchenko made it 3-0 in the 77th, firing home after a neat one-two with Cafu, with the Inter defence looking woeful. Two minutes later, Inter give itself a glimmer of hope with a beautiful individual strike from Nigerian teenager Obafemi Martins, but Milan's victory was never under threat. It was far from a vintage performance from Juventus, missing the creative input of the injured Alessandro del Piero, but as so often it managed to take three points from a below-par display. Juve went ahead in strange fashion in the 23rd minute when Czech midfielder Pavel Nedved crossed from the left and defender Mark Iuliano rose for a header, only for the ball to fly off his back past Gianluca Pagliuca. Three minutes later, though, Bologna pulled level when former Italy striker Giuseppe Signori converted a penalty awarded after Juve defender Nicola Legrottaglie brought down Carlo Nervo. It was a struggle for Marcello Lippi's team after the break, but it finally broke through when Cristian Zaccardo was ruled to have tripped Gianluca Zambrotta inside the Bologna area. There were lengthy protests from Bologna players, but that failed to deter Trezeguet, who blasted home the spot-kick to take unbeaten Juve on to 13 points from five games. Lazio returned to winning ways when a deflected Sinisa Mihajlovic free kick secured a 1-0 win over Chievo at the Olympic Stadium, and Parma's good start continued with a 1-0 victory over Sampdoria that took it up to fourth place. AS Roma is third after being held to a 0-0 draw at Siena, with Lazio moving above Inter to fifth after five games. Spain. Valencia stayed a point ahead of Deportivo Coruna and three clear of Real Madrid at the top of the table. A brilliant Ricardo Oliveira strike sent Valencia back to the top of the Primera Liga with a 1-0 win at Barcelona, while Real Madrid stayed in touch with the leader thanks to a Ronaldo double in a 2-1 win over Espanyol. Valencia, a 2-0 winner over Real Madrid last week, was outplayed by Barca for much of an entertaining Nou Camp clash, but a first-time shot from the edge of the box by Brazilian Oliveira after 15 minutes clinched the win. A fifth successive win for Rafa Benitez's team took it back to the summit with 16 points from six matches, one point ahead of Deportivo Coruna after its 5-1 home win over Atletico Madrid on Saturday. Real Madrid stayed close to the leaders thanks to another Brazilian striker. Ronaldo turned in a cross from Raul in the 53rd minute and made it 2-0 eight minutes from time by meeting David Beckham's precise cross with a downward header. Alex pulled one back for Espanyol with the last kick of the game in the third minute of injury time. England. Australian forward Harry Kewell put Liverpool ahead, but Brazilian Edu equalized and French midfielder Robert Pires sealed Arsenal's win with a superb curling shot from 25 meters. Manchester United climbed into second place, a point behind Arsenal, following a routine 3-0 home victory over 10-player Birmingham City, while Chelsea needed a late header by Argentine striker Hernan Crespo to secure a 2-1 win at Middlesbrough. The big-spending London club is level on 19 points with United, whose goals against Birmingham were scored by Dutch striker Ruud van Nistelrooy from a penalty, England midfielder Paul Scholes and Wales winger Ryan Giggs. Crespo scored his third goal in five games for Chelsea in English and European competition, rising to nod home from a tight angle after Damien Duff's cross to the far post. The Argentine made up for a bad miss 11 minutes earlier when he robbed Boro captain Colin Cooper but shot straight at Mark Schwarzer, hitting the advancing keeper squarely in the face. Man-of-the-match Duff also set up Chelsea's opening goal in the 17th minute for Iceland's Eidur Gudjohnsen, who fired a low shot inside Schwarzer's right-hand post from the Ireland international's defense-splitting pass. Germany. Werder Bremen climbed to the top of the Bundesliga standings with a spectacular 5-3 victory over VfL Wolfsburg on Sunday. Prolific Brazilian striker Ailton paved the way for Werder's win with two first-half strikes, while French midfielder Johan Micoud orchestrated play brilliantly and scored a goal. The northerners move a point ahead of VfB Stuttgart, which remained undefeated eight games into the season but was held to a 0-0 draw by last-place club Cologne on Saturday and is now third. Bayer Leverkusen climbed to second, level on points with Werder, by scoring three times in the last 20 minutes to beat lowly Hansa Rostock 3-0 in Sunday's other game. Dutch striker Roy Makaay scored one goal and set up another to help Bayern Munich crush struggling Hertha Berlin 4-1 on Saturday. Russia. A goal on the stroke of halftime from Vladimir Bystrov and two late strikes, one a penalty, by Alexander Kerzhakov secured Zenit a 3-0 win over last-placed Chernomorets Novorossiisk in the Premier League on Saturday. The win strengthened Zenit's hold on second place, as it pushes for its best final position since winning the former Soviet Union championship in 1984. Zenit is six points ahead of third-placed Lokomotiv Moscow - which was officially dethroned as champion after losing 1-0 to city rival Torpedo on Saturday - with three games remaining. Russian international midfielder Igor Semshov scored the only goal shortly after the interval to seal Torpedo's first victory in its last four games. The defeat, which snapped Lokomotiv's nine-game unbeaten streak, left the railway club 10 points behind leader CSKA Moscow. CSKA battled to a 1-1 draw with arch-rivals Dynamo Moscow in a heated derby on Saturday to lead Zenit by four points. (Reuters, SPT) (For other results, see Scorecard) TITLE: Dante Does It All Over Again PUBLISHER: The Associated Press TEXT: KANSAS CITY, Missouri - He cut left, then right, then stutter-stepped and actually ran backward toward the end zone. Surrounded by Denver tacklers and just a couple of yards from the goal line, Dante Hall cut back left, looped around to the outside and darted 93 yards into the end zone - and the record book. His NFL record fourth touchdown return in four games came with 8:20 left and gave Kansas City a 24-23 victory over Denver and the Chiefs' first 5-0 start. But to the other Chiefs players, the game between previously unbeaten AFC West rivals was almost secondary. They all seemed to want to talk about their remarkable teammate. "He's a human highlight reel," Chiefs defensive end Eric Hicks said. "He's like Michael Jordan. It's ridiculous. The play he made, really nobody was blocked on the initial part of the play. My God, I've never seen anything like that in my life." Hall began his streak with a 100-yard kickoff return against Pittsburgh, then had a 73-yard punt return against Houston and followed with a 97-yard kickoff return for a score against Baltimore. Until then, nobody in NFL history had ever had touchdown returns in more than two consecutive games. Now with 11 regular-season games left, Hall has already tied the NFL's single-season record for touchdown returns. "I was beside myself I was so excited for him," head coach Dick Vermeil said. "I said to myself, 'Oh, Dante, don't go backwards."' The Broncos (4-1) had never trailed when Micah Knorr punted to Hall with a little more than 8 minutes left. When he started running backward, he feared he might be about to get tackled for a safety and be guilty of a colossal error. "I thought, 'Oh, I've got to get out of this jam,"' Hall said with a laugh. But the Chiefs didn't have a return set up. By the time he finally got outside, there were plenty of blockers to clear the way. "The first part of that return was not smart at all," Hall said. "I caught it maybe on the 8, then I retreated back to the 5, then the 2. I got dumber and dumber and dumber." Dating to last season, Hall has seven touchdown returns in 10 games. "He's the best in football," said Denver wide receiver Chris Cole, a former teammate of Hall's at Texas A&M. "Probably one of the best ever. One guy's not going to tackle him. You have to put 11 hats on him. You can't have a let down." Philadelphia 27, Washington 25. Patrick Ramsey overthrew Laveranues Coles on a 2-point conversion with 13 seconds left, and the Philadelphia Eagles held on to beat the Washington Redskins 27-25 on Sunday. Ramsey rallied Washington from an 11-point deficit in the final 3:10, connecting with Darnerien McCants on a 32-yard touchdown pass in the final seconds. But under pressure from Brandon Whiting, Ramsey rushed his pass to Coles in the corner of the end zone and the ball sailed over the receiver's head. "Coles was wide open and I overthrew the ball. It was as simple as that," Ramsey said. After John Hall's fourth field goal, a 53-yarder, cut it to 27-19, the Redskins' Bryan Johnson recovered an onside kick at Washington's 43 with 1:13 left. Ramsey then drove the Redskins 57 yards in five plays. Defensive end N.D. Kalu returned an interception 15 yards for a go-ahead TD, and Brian Westbrook had a 19-yard TD run for the Eagles. The Eagles (2-2) won for the first time at Lincoln Financial Field after opening the season with consecutive losses at their new stadium. Washington (3-2) fell to 1-7 against NFC East teams under Steve Spurrier. All the Redskins' games have been decided by three points or less. Playing without three Pro Bowl players in their secondary, the Eagles held Coles and Rod Gardner to just five catches combined in the first 57 minutes. Free safety Brian Dawkins (foot) and cornerback Bobby Taylor (foot) missed their third straight games, and cornerback Troy Vincent sat out with a hamstring injury. Donovan McNabb completed 16 of 30 passes for 157 yards and his first TD of the season. He was intercepted twice. Ramsey finished 25-of-50 for 271 yards, one TD, two interceptions and one TD rushing. This was McNabb's first game since conservative commentator Rush Limbaugh made comments about him that ignited a weeklong firestorm. Limbaugh said on last week's ESPN's "Sunday NFL Countdown" that McNabb was overrated because the media wanted to see a black quarterback succeed. TITLE: SPORTS WATCH TEXT: Snyder Dies ATLANTA (AP) - The Atlanta Thrashers' Dan Snyder, who never regained consciousness following a horrific car crash, died Sunday night at Atlanta's Grady Hospital, the team said, six days after sustaining massive brain injuries in the wreck. He was 25. Snyder underwent surgery for a skull fracture but remained in a coma until his death. "We are deeply saddened by the tragic loss of Dan Snyder," the Thrashers said in a statement. "Dan was a teammate and friend to all of us. We feel a tremendous amount of pain as an organization and extend deepest sympathies to his family." Snyder, a center who had 10 goals and four assists in 36 games for Atlanta last season, had surgery on his ankle in September before the start of training camp. He was expected to start the season on the injured list. Snyder signed with the Thrashers as a free agent in 1999 after playing four seasons of junior hockey for Owen Sound in the Ontario Hockey League. Woods Wins WOODSTOCK, Georgia (AP) - Against the best players in the world, in the toughest conditions this side of a major, Tiger Woods felt right at home. It was his fifth victory of the year, and his seventh World Golf Championship in 13 tries. Only Darren Clarke has won more than one since the series began in 1999. And it might be enough for his peers to vote Woods the PGA Tour player of the year for an unprecedented fifth straight time. "To win against this field, on this golf course with a major-type setup, it will have a lot of weight to it," David Toms said after a 65 left him alone in fifth. Woods finished at 6-under 274, the third-highest winning score this year behind the British Open (1-under 283) and the PGA Championship (4-under 276). He won $1.05 million to replace Singh atop the money list by about $170,000. Bryant Reports HONOLULU (AP) - Kobe Bryant returned to the basketball court Saturday, admittedly out of shape and scared about what lies ahead for his family as his rape case proceeds. After participating in a few drills with his Los Angeles Lakers teammates at training camp, the superstar guard said he considered not playing until his case is settled. "Basketball to me just took a back seat, man," Bryant said in his first public comments since July 18, the day he was charged with sexually assaulting a 19-year-old woman in Eagle, Colorado. Bryant smiled occasionally as he spoke Saturday, although he mostly appeared serious. Asked if he was scared about the case, he replied: "Terrified." "Not so much for myself, but just for what my family is going through," Bryant said. "They had nothing to do with this, but just because their names have been dragged in the mud I'm scared for them."