SOURCE: The St. Petersburg Times
DATE: Issue #940 (8), Tuesday, February 3, 2004
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TITLE: Yukos Distances Itself From Last Key Owner
AUTHOR: By Valeria Korchagina and Catherine Belton
PUBLISHER: Staff Writer
TEXT: MOSCOW - Oil major Yukos on Monday ramped up the damage control, distancing itself from its troubled group of core owners by announcing that it had dismissed Mikhail Brudno, the last key shareholder to hold a management position.
The move came just days after prosecutors announced Brudno and other core Yukos shareholders, including the company's co-founder Leonid Nevzlin, had been placed on an Interpol wanted list on embezzlement and fraud charges.
It came too as the company said it would move to end the use of so-called tax optimization schemes to lower taxes, a practice that has already resulted in $3.4 billion in charges for 2000.
Tax Minister Yury Bukayev, meanwhile, said last week that similar tax bills could be in the making for the years 2001, 2002 and 2003.
Company executives Monday made clear they wanted to pull Yukos clear of the politically-charged probe surrounding core shareholders, which many observers see as being a force behind the mounting tax inquiry into the company.
"The decision to dismiss Mikhail Brudno has primarily been prompted by our drive to rigorously follow international standards of corporate governance and to guarantee all shareholders a completely independent management," said Yukos CEO and Board Chairman Simon Kukes in a statement released Monday.
The company said Brudno had been replaced as head of marketing and refining (RM) by his deputy Pytor Zolataryov, who is now acting RM president. Brudno is sought by prosecutors for allegedly embezzling $2.8 million from the Apatit fertilizer plant, controlled by Yukos parent company Group Menatep, and is reported to be on a business trip abroad.
Yukos said the move came after its board recommended on Thursday that core shareholders should not interfere in the management of the company.
A source close to Yukos said Monday that the company wanted to extract itself from the political conflict core shareholders are embroiled in.
Analysts said Monday's moves appeared to come as part of a bid to stave off any further attack on the company's operations and assets.
"Yukos as a company is outside politics, which means that if Nevzlin says he is supporting an opposition candidate for presidency, then this is just the opinion of one shareholder and has nothing to do with Yukos," the source close to Yukos said. "To speak about core shareholders as one group in some cases is inappropriate."
Nevzlin said last month he would support opposition candidate Irina Khakamada's run in this March's presidential elections.
The former leader of the Union of Right Forces is running on a strong anti-Putin ticket. Nevzlin's statement appeared to attract immediate consequences. Just days after he made the statement, prosecutors announced he and nine other core Yukos shareholders and senior executives had been placed on the Interpol wanted list for large scale fraud and embezzlement.
Khakamada, however, told The St. Petersburg Times on Monday that she has not received any support from Nevzlin, who is now in exile in Israel, and has no plans to do so in the future.
Yukos management, nevertheless, appears to be concerned. The source close to Yukos said the move to dismiss Brudno was an attempt to underline the company's independence.
"The move reflects an analysis that, in some cases, the interests of the company minority and majority shareholders dovetail, but in others the interests might be diverging," the source said. "We want to make sure there are no conflicts of interests."
The source confirmed Monday that Yukos plans to cut back dividend payments in order to pay more taxes, a move that further drove home the company's push to move away from the conflict.
He confirmed a report published in Vedomosti on Monday that cited unnamed Yukos officials as saying it intended to close down tax optimization schemes that made use of loopholes to minimize taxes.
"This is an action plan that the company will deliver on," he said.
Yukos spokesman Alexander Shadrin said the board would discuss the issue at the next meeting scheduled for Feb. 26. The company cannot make the policy changes without approval from the board because it is likely to have a major effect on its bottom line. Shadrin said the move would not affect the $2 billion in intermediary dividends scheduled to be paid out by the end of February.
Analysts, however, said Monday the company's moves to extract itself from the mushrooming affair may come as too little, too late.
"As for giving up on tax optimization schemes, they should have realized that two or three years ago," said James Fenkner, head of research at Troika Dialog investment bank.
According to the company's latest financials released Friday, Yukos was still making maximum use of tax minimization schemes in the third quarter of 2003, with its effective tax rate well below the statutory rate of 24 percent, analysts said.
Analysts said Yukos management could be fighting a losing battle despite Monday's moves.
Yukos is trying its best to spin things well, saying production is going to be up and that the negotiations with the Tax Ministry went constructively... But it's very clear they are clinging on by their fingernails," said Adam Landes, oil and gas analyst with Renaissance Capital investment bank.
The company is also facing a potential takeover attempt by core shareholders of the Sibneft oil company, with which Yukos attempted to merge last year.
The merger process went through on paper, giving Sibneft core shareholders a 26 percent stake in Yukos and making them the largest shareholders in the company not in jail.
The source close to Yukos, however, denied on Monday that Sibneft was attempting to gain management control over the company. He denied that any of Monday's moves came as a result of Sibneft pressure. "They have no leverage whatsoever," he said.
Sibneft agreed.
"The former Sibneft core shareholders are not involved in Yukos day-to-day operations. Sibneft operates independently as per its agreement with the Yukos shareholders," said Sibneft spokesman John Mann.
A spokesman for Group Menatep, the holding company that manages the assets of Yukos' core shareholders, said Yukos' moves to distance itself were not a threat to them.
"Yukos has been moving towards the withdrawal of its shareholders from daily operations for some time. The intention has been stated in the past by [former Yukos head Mikhail] Khodorkovsky and [co-core shareholder Platon] Lebedev," said Group Menatep spokesman Yury Kotler.
Lebedev was the first Yukos shareholder to be jailed. He was arrested on July 2 last year on charges of alleged fraud during the privatization of the Apatit plant in 1994. Khodorkovsky was arrested on Oct. 25.
He is facing seven charges related to fraud and tax evasion. Other Yukos key shareholders too have been charged with embezzlement, tax evasion and fraud.
"Shareholders should only influence the strategy. So, although in the current very politicized situation, the decision could provide various readings, it is in fact an absolutely normal way," he said.
TITLE: Wider EU May Create 'Vacuum'
AUTHOR: By Alex Fak
PUBLISHER: Staff Writer
TEXT: MOSCOW - Foreign Minister Igor Ivanov warned Monday of a "legal vacuum" that could arise once 10 new member states join the European Union this spring.
Ivanonv's comments in Minsk were the latest in a series of Russian demands that Brussels respond to political and economic concerns precipitated by EU expansion.
Russian relations with the EU are already strained because of Moscow's reluctance to ratify the Kyoto protocol on global warming and the EU's de facto veto over Russia's membership in the World Trade Organization.
Ivanov's remarks came on the heels of a closed-door meeting in Moscow between deputy foreign minister Vladimir Chizhov and ambassadors of the 25 current and future EU countries, as well as the EU's top diplomat on Friday.
Chizhov handed over a list of 14 concerns, ranging from steel duties to the status of ethnic Russians in Latvia and Estonia.
On Monday, Konstantin Kosachyov, head of the State Duma's foreign relations committee, said in an interview with Interfax that EU enlargement could cost Russia 150 million euros per year.
At the same time Ivanov cautioned that as bilateral agreements between Russia and new EU members become null and void upon expansion, a legal vacuum could arise without proper planning.
The EU has gone to great lengths to sell its expansion as beneficial to Moscow, saying it would bring a huge market up to Russia's borders and simplify the negotiation of trade provisions.
Kosachyov estimated that Russia will soon conduct 54 percent of its trade with the expanded EU.
But the 14 demands indicate that Moscow is still not convinced.
Russia opposes the automatic extension to incoming members of its 1997 Partnership and Cooperation Agreement (PCA) with the EU.
The extension of the agreement would force Russian agricultural exports to Eastern and Central European countries to conform with the EU's tougher hygiene standards; place higher import tariffs on most goods; and complicate market access for the country's steel and food producers.
For example, a related agreement signed in 2002 allows Russia to sell 1.3 million tons of steel roll to the EU this year.
But Russia annually exports 500,000 tons of steel roll to Eastern Europe. The EU has indicated it would consider raising the steel quota, although a final decision is still pending.
"The Russian side has repeatedly noted, including at the highest level, that the issue [of extending the PCA] is not a technical procedure that could be implemented automatically," the Foreign Ministry said last week.
The EU insists some of the issues, especially those related to political settlements and health and safety, must not be tied to PCA or overall economic negotiations.
"We can not review sanitary standards to a lower level just because we are going to enlarge," Arancha Gonzalez, spokeswoman for EU Trade Commissioner Pascal Lamy, told reporters late Monday.
Ireland, which holds the EU presidency, has said the extending the PCA to accession states by May 1 was one of its top priorities in relations with Russia.
"We do not regard the concerns that Russia has as a barrier to the extension of the PCA," said James O'Shea, spokesman for the Irish embassy in Moscow. The extension "will proceed more or less automatically."
But he stressed that the presidency recognizes the concerns and that negotiations are ongoing. "They will continue in a good environment, and we expect to reach the solution well before May 1."
The dispute over the PCA extension has deepened disagreement between Russia and the EU.
The EU has been trying to overcome Russian reservations to ratifying the Kyoto protocol.
The Kyoto treaty envisions allocating tradable emission credits to each country. Because the United States has pulled out of the treaty, only Russia can provide the critical mass to save the protocol.
Speaking in Washington on Friday, Andrei Illarionov, a top economic adviser to President Vladimir Putin, complained that the EU's plan for emission credit swaps under the Kyoto protocol would leave Russia at a marked disadvantage.
He said that EU trade preferences will give countries incentives to purchase excess emission credits from EU members before Russia.
Illarionov also faulted the EU for not providing Russia with incentives to ratify the protocol.
"We are not in a hurry" to ratify, Illarionov told reporters.
The EU has indicated that Moscow may be drawing out the discussion over Kyoto as a way to speed up EU approval of Russia's WTO bid.
"There are signs of a political link between finalizing the WTO negotiations and Russia's ratification of the Kyoto protocol," European enlargement commissioner Gunter Verheugen told a German parliamentary hearing last week.
"I understand it as an attempt to get us to relax some of our demands for Russian WTO entry and then to compensate for that by signing the Kyoto protocol," Reuters reported Verheugen as saying.
Experts, however, are beginning to doubt that any agreement is likely.
Russia-EU relations hinge on oil and gas exports, and neither side has a clear incentive to move beyond fuel trade, said Igor Leshukov, director at the Institute of International Affairs in St. Petersburg.
"They are saying nice things to each other publicly while engaging in protracted negotiations with no clear strategy. Even if they reach a technical agreement, it will be something that won't change the overall picture in any respect," Leshukov said.
Among other Russian demands to the EU are more lax visa requirements, including a visa-free travel to Kaliningrad and privileges for Russian minorities in the Baltic states.
TITLE: Boxers Celebrate Wedding by Sparring in the Ring
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Two professional boxers who wed in St. Petersburg on Saturday said celebrating their marriage in a boxing ring was a knockout.
An audience of about 150 guests went wild when Natalya Karpovich, 31, and Nikolai Kibkalo, 40, dressed in their wedding finery, put on boxing gloves and sparred with each other in the ring shortly after getting married.
"We decided to have our wedding party in a boxing ring because we first met in a ring and thought it would be very symbolic to have a wedding here," Kibkalo said.
The newlyweds met five years ago when Kibkalo became Karpovich's coach. She went on to become one of the most successful female boxers in Russia, winning the national championships and several international and European tournaments.
Karpovich took up boxing after her first husband died, leaving her to bring up two children on her own.
"I thought that maybe physical pain from that sport would drive away my spiritual pain," she said.
Boxing is no more unsuited for women than any other sport, she said.
"Sports have no gender," she said. "I used to be a professional skier. When I had to ski 50 kilometers that wasn't that easy for a woman either."
"I'm not a woman when I'm in the ring - I'm an athlete. If you want to assess my femininity then do it when I am out of the ring - from how I move, dress, behave and communicate."
Experience in boxing, which is becoming ever more popular with Russian women, can help solve many problems in life, she said.
"Some women take up boxing so they can be stronger, others want to learn how to defend themselves, and others come to meet interesting people," she said.
"I'd say sports can also help women in their careers and their personal lives."
When she is in the ring she feels as if she is "an actress."
"A boxer in the ring is on public display like an actor. And one can play with it, really. For instance, each time [I box] I choose my own style - how to look at an opponent, how to behave, how to enter the ring and how to leave it," she said.
Maxim Nesterenko, a St. Petersburg boxer and international champion, who was one of many boxers attending the wedding, said it was "the most original wedding [he] had ever seen".
"I'm sure they will create a very strong family because not only do they love each other, but they also have common interests," Nesterenko said.
When men and women boxers train together in the ring, it is quite different to a single-sex encounter, he said.
"You can't really punch a woman when practicing with her. A man can only defend himself from her punches. And it's also funny that the ring smells of perfume when a woman is boxing."
Vazha Mikaelyan, president of the St. Petersburg Professional Boxing Federation, who refereed the newlyweds' "fight," said women boxers are popular with spectators. "It's unusual when beautiful women fight," he said.
Lidia Kibkalo, the groom's mother, said that at first she was concerned about her future daughter-in-law's love of boxing, but came to terms with it when she realized the strength of Karpovich's character. "Natalya is a leader, and this sport really fits her nature," she said.
TITLE: Bomb Blast Near 'Digger'
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW - Yelena Tregubova, a newspaper reporter who recently published a tell-all book about her days covering the Kremlin, was about to step outside of her apartment on Monday when a small bomb exploded in the corridor. No one was hurt.
The explosive device was strung onto the door handle of the apartment opposite hers on the second floor of 10 Bolshoi Gnezdnikovsky Pereulok off Pushkin Square, Tregubova said.
"Everything shook like in an earthquake," she said when reached by telephone.
The blast dented the steel door of the opposite apartment, which is vacant, and smashed several lampshades and a windowpane in the corridor, police said.
A police officer on the scene said they were investigating it as hooliganism. A police spokesman told NTV television that the explosive device, which contained about 50 grams of TNT, was too small to have been an attempt on Tregubova.
Tregubova, however, said she believed she was the target.
Tregubova's book, "Tales of a Kremlin Digger," which came out late last year, describes her behind-the-scene experience of covering the Kremlin for several Russian newspapers from 1997 to 2001.
TITLE: Estonia Seeks Compensation
PUBLISHER: The St. Petersburg Times
TEXT: TALLINN - Estonia intends to ask Russia for compensation for its citizens who were repressed in Soviet times, Interfax reported Friday.
Estonian Justice Minister Ken-Marti Vaher announced the decision at a press conference, the news agency reported.
His ministry is preparing to calculate the losses Estonian citizens suffered during Soviet rule of the republic after 1940, as a first step in the process, he said.
"We should work out how our country can help people to express their demands for compensation and collate them," he was quoted as saying.
He also suggested creating an action plan "with the intention that Russia will recognize the damage that it did to those who were repressed."
Vaher said that the work would be done in conjunction with the Estonian Foreign Ministry.
The Estonian Red Cross and the Foreign Ministry have already begun to collect declarations from Estonians who suffered under the Soviets, Interfax said.
At the beginning of the year a law came into force under which those who were deported by the Soviet regime and those who fought to liberate Estonia from the Soviet Union receive pensioner discounts, In addition, parliament's constitutional committee has said it will ask the European Parliament to recognize the Communist regime as criminal. The Estonian Parliament made this decision last year, the report said.
TITLE: Putin Registered as Presidential Candidate
AUTHOR: By Anneli Nerman
PUBLISHER: The Associated Press
TEXT: MOSCOW - The Central Elections Commission on Monday registered President Vladimir Putin as a candidate in next month's presidential election, which he is widely expected to win.
Election officials approved Putin's candidacy after verifying a sample of the almost 2.5 million signatures that his supporters submitted to back his nomination. All candidates running independently were required to gather at least 2 million signatures.
Putin's supporters had delivered above the required number in case some were thrown out by election officials. The commission said it found that almost 7,000 signatures, or 1.2 percent of those checked, were invalid - not enough to disqualify Putin.
The commission voted unanimously to register Putin despite objections raised by a Communist Party representative to the commission. Vadim Solovyov cited an article in the newspaper Nezavisimaya Gazeta claiming some people were paid and others were told to sign Putin's support list by state officials.
Solovyov also questioned why Putin only declared one official post - that of president - and not his others, like commander in chief of the armed forces. The commission, he said, refused to register a candidate for December's parliamentary elections for not declaring all his posts.
Nevertheless, Solovyov said he saw no legal basis to not register Putin.
Election officials said an investigation is under way.
Putin became the third candidate officially registered, joining Communist Party candidate Nikolai Kharitonov and Oleg Malyshkin from Vladimir Zhirinovsky's ultranationalist Liberal Democratic party. Neither of those two candidates had to submit signatures because they are running on behalf of parties represented in the State Duma.
Election officials have until Sunday to finish verifying the candidacy papers of four other presidential hopefuls - liberal politician Irina Khakamada, Rodina co-leader Sergei Glazyev, Ivan Rybkin of the Boris Berezovsky-backed Liberal Russia party and Federation council Speaker Sergei Mironov.
Putin's papers were considered first because his supporters were the first to submit their documents.
Another presidential hopeful, former Central Bank chief Viktor Gerashchenko of the Rodina bloc, argued in the Supreme Court on Monday that he should be allowed to register his candidacy without having to submit the 2 million signatures. He said he did not need to collect signatures because he was nominated by the Russia's Regions party, which is part of the Rodina bloc.
The elections commission earlier rejected his application, ruling that Gerashchenko should have been nominated by the entire bloc.
The Supreme Court decided to consider Gerashchenko's appeal Friday, Interfax reported.
Alexander Veshnyakov, chairman of the elections commission, has predicted that only three of the five independent candidates will make it through the verification process and see their names on the ballot. The candidates' names will appear in alphabetical order. In past elections they were determined by the drawing of lots.
Putin is expected to sweep the March 14 election.
TITLE: McCartney Plans Gig In Palace Square
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: McCartney even wrote a letter to President Vladimir Putin asking to support the planned event, according to Russian media and promoters.
Very few details are available about the concert that is being negotiated between McCartney's management, Moscow-based Alfa Bank and promoters SAV Entertainment, who cooperated on McCartney's Moscow concert last May.
"The only thing I can say that there are only very initial agreements about this event," said Alfa Bank's representative by telephone on Monday.
"We can also confirm that we, at Alfa Bank, also received a letter from Paul McCartney's agents who asked for our assistance to promote a concert in St. Petersburg."
Signed by longtime McCartney tour director Barrie Marshall, the letter reads, "Paul was very impressed with the city and the culture, and after the wonderful reception he received in Moscow, Paul felt that to play a concert in St. Petersburg would be a great way to finish off his informal visit there last year."
McCartney's press officer Geoff Baker said from London on Monday that he knew nothing about the planned concert and suggested contacting tour director Marshall. Marshall was not available for comment late Monday.
The concert is expected to be held on Palace Square on City Day, May 27. Palace Square can hold 100,000 people.
The news about McCartney's letter to Putin asking for presidential support for the concert, was first distributed by Moscow's Intermedia entertainment news agency last Thursday.
In a telephone interview on Monday, Intermedia's director and editor Yevgeny Safronov said the agency got the information about the letter from its "own very reliable, trustworthy sources," whom he declined to identify.
Though tours of Western artists do not normally demand any involvement of the president or any Kremlin officials, Safronov said asking Putin for support made sense.
"The thing is that events of this sort are high-budget and demand serious financing or granting discounts," he said. "If Putin ignores the letter or just replies 'You are welcome,' the concert can still take place. But if he gives a couple of instructions to a few people in important positions, then you can be 100-percent certain it will take place."
McCartney met Putin on the afternoon of his Moscow concert in May. Putin was reported to have given McCartney and his wife Heather Mills a personal guided tour of the Kremlin, while McCartney later sang "Let It Be" exclusively for Putin.
During the meeting Putin asked the former Beatle about his impressions of St. Petersburg, the president's home city. Later that day, Putin joined the audience for McCartney's concert.
Though McCartney's Russian tour was restricted to the one concert in Moscow, he paid a two-day private visit to St. Petersburg amid celebrations of the city's 300th anniversary last May.
TITLE: Court Shift To City On, Then Off
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW - In the latest twist surrounding a proposal to move Russia's highest courts from Moscow to St. Petersburg, Prime Minister Mikhail Kasyanov has canceled a feasibility study into the idea.
In a Jan. 24 order, Kasyanov had asked the Presidential Administration, Cabinet and St. Petersburg City Hall to present their conclusions by Mar. 15 on relocating the Supreme Court, Constitutional Court and Supreme Arbitration Court.
He later canceled the order because it created the impression "that a final decision on moving the courts has been made," a Cabinet spokesman, Konstantin Merzlikin, told RIA Novosti on Friday. Merzlikin denied a decision had been made.
A flurry of arguments for and against the courts relocation came after news of the feasibility study broke.
The main proponent of the relocation, St. Petersburg Governor Valentina Matviyenko, has maintained that hosting the country's senior judiciary would add clout to Russia's former imperial capital and help its economy. Her comments in support of the move first gained media coverage last fall when she ran for city governor.
Some other supporters of the move say it would increase the courts' independence from the executive branch of government.
But Constitutional Court deputy chairman Vladimir Strekozov, an outspoken critic of the move, said relocation of the three courts would cost a fortune, partly because it would mean providing accommodation for about 200 judges and 2,500 support staff.
Vedomosti speculated that the move could be used to filter out some judges, in particular those appointed by former President Boris Yeltsin, by not providing them with free accommodation.
Strekozov said the move would delay court cases by about a year, citing the example of the Supreme Court, which suspended court hearings for three months when it moved into a new building in Moscow recently.
He also said trials in St. Petersburg would be more expensive and time-consuming, because they would require many Moscow-based officials to attend.
Supreme Court Deputy Chairman Viktor Zhuikov also said the move would be a retrograde step. "It would be a mistake," Gazeta.ru reported him as saying. "The move would bring no benefits, only expenses."
TITLE: IN BRIEF
TEXT: HIV Infections High
ST. PETERSBURG (SPT) - St. Petersburg and the Leningrad Oblast had some of the highest rates of new HIV infections in Russia, Interfax reported Friday.
Citing the disease monitoring arm of the Health Ministry, the agency reported that last year 86.18 people became HIV-positive out of every 100,000 citizens of the city and 63.29 per 100,000 are HIV-positive in the oblast. Other regions with high infection rates include Sverdlovsk region (68.85 cases per 100,000), Samara region (58.31), Irkutsk (54.39) and Khanty-Mansiisk (56.61), the report said.
The ministry said that 31,986 new cases of HIV infection were registered nationally last year, a 27.5 percent drop on the previous year. The national average rate of new infections was 22.29 cases per 100,000.
Shooting Investigated
ST. PETERSBURG (SPT) - The military prosecutor's office of the St. Petersburg garrison has opened a criminal case over a breach of the rules for handling weapons against a guard who opened fire in an army unit on the outskirts of St. Petersburg, Interfax reported Friday.
Mikhail Yanenko, deputy chief of the federal Military Prosecutor's Office, confirmed that an incident occurred about 6 p.m. on Thursday and resulted in the death of a private, the report said.
Blok Papers Saved
ST. PETERSBURG (SPT) - An attempt to steal manuscripts relating to the poet Alexander Blok from the Imperial Theater Library was foiled last week, Interfax reported Friday.
The agency quoted Lyudmila Dushkina, head of the Culture Ministry's center of cultural treasures as saying that a video camera had captured the actions of a man, who had been caught trying to steal the manuscript.
The library also said that last week a student at the Mining Institute had been detained after an index and manuscripts from the library had been found in his apartment, the agency reported.
12 in Race for Duma
ST. PETERSBURG (SPT) - Twelve people have provided documents to run for the city's electoral district No. 207 for the State Duma on March 14, Interfax reported Friday.
"Twenty-two people had declared an interest in the post, but only 12 have provided the documents for registration," the city election commission was quoted as saying.
Registered are Communist candidate Yury Gatchin, Rodina candidate Oleg Prosypkin and Sergei Tikhomirov, of the Center for the Support of Youth Initiatives. Among other would-be candidates are former deputy governor Anna Markova and former Union of Right Forces deputy Grigory Tomchin.
Romanov Memorial
ST. PETERSBURG (SPT) - A memorial plaque in honor of four Grand Dukes of the Romanov Russian royal family was unveiled at the Peter and Paul Fortress on Friday, 85 years after they were shot by the Bolsheviks, Interfax reported.
Dmitry Romanov, a descendant of the royal family, came from Denmark to attend the ceremony and lay a wreath, Interfax reported.
"This wreath is not from me, but from the entire Romanov family, whose members live throughout the world - from Australia to America," he was quoted as saying. "We all remember, pray for and think of the future of Russia."
2 Killed in Cash Heists
ST. PETERSBURG (SPT) - Two security guards were killed in cash heists on Sunday and Monday, Interfax reported city police as saying.
About 9:30 p.m. on Sunday three men attacked a staffer of Rosinkasa who was collecting cash from a money exchange booth near the Paterson store on Prospekt Bolshevikov.
The first staffer was shot in the hand, and a second, who returned fire to the robbers, was fatally injured, the report said.
On Monday at about 11:30 a.m., a security guard bringing money from an electronics store on Bolshoi Prospekt was gunned down, the report added. UES Eyes Baltic
MOSCOW (Bloomberg) - Unified Energy Systems may bid for electricity grids in Latvia and Lithuania and seeks to participate in the construction of a power link between Estonia and Finland, a UES executive said Friday.
"We're interested in buying energy assets in Latvia and Lithuania and hope they allow Russian companies to participate,'' UES deputy chief executive Yakov Urinson told a conference in Moscow.
SPF Buys Rubles
MOSCOW (Bloomberg) - The State Pension Fund, which has 124 billion rubles ($4.3 billion) of invested assets, said it slashed the amount of dollar bonds it holds because of the weakness of the dollar against the euro.
The pension fund cut the proportion of its assets denominated in dollars to 35 percent from 65 percent and raised the amount of assets denominated in rubles to 65 percent from 35 percent, Mikhail Zurabov, the fund's general director, said at a press conference in Moscow. He said the fund hadn't boosted euro denominated assets to compensate.
No Alumina Export Tax
MOSCOW (Reuters) - Prime Minister Mikhail Kasyanov has signed a resolution scrapping a 5 percent export tax on alumina, an intermediate product used for aluminum smelting, the government said Friday.
It said in a statement the tariff would be scrapped for nine months.
McDonald's Growth
MOSCOW (Bloomberg) - McDonald's Corp., the world's largest fast-food chain, plans to expand its Russian operations this year by adding more than 20 restaurants to tap consumer spending that's climbing as the country's economy heads for a sixth year of expansion.
The company's sales in Russia rose 28 percent in 2003, according to a faxed statement from Oak Brook, Illinois-based McDonald's that did not provide the revenue figure. McDonald's, which now has 109 restaurants in the country, plans to add outlets in two more cities this year, raising the number of Russian cities where it has sites to 32. S&P Upgrades City
LONDON (SPT) - Standard & Poor's Rating Services said today it revised its outlook on St. Petersburg to positive from stable, owing to the city's continuing economic growth and improved debt structure, a Standard & Poor's press release said Monday.
At the same time, Standard & Poor's affirmed its BB long-term issuer credit rating on the city.
"Should the new city government demonstrate continuity in its financial and socioeconomic policies, and the effects of further redistribution of tax revenues and responsibilities prove neutral or positive for St. Petersburg, the rating could be raised," Standard & Poor credit analyst Elena Okorotchenko said.
Heineken Output Up
ST. PETERSBURG (SPT) - The Heineken brewery invested 6.3 million euros in a new beer bottling line launched Monday, Interfax reported.
The brewery, formerly Bravo International, will now produce 45,900 liters of Okhota beer in plastic 1.5-liter bottles - double previous output. The new line was manufactured by the German KHS firm.
The Dutch Heineken NV bought Bravo in 2002 for $400 million. The brewery was previously part of Bravo Holdings Limited, founded in 1993 by a group of Dutch businessmen. The holding produced light alcoholic and non-alcoholic beverages between 1994 and 1998, with beer bottling starting in 1999.
Private Utilities?
ST. PETERSBURG (SPT) - The city will invite private companies to manage state unitary enterprises providing utilities, Interfax reported Friday.
Chairman of the committee on economic development, industrial policy and trade Vladimir Blank made the announcement at a meeting Friday.
Blank named federal enterprises Vodokanal, TEK and Lengaz.
Under private management, the enterprises would retain ownership and invest in development in accordance with the city's capital investment program.
Vodokanal, TEK and Lengaz require investments of 98 billion, between 40 billion and 60 billion rubles and between 25 billion and 30 billion rubles, respectively.
Even if the city budget is doubled there would still be a shortfall of between $3 billion and $3.5 billion, Blank said.
TITLE: Russian Muslims Offer Sacrifices on Kurban Bairam
AUTHOR: By Valeria Korchagina
PUBLISHER: Staff Writer
TEXT: MOSCOW - Millions of Muslims across Russia began celebrations Sunday for Eid-ul-Adha, or the Festival of Sacrifice, a major Muslim holiday that symbolizes Ibrahim's willingness to obey God and sacrifice his son Ismail.
President Vladimir Putin took the opportunity Sunday to issue another call for tolerance within Russian society.
"This holiday is taking place with the further rebirth of spiritual life of millions of followers of Islam in our country," he said in an address to believers, published by the presidential web site.
"Religious tolerance and good-neighborliness, to love peace and care for fellow human beings are true values of Islam," the statement said. "In our time they hold a particular significance, serving as a firm foundation for peace and concord, promoting unity in our multinational homeland."
Russia is estimated to have at least 20 million Muslims, while many more are residents and visitors from former Soviet republics where Islam is widely practiced - particularly Azerbaijan and Central Asia.
Known in Russia by its Turkish name Kurban Bairam, the holiday comes on the last day of the Hajj religious festival, but is celebrated by all Muslims, regardless of whether they have been on a hajj, or pilgrimage, to Mecca or other holy Islamic places.
After prayers, believers slaughter sheep, which are then shared amongst relatives, friends and the poor.
Koranic teaching says that the more sheep a believer sacrifices during his or her lifetime, the easier it is to be admitted into heaven.
In Moscow, Muslims gathered Sunday at mosques around the city, where specially grown sheep were on sale nearby for about $100 apiece.
The sheep are usually sacrificed at home or on the premises of restaurants where Islamic nations' ethnic cuisine is served.
The holiday is set to continue for another two days, as Muslims celebrate Ibrahim's and their own devotion to God.
Apart from prayers and sacrifice, presents are often given to friends and relatives. In Islamic countries Eid-ul-Adha is a public holiday.
TITLE: Russia to Stage Massive Nuclear War Exercise
AUTHOR: By Vladimir Isachenkov
PUBLISHER: The Associated Press
TEXT: Russia's nuclear forces reportedly are preparing their largest maneuvers in two decades, an exercise involving the test-firing of missiles and flights by dozens of bombers in a massive simulation of an all-out nuclear war.
President Vladimir Putin is expected to personally oversee the maneuvers, which are apparently aimed at demonstrating the revival of the nation's military might and come ahead of elections in March.
The newspaper Kommersant said the exercise was set for mid-February and would closely resemble a 1982 Soviet exercise dubbed the "seven-hour nuclear war" that put the West on edge.
Official comments on the upcoming exercise have been sketchy. The chief of Strategic Missile Forces, Colonel General Nikolai Solovtsov, was quoted by the Interfax-Military News Agency as saying the planned maneuvers would involve several launches of intercontinental ballistic missiles in various regions of Russia, but he wouldn't give further details.
A Defense Ministry spokesman refused to comment Friday on the reports. The military typically says little about imminent exercises.
In Washington, the U.S. State Department said it has seen reports that Russia has plans to conduct the exercises in February. The department also said Russia is obliged to notify the United States 24 hours before a missile test and has done so in the past.
Kommersant said the maneuvers would involve Tu-160 strategic bombers test-firing cruise missiles over the northern Atlantic. Analysts describe such an exercise as an imitation of a nuclear attack on the United States.
Other groups of bombers will fly over Russia's Arctic regions and test-fire missiles at a southern range near the Caspian Sea, the newspaper said.
As part of the exercise, the military is planning to conduct several launches of intercontinental ballistic missiles, including one from a nuclear submarine in the Barents Sea, the Kommersant report said.
The military also plans to launch military satellites from the Baikonur cosmodrome in Kazakhstan and the Plesetsk launch pad in northern Russia - in a simulation of the replacement of satellites lost in action, Kommersant said.
Russia's system warning of an enemy missile attack and a missile defense system protecting Moscow will also be involved in the exercise, it added.
Pavel Felgenhauer, an independent military analyst, said the military has regularly held nuclear exercises that were timed to coincide with the annual test-firing of aging Soviet-built missiles.
"It has been a routine affair, but it can be expanded if they want a show," he said.
Ivan Safranchuk, head of the Moscow office of the Center for Defense Information, a Washington-based think tank, said the maneuvers would further strengthen Putin's popularity ahead of the March 14 presidential election, which he is expected to win easily.
Putin has pledged to rebuild Russia's military might and restore pride to the demoralized service. When he ran for his first term in 2000, he flew as a second pilot in a fighter jet and later donned naval officer's garb on a visit to a nuclear submarine in images that played well with many voters who are nostalgic for Soviet global power and military prestige.
"This exercise will make a great show, with Putin receiving reports from military commanders," Safranchuk said.
Kommersant said Moscow had notified Washington about the exercise, describing it as part of efforts to fend off terror threats even though it imitates the Cold War scenario of an all-out war.
"The exercise follows the old scenario, and casting it as anti-terror is absurd," Safranchuk said.
Putin's support for the United States following the Sept. 11 terror attacks bolstered relations with Washington and helped broker a new U.S.-Russian nuclear arms reduction deal and a Russia-NATO partnership agreement in 2002.
But U.S.-Russian relations soured over Moscow's criticism of the war in Iraq , U.S. concerns about authoritarian trends in the Kremlin's domestic policy, and Russia's perceived attempts to assert its authority over ex-Soviet neighbors.
TITLE: Putin Urges Corruption Clampdown
AUTHOR: By Vladimir Isachenkov
PUBLISHER: The Associated Press
TEXT: MOSCOW - President Vladimir Putin urged prosecutors Friday to step up anti-corruption efforts but warned them against abusing their sweeping powers.
In a speech before top prosecutors, Putin also warned them against jailing suspects if they don't have strong evidence to defend their cases in court.
"It's inadmissible when, after a probe dragging out for many months during which suspects are kept in custody, charges against them collapse in court," Putin said in televised remarks. "It doesn't mean that you have to defend your office at any price and keep people rotting behind bars, it means that you must improve the quality of investigation."
He urged prosecutors to conduct "systematic" anti-corruption efforts and not limit the fight against graft to "individual, high-profile cases." The prosecutors must oversee compliance with laws, and "not interfere with economic or any other activities," Putin added.
Prosecutors' probe against Russia's largest oil company, Yukos, which reached a peak with the Oct. 25 arrest of its then-chief Mikhail Khodorkovsky and the freezing of about 40 percent of the company's assets, has been widely perceived as a Kremlin-inspired punishment for the magnate's political activities. Putin has denied any political undertones and cast the case as part of anti-corruption efforts.
Prosecutor General Vladimir Ustinov said that more than 1,800 people were convicted on corruption charges last year even though his office registered 7,000 such crimes, Interfax and Itar-Tass reported. He criticized courts in many Russian provinces for being too lenient toward corrupt officials.
Ustinov specifically targeted military corruption, saying that more than 1,000 servicemen were convicted of embezzlement last year.
He said that the amount of food and ammunition stolen in the armed forces last year was enough to feed and dress the huge military armada in the North Caucasus region for one month.
Checks at just one air force grouping revealed that 4,000 tons of jet fuel were missing - enough for a squadron of MiG fighter jets to make flights throughout the year, Ustinov said, the agencies reported.
While corruption has mushroomed, other crimes have also soared.
Of the nearly 3 million crimes registered last year, about 1.2 million have remained unsolved, Ustinov said.
TITLE: UN Calls for Georgia, Abkhazia to Seek Peace
AUTHOR: By Edith M. Lederer
PUBLISHER: The Associated Press
TEXT: UNITED NATIONS - The UN Security Council urged Georgia's new government and Abkhazian separatists on Friday to revitalize the peace process and make concessions to achieve a lasting political settlement.
In a resolution extending the UN military observer mission in Georgia for six months, the council singled out the Abkhaz side for refusing to discuss basic principles for resolving the conflict that have been proposed by a UN-led group of international mediators.
Abkhazia, a province in northwestern Georgia, has had de facto independence since 1993, when two years of fighting with Georgian troops ended.
It called on the parties "to spare no efforts to overcome their ongoing mutual mistrust" and "to publicly dissociate themselves from any militant rhetoric and demonstrations of support for military options or for the activities of illegal armed groups."
The resolution reminded the Abkhaz side of its responsibilities to protect displaced persons, calling on it to improve law enforcement and urging it to permit a human rights office to open.
A United Nations observer mission, with about 400 military and civilian personnel, has been helping to stabilize Abkhazia for more than a decade.
The resolution extends the mission until July 31.
Georgia's UN ambassador, Revaz Adamia, said that, despite more than two dozen resolutions, only small steps have been taken toward resolving the conflict, which has driven nearly 300,000 people from their homes and he blamed Russia.
Several thousand Russian peacekeepers patrol the dividing line between Abkhazia and Georgian-controlled territory. Russia also has maintained control over two military bases in Georgia since the breakup of the Soviet Union.
Russia's UN ambassador, Sergei Lavrov, said last week that Georgia must take "confidence-building" measures before any more discussions on the withdrawal of Russian troops. For now, discussing the political status of Abkhazia would be "counterproductive," he said.
Lavrov, when asked Friday about internationalizing the peacekeeping force, said "this was something which the Georgian government repeatedly pronounced but there is no proposal on the table and I don't think there is any interest in discussing anything like this.
"It's a dangerous place," Lavrov said, noting that about 60 Russian peacekeepers have died, "And frankly, I don't think there are many volunteers to go there."
TITLE: Five Members of Kadyrov's Security Service Die in Attack
PUBLISHER: The Associated Press
TEXT: ROSTOV-ON-DON, Southern Russia - Gunmen wielding hand grenades killed five members of Moscow-backed Chechen president Akhmad Kadyrov's security service on Sunday in the native village of the region's separatist ex-president, authorities said.
A group of eight to 10 attackers burst into the home of the local commander of Kadyrov's security force in Alleroi, said Ruslan Atsayev, chief spokesman for the Interior Ministry in Chechnya, where fighting persists more than four years after the start of the second war in a decade.
The local commander, Sultan Dadayev, and four other members of the force were killed in the morning attack, Atsayev said. He said one of the assailants was also killed.
Interfax quoted the head of the security service - Kadyrov's son Ramzan - as saying that four of the attackers were wounded, including a rebel commander he said led the attack. Ramzan Kadyrov said he was offering a $200,000 reward for information on the whereabouts of the attackers, Interfax reported.
The assault followed a major operation in Alleroi by security service troops who were searching for rebel fighters, weapons, ammunition and explosives, Interfax reported. At the time, Ramzan Kadyrov said there was information indicating the chief bodyguard of former Chechen President Aslan Maskhadov was in the village along with a group of rebels, it said.
The separatist leader Maskhadov, a native of Alleroi, was elected president of Chechnya in 1997.
TITLE: Parents Commit Suicide Over Their Son
AUTHOR: By Maryclaire Dale
PUBLISHER: The Associated Press
TEXT: BENSALEM, Pennsylvania - Edward Goldman and Inessa Lemashova - Soviet Jews who came to America with hopes for a better life - devoted themselves to their only child, going so far as to help him flee the country with a bag of cash after he allegedly killed his mistress.
Then the couple returned to their apartment and slit their wrists, Lemashova dying in the bathtub, her husband on the floor beside her.
In their suicide note - translated from Russian into English with help from their own daughter-in-law before they took their lives - they said they could not live with the shame of their son's act.
The almost Dostoyevskian tale of murder, guilt and suicide unfolded earlier this month in suburban Philadelphia.
Lemashova, 63, "was a sick person, close to death, and she escaped that. She survived. But she couldn't survive emotionally what happened with their son," said Cantor Elena Zarkh, who led a funeral for the couple on Jan. 16 as authorities chased leads in France and Germany for their son.
A postcard found at the son's Mount Laurel, New Jersey, townhouse ultimately led investigators to a home in Grenoble, France, where 39-year-old Paul Goldman was captured Jan. 20.
He is expected to be extradited to the United States within 60 days to face charges in the slaying of Fania Zonis, a 42-year-old mortgage broker found dead in her office Dec. 29.
Goldman's parents came to the United States from Uzbekistan, joining the exodus of Jews from the former Soviet Union who fled discrimination in the early 1990s. The elder Goldman, a vocational teacher in his homeland, found work as a machinist in Philadelphia, and also cared for his wife, who suffered an undisclosed illness. A relative said father and son were like best friends.
The younger Goldman married an immigrant from the Ukraine, Irina Sapiro, now 42. He most recently worked as a handyman at a computer company.
Friends say he met Zonis, another married immigrant from the former Soviet Union, when she taught a computer class he took about 10 years ago. At some point they started an affair that culminated in the 15 cellphone calls they exchanged in the hours before Zonis' slaying, authorities said.
While the motive remains unclear, the killer was clearly angry with her, stabbing her seven times and smashing her face, authorities said.
While Paul Goldman was on the lam, prosecutors arrested his wife for allegedly covering for him by telling police he was shopping with her the night of the crime and away on business when he had fled the country. Sapiro was charged with hindering prosecution and jailed on $1 million bail.
Goldman's parents also helped him, accompanying him to New York, where Goldman and his father boarded a plane to Germany on Jan. 7, authorities said. The elder Goldman gave his son a bagful of cash and a relative's address, then flew home, authorities said.
Three days after the younger Goldman fled, he was charged with murder.
The next day, on Jan. 11, the elder Goldman, 66, and his wife visited their 22-month-old grandson, who has been hospitalized since his premature birth with severe breathing problems and other ills.
Then they gave their daughter-in-law their wedding rings and $20,000 in cash, and asked her to translate their suicide note from Russian to English, authorities said. The note said they could not live with the disgrace of their son's conduct, authorities said.
Two days later, police found them dead in their Bensalem apartment.
Prosecutor Diane Gibbons called the daughter-in-law's silence about the planned suicides unconscionable. "This to me shows just a complete disregard for life," she said.
Sapiro's lawyer, Andrew Baratta, said the woman did not think her in-laws would go through with it.
Kevin Platt, chairman of Slavic language and literature at the University of Pennsylvania, said the suicides may reflect immigrant expectations and pressures. Immigrants leave careers and friends behind to improve their children's future, he said.
"So when their son manages to destroy that future for them, it would seem perfectly natural to me that they felt their futures were over, too," Platt said.
TITLE: Deputies May Have To Carry Microchips
AUTHOR: By Caroline McGregor
PUBLISHER: Staff Writer
TEXT: MOSCOW - By this fall, State Duma deputies may need an electronic card key in place of a simple ID to get to their desks.
If the Duma's regulations committee gets its way, access to parliament buildings and movement between floors will be restricted by an electronic security system.
It's all part of plans to boost security, but some deputies, wary of carrying a microchip that indicates their location at any given moment, are less than thrilled.
"What am I, a cow? Hang a bell around my neck and go?" an unidentified United Russia deputy was quoted by Gazeta as saying.
During a discussion of the plans at a Duma plenary session Friday, Sergei Glotov, a deputy from the Rodina bloc, wondered whether this would be a way to monitor deputies during both working and nonworking hours.
"Who will guarantee that these microchips won't be used to track a deputy's movements around the world? No one," he was quoted by Kommersant as saying.
Alexander Loktaryov, head of the Duma's administration body, tried to soothe jitters with assurances that the smartcards are meant to protect deputies and that satellite surveillance is out of the question.
The system, which provides a record of when deputies show up at work and how long they stay there, is expected to raise attendance - a departure from the past when some deputies were infamous for appearing only once a year.
Since the deadly blast last fall outside the National Hotel by a suicide bomber whose target is believed to have been the Duma, an expansion of the security perimeter outside the parliament buildings has been in the works.
Historically, the buildings on Okhotny Ryad and Georgievsky Pereulok have processed as many as 3,000 people a day, according to Duma figures.
Access for the public is likely to become more difficult. Guests to a committee round table, for example, will be granted entry only if the deputy who issued the invitation is in the building. Once past that hurdle, the guest will have access, as in some hotels, only to the floor where the meeting is held. Tourists will be led on a defined loop by Duma guides.
Regulations committee chairman Oleg Kovalyov assured journalists that they will be able to "go everywhere," which is generally the case already, although reporters are barred from listening in on deputies' informal chats in a bar opened last summer on the second floor.
Kovalyov said the question of who can go where is more of an issue here than in other countries because deputies' offices are located alongside assembly halls, where elsewhere the two functions are kept separate.
The electronic access system does not represent creative thinking on the part of the Duma's new United Russia leadership. The presidential administration has had a similar system in place for a few years now. The card-key fad also has swept some private companies, which have seen it as a way to keep tabs on employees' productivity.
Though the smartcard transition seems less a question of whether than when, the regulations committee has yet to make a final decision and funding has yet to be secured.
TITLE: The Kremlin's Harmful but Beautiful Insect
AUTHOR: By Anna Dolgov
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW - It's the country's last major broadcaster of independent news, a radio station that the Kremlin reportedly sees as hostile but still respects for its biting professionalism.
However, Ekho Moskvy, or Echo of Moscow, may be living on borrowed time. Its journalists, who say they are caught in constant disputes with government-linked majority shareholder Gazprom, seem ready to throw in the towel. They want to sell out their blocking stake in the station - and with it, control over programming.
"The situation is favorable because, on the one hand, there is a will to do so and, on the other, we are being bothered from all sides," general director Yury Feutinov said.
With the main television networks firmly under government control and effectively acting as Kremlin mouthpieces, Ekho Moskvy remains critical of President Vladimir Putin's policies. Its survival so far seems partly due to the fact that it has some influential supporters within the Kremlin who turn to Ekho Moskvy for the news.
"They explain to President Putin that we are a harmful insect but a beautiful one," said Ekho Moskvy chief editor Alexei Venediktov, sitting in his tiny office off a hall covered with autographed photographs of the station's celebrity guests.
Independent media analysts concurred with Venediktov's description.
"They are now a serious and even unique radio station, and a much-needed one," said Yasen Zasursky, the dean of journalism school at the Moscow State University.
"I think that any person interested in the real spectrum of moods in society tunes in to this radio. For those who only want to hear praise, it is not a good source, but for those who want a real picture of events, this radio provides a great deal," he said.
Since its creation in 1990, Ekho Moskvy has risen to being the country's premier news radio station. A deputy prime minister in Putin's administration is said to have described the station at a Cabinet meeting as "part of Russia's cultural landscape."
During the 1991 hard-line putsch against Soviet President Mikhail Gorbachev, Ekho Moskvy was the only broadcaster that brought the nation independent accounts of the dramatic standoff, airing reports from a 14th-floor studio overlooking Novy Arbat despite repeated attempts to muzzle it.
Ekho Moskvy also draws millions of listeners with its trademark live - and lively - interviews. Recent guests include U.S. Secretary of State Colin Powell, and European Union foreign policy chief Javier Solana.
During a visit in 2000, former U.S. President Bill Clinton fielded call-in questions on everything from missile defense and international finances to the possibility of his returning to the White House as the husband of President Hilary Clinton.
Ekho Moskvy was once part of financier Vladimir Gusinsky's Media-MOST empire, which was taken over in 2001 by government-controlled Gazprom. The gas giant said it was recouping multimillion-dollar debts that Media-MOST could not pay; critics said it was a Kremlin-orchestrated attack motivated by his media's critical coverage.
Gazprom replaced the top managers at Media-MOST's flagship television network NTV, shut down its daily newspaper Segodnya, and sacked the journalists of Itogi magazine. Only Ekho Moskvy was left relatively unscathed.
"We have already lasted three years longer than the time allotted us," Venediktov said. "When NTV was crushed, we should have followed immedately because we were more critical."
One reason that the station was left alone was that unlike other the media outlets, it was free of debts and even profitable - making it virtually impossible to take it over under a financial pretext.
Another, analysts said, was to guard against further damage to Putin's international reputation amid wide criticism over the Media-MOST takeover.
Most important, however, could be the fact that while Ekho Moskvy reports might sting the Kremlin, the station is not nearly as capable of swaying public opinion as television.
A poll conducted earlier this month by Romir Monitoring indicates that while 39 percent of Russians trust national television, only 7 percent trust radio.
Ekho Moskvy's audience is also much smaller than that of national television networks - even though it leads by far among news radio broadcasters. Some 665,000 people in Moscow tune in to Ekho Moskvy every day, according to the latest survey by Comcon, conducted in December, in addition to another 2 million or so in the regions.
Only music radio has a larger audience, with more than 1.1 million listeners every day in Moscow alone tuning in to the most popular station, Russkoye Radio, according to the Comcon.
FM broadcasts by state radio Mayak - the second most-popular news radio station - trails far behind Ekho Moskvy with 151,000 listeners in Moscow, according to Comcon.
While Ekho Moskvy's audience remains large, it has lost broadcasting contracts in 50 cities over the past three years and is now received in only 39 regions.
"So many cities dropped out between 2000 and 2003," Venediktov said. "Dealing with heretics ... was too much trouble" for regional partners, he said.
Ekho Mosvky's journalistic freedom is protected in part by its charter, which states that the editorial policy is determined exclusively by the chief editor. As long as the journalists keep their 34 percent blocking stake in the station, the charter cannot be changed without their assent. The remaining 66 percent belongs to the Gazprom-Media holding.
But disputes with Gazprom over managerial issues have been growing, prompting station staff to offer up their stake, Venediktov and Fedutinov said.
"Gazprom has a firm system of management, an elaborately built vertical administration structure, and that applies whether they are dealing with natural gas or with mass media," Fedutinov said.
"Playing corporate games with a large shareholder like that is difficult for us," he said.
Gazprom does not seem to be enthusiastic about the offer, but Ekho Moskvy journalists are also in talks with other potential investors, said Fedutinov, who is leading the negotiations.
Gazprom said any talks about a sale are informal at this stage.
A sale could be a win-win situation for the journalists, said Alexei Pankin, editor of media magazine Sreda. They could pocket a substantial amount of money and still maintain their independence by threatening to quit if the new owners meddle in the editorial policy, he said,
"Having good money sitting in a bank account somewhere would even allow them to feel much better about dealing with Gazprom than having some mythical package of shares," he said. "In the media business, the immaterial assets are more important. Pocket the money and keep on working."
Alexei Samokhvalov, head of the National Research Center for Television and Radio, said Gazprom may be reluctant to buy out the shares over fears that turning Ekho Moskvy into a fully owned subsidiary would damage the station's reputation, thus costing it part of the audience and profits.
"In this country, like nowhere else in the world, we are interested in who the owners are, who is behind all this, and can this be trusted," Samokhvalov said.
Gazprom-Media already has five entertainment radio stations, and even if it buys out the 34 percent stake, it seems to make business sense for the holding to preserve Ekho Moskvy as it is.
Still, the future of Ekho Mosvky will become clearer "when we know who the new owner may be and what he wants - because he may want to turn it into some sports radio station," Samokhvalov said.
With a sellout in the offing, is there any risk that the Ekho Moskvy as Russians know it may disappear?
"I wouldn't paint such an apocalyptic scenario," Fedutinov said. "But in a year or two, it may happen."
TITLE: New Russian Law Is One of Country's First Steps Against Human Slavery
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russia has taken its first steps toward tackling the serious problem of human trafficking but much remains to be done, with thousands of women and children being sold into slavery every year, anti-human trafficking organizations warned Tuesday at Russia's first conference on the issue.
U.S. Secretary of State Colin Powell, who is on a two-day visit to Moscow, made a brief appearance at the conference to praise the government for recently passing "strong legislation" to combat human trafficking.
He urged Russian authorities to enforce the legislation and work more closely with nongovernmental organizations.
"Enforcement is the key. Good intentions are not enough," Powell said.
President Vladimir Putin last month signed amendments to the Criminal Code establishing lengthy prison terms for human trafficking.
In a statement addressed to conference participants, Putin expressed hope that the gathering "will unite the efforts of government bodies and nongovernmental organizations and will help solve this problem."
Human trafficking became a serious problem for Russia and other former Soviet republics after the collapse of the Soviet Union, largely because of economic turmoil and an easing of travel regulations
Some 50,000 women and children from Russia and other former Soviet republics are sold into slavery in the United States alone every year, conference organizers said. Other destinations include Turkey, Italy and Spain.
Up to 92 percent of all cases of human trafficking involve prostitution, Yelena Mizulina, a former State Duma deputy from the liberal Union of Rights Forces party, said citing United Nations statistics. Mizulina drafted anti-human-trafficking legislation while in the Duma and was a key force in getting the amendments to the Criminal Code approved.
Mizulina told the conference of 83 Russian organizations that many human trafficking cases are strikingly similar: Unsuspecting young women looking to make some money respond to what appears to be innocent newspaper or Internet advertisements offering jobs as dancers, babysitters or governesses and end up selling their bodies.
Statistics are few as human trafficking only became illegal last month. The Angel Coalition, a public entity that unites 43 nongovernmental anti- human trafficking organizations in 25 regions, estimates that at least 3,500 Russian women become sex slaves abroad every year.
Mizulina said that to her knowledge no one yet has been convicted on human trafficking charges in Russia.
"As a rule, women who have gone through being sold into sex slavery and manage to escape and return home prefer not to report what happened to them to law enforcement," she said.
A senior Interior Ministry investigator, Boris Gavrilov, conceded that police efforts to combat human trafficking have been far from sufficient in the past.
Work is not the only way women end up in prostitution ~- some hoping to marry foreign men through the Internet find themselves stranded abroad without documents and forced to work in brothels, said Alexandra Kareva, a legal expert with the Stop Violence Association, which unites dozens of crisis centers across Russia. The centers have offered counseling to some 200 victims of human trafficking and their relatives over the past six months.
Kareva also recalled an incident when a young Russian woman who arranged to study foreign languages in Europe for the summer was instead taken to a farm in Poland. She was forced to work there without pay until she was found by the authorities and deported.
TITLE: Highway Gets Putin's Nod
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Construction of a new highway between St. Petersburg and Moscow has been approved by President Vladimir Putin, according to the Russian Transport Ministry. During his visit to St. Petersburg last week President Putin discussed the issue with St. Petersburg Governor Valentina Matviyenko, who said the Russian government has already been asked to start working on the project.
According to Alexander Gryaznov, a spokesman for Rosavtodor, a state service within the Transport Ministry that builds and maintains roads, the cost of the new highway could reach $5 billion. Most of the cost would be covered by the state but the project would need extensive investment, Gryaznov said.
The idea of speeding up overland travel between the two cities has been around for more than a decade, but efforts failed to yield results. The VSM project to construct a high-speed railroad between the two capitals saddled the Russian government with losses.
The ambitious $5 billion project to lay 654 kilometers of track between St. Petersburg and Moscow to carry high-speed trains that would reduce journey time to only 147 minutes was shelved in 2002. And the Sokol-250 high-speed train, which cost $20 million to design and build, failed to achieve the projected speed of 250 kilometers per hour. At the time, Anatoly Sobchak, the city's late mayor, threw away his symbolic ticket No. 1 on the Sokol train.
The VSM Co., or High Speed Railway, created in 1992 specifically for the project, received $200 million from two British banks, Indosuez and SBC Warburg, but never returned the money. The Russian government, which had provided guarantees for VSM, had to assume responsibilities for the loans. The Property Ministry owned 87 percent of shares in VSM.
Many experts believe that investors for the new road project would be very hard to find.
Lev Savulkin, an analyst with the Leontieff Center in St. Petersburg, said investors would shrug at the sound of a new project. "Foreign investors have had enough of those grandiose enterprises, Russian-style," the expert said. "Memories of the VSM embarrassment are still fresh. Even the hole at the Moskovsky Station [where terminal buildings were due to be built] is still there, as a vivid reminder."
St. Petersburg lawmaker Alexei Kovalyov called construction of a new highway a suspicious adventure. "It reminds me so much of the VSM affair," Kovalyov said.
"These grand-scale projects are only created for certain people to get rich. Nobody cares about paying debts or loans, everybody knows it will be left for the state to deal with."
According to Gryaznov of Rosavtodor, development of the new project and negotiations with investors may take several years. "The general strategy already exists: we know the highway should avoid running through large cities and towns, since diverting communications would make the construction much more expensive, but things like the number of lanes and intensity of traffic must be calculated," he said.
But even if the highway avoids crossing through major towns, it will be impossible to avoid swamps. "Drainage work would cost a fortune; if the project does take shape, the sums would be colossal," Kovalyov said.
The Leontieff Center's Savulkin believes it would be much more rational to rebuild and extend the existing highway.
"Yes, it is clear that it is now overloaded and can't cope with the traffic," Savulkin said. "But construction of a new highway of world-class quality is not just illogical but simply utopian: after the VSM affair investor interest is highly unlikely."
TITLE: Ferry to Link City to Tallinn and Helsinki
AUTHOR: By Vladimir Kovalev
PUBLISHER: Staff Writer
TEXT: After a hiatus of more than ten years, the St. Petersburg Sea Port will start regular ferry services on the Helsinki-Tallinn-St. Petersburg route on April 2. The service is organized by AS Tallink Group, an Estonian international ferry operator, port officials announced at a briefing Monday.
It will take about 17 hours to get from Helsinki to St. Petersburg by water via Tallinn on the Fantasia ferry, which has a capacity of up to 1,600 passengers. Ticket prices start at $25 one way or $40 return and $50 to put a private vehicle on board.
In the first year of operation the ferry will run every other day and will probably be upgraded to daily service depending on how popular it becomes on the regional travel market, the company's representatives said.
"You don't have to drive 350 kilometers to Helsinki, but can put your car on board, order a glass of wine and enjoy a ferry trip," said Keyo Mehtonen, a member of the AS Tallink Group board of directors at the briefing Monday.
Total investment in the project is estimated at between $3 million and $5 million, which relies on operating a 25-year-old ship that was recently taken off the Tallinn-Stockholm route and slightly renovating it.
"We are hoping we would break even this year or next year and in 2006 we'll start getting a profit," said Enn Pant, the chairman of AS Tallink Group, board at the briefing.
The city passenger port will be prepared for a possible increase of passengers coming to St. Petersburg by sea in the future, passenger terminal chief Vladimir Malik said at the briefing. A tunnel will need to be built from the south side of the Neva river to Vasilievsky Island and a new channel will need to be dug to make the terminal able to service ships which are more than 200 meters long.
This year alone the port expects to serve up to 350,000 passengers, almost ten times more than it served in 2003. The total number of people coming to the city by sea could go up to 600,000, almost double last year's figure.
Meanwhile, the experience of Finnish cruise operator Silja Line, which started docking in the city in August, has been as successful as could be expected, said Igor Glukhov, head of Inflot World Wide St. Petersburg, a local sea tourism operator. Silja Line delivers mostly tourists from Finland on fast-track 72 hour visas.
Confusion on the part of border control authorities over the new visa system introduced as an experiment until May of this year has driven the number of tourists coming to the city with the Finnish line to half of what was originally expected, Glukhov said. He expressed hopes the situation will get better this year.
"Instead of 250 ships coming to the city as last year, there will be 600 this year. It is the state's problem [to solve the visa issue]. These all are foreign investments and the state, in principal, doesn't have to do anything," Glukhov said.
TITLE: Land Buyout Becomes an Option for Renters
AUTHOR: By Natalia Diatlova
TEXT: Interest in land buyout is growing rapidly, and the reason is clear. Once title to the land is obtained, the owner's further cash outlay depends only on the land tax rate. Tenants, however, base their payments on lease agreements. Given the deficiencies of current legislation, the tenant-landlord relationship could turn into a battleground.
Russian leaseholders are totally at the mercy of bureaucrats. They cannot rely on agreements with the authorities, which can be terminated at any time without good reason. Leaseholders are even less confident in rent payments, which are constantly growing.
The legislation in effect does not establish a pricing procedure for industrial sites. As a result, local authorities are free to fix rates arbitrarily, and occasionally attempts are made to change rent payments in violation of current lease agreements. Taking advantage of this situation, the authorities conclude short-term lease agreements, thus preventing long-term business planning and development.
In order to solve this problem, the Ministry of Economic Development proposed amendments to the Land Code and to the law on the Code's implementation. These bills propose the rent payments be determined as the land tax rate plus 13 percent of the land buyout cost (the land buyout cost is determined as the effective land tax rate multiplied by a differential coefficient). This makes land buyout profitable in the long term.
DIFFICULT TO PRICE
Before deciding to buy the land under a business, the questions of cost and red tape should be considered.
Land buyout price is a controversial issue. In a typical case, the company applying for land buyout has no clear idea what the selling price will be. The truth is that, although the land buyout pricing formula is fixed by law, how it should be applied is unclear. The complexity of land buyout price calculation lies in the long-standing problem of land tax rate calculation, which has a direct impact on the buyout price.
Pursuant to the effective legislation, the land tax rate is established at the local government level since it is considered a local tax. The federal coefficients adopted over the past few years have complicated the issue even further. Tax authorities are of the opinion that, when calculating land tax, the taxpayer must apply all coefficients as adopted up to the date of calculation by serial multiplication, which means the buyout price will go up by 9.504 for the year 2004.
This position of the tax authorities can be challenged in court. In St. Petersburg the issue has led to a number of cases. The Arbitration Court of the Northwest Region has tended to rule in favor of taxpayers.
It should be noted that pricing and legislation applicable to a particular land plot is a complex issue. In each particular case the amount is calculated based on analysis of local legislation.
IS IT REAL?
The importance of land buyout analysis and preparatory work does not receive much coverage in the press. Companies primarily focus on how much they will pay for the land and do not really pay attention to other important aspects of land purchase.
There are currently a number of limitations and restrictions on purchase of developed land. Certain types of land are off limits for buyout, namely water protection areas, sanitary protection areas, public land, and frontier areas in cases where foreign corporate buyers are concerned, etc.
The problem is that some of these restrictions are imposed by the Privatization Law, but the Land Code does not contain any buyout limitations with respect to these types of land. No explanations whatsoever - including those from the Property Ministry or the Supreme Arbitration Court - have determined which law takes precedence, while the problem (specifically buyout of water protection areas) is pressing in many regions of Russia, such as St. Petersburg, the Leningrad Oblast, the Volgo-Vyatsky district and the central regions.
OWNERSHIP TITLE
At the preparatory stage little attention is paid to analysis of legal title to buildings and structures located on the land plot to be bought out. Yet title is key to the process. Pursuant to the Land Code, the exclusive right to land buyout lies with legal owners of buildings, structures and facilities located on the land.
Often companies hold inchoate title to their real property, or the title is presumed without being registered in accordance with statutory requirements for registration of the title to real estate and transactions involving this property. Therefore, in some cases due registration of the title to the property must be completed before applying for land buyout.
PREPARING THE PLOT
Statutory requirements to complete a cadastral plan have become more rigorous. Recent amendments to the law concerning registration of ownership require a cadastral plan for all land transactions that entail signing or amending land leasehold agreements.
Land buyout is no exception. The key buyout condition is a cadastral plan, which takes time to prepare. Depending on the size of the land plot, preparation of the cadastral plan may take from two to eight months. As a rule, this procedure also presents an opportunity to take inventory of fixed assets, to set clear boundaries with the adjoining land and resolve many other controversial issues.
NO UNIFIED PROCESS
The land buyout issue puts more questions than it provides answers. The Land Code does not give a detailed land buyout procedure or a list of documents to support the buyout application. Requirements vary by region.
Lawsuits continue as to which authority should conclude land sales and purchase agreements. After almost half a year of litigation, St. Petersburg managed to resolve the issue. Now buyout applications are filed with the Northwest Interregional Department of the Federal Property Fund. Other parties to the process that previously challenged the right to sell state-owned land plots - KUGI and the St. Petersburg Property Fund - raise no objection.
In conclusion, land is a major asset of any company that, with an integrated and clever approach to land buyout, helps companies occupy stronger positions on the market and lay the foundation for future projects.
Natalia Dyatlova is an associate with EY Law Real Estate Consulting Group.
TITLE: Center Housing Needs Repair
PUBLISHER: The St. Petersburg Times
TEXT: More than half of the housing in the city's historic center is in need of capital repairs, Interfax reported Monday.
Vladimir Antonov, head of the Tsentralny District administration, aired at a press conference Monday data showing that 934 apartments in the district are considered dilapidated. The district's housing pool counts 2,375 structures.
Despite the fact that 178 dilapidated apartments, or more than 21,000 square meters were renovated in 2003, "This is obviously not enough although we are the leaders in the city in terms of renovating worn out housing," Antonov said.
In 2003, more than 5,000 square meters of attics in the Tsentralny District were renovated. This helped improve the condition of the buildings, Antonov said.
There are 87 residential and non-residential buildings currently under repair in the Tsentralny District. In addition, 29 buildings were recently dedicated, including 13 residential buildings.
The district administration is particularly concerned about preserving the city's cultural heritage, Antonov said. "We understand that we receive constant attention from residents and visitors to St. Petersburg," he said.
Antonov added that 88 courtyards were improved in 2003 and work is continuing on turning the courtyards of buildings facing Nevsky Prospekt into a unified ensemble.
TITLE: Real Estate Market Sees Growth in All Areas
AUTHOR: By Simone Kozuharov
PUBLISHER: Staff Writer
TEXT: St. Petersburg real estate increased sharply in overall cost in 2003 as the real estate market experienced significant growth, experts say.
Last year proved to be a year of prosperity and growth in the housing, retail, business and industrial sectors of the market, with some figures increasing as much as 30 percent over 2002, according to experts. This has also been matched by a significant increase in construction and housing costs in the city.
HOUSING
At the beginning of 2003, the average price of apartments per square meter in St. Petersburg was $645, according to Delovaya Nedvizhimost editor in chief Vladimir Strunin. By the end of 2003, the average had jumped to $910, Strunin said. That is an increase of nearly two thirds in one year.
"[The] cost of housing increased by 35 percent to 40 percent on average for typical apartments," Vladislav Miagkov, a real estate consultant at Ernst & Young, said. And "about 1.5 million to 1.7 million square meters of residential buildings were commissioned in 2003."
There are several reasons for this dramatic price increase, according to Strunin, including growth in dollar savings among the population and a growth in the number of loans given by leading companies to staff.
If economic indicators remain stagnant, prices are only likely to rise in the coming year, Strunin said.
"It is likely that with the development of mortgages and other kinds of loans, an increase will be seen of between 30 percent and 40 percent a year," Strunin said.
Prices are currently 50 percent higher than they were before the 1998 financial crisis, Strunin said.
Construction costs also rose, according to experts.
"Construction costs increased by 28 percent to 30 percent," Miagkov said.
About 10 percent of St. Petersburg's apartments are communal, according to S. Zinovieff and Co.
"The percentage of communal apartments has decreased in the last five years, but from the autumn of 2003 the resettlement of kommunalkas has become not effective or not liquid and has stopped," S. Zinovieff & Co. said in a statement.
RETAIL
The retail industry in St. Petersburg is booming according to figures provided by Colliers International, showing a large number of new chains opening stores across the city with plans in the works for more openings in 2004.
The retail market has been climbing steadily over the past five years, according to Colliers data. The forecasted total retail turnover is $5.5 billion. It 1999, it was approximately $1.5 billion. That is an estimated $4 billion increase in five years.
The leading retailers in St. Petersburg are local companies - Pyatyorochka with 92 stores in St, Petersburg and the Leningrad Oblast, Dixi with 35 discounters, Kopeika St. Petersburg with 24 discounters and Nakhodka with 19 discounters, Colliers said in a statement.
Regional retailers operating in St. Petersburg include Viktoriya, which opened two stores last year and is planning to add up to 20 more in 2004, Colliers said. Dalport-City now operates 10 supermarkets and plans to set up 200 outlets by sometime in 2005.
"Foreign investors are not so numerous," Colliers said. Metro Cash and Carry has two stores, with plans for a third according to Colliers. Okey, now with three stores, "will open at least two hypermarkets in 2004," Colliers said.
Swedish furniture giant IKEA, which has had its share of struggles with governmental rules and regulations, has one store in St. Petersburg and plans one or two more, IKEA spokeswoman Irina Vanenkova said. The planning is currently in preliminary stages according to Vanenkova and depends on "how quick the authorities do the paperwork."
Some local dealers have expanded and begun operating in wider sectors, according to Colliers. "Pyatyorochka plans to produce three hypermarkets under the Opus brand name in 2004 [in the] Primorsky, Moskovsky and Nevsky districts." The chain plans to open a total of 10 hypermarkets in the city, Colliers said.
Hypermarkets are stores that purvey between 35,000 and 40,000 articles of goods. Supermarkets sell between 15,000 and 30,000 articles of goods, according to one company's spokeswoman.
The Turkish-owned chain, Ramstore, headed by parent company Ramenka, hopes to ride its wave of success from Moscow into St. Petersburg this year with the opening in mid-March of its first hypermarket in the Gulliver trade center. The store will be 3,630 square meters according to a Ramenka spokesperson. Another Ramstore is scheduled to open an even larger store - 4,672 square meters - at Udelny Park at the end of this year. A third is scheduled for completion in 2005.
"The Paterson supermarket chain continues conquering the St. Petersburg market," Colliers said. "Now it consists of five stores and intends to enlarge its business up to 12 supermarkets, located mainly in shopping centers, in 2004."
Moscow retailers either coming to or now in St. Petersburg include Paterson, Perekryostok, M. Video, SportMaster and Detsky Mir, Colliers said. "Detsky Mir, one of the largest operators on the Russian children's goods market, will open its first outlet in the PIK shopping center on an area of 2,200 square meters.
OFFICE SPACE
The overall vacancy rate for office space has dramatically decreased over the past four years, according to Colliers' data.
That data indicates that four percent of the city's office space is comprised of class A space, 22 percent of class B space and 74 percent of class C space.
In 2000, more than half of all A quality office space was vacant. By 2003, nearly all A quality office space was occupied. Nearly four fifths of B quality office space was rented in 2000, but in 2003, that number increased to one twentieth. Class C office space saw a similar increase in retail.
"Class A office space is located in the historical center of the city, mainly in the 'Golden Triangle' and nearby area," Colliers said.
A new 10,000 square meter business center is planned to be erected by the end of this year on Petrogradskaya Naberezhnaya, Colliers said.
"Now the correspondence of A class business centers to worldwide standards is often disputed (the level of services and layout not satisfying requirements, shortage of parking space)," Colliers said. "Mostly new business centers position themselves as B class."
The ratio of A to B space in the city is approximately 1 to 5, according to S. Zinovieff & Co.
"Modern B grade business centers are capable of competing with A grade when it comes to finishing and services provided by the lessees," S. Zinovieff & Co. said. "Quite often the only difference between A and B grade business centers is the location."
The leading office space is centrally located in the Tsentralny, Admiralteisky and Petrogradsky districts and the Vyborgskaya and Pirogovskaya embankments, Colliers said.
INDUSTRIAL
"In spite of the fact that the constitution of the Russian Federation formalized the right of private ownership to land in 1993, there is actually no developed land market in Russia," Miagkov of Ernst & Young said.
"The exception is St. Petersburg where in 1995-2003 legal entities and individuals privatized over 12 percent of urban lands as full plots or as undivided share. In other Russian cities private lands are rare. There was not any private land in Moscow until recently," he said.
Undeveloped plots are still owned largely by the government and are leased to developers by the local administration, Miagkov said.
According to Miagkov, the Land Code permits the local government to sell undeveloped land, but only by auction and after the necessary zoning.
"However, municipalities are not rushing to sell off underdeveloped land via action, preferring instead the old, drawn-out method of allocating land for construction projects that is accompanied by a costly and complicated preliminary approval process," Miagkov said.
After the construction project is completed, Miagkov said, the building's owner can privatize the land on which the building is built or lease it long term.
"Local administrations all over the country charge a fee for land allocation, or require performance of certain work - or both," Miagkov said. "In most cases, such a fee is called 'the fee for infrastructure development.'"
Each local administration establishes the amount charged using its own methods, Miagkov said. However, this often depends on the administrations' and investors' negotiations.
"We may say that, based on the existing practice, the fee for allocation of land in the city residential districts was about $20 to $40 per square meter of land in the outskirts and $100 to $200 per square meter of land closer to the city center," Miagkov said. "The fee for small land plots near Nevsky Prospekt could reach $400 to $500 per square meter."
Recently, Governor Valentina Matviyenko announced that the minimum fee for land allocated for commercial development would be $80 per square meter, Miagkov said.
"However, these are only intentions and it is not clear they will be realized," he said. "During the last few months the secondary land market has become more active and the prices have slightly increased.
"In 2003, private industrial land parcels were sold for $15 to $40 per square meter, reaching $120 to $200 per square meter for small parcels along busy streets," Miagkov said. "If the city raises the prices for municipal land, the prices on the secondary market will definitely go up."
Maxim Kalinin of Baker & McKenzie pointed to the complicated nature of the privatization process.
"Obviously the intention of lawmakers was to push forward the privatization of land and ensure its market turnover," Kalinin said.
"The major problem now is that the majority of the big enterprises which have such rights do not have enough money to privatize their land. Therefore, there are attempts on the federal level to pass legislation which would ensure that such land is privatized at a minimum price," he said.
A number of facilities are under construction in the Leningrad Oblast where "the investment climate is considerably better than in St. Petersburg," Miagkov of Ernst & Young said.
"At the same time the process of redevelopment of old inefficient factories has started in the city. Some old factories located in the city are closed and their properties in most cases are run down [and] are sold to developers for dismantling and further residential or commercial development," Kalinin said.
TITLE: Former Property Chief Favors Order
AUTHOR: By Anna Shcherbakova, Anatoly Tyomkin and Alexander Bekker
PUBLISHER: Vedomosti
TEXT: Valery Nazarov has a reputation as a government man with liberal economic views. As a St. Petersburg vice governor he distanced himself both from politics and from former Governor Vladimir Yakovlev, who was often in the doghouse with the Kremlin. It is no wonder he is now breaking in a new office in Moscow. In January Nazarov was appointed deputy chief of the presidential administration and chief of the Kremlin's control department.
Born in the town of Michurinsk in the Tambov region, Nazarov studied at the Tallinn Maritime School, the Leningrad Elecrotechnical Communications Institute and the Russian State Service Academy.
Nazarov entered St. Petersburg government in 1994 when he returned from Estonia. With plenty of government experience - he worked for more than 10 years with the Estonian communications ministry - and a certificate as a municipal manager from the State Service Academy, Nazarov became deputy of the city's housing agency.
Legislative Assembly deputy Vatanyar Yagya, a former adviser to Mayor Anatoly Sobchak, recalled that Nazarov was recommended to Sobchak by "friends." "Thanks to that friendship the deputy chairman of the housing agency gained access to the offices of vice mayors [Vladimir] Putin and [Alexei] Kudrin," Yagya said.
Nazarov wasn't a deputy for long. Soon he headed the housing agency and, in December 1994, became the director of the city's property rights registry. It was in this capacity that he sat out the change of regime when Vladimir Yakovlev was elected governor in 1996 and the so-called Sobchak team moved to Moscow.
Nazarov was appointed chairman of the City Property Committee, known by its Russian acronym of KUGI, on Dec. 12, 1999.
"Nazarov is a very pedantic, punctual person who loves order," said Lenenergo general director Andrei Likhachyov, Nazarov's predecessor at KUGI. "Wherever he worked he created a logical system of relationships and behavior, regulating the activity of his employees so they would be unable to interpret laws in their own way," Likhachyov said.
A former KUGI employee recalled Nazarov set up a clear hierarchy. He insisted on posting concise work requirements in all departments and ensured strict adherence to them.
Nazarov struck another committee employee as a "functionary" who "never argued with anyone."
Nevertheless, KUGI figured in several major city property conflicts. In 2000, Nazarov's committee got a court to force a company that owned the city's largest department store, Gostiny Dvor, to pay rent. In 2002, KUGI recovered the city's blocking share in the other major department store, Dom Leningradskoi Torgovli, or DLT. But the committee was unable to keep the city's 14 percent share in the charter capital of Peterburgskaya Toplivnaya Kompaniya, or PTK. The gasoline retailer floated shares without City Hall's knowledge. Under Nazarov, KUGI also failed to convert the city's 28 percent share in the St. Petersburg Sea Port into voting shares and get its candidate onto the board of directors.
"Nazarov's greatest achievement was returning DLT to the city," legislator Yagya said.
In May 2000, Yakovlev was reelected by a landslide. By the end of June, Nazarov became part of Yakovlev's new team. It was then that he also became a vice governor. Nazarov soon joined the so-called "silent opposition," according to one former Yakovlev administration employee. "Nazarov represented the interests of the Moscow Petersburgers more than those of Yakovlev," the same source said. But Yagya said that as a vice governor, Nazarov enjoyed the support of UES chairman Anatoly Chubais and economic development minister German Gref.
Nazarov was unable to distance himself completely from the governor's decisions. One real estate consultant recalled that while Nazarov headed KUGI the city lost its shares in the Pribaltiiskaya and Pulkovskaya hotels to little known firms on unfavorable conditions. "That was done openly and to this day there is no official statement naming the actual owners and conditions of sale," the expert said. "KUGI ceded the determining role in developing new hotels to other committees that the governor could more easily control."
Several times Nazarov was in danger of being fired. Arkady Kramarev, a Legislative Assembly deputy, recalled that law enforcement agencies suspected KUGI employees of corruption. "But Nazarov himself was clean, so it would have been illogical to fire him," Kramarev said. In mid-2001, on the initiative of Yabloko deputies who opposed Yakovlev, the Legislative Assembly tried to muster a vote of no-confidence in Nazarov. Yagya recalled that the vice governor was accused of mistakes during privatization and of ignoring the concerns of deputies.
One year later the deputies wanted to revisit the issue of removing Nazarov but were unable to raise enough votes. It was then that the St. Petersburg Audit Chamber ran a check on KUGI. Dmitry Burenin, chairman of the chamber, said the audit did not reveal any serious flaws. Nazarov struck Burenin as a "reformer and market economist in the good sense of the word." The system of managing state property began to work more effectively under Nazarov's tenure, and non-tax contributions to the city budget grew.
Local business circles see Nazarov as a government man who protects the interests of business.
"Despite the fact that he has been a bureaucrat all his life, this is a man with market views who does not think property should be owned by the state alone," said Vasily Sopromadze, president of Korporatsiya S developers. Alexander Shabasov, general director of the Apraksin Dvor reconstruction and development agency said Nazarov favors "nonstandard, original decisions and does not submit to outside influences."
"The state should develop rules and control adherence to these rules," Nazarov said in an interview with the Rosbalt news agency.
TITLE: Market Calm, Dollar Rises
AUTHOR: By Angelina Davydova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Last week was calmer than the previous weeks after the New Year with weaker activities and lower volumes on the Russian stock market. However, on the foreign currency front Monday witnessed a rise of the U.S. dollar rate unprecedented since the beginning of the year.
In terms of growth, last week was less exciting than early January and the market was ruled mainly by profit-taking, a Troika Dialog report said. "This was particularly the case on Friday, when the benchmark RTS index shed 1.5 percent to 611.10. There was major supply in UES, which closed down 5.75 percent on MICEX, after dropping as much as 10 percent during the day on the back of a major one-off sell execution."
United Financial Group analysts maintained that Friday's trading session in Russian equities was marked by end-of-the-month activities at Russian banks, as they offloaded Gazprom locals to close the books. "MICEX volumes were $517 million. Gazprom was down 3.0 percent to $1.505. UES was the big loser of the day, with Russian investors nervous over the outcome of the board meeting and the restructuring program. The board didn't come to any definite solution (it did, however, approve a corporate restructuring plan for Mosenergo) and UES dropped 5.8 percent to $0.308.The wireline telecoms were the biggest losers of the week, with Uralsvyazinform and Central Telecom leading the pack, down 8.3 percent and 12.1 percent on the week, respectively."
Troika Dialog said Yukos was at the positive end of the market, while it sailed against the broad tide of decline to finish up 1.4 percent on MICEX on above average turnover. Analysts say the stock has bottomed out and further downward movement is unlikely. "The combination of three good quarters of 2003 financials and the company's desire to appease the government by paying taxes and distancing Menatep from its management are all likely to boost investor sentiment. In general, we expect the market to bottom out and possibly start rising."
On the corporate front, two small eurobonds were launched by Russian banks on the primary market last week. Petrocommerce, Russia's 16th-largest bank with $1.4 billion in assets, and NOMOS Bank, the 18th-largest with $1.2 billion in assets, placed $120 million and $100 million worth of three-year eurobonds respectively on Friday.
UFG analysts maintain that the eurobonds were fairly similar in terms of volume, tenor and coupon rate and they were placed at fairly close yields and spreads. They were also close to the eurobond yields and spreads of other Russian banks, UralSib (B-) and Zenit (B-/B1). These are the widest spreads among Russian eurobond issuers, reflecting the higher risks implied in the banking sector.
"The placements demonstrate the new borrowing opportunities in the eurobond market provided by the declining global interest rates and tighter Russian spreads. The latter have been boosted by the recent upgrades of Russia's sovereign rating by Moody's and S&P," a UFG report said.
A Central Bank statement on international reserves, released last week, also affected the market. According to an Aton report, international reserves enjoyed their highest weekly increase since the 1998 crisis, rising by $3.6 billion over Jan.16-23 to stand at $82.7 billion."
"Two main factors are behind the recent growth: Foreign capital inflow due to high commodity prices and an increase in foreign borrowing by Russian corporations and banks; and the fact that banks and individuals switching from dollars to rubles as dollar weakening brings excessive dollar supply on the Russian Forex market. We expect international reserves to continue to grow as a result of high commodity prices," Aton analysts said.
And last but not least, the U.S. dollar rate rose to 28.53 rubles Monday. This is 0.04 rubles above the dollar's official exchange rate against the ruble set by the Central Bank of Russia for Feb. 2. Prior to that, the largest rise of the dollar against the ruble was 0.01 rubles a day.
This course of events is probably due to rising demand for dollars on the part of Russian banks. Traders are short on dollars and seek to improve their dollar liquidity. Another possible reason for a wane in the ruble is the Central Bank's active stalling of the ruble's strengthening. According to RosBusiness Consulting, experts say the dollar's rise could be linked to recent statements by government officials about the undesirability of the ruble's significant strengthening.
TITLE: How Dependent is Growth on the Oil Price?
AUTHOR: By Laza Kekic
TEXT: Russia's real GDP growth over the past five years has averaged an impressive 6.6 percent per year. There is general agreement that the strong recovery after the 1998 crisis owed much to favorable external conditions, in the form of buoyant oil prices, as well as the effects of the sharp 1998-99 ruble devaluation. There is much less agreement, however, on the precise role these factors played.
More importantly, there is also an apparent lack of agreement on what the impact of oil prices and the real ruble rate will be on future growth, and what role other potential drivers of growth will have. Statements by various Russian officials also reveal significant differences on this issue. Some have begun to talk of "a new quality of growth free from high oil prices", while others tie their growth predictions very closely to assumptions about the oil price.
To explain recent Russian growth, in addition to oil prices and the exchange rate, macroeconomic stabilization, the political stabilization in recent years and progress in reform are thought to have contributed to economic recovery. A regression of annual real GDP growth from 1992 to 2003 on annual values of the dollar oil price, the real effective exchange rate index (REER), inflation, a crude index of political stability, and a "dummy variable" for the "atypical" year of 1994 explains an astonishingly high 98 percent of annual variation in Russian growth over this period.
The estimated elasticity of real GDP with respect to the oil price implies that a 10 percent change in the oil price leads to a change in real GDP growth by 0.8 percentage points - that is at present levels of the international oil price, a $1 drop (rise) in the price of a barrel of oil leads to an increase (decline) in real GDP growth of about 0.4 percentage points. The elasticity of real GDP to the REER indicates that a 10 percent appreciation (depreciation) of the REER reduces (increases) growth by 1.4 percentage points. Using quarterly data for the period from the first quarter of 1996 to the third quarter of 2003 yields almost exactly the same oil price and REER elasticities as the exercise based on the annual data. The estimated sensitivity of growth to oil prices and the real exchange rate is high. But it is lower, and more plausible, than the results of some other empirical investigations. The main reason for this is that other influences on growth have been accounted for.
This framework can be used to derive the sources of growth since 1999, by comparing growth in 1999-2003 with growth in 1995-98. In the latter period, real GDP declined at an annual average rate of 2.9 percent; in 1999-2003, as noted, average growth amounted to 6.6 percent. Taking the difference in the average values of the explanatory variables in the two sub-periods, the source of the acceleration in growth between 1995-98 and 1999-2003 of 9.5 percent can be decomposed into a contribution of about 30 percent each for the impact of the average oil price increase, the weaker real ruble and improvement in political stability, or other factors that the political stability index proxies for. The remaining 10 percent is due to the decline in average inflation between the two subperiods. Thus, although changes in the oil price and the real exchange rate do not explain all of the recovery, their joint impact is considerable - accounting for about 60 percent of the growth since 1999.
Strong Russian real GDP growth in 2003 has tended to feed an increasing bullishness among many forecasters about Russia's growth prospects in 2004. Forecasts have been upgraded to 6 percent or higher in some cases. In part this is because the projected oil price is considerably higher than the $22 per barrel Urals blend assumed for Russia's 2004 budget, which in turn underpins the official 5.2 percent growth forecast.
But the optimism also stems from a widespread sense that the economy's dependence on oil prices is declining and that the outlook for non-oil drivers of growth is good. This is in turn based on some or all of the following arguments: growth is becoming more broadly based and not only confined to the energy sector; there has recently been considerable micro-restructuring; the outlook for reform after the presidential election is very good; real ruble appreciation will not have much of an adverse impact; the negative impact on liquidity of a decline in oil prices will be offset by increasing foreign capital inflows.
In fact, none of these considerations is likely to hold - with the exception of the probable increase in foreign capital inflows. Signs of micro-restructuring are weak and patchy. There is even less evidence that recovery is becoming more broadly based and less dependent - directly and indirectly - on the energy sector. Industrial production data show that the energy sector and closely linked branches, are still the main growth areas. Other sectors such as light industry are performing much more poorly, and a disproportionate amount of investment is still directly attributable to the energy sector. There is no sign that recent deregulation and other reforms are spurring small enterprise development - if anything this has stagnated in recent years. It is unlikely that the Kremlin's strengthening power will be used for any reformist "great leaps forward," that Putin will buck the national mood which favors greater statism and a conservative policy approach. Russia's labor and capital markets remain weak. The empirical evidence shows considerable sensitivity of growth to real appreciation.
The economy's dependence on oil, and natural resources more generally, remains very high. The energy sector accounts for a large proportion of Russia's GDP, and the dependence of export earnings on energy exports is especially high. In 2003 exports of oil, oil products and natural gas made up 55 percent of total goods exports (some 17 percent of GDP). For the time being, Russian growth performance remains heavily dependent on the oil price, as well as trends in the REER.
If the price of oil in 2004 drops to $22 per barrel for Urals blend, and assuming appreciation of the REER by about 6 percent, GDP growth will drop to around 4.5 percent (lower even than the ostensibly cautious official projections associated with that oil price). The only way that growth can be appreciably higher is if the oil price turns out to be appreciably higher. Over the longer term, if the oil price drops to and remains around $20 per barrel, or lower, and given ongoing real ruble appreciation, stagnation would gradually set in in the absence of significant improvements in other growth generators, that is the overall business environment.
Laza Kekic, director for Central and Eastern Europe of the Economist Intelligence Unit, contributed this comment to The St. Petersburg Times.
TITLE: Oligarchs Trade Davos Forum for Courcheval Frolic
AUTHOR: By Yulia Latynina
TEXT: In early 1996, in the small Swiss town of Davos, Communist Party leader and presidential hopeful Gennady Zyuganov was staying in a hotel room next to Mikhail Khodorkovsky. One evening Zyuganov imprudently greeted his neighbor. "You're doing a good job," he said. "We need good general directors." Deep in thought, Khodorkovsky went into his room and called Boris Berezovsky. His message was simple: We've got to do something.
As a result, Boris Yeltsin defeated Zyuganov in the presidential election, a Menatep truck full of campaign-finance documents plunged into a river, and Khodorkovsky eventually went to jail. He'd have been better off as a general director.
And the time when Russia's fate was decided in Davos came to an end. The important decisions are made in the Kremlin these days, not in Davos. President Vladimir Putin's absence at this year's World Economic Forum was telling. Putin is such an avid fan of downhill skiing that his first state visit was to a ski resort in the Austrian Alps. Davos is a ski resort first and foremost, and Putin has never been there. Maybe he didn't like the question raised there a few years ago: "Who is Mr. Putin?"
The official Russian delegation in Davos this year was extremely modest. Even Prime Minister Mikhail Kasyanov sent his deputy, Finance Minister Alexei Kudrin, who was brought into politics by Anatoly Chubais. Kudrin is considered a top candidate to succeed Kasyanov this spring. He seems to have forgotten his liberal past, though he has clearly remembered his St. Petersburg roots. Ever since Yukos began to experience difficulties, Kurdin has been unstinting in his criticism of the oil major and in his praise for the economic program of United Russia.
The Russian business elite also stayed away from Davos this year. The days when the oligarchs played kingmaker in Davos, or anywhere else, are gone. And the main event in Davos at this time of year, the World Economic Forum, holds no interest for them.
The Yukos affair made clear what happens to companies that want to be transparent. The more transprarent they become, the less they depend on the Kremlin. The drive for transparency is equated with a revolt against the regime. Russian businessmen are no fools. They've learned their lesson.
Until recently, Severstal, Russia's second-biggest steelmaker, was moving towards transparency. To shield itself from potential enemies and to boost its share price, the company reported profits of $370 million in 2002 after reporting a $460 million loss the year before. This was a revolutionary move. Now Severstal has gone down a different road. In December it spent 600 million rubles (just over $21 million) to acquire 9 percent of Rossia Bank, a very small bank located ~ you guessed it ~ in St. Petersburg.
It strikes me that this purchase doesn't jibe with corporate transparency and independent Western audits. It does, however, help to protect the company in other ways. And $21 million is a whole lot less to lose than $370 million.
Russia's oligarchs, who once risked it all to win big in the loans-for-shares scheme and to change the course of Russian history, now look more like cringing medieval Jews whom the new king is about to toss into the ghetto and accuse of exterminating Christian infants.
They have Stockholm syndrome. If they blame anyone for what has happened, it's their fellow oligarchs who had the audacity to refuse to pay the racketeers and wound up in prison. If they dream of anything, it's that they will get a piece of the Yukos pie.
In this new climate, Russian businessmen have no business in Davos. Everything they now talk about openly - buying villas, yachts and women - can be discussed just as well in Courcheval.
Yulia Latynina is a columnist for Novaya Gazeta.
TITLE: The 900-Day Siege Racism, and Museums
TEXT: In response to a series of articles printed on Jan. 23, 27 and 30 by Irina Titova, Galina Stolyarova and Matt Brown about the Siege of Leningrad and events to commemorate the 60th anniversary of the final breaking of the siege.
Editor,
It never ceases to amaze me what strength of character the Russian spirit can display. Vera Rogova must be a very beautiful human being as she can accept what happened and be part of the healing process. To know that she is one of so many who can accept the pain of revisiting that horrible conflict with those who were her enemies and still see the humanity, the divine spark, in all mankind is truly profound. Such is the road to forgiveness, the greatest of gifts yet the most difficult to give. A nation with such a heart can overcome any adversity. God bless you Mother Russia!
Brad Golding
Saratoga, NSW
Australia
Editor,
Last May I was privileged to spend a week in your magnificent city. The 300-year anniversary celebrations, the people and the weather could not have been finer. I had read about the siege and the first place I had to visit was Piskaryovskoye Cemetery. Twenty paces into that sacred place and my eyes were running rivers. Goose bumps ran up my arms. There is some of that same sensation as I write now. I salute all Leningraders, may you always be honored, your sacrifices never forgotten.
James Donovan
Boston, Massachusetts
Editor,
Nothing in my life could compare with the 900 day siege that the wonderful people of Leningrad/St. Petersburg had to endure. I can only imagine what it was like during this period of time.
As I walked along Nevsky Prospekt and other streets during a visit to St. Petersburg, I tried to picture what it must have been like during the siege. Of course, there is no way that my imagination could let me see what it was truly like.
As I read the articles about what happened during he 900 days my heart is filled with so much sadness. I feel so terrible for the thousands that died. I feel terrible for the pain and suffering of those who managed to survive.
I pray to God that nothing like this ever happens again to anyone in this world of ours.
And I pray that God will care for the people of St. Petersburg, particularly those who lived through this most trying time in world history.
Bob Stomber,
United States
Editor,
When we visited St. Petersburg we were really impress with the big monument and the museum of the terrible siege of the city.
We liked the whole city, palaces, museums, and all the history, but the monument, which was very close to our hotel, really made an impression on our souls.
My congratulations for your article.
Sadi Ubaldo Rife
Buenos Aires, Argentina
Editor,
This was a very informative article about one of the great tragedies/triumphs of history that is all too little known in the West.
Having read Harrison Salisbury's "The 900 Days," I found the details Titova was able to include in the article a good compliment to that seminal work; finding horror and humanity in the event.
May God bless the survivors and the victims of the siege and may good fortune shine on St. Petersburg.
Wayne D'Avanzo,
Norwalk, Connecticut
Editor,
I am almost 70 years old and clearly remember my father telling me about the Siege of Leningrad, that it was a terrible time, and the tremendous heroism of the city and its people, surviving in spite of the might of the invading Nazi armies.
My best regards to all those that survived. And a word to the new generations of St. Petersburg: do not forget to honor them.
Gorge Pérez Blanco
Tres Arroyos
Argentina.
Editor,
I was in St. Petersburg late last winter and fell in love with the city. I have read moving stories of the siege before (such as that of the genetic researchers who starved rather than eat their store of seeds). This certainly is another. Long live this spirit!
Carolyn Breedlove,
Natchitoches, Louisiana
Editor,
What a poignant and wonderful article. We loved going to the Shostakovich Philharmonic when we lived in St. Petersburg. And we noted that, when Shostakovich's works were performed, there was a great response from the Russian people, which we didn't comprehend then as well as we do after this article.
The Blockade Museum on Moskovsky Prospekt is a wrenching reminder of what the city suffered; and we were sobered and moved when we visited it.
Esther Matteson
South Bend, Indiana
Police and Racism
In response to "Victims Say Racism on Rise After Nationalist Elections," an article by Ali Nassor on Jan. 23.
Editor,
I am a 22-year old student from the Middle East studying in St. Petersburg. A big fan of Russian language and culture, I am deeply wounded by such incidents and the total indifference of the police to them. Many thanks to Nassor for your courage and devotion in writing about this recurring problem. I suffer from constant fear of an unpleasant encounter with skinheads. Actually, one of the victims you wrote about in your article is my friend, but I would prefer not to mention my name because I'm really scared of the racists in this city.
I can't believe that this city which is one of the most beautiful in the world is unaware that racist groups have severely damaged its reputation. Many of us have friends or relatives back home who wanted to join us here to be educated, but changed their minds when told about the racists. It's really incomprehensible that racist attacks occur not only in remote areas of the city, but also in famous, tourist areas such as Nevsky Prospekt.
I don't trust the reactions of the police at all. We always wonder what makes the local authorities close their eyes to such crimes. We foreign students are interested only in learning the language and trying to find ourselves some Russian friends.
The police are wrong to accuse foreigners of being involved in criminal activities. They forget that students are seeking higher education are totally involved in study and getting used to the harsh weather conditions.
Please write more about this and let the words be read by someone who can see that it's getting out of hand. Create a telephone number for people suffering from racists to call when the police won't help them.
I hope that the city that has the Hermitage won't stain its reputation with racism. This is the same city that gave the whole world a lesson in heroism during World War II. Let it also give the world some lessons in tolerance and anti-racism.
Anonymous
Editor,
I am a student in St. Petersburg and I had the bad experience of losing one of my fellow citizens who fell under the blows of fascism last February. I will not come into details of how he was killed, but one thing that was incredible was the total lack of support by the police.
I have the impression that people working there have no brain, no culture and no sentiments, To suggest that we foreigners are simply in Russia to rob, steal and create havoc is refusing to accept facts. You should come and see the conditions we live in.
You refuse to deal with this problem because you are unable to make your citizens respect the law.
Other cities throughout the world are trying to combat racism by buying cameras, recruiting more officers, good monitoring and amending laws, but what about Russia? Russia is not up to the standard of the world's leading cities because it has not shown any change in its attitude toward this problem. We are simply considered animals here and nothing more.
The police should go to church and ask for advice. This will help you in your job and you will see that we who have dark skins are equal to you.
Anonymous
Fighting Crime
In response to "City Crime Not What Once Was - Author," an article by Irina Titova and "Police Want 50,000 Security Cameras," an article by Vladimir Kovalev on Jan. 20.
Editor,
One could say this about any city in the world, but are figures based on per head of population or actual statistics? As a population grows the percentage of crime decreases. Wealth in any country is a factor in decreased criminal activity since there's more money and clout by the people to fight such elements.
As for 50,000 cameras, how many people will it take to operate so much equipment? It will require more police officers for enforcement, at least in the beginning. As for abuse by politicians/police, that's the same concern we have in the U.S. I guess the toss-up is whether people are more content with security or personal freedom, you gain on one hand lose on the other, the price of democracy. Under communism the average person was safe from street crime, except that committed by the government.
Instead of 50,000 cameras why not try the concept in a high-crime area with fewer cameras and cash outlay, then one can see where improvements are needed. There will never be enough cameras and costs will rise substantially. With 35,000 police officers for a city of 3 million people, you'll never have enough officers to staff the monitors and fight crime at the same time. The estimated cost of the cameras is too low when considering future expenses.
Al,
Reno Nevada USA
Cold Comfort
In response to "One Conscript Dies, 50 Hospitalized After Chilly Stopover," an article by Simon Saradzhyan on Jan. 16.
Editor,
Russia is a great nation with incredible history. Why do your citizens in uniform have to endure such ridiculous conditions?
Say what you will about the United States military, but look at their performance! We have the best trained, best equipped armed forces in the world. They are taken care of, and their performance is superior to all other nations.
Some day Russia will be back to where it was militarily, and that will be good for stability in that entire region.
Jim Fisher,
Pennsylvania
Skills for Life
In response to "Travel Agent Masters Tough Reality," an article by Ali Nassor on Jan. 13
Editor,
One line in the article about Julia Stepanova caught my attention: "It was a six-month course in international tourism management that finally inspired Stepanova to launch her own business in May 1999."
One cannot but not admire Julia's courage and determination to survive the misfortune and ill treatment she had suffered during her childhood. Many if not all who had a similar upbringing and environment would never have made anything of their lives.
She is a model for today's students who, although they might not have access to all that life has to offer, should realize the importance of education. This is especially important for students from under-privileged homes. Teenagers have to understand the importance of education, not only for ensuring the making of a successful career, but also as an inspiration to the accepted values and principles of life. May many students follow Julia's example.
Mark Ransley,
Malta
Hermitage Blues
In response to "Entry Fee to Hermitage Rises," an article on Jan. 9.
Editor,
I married a beautiful Russian woman in 1999 and she decided to show me the best of St. Petersburg, so we went to the State Hermitage Museum.
The experience was not what I expected. Little Russian women sitting in all corners of each room yelling, "Don't touch" even if you only looked closely or pointed. That was all the English they knew. One female guard even yelled across the entire room so as to embarrass me, my bride and our friend. I didn't understand Russian so I had no idea what she was screaming, but it upset me since I was the purported criminal. She didn't attempt to discuss the issue in a civilized manner, knowing fully well I was a foreigner but directly addressed her anger at my wife.
This is totally unacceptable for anyone visiting your wonderful city. Since then I have had no desire to visit any museum in the city and I have warned all my friends not to.
It's the same in other museums, with the exception of the Naval Museum and the Summer Palace.
The beauty of St. Petersburg has been tarnished by a few arrogant people.
I love Russia and all it has to offer but you will get what you receive.
John Fisher,
Fresno, California
Imperial Remnants
In response to "Heavyweights Shun Presidential Election," an article by Oksana Yablokova on Dec. 30.
Editor,
The Soviet Union was considered to be the "Evil Empire". This "dragon" of last century ceased to exist in 1991. And we found a bunch of smaller poisoned chunks of "the dragon's" body scattered all over the place. They used to be connected formally and informally with the decomposed "Evil Empire".
Russia inherited all property of the U.S.S.R. It claimed all the "Evil Empire's" properties abroad. Russia also agreed to honor all international obligations of the dead "dragon". Thus Russia appeared in history as a newborn, democratic "dragon," with a democratically elected president.
Russia never changed the old imperial military doctrine that it inherited from the U.S.S.R. It only changed its strategic approach. Russia has become a supplier of arms and ammunition for terrorist states and terrorist organizations.
Keep in mind that all military-industrial enterprises and domestic and international distributors are still solely owned by the Russian government and totally under the government's control.
Boris Tiraspolsky
Southfield, Michigan
TITLE: Speaking Truth to Putin
AUTHOR: By Jackson Diehl
TEXT: Considering that she is a marginal challenger to a powerful Russian president embraced by U.S. President George W. Bush, Irina Khakamada got quite a reception during a 36-hour visit to Washington last week. The congressional Russian democracy caucus, chaired by Representative Chris Smith, held an open meeting with her. Senator John McCain received her. Senior State Department officials and think tanks of both the right and left consulted her. At the White House, Condoleezza Rice, architect of Bush's special relationship with Vladimir Putin, dropped in to see the tall and tough liberal democrat who has mounted a lonely campaign to oppose Putin's upcoming re-election in March - and his consolidation of authoritarian power.
Khakamada explained to Rice why she had chosen to enter a race in which Putin's landslide victory is preordained and in which her own place on the ballot - not to mention state-controlled television - is subject to the Kremlin's whim. One of her aims, she says, is to educate the outside world about what has happened to democracy in Russia. Another is familiar from Russia's totalitarian history: to offer a model of someone not afraid to speak up about a ruler's abuse of power.
The response, she says, was surprisingly sympathetic - and suggestive of a partial but real shift of attitude toward Putin. "I have noticed that the spirit in Washington has changed somewhat," she said. "What I hear from Congress and the State Department is somewhat different from what we've witnessed when the two presidents have gotten together, which has been idyllic."
Khakamada connects the change in Washington to December's State Duma elections, in which her party - the liberal Union of Right Forces - lost almost all its seats after elections condemned by the State Department as unfair. But the administration's shift of attitude can be traced back at least several weeks earlier, to a meeting in London on Nov. 20 among Bush, Rice, Secretary of State Colin Powell and British Prime Minister Tony Blair.
Powell, sources say, raised the issue of Russia, saying that Putin's increasing authoritarianism was a serious problem. Rice responded with some mitigating context: Russia's long history of authoritarian rule, the considerable differences between Putin's Russia and the Soviet Union, the need to do business with Moscow. But Blair said that while the context was important, Putin's behavior was indeed a problem - and Bush agreed with him.
Since then Powell has been methodically pushing the envelope of the administration's new willingness to publicly criticize Putin. Less than two weeks after the London meeting he chastised Putin at a diplomatic conference in Europe for failing to meet treaty commitments for the withdrawal of troops from Georgia and Moldova. There followed his spokesman's condemnation of the elections. Last week Powell published an article - approved in advance by the White House - in Izvestia that took Putin to task on democracy, relations with neighbors and the war in Chechnya. It warned that "without basic principles shared in common, our relationship will not achieve its potential."
It's not yet clear whether Powell's pronouncements will be followed by substantive changes in policy - or even echoed publicly by the White House. Rice remains cautious about any confrontation with Putin; the administration is still hoping for his help on a range of issues, including a democracy charter for the Middle East that the president may unveil at the G-8 summit of rich democratic nations this spring. The idea, floated by McCain, that Russia - which is neither rich nor democratic - should be expelled from the G-8 group has been dismissed inside the administration. Nor is Bush prepared to cut aid programs seen to be in the U.S. interest, such as those that help dispose of Russian nuclear weapons material. The president himself has yet to say a critical word about Putin in public.
Should Bush decide to stand up to Moscow's new strongman - hasn't he made several speeches about defending "freedom"? - Khakamada has some suggestions. "Putin needs to be pressed to spell out what kind of a political course he is mapping out for the next four years," she says. "Lip service to certain principles isn't enough; we need to know what real actions he has in mind. Rather than talk about democracy and human rights in Russia, focus on the specifics of what Putin says he will do and what he is really doing." Western governments, she says, also must keep supporting Russia's civil society - free media, labor unions, independent social organizations.
Above all Bush would do well simply to imitate Khakamada - to be bold enough to speak the truth about Putin. It might make his friend angry - but it would also offer the world an example.
Jackson Diehl is a columnist for The Washington Post, where this comment first appeared.
TITLE: Nuclear War Games Are Redundant
TEXT: Later this month, Russia's strategic nuclear forces will hold their largest exercises since the early 1980s.
The official explanation, according to a report in Kommersant, is that the war games are designed to help Russia prepare to counter terrorist threats.
But no sensible person could believe that the launching of cruise missiles over the Atlantic and satellites into space combined with the test-firing of ballistic missiles would make the military better able to interdict a group of terrorists, even if they had managed to get hold of a nuclear weapon.
When the Soviet military last held strategic war games of a similar scale, in 1982, both the Kremlin and the White House knew perfectly well what they were for - to simulate a global nuclear war. The planned exercises will also simulate a U.S.-Russian nuclear war, and the Russian side should not pretend otherwise.
The exercises are clearly intended to send a message to Washington, but also to the voters at home as President Vladimir Putin comes up for re-election.
It would be a little alarming if the Kremlin was planning to simulate a nuclear war just to show that Russia is still a power to be reckoned with. What is more alarming is that Russian commanders, though they would not admit it in public, continue to believe that a nuclear exchange between the United States and Russia is possible and thus that they should plan for it. Sadly, the situation is the same with U.S. commanders.
Otherwise, how to explain why each country has 2,500 nuclear warheads on hair-trigger alert? Even a fraction of either arsenal would be enough to deter and, if necessary, destroy any third nuclear power. And the high state of alert greatly increases the risk of a false alarm triggering a nuclear exchange.
The reported holes in Russia's early warning system, and the fact that a joint center for exchanging data from early warning systems, which leaders of the two countries agreed to establish at a summit in 2000, has yet to materialize, increases the risk of a doomsday even more.
The sheer number of launch-ready nuclear weapons on both sides makes it easier for terrorists to try to seize one or hack into the command and control network to launch one.
True, Russian and U.S. leaders have done a lot to reduce their nuclear arsenals, increase security and improve communications between their strategic commands. They need to do even more.
If they are serious about fighting terrorism, political leaders on the banks of the Potomac and the Moskva should prod their generals to game joint interdictions of nuclear terrorist attacks rather than U.S.-Russian nuclear wars.
TITLE: Ethnic Russians In Baltics Don't Need Inciting
TEXT: The Latvian parliament has passed a law dictating that from Sept. 1 all Russian-language high schools will switch to instruction in Latvian. The law makes an exception for subjects intended to preserve national cultural identity, that is Russian language and literature.
Such news has always been presented and received in our mass media as yet another attempt by Baltic nationalists to abuse the rights of the Russian minority. Since the triumph of patriotic forces in the recent State Duma elections, statements to this effect have tended toward the obscene.
Here is an excerpt from Russian nationalist web site rusedina.org (the name suggests United Russia): "The majority of deputies in the Latvian Saeima would hardly be pleased by the increasing frequency with which they are compared to fascists at protests held by Russian inhabitants of the country. At the same time, civilized people might have difficulty understanding why the current leaders of the republic find it necessary to naturalize and assimilate all national minorities .... On the day the barbarous law was passed, more than 2,000 people took part in a demonstration in front of the Saeima building to protect Russian schools. Most participants were schoolchildren. They were the first to say 'stop fascism!'"
I can imagine how the schoolchildren, forgetting their walkmen, were driven by the impulse of national consciousness to draw up a "Stop Fascism!" placard and, instead of hanging out or going to a disco, assemble before parliament. I suppose in a crisis anything is possible.
At the same time, it's clear that the protest is aimed mostly at the idea of what is effectively transplanting the Russian-speaking young people into a new political reality. That reality in which the prospects are bleak for those "Russian-language" political organizations that harbor a nostalgia for the U.S.S.R. I don't think the young people, who are quite easy to manipulate these days, will thank those who defended their "right" to live in the past and think in terms of a long-lost "state construct."
After all, they will eventually go to college in Riga, serve in the Latvian army, and elect the deputies and presidents of their country of residence. Is it really so bad for young people to be fluent not only in the conversational, but in the cultural language of that country to which they have joined their fates? This they have done since we see no mass repatriation of the Russian-speaking minority to Russia.
The real language situation in Latvia, as in the other Baltic states, is more balanced after a decade of independence. The logic of life has overruled nationalist obscurantism and today no one tries to keep Russians from speaking their language or publishing their newspapers. Many use Russian for business because most business there is Russian, and shop assistants do not refuse to serve Russian-speaking customers in their native language. Russian tourists are welcome. The Russian language, along with English, is becoming popular with Estonians, especially the young people, who understand that under the new globalism it isn't practical to refer to national roots. The language of the majority group is really only mandatory in the army and in legislatures at various levels. That's also how it is in Russia.
But we forget our own problems when we express our sympathy for the Russian speakers in the Baltics. Are we ready for "southern" minorities to struggle to protect their national identity in Russia, where they already make up a hefty portion of the population? Most likely not. Professional "patriotic" politicians only postpone the time when we will have to find sensible solutions to the challenges of the new age. And the situation is only made worse by the Rusisan government quietly supporting such forces. The odious rusedina.org site is financed in part by the Press Ministry.
Vladimir Gryaznevich is a political analyst with Expert Severo-Zapad magazine. His comment was first broadcast on Ekho Moskvy in St. Peterburg on Friday.
TITLE: Chris Floyd's Global Eye
AUTHOR: By Chris Floyd
TEXT: Ground Zero A man in Lawrence, Kansas walks into a day-care center. He has a gun in his pocket but nobody sees it. He goes up to the second floor, where the preschool kids are having their afternoon snack of cookies and juice.
He pulls out the gun and shoots a little boy in the head, leaving his face a mass of bone-flecked goo. Then he fires into the chest of the girl in the next chair; she dies still clutching the stuffed rabbit she brings with her every day. Another boy is hit while running for the door. The man is using special bullets, tipped with depleted uranium; the shot explodes the boy's shoulder in a spray of red mist and sends his gangly body hurtling down the concrete stairwell.
A day-care worker grabs the man, tries to wrestle him down. He turns, jams the gun barrel against her womb and fires. She dies, eviscerated, clinging to his shoulders. The other children have run away screaming, except for one little girl who's fallen in the slick of blood. She tries to scramble to her feet, slips again, can't find her footing, claws at the floor in a wild panic. The man fires into her back, obliterating her spine, the heavy bullet drilling through the polished wood below.
The room is filled with smoke and the sharp tang of freshly gutted meat. The man takes a desultory look around, shrugs his shoulders, then sits down on the snack table. When the police come and ask him why he did it, he answers forthrightly, without a shred of guilt or unease, as if it were the most natural thing in the world:
"Somebody said the guy who runs this place might attack me someday. I had questions that needed to be answered: Did he have a gun or a knife - or nothing? We must be prepared to face our responsibilities and be willing to use force if necessary."
The cops roll their eyes - another nutball. "So," says an officer, humoring him, "did he have any weapons?"
The killer shakes his head. "Nah, don't look like it. But he could have had some. What's the difference? - Say, you fellas aren't going to lock me up, are you? It was an honest mistake. I just got bad advice, that's all."
This fable is the precise moral equivalent of the Bush Regime's murderous misadventure in Iraq. Last week, the Regime's own duly-appointed, CIA-paid weapons hunter, David Kay, finally coughed up a dinosaur-sized bone and admitted, openly, publicly, what the sane world has long known: that Iraq had no weapons of mass destruction before the war - and in fact hadn't had any since George Bush Senior stopped supplying Saddam Hussein with the money and material to make them many years ago.
The existence of Iraqi WMD and the dire threat it posed to America and the world was the publicly stated cause for the Anglo-American invasion of Iraq. The utter falsity of this claim has now been established beyond rational dispute. Likewise, it is impossible for a rational person to believe that, in the absence of any real weapons, a substantial body of credible "evidence" for this phantom stockpile could have been amassed by the Anglo-American intelligence services. You can't have real evidence of something that isn't there.
Thus we come to this unavoidable conclusion: The Bush Regime launched a war of aggression on the basis of evidence that had to be, by its very nature, insubstantial, insufficient, false. That's the only kind of evidence they could have had. What does this mean? It means they have killed hundreds, perhaps thousands of children - blown them to pieces, shot them, crushed them, terrorized them, rendered them into hunks of rotting meat - in an act of moral insanity no different than that of a nutball in Lawrence, Kansas, shooting up a day-care center to "protect" himself from imaginary threats.
And they've reacted to the consequences of their crime with the same kind of moral nullity. Colin Powell - the "moderate" Bushist, we're told - simply shrugged his shoulders at Kay's revelations. "We had questions that needed to be answered," he said, while flying to Moscow to tell the Russians they must resolve all their problems peacefully, within the strict rule of law. "What was it [Saddam had]?" mused Powell. "One hundred tons, 500 tons or zero tons" of WMD? "Was it so many liters of anthrax, 10 times that amount, or nothing?"
Nothing, as it turns out. All those children - each one of them an individual human being, each one a unique and irreplaceable vessel of consciousness, a single coalescence of the blind, churning forces of nature into a star-point of awareness, brief but incandescent, worthy beyond measure, and every bit as valuable as any mother's tow-headed darling in Lawrence, Kansas or Crawford, Texas - killed, eliminated, snuffed out... for nothing. For zero.
Yet Powell dismissed these pointless killings, echoing George W. Bush's Solomonic declaration on the question of existing weapons versus hypothetical ones as a basis of war: "What's the difference?" Powell said the decision to kill the children was "based on the best intelligence we had at the time" - intelligence that, as we've seen, could not possibly have been substantial or convincing. But who cares? We heard rumors. "We had questions." We killed children. We found nothing. We're not guilty. It was bad advice, an honest mistake.
That's all they have left as a public defense: the ravings of a man who killed for no reason, who sits in the ghoulish mire he's created and calls himself good.
For annotational references, see the Opinion section at www.sptimes.com
TITLE: Iran Deputies Resign in Protest
AUTHOR: By Ali Akbar Dareini
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran - More than one-third of Iran's lawmakers resigned in protest Sunday over disputed elections and the parliamentary speaker charged ruling clerics with trampling on the rights of his countrymen.
Speaker Mahdi Karroubi appealed to Iran's supreme leader, Ayatollah Ali Khamenei, to help resolve the crisis caused by disqualification of thousands of liberal candidates from the Feb. 20 vote.
Some 124 lawmakers in the 290-seat Majlis, or parliament, resigned Sunday in a dramatic gesture intended to force the clerical hierarchy to reinstate the disqualified candidates.
The mass resignation "will determine Iran's direction: rule of absolute dictatorship or democracy," reformist lawmaker Mohammad Kianoush-Rad told The Associated Press.
Karroubi said he and reformist President Mohammad Khatami started new efforts to resolve the crisis, holding discussions with Khamenei, who has the final say on all state matters.
But Khamenei left the capital Tehran for an undisclosed location, making it difficult to reach him, parliamentary officials said.
Karroubi, the parliamentary speaker, launched a rare verbal attack on the Guardian Council, the unelected body of hard-line clerics that disqualified more than 2,400 reformist candidates from the legislative elections.
"Are you loyal to Islam if you pray daily, but then trample on the rights of the people?" said Karroubi, himself a cleric.
He accused the Guardian Council, whose 12 members are appointed by Khamenei, of "disrespecting democratic values and having no faith in a popular vote."
The furor began in early January when the Guardian Council disqualified more than 3,600 of the 8,200 people who filed papers to run in the polls. After protests and an opinion from Khamenei, the council on Friday restored 1,160 low-profile candidates to the list.
Reformists say the council disqualified liberal candidates to fix the election in favor of conservatives. Hard-liners lost control of the parliament in elections four years ago, and repeatedly have thwarted Khatami's efforts toward greater democracy and a relaxation of the Islamic social code.
The council denies political motives and argues that the disqualified candidates lacked the criteria to stand for election, even though more than 80 of them were elected in 2000.
Those lawmakers resigned Sunday.
"An election whose result is clear beforehand is a treason to the rights and ideals of the nation," resigning legislators Rajab Ali Mazrouei told the parliament.
The leader of the biggest reform party in parliament, Mohammad Reza Khatami, resigned and accused the Guardian Council of killing all opportunities for resolving the dispute.
"There is no hope for a solution. We will not participate in this sham election. Even if all those disqualified are reinstated today, there will be no time for competition. Elections on February 20th are illegitimate," said Reza Khatami, the president's younger brother and a deputy speaker.
Iran's leading reformist party, the Islamic Iran Participation Front, has called a meeting Monday and is expected to announce a boycott of the polls.
President Khatami called an emergency Cabinet meeting to discuss the dispute Saturday, but was forced to postpone it when he suffered severe back pain and was confined to his house by doctors.
On Saturday, President Khatami suggested his government would call off the elections.
"My government will only hold competitive and free elections... the parliament must represent the views of the majority and include all [political] tendencies," he said.
If he follows through, that would leave voting in the hands of hard-liners most likely relying on elite Revolutionary Guards and supporting military forces to organize the polls.
Many hard-line legislators did not attend Sunday's session, apparently hoping to deny it a quorum. But the quorum of 194 of the Majlis' total 290 seats was reached.
Of those attending, 124 resigned.
Karroubi said each resignation would be considered and put to the vote in future sessions, but he did not say how long that process would take.
One resigning legislator, Mohsen Mirdamadi, said that if hard-liners tried to hold the elections without government support, it would be "a full-fledged coup with the help of military forces."
TITLE: Pakistani Scientist Admits To Selling Nuclear Secrets
AUTHOR: By Matthew Pennington
PUBLISHER: The Associated Press
TEXT: ISLAMABAD, Pakistan - The founder of Pakistan's nuclear program, Abdul Qadeer Khan, has acknowledged he transferred nuclear technology to Iran, Libya and North Korea, a Pakistani government official said Monday.
Khan made the confession in a written statement submitted "a couple of days ago" to investigators probing allegations of nuclear proliferation by Pakistan, the official told The Associated Press on condition of anonymity.
The transfers were made during the late 1980s and in the early and mid 1990s, and were motivated by "personal greed and ambition," the official said.
The official could not give details of the nuclear transfers, but said they were not authorized by the government.
A meeting of the National Command Authority that controls Pakistan's nuclear assets was briefed on the statement at a meeting on Saturday, when Khan - long regarded as a national hero in Pakistan - was sacked from his position as a scientific adviser to the prime minister.
A military official briefed a number of Pakistani journalists late Saturday about Khan's confession. Khan had previously been reported as denying any wrongdoing. The government official who spoke to AP was familiar with the briefing.
The government official said the two-month probe into the proliferation allegations had reached its conclusion, but said it was up to the authority to decide whether to prosecute Khan and six other suspects in the case.
President General Pervez Musharraf, who heads the authority, is due to make an address to the nation about the progress of the investigation after the Muslim holiday of Eid al-Adha, the Feast of Sacrifice, which ends Thursday in Pakistan, officials said.
Pakistan began its investigation in November after revelations by Tehran to the International Atomic Energy Agency, the U.N. nuclear watchdog. Allegations of nuclear transfers to Libya and North Korea have also surfaced.
The government official said that "questions have been put" to two former army chiefs, General Mirza Aslam Beg and General Jehangir Karamat, to check information provided by Khan and other suspects during the "debriefings" - as the government has referred to the questioning of scientists.
The official stressed that the two generals were not the focus of the investigation. He said they told investigators they never authorized nuclear transfers.
However, the official said the probe had concluded there had been a lapse in security that allowed the transfers to take place, although no blame had been apportioned.
Analysts say that many unanswered questions remain over how powerful generals who oversaw Pakistan's nuclear program that began in the 1970s - with the aim of creating a military deterrent against rival India - could have been so in the dark about any nuclear transfers by its scientists.
The mission to create the bomb was conducted in secret, using black market suppliers to circumvent international restrictions on trade in nuclear-related technology. Pakistan conducted its first nuclear test in 1998.
In all, 11 employees of the Khan Research Laboratories, a top nuclear facility named after Khan, have been questioned since November, and some subsequently released. Officials say that three scientists and four security officials - military officers among them - are still being investigated.
Six are held in custody in an undisclosed location. Khan has been told to stay at his Islamabad home, where he is guarded with tight security.
TITLE: Bush To Order Intelligence Probe
AUTHOR: By Deb Riechmann
PUBLISHER: The Associated Press
TEXT: WASHINGTON - President Bush will sign an executive order to open an investigation into U.S. intelligence failures in Iraq, his way of quieting mounting election-year criticism from Republicans and Democrats alike.
The investigation will examine Iraq and other intelligence issues dealing with stateless groups, such as al-Qaeda, and secretive regimes, such as North Korea, a senior White House official said Sunday on condition of anonymity.
Given the broad mandate, the investigation's findings are not likely to be known until after the November presidential election.
Bush's decision comes amid assertions that America's credibility is being undermined by uncertainty over flawed intelligence used as a basis for invading Iraq. Despite months of searching, U.S. inspectors have found no banned weapons in Iraq. Former Iraq weapons inspector David Kay has said the administration's intelligence on Iraqi weapons was "almost all wrong."
Bush initially reacted coolly to setting up an independent investigation, then decided during the weekend to go forward.
By setting up the investigation himself, Bush will have greater control over its membership and mandate.
The senior White House official said it would be patterned after the Warren Commission, which conducted a 10-month investigation that concluded in 1964 that Lee Harvey Oswald acted alone in killing President Kennedy.
In appointing the members, Bush will draw heavily from experts familiar with problems in intelligence, the White House official said, describing them as "distinguished citizens who have served their country in the past."
Senator Jon Corzine, whose measure to set up a similar bipartisan commission to investigate prewar intelligence was defeated in the Senate last July, said any investigative panel must be able to probe the collection and analysis of intelligence as well as the use of the information, "including whether there was any misrepresentation or exaggeration of the intelligence."
"We must not lose sight of the big picture," Corzine said in a statement Sunday. "Americans are fighting and dying in Iraq because of what the administration told us about the intelligence."
Lawmakers from both parties say the intelligence flap has diluted America's credibility.
"The issue is not just shortcomings of U.S. intelligence," Senator Chuck Hagel, a senior member of the Senate Foreign Relations Committee, said Sunday on CNN's "Late Edition, but "the credibility of who we are around the world and the trust of our government and our leaders."
There was no indication when Bush would sign the order creating the panel. The White House also has not decided on a deadline for the investigation - a sensitive issue since its findings could become an issue in the presidential campaign.
"That's not something you want to do from horseback," Kay told "Fox News Sunday. "It's going to be a time-consuming process. Whether it's going to take six months or nine months, I have no idea at this point."
Senator Jay Rockefeller, vice chairman of the Senate Intelligence Committee, said the commission must start investigating soon. Delaying any report until after the election would be a "big mistake," he said on Fox.
David Albright, a former weapons inspector, told The Associated Press he feared the administration might try to use the commission as a way to delay judgments about the intelligence community and the administration's use of the information it receives.
"The bottom line for them [the Bush administration] is to delay the day of reckoning about their use of the weapons of mass destruction information," Albright said.
"David Kay can blame the CIA and say, 'Oh, I made all these comments based on what I heard from the intelligence community.' President Bush can't do that. He's the boss."
TITLE: Stampede Kills 244 At Muslim Hajj
AUTHOR: By Rawya Rageh
PUBLISHER: The Associated Press
TEXT: MINA, Saudi Arabia - A stampede killed 244 people and injured hundreds as pressure built up among tens of thousands of Muslims performing the annual pilgrimage. The toll was the highest in seven years for the disaster-prone hajj.
The crowd got out of control as people moved along a wide ramp leading to the "stoning of the devil" ritual - where pilgrims throw stones at three stone pillars, symbolizing their contempt for the devil.
"All precautions were taken to prevent such an incident, but this is God's will," said Saudi Hajj Minister Iyad Madani.
The authorities said that with pressure from behind, a few pilgrims fell down and set off a stampede.
"Caution isn't stronger than fate," Madani said.
Brigadier Mansour al-Turki of the Saudi General Security Forces said about 10,000 general security officers were on duty at the time in that area.
The officers intervened and succeeded in "containing the pushing toward the pillar to prevent more pilgrims from falling," an unidentified Saudi Interior Ministry official told the state-run Saudi Press Agency.
Pilgrims were trampled to death on their way to the stoning ritual in 1998, 2001 and last year.
A pilgrim who was performing the hajj a third time, Sami Ibrahim, said the approach to the stoning is always "dangerously overcrowded."
"The pushing and shoving make things really hard in this particular place," said Ibrahim, an Egyptian.
Most of those killed Sunday were pilgrims who live in Saudi Arabia and who may not have been authorized to participate, Madani said. Not all residents have the $350 to attend legally.
It was unclear how many foreign pilgrims died, but Egypt's Middle East News Agency reported that 13 Egyptians were among the dead.
"We are deeply saddened when we hear such news," said a Saudi pilgrim, Mohammed el-Shahrani, "but all we can do is to pray to God to keep us safe."
The victims, he said, "are now martyrs, may God bless them." Muslims believe that if a person dies while performing the hajj, he or she goes directly to heaven.
Sunday's tragedy was the worst disaster at the hajj since 1997, when 340 pilgrims died in a fire at the tent city of Mina, near Mecca.
About 2 million Muslims are participating in this year's pilgrimage.
To control the crowd, the Saudis set quotas for pilgrims from each country.
On Monday and Tuesday, the pilgrims will complete the stone-throwing ritual. They then have to walk once more around the Kaaba, the black cubic structure in the center of Mecca's Grand Mosque, to finish the hajj.
Sunday began with the pilgrims praying at dawn, and then gathering pebbles to throw at the pillars for the ritualized stoning of Satan.
Someone had scrawled "USA" on one of the pillars. Egyptian pilgrim Youssef Omar lobbed pebbles at it, shouting that America was "the greatest Satan."
TITLE: Islamic Jihad Leader Killed In Israeli Raid in Gaza Strip
PUBLISHER: The Associated Press
TEXT: GAZA CITY, Gaza Strip - Israeli soldiers killed four Palestinian militants, including a one-armed leader of the militant Islamic Jihad group, in an intense gun battle in a Gaza refugee camp Monday, Palestinian witnesses and doctors said.
The army said troops came under fire as they attempted to arrest the militia leader, Yasser Abu Ayish, at his home and returned fire. The army confirmed three gunmen had been killed, while one soldier was lightly injured.
Palestinian witnesses said four people were killed and the militant's house in the Rafah refugee camp was destroyed. Abu Ayish and his brother at one point ran out of ammunition, witnesses said. The army said soldiers searching the building after the firefight found the militant leader's body inside the house.
Abu Ayish's legs and arm were blown off last year when a rocket he was building exploded prematurely. Abu Ayish, who was using a wheelchair, was the leader of the Islamic Jihad military wing in the Rafah area, and was mainly involving in building home-made rockets. He was high on Israel's wanted list.
The Israeli operation came a day after soldiers carried out a similar raid in the West Bank town of Jericho. One militant was killed.
David Baker, an official in Prime Minister Ariel Sharon's office, described the raids as pre-emptive "search and arrest" operations. "We will not wait for these same terrorists to show up on our doorsteps," he said.
On Sunday, Israeli Defense Minister Shaul Mofaz said that the heads of violent Islamic groups are targets for assassination.
Mofaz issued the threat in response to a declaration by the spiritual leader of Hamas, Sheik Ahmed Yassin, that Hamas is making an all-out effort to kidnap Israeli soldiers.
"The statements of Yassin just emphasize the need to strike the heads of Hamas and the Islamic Jihad," Mofaz told the weekly meeting of the Israeli Cabinet, according to an Israeli official who attended the meeting.
The statements by Mofaz and Yassin threaten to inflame an already tense situation. In more than three years of violence, 2,672 people have been killed on the Palestinian side and 919 on the Israeli side.
Last week, Israel killed eight Palestinians in a shootout in Gaza City, while a Palestinian suicide bomber killed 11 people in Jerusalem. Hamas took responsibility, a day after a claim from the Al Aqsa Martyrs' Brigades, loosely linked to Palestinian leader Yasser Arafat's Fatah movement.
Hamas officials did not immediately react to Mofaz's comments.
During the conflict, Israel has carried out many pinpoint attacks aimed at leaders of the Hamas and Islamic Jihad militant groups - often prompting a violent response. In September, Yassin narrowly escaped an Israeli airstrike in the Gaza Strip.
But Israel has greatly reduced the number of targeted killings in recent months. Last month, Mofaz's deputy, Zeev Boim, retracted comments saying Yassin should be "eliminated," saying later that no decision had been made.
Hamas, responsible for dozens of suicide bombings over the last three years, also appeared to have scaled back its activities, until a Hamas female suicide bomber killed four Israelis at a Gaza-Israel checkpoint on Jan. 14.
Yassin called for the kidnapping of Israeli soldiers after Israel released 400 Palestinian prisoners as part of an Israeli exchange with the Lebanese Hezbollah group for a businessman and the bodies of three soldiers.
TITLE: IN BRIEF
TEXT: Jail Standoff Ends
PHOENIX, Arizona (Reuters) - Two inmates of an Arizona jail surrendered on Sunday after holding a woman prison officer hostage in an observation tower for 15 days, ending the longest U.S. prison standoff in decades.
The standoff, which started on Jan. 18 at the Lewis state prison 45 miles from Phoenix, ended at 6:30 p.m. without violence, Alan Ecker, a spokesman for the Arizona department of corrections, told reporters.
The inmates, both serving long sentences for violent crimes, originally took two officers hostage. One, a man, was released after a week.
Haitians Protest Aristide
PORT-AU-PRINCE, Haiti (AP) - Tens of thousands of government opponents marched peacefully Sunday to demand President Jean-Bertrand Aristide's resignation, a day after the embattled leader rescinded restrictions on street protests and vowed to end the country's unrest.
The protesters walked nearly 10 miles from a park in suburban Petionville to the capital, protected by a contingent of police.
On Saturday, Aristide rescinded a police order outlawing marches in Port-Au-Prince after a one-day meeting with Caribbean leaders in Jamaica, who put forth measures to end a three-year political impasse in Haiti.
Sunday's demonstration was organized by the Democratic Platform, a coalition of opposition political parties and civil society groups.
Airlines Cancel Flights
LONDON (AP) - British Airways and Air France on Saturday announced the cancellation of seven flights to and from the United States because of security concerns. The United States has indications of al-Qaida's continued interest in targeting international flights to America, a government official said.
British Airways canceled four flights between Heathrow Airport and Washington on Sunday and Monday and one from Heathrow to Miami on Sunday. Air France canceled two Paris-to-Washington flights. There are no plans to raise the terror alert in the United States because of the latest threats, Homeland Security Department spokesman Brian Roehrkasse said.
Empress of Japan?
TOKYO (AP) - A government panel plans to recommend that Japan amend a law to let women inherit the Chrysanthemum Throne, a newspaper reported Sunday, as the imperial family faces its most serious succession crisis in centuries.
The birth in December 2001 of Princess Aiko, the only child of Crown Prince Naruhito, has generated intense debate over whether the Imperial Household Law should be changed to allow her one day to reign.
The law, which was drawn up in 1889 and survived an overhaul of the country's constitution after World War II, dictates that only men can inherit the throne.
However, no boy has been born to the imperial family since the 1960s.
Taiwan Links for Unity
TAIPEI, Taiwan (AP) - About 70,000 people linked hands on Sunday to create a human chain in a show of unity against rival China's military threats against the island, officials said.
Cars stopped at intersections for three minutes as people linked hands throughout southern Tainan County, home of President Chen Shui-bian, organizers said.
The chain stretched 40 miles, said Su Huan-chih, head of the Tainan County government.
The event, called "Hand in Hand to Protect Taiwan," was a rehearsal for an even longer human chain on Feb. 28, which organizers say will stretch across the island at a distance of more than 190 miles.
TITLE: Russian Ice Stars Still Lead Field
AUTHOR: By Salvatore Zanca
PUBLISHER: The Associated Press
TEXT: BUDAPEST - World champion Yevgeny Plushenko and Yelena Sokolova lead a Russian squad hoping for another sweep at the European figure skating championships, even without some of its top skaters.
Irina Slutskaya, Alexei Yagudin, and Irina Lobacheva and Ilya Averbukh are gone - with nine European titles between them.
But the Russians will try to retain the four championships they won last year. Men's qualifying began Monday, along with the pairs short program.
Plushenko has not lost at the Europeans since 1999, winning titles in 2000, 2001 and 2003 while missing the 2002 competition. But various knee problems have been ailing him. He skates despite a torn meniscus in his right knee, and now has pain in his left knee.
Though he practiced last Friday, Plushenko could still withdraw and be replaced by alternate Andrei Lutai. Surgery on his right knee is an option after the season.
"That is one of the possibilities. We'll still consult doctors. It's not excluded that there will be surgery, but maybe we can avoid it," Plushenko said.
Sokolova could replace Slutskaya as the top European woman to challenge American Michelle Kwan at the world championships in Dortmund, Germany, in March. Slutskaya, a five-time European champion, beat Kwan the last five times they met in major competitions but has been unable to compete this season because of health problems.
Sokolova, with an array of triple-triple jumps, still is formidable. She was second behind Slutskaya last year after an absence of five years from major championships. Sokolova just won her second Russian title, and also was second to Kwan in the world championships last year.
TITLE: Federer Outguns Tired Safin To Sieze Second Grand Slam
PUBLISHER: The Associated Press
TEXT: MELBOURNE, Australia - Roger Federer looked every bit like the world's top-ranked men's player.
Playing shrewd and confident tennis, Federer won the Australian Open 7-6 (3), 6-4, 6-2 on Sunday against a weary and frustrated Marat Safin.
Federer became the 23rd man to hold tennis' top spot when the new rankings were released Monday. He's the first Swiss man to be No. 1.
"What a great start to the year for me, to win the Australian Open and become No. 1 in the world," said Federer, the reigning Wimbledon champion. "To fulfill my dreams, it really means very much to me."
Safin, fighting back from an injury-plagued 2003 season during which the former top-ranked Russian lost his last six matches of the year and slipped to 86th, became a crowd favorite while beating Andy Roddick and Andre Agassi in consecutive matches.
But 30 sets - tying a Grand Slam record - and nearly 21 hours on court took their toll. Safin put most of his energy into trying to win the first set and was clearly deflated when he didn't.
His famed temper flared, getting a code violation for trashing a racket after a double-fault. But by the end, Safin looked as if he were slogging through mud, his head drooping as Federer broke him twice in the third set.
The packed center court crowd tried to rally him on, but only served as a distraction.
"Don't give me a hard time," he implored as shouts of encouragement were mixed with demands for a more competitive match. "I'm trying my best."
When it was over, Safin managed a smile.
"I'm really sorry, I just ran out of gas today," he said.
Kim Clijsters didn't run out of gas, but she also wasn't devastated by her loss in the women's final to Justine Henin-Hardenne for the third time in three Grand Slam finals.
Clijsters badly sprained an ankle earlier in the month and had been in doubt for the Australian Open up until she took the court for her first match.
Henin-Hardenne retained her top ranking and has won three of the last four Slam events. She's setting her sights on the only one that has eluded her: Wimbledon.
Martina Navratilova made her last appearance at Melbourne Park when she and Leander Paes, the defending mixed doubles champions, lost 6-1, 7-6 (3) Sunday to Elena Bovina and Nenad Zimonjic, who teamed up for the first time.
Navratilova, seeded fourth with Paes, has said she'll retire from tournament play at the end of the year.
"I'm not saying goodbye to playing tennis, I'm just saying goodbye to hitting the ball here," she said. "I've still got a whole year to go."
Navratilova has won 167 singles titles and 173 in doubles. She has a total of 58 Grand Slam titles.
While Safin never had an easy match, going five sets three times, Federer lost only two sets in six rounds and spent only 10 1/2 hours on court before the final.
He started off a little slow, getting broken in the third and seventh games, but soon found the range with his all-around game, hitting baseline winners from both sides and winning two-thirds of his net approaches.
Safin slammed 31 aces in the semifinals against Agassi, one of the best serve returners. He had just three against Federer, who had eight of his own.
Safin's antics didn't bother Federer. Neither did the music resounding through Rod Laver Arena from a nearby outdoor concert. About the only thing that broke his focus was a cell phone ringing as he answered a question in the news conference.
"[Safin] had to battle. He's been longer on the court than me, way longer," Federer said. "It's really nice to see him back. He's a great guy and a great player."
The 22-year-old Federer clinched the top spot in the rankings with a semifinal victory over Juan Carlos Ferrero.
"I thought I played great basically from the first round," he said.
Safin matched American Harold Solomon's record of 30 sets for a Grand Slam tournament set in the 1976 French Open. Solomon lost the final at Roland Garros in four sets to Adriano Panatta.
"I was out of energy, my legs were just too tired," Safin said. "I was a little too tired to keep up with him. I felt that I was missing just a little bit. Against Roger, you have to do better than that. I'm not playing a yo-yo. He knows how to play tennis."
Still, he was happy with two weeks of tennis that took everyone by surprise, including himself. Safin beat top-seeded Roddick in the quarterfinals and ended Agassi's 26-match Australian Open winning streak in the semifinals.
"For me to beat Roddick and to beat Agassi, it was really important," he said. "I always thought that Agassi was unbeatable for me. I'm really glad to play my best tennis after the injuries I had last year."
TITLE: Kotlayrova Breaks Record
PUBLISHER: The Associated Press
TEXT: MOSCOW - Russia's Olga Kotlyarova broke the long-standing indoor women's 600 meter world record by nearly two seconds Sunday at the Russian Winter IAAF indoor meet.
Kotlyarova was timed in 1 minute, 23.44 seconds in the seldom contested race, beating the previous record of 1:25.46, set by Russian Lyubov Kiryukhina in 1987.
Kotlyarova, a specialist in the 400, was out of competition for two years after giving birth to her daughter Tatiana in late 2002.
Olga Raspopova of Russia set a new European record in another rarely run race - the women's 1,000. She clocked 2:34.68, shaving 0.12 seconds off the previous mark of 2:34.80, set by Germany's Brigitte Kraus in 1978.
Two-time triple jump world champion Tatyana Lebedeva of Russia set a new meet record with a leap of 49 feet, 1 1/2 inches, breaking the old mark of 48-4 3/4 set by Anna Biryukova in 1995.
Vitaly Shkurlatov of Russia won the men's long jump with a leap of 26-8 1/4. Cuba's Ivan Pedroso, an Olympic and four-time world champion, cleared only 26-3 1/2 to finish third.
Brazil's Claudio Souza won the 60 in 6.64. Gennady Chernovol of Kazakhstan was second in 6.66, and Russia's Alexander Smirnov was third in 6.68.
TITLE: SPORTS WATCH
TEXT: Maier Wins Again
GARMISC-PARTENKIRCHEN, Germany (AP) - Hermann Maier won his fifth World Cup super-giant slalom title Sunday, and also put himself in the running for the overall crown.
Maier earned four straight super-G championships before a motorcycle accident in August 2001 nearly cost him his right leg.
He returned late last season.
"It's the best of all of my World Cup wins," Maier said. "Who would have imagined that I would come back from all of that and win back the super-G ?"
O'Neal Lashes Officials
TORONTO (AP) - Shaquille O'Neal ripped the officials after the Los Angeles Lakers beat the Toronto Raptors 84-83 on Sunday.
"My message ... is get some people in there that understand the game and don't try to take over the game because people pay good money to see good athletes play," O'Neal said after scoring 36 points.
O'Neal was so frustrated with the officiating that he twice used profanities on live television in a postgame interview. When informed he was on live, O'Neal replied with a vulgarity.
Drunk Best Banned
LONDON (AFP) - Former Manchester United star George Best was banned from driving for 20 months on Monday and fined 1,500 pounds after pleading guilty to drink driving at a London court.
Best, 57, was stopped by police in south-west London in the early hours of Friday morning.
The star has had a troubled time in the last few months after reportedly hitting the bottle again.
Last November it was claimed Best threw bricks through the window of his wife Alex's car after he suspected her of having an affair.
The football legend split from his 31-year-old wife last September after failing to give up drinking despite undergoing a liver transplant in July 2002.
Camara Saves Guinea
TUNIS (AFP) - Veteran striker Titi Camara saved Guinea from having their African Nations Cup fate decided by the drawing of lots when he smashed home a late equaliser to give his side a 1-1 draw with Tunisia and a place in the quarter-finals.
The result gave Guinea the runners-up spot in Group A behind the hosts and killed off little Rwanda' dreams of snatching the second qualifying spot.
Rwanda, playing in their first finals, beat Democratic Republic of Congo 1-0 in Bizerte but Camara's goal six minutes from time at Rades gave Guinea breathing space as they finished a point ahead.
Had both games ended 1-0, then Guinea and Rwanda would have drawn lots because they would have finished level on points with identical goal difference and goals scored while their own game last week finished in a 1-1 draw.