SOURCE: The St. Petersburg Times
DATE: Issue #975 (43), Tuesday, June 8, 2004
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TITLE: In-Fill Construction Proceeds In Spite of Legal Ban
AUTHOR: By Vladimir Kovalev
PUBLISHER: Staff Writer
TEXT: Shortly before a city-wide law to protect
green areas of the city from being
destroyed by construction companies
came into force Sunday, Governor
Valentina Matviyenko reportedly
signed a decree allowing local developer
LEK ESTATE to chop down
trees around buildings No. 45 and No.
51 on Zanevsky Prospekt.
The company plans to erect a new
residential block on the site within the
next year.
Residents of 51 Zanevsky Prospekt
have set up an action group that is angry
that Matviyenko “makes promises
by signing one document and breaks it
[the promise] by signing another.”
“We have lived here all these years
and now they would come and destroy
all the trees around here,” Leonid Fedotov,
a member of the action group
said Monday in an interview. “There is
a childrens’ playground. Where will
they play now? And why is this that we
have to put up with all the noise of construction?”
“If [City Hall] would give us apartments
of an equal value, it would have
been fine, but there are rumors they
want to relocate us to somewhere in the
suburbs,” he said. “Why would we want
to do that?”
Another resident, who wanted to be
identified only by his first name, Kirill,
and who said he had experienced the
horrors of World War II, looked upset.
Pointing at trees growing along
Zanevsky Prospekt, he said: “I remember
we planted them in 1965 on Victory
Day anniversary and now they want to
chop them down.”
The action group has a copy of a decree
dated May 5 and signed by
Matviyenko, that “approves a decision
made by the investment and tender
commission Dec. 23, 2003 to allow the
joint stock company LEK ESTATE to
construct a building with additional
premises on a plot of land of 10,104
square meters located in the Krasnogvardeisky
district.”
Meanwhile, the law to protect green
areas that came into force at the weekend
bans construction in so-called “areas
of common use,” in other words in parks, gardens and yards next to residential
buildings. Any developer who
has to chop down trees so that they can
start a construction project, must plant
the same amount of trees nearby, the
law says.
“The law says that the amount of
money a company must pay for removing
trees cannot be less than the
real cost of planting new trees,”
Greenpeace wrote in a commentary on
the law. “Before the law was introduced,
the cost was made significantly
less, just a few hundred rubles for one
mature tree,”
Matviyenko promised during her
successful gubernatorial campaign last year to halt construction encroaching
on green areas, but Smolny delayed the
law for months after it was approved by
the Legislative Assembly. In those
months, she appears to have given approvals
for a lot of construction in green
areas.
Matviyenko signed the law May 21
and it came into force Sunday.
Greenpeace said contracts signed
before the law was put in force would
not be revised because the law is not
retroactive.
Meanwhile, a protest over fill-in construction
on at 9 Institutsky Prospekt in
the in Vyborg district stopped traffic
Monday after residents blocked the
road to make their anger felt.
After weeks of actions against a construction
project in their yard and 24-
hour patrols organized by residents
themselves to prevent construction vehicles
from coming into their yard, City
Hall gave an order to stop the construction
Thursday to cool down a conflict
that had raised hackles.
But the next day two construction
cranes drove into the yard and installed
additional fences around the planned
construction site.
“We went there to support the residents,”
said Andrei Raikov, a member
of National Bolshevik Party, who
headed the protest in a telephone interview
Monday. “We stopped traffic for
two hours and demanded that the local
authorities show up to explain themselves
to residents.
“This situation is very indicative; authorities
promise something in words,
but in practice they do absolutely the
opposite thing,” he said. “Nevertheless,
we still hope the construction there will
be stopped in the end. We believe in
that.”
Mikhail Amosov, head of the
Yabloko faction in the Legislative Assembly,
said the 9 Institutsky Prospekt
case showed City Hall’s was ignoring
landowners’ rights.
“This case appears more difficult
than others about green areas being destroyed,”
Amosov said Monday in a
telephone interview.
“There is a rent agreement signed in
1969 between City Hall and the residents
for this area, and they have paid taxes
for it for many years,” he added. “Some
outsiders have now come to the residents’
land and started building on it.
“I have looked at the residents’ documents
and I think they are in order.
This really puts egg on City Hall’s face,”
he said.

TITLE: Citizens Fear Taxi Reform
PUBLISHER: Staff Writer
TEXT: Ordinary St. Petersburg citizens are
worried that City Hall’s plans to clean
up the taxi industry, including putting
drivers in uniforms, will mean they
lose the relatively inexpensive luxury
of waving down gypsy cabs.
“If they forbid gypsy cabs, it will be
a catastrophe for me,” said Svetlana,
28, an English teacher. “I just won’t be
able to afford a legal taxi.”
The plan to reform the city’s taxi
service popped up after St. Petersburg
governor Valentina Matviyenko last
month expressed her dissatisfaction at
the disorderly nature of the city’s taxis.
A new law is expected at the beginning
of next year.
“Foreign guests come to St. Petersburg
and strangers at airports and railway
stations grab them by the sleeve
and offer to drive somewhere for an
unclear price,” Matviyenko said at a
recent government meeting.
“We should get rid of this phenomenon,”
she said. “It’s improper to
grab people by their arms as if they are
in some wild village.”
The city administration said the taxi
market has slipped out from under state
control in the city and causal drivers take
money for offering rides without paying
any taxes or meeting any standards.
In response, City Hall has developed
a plan to regulate the industry.
It intends to set standards for the
mechanical safety and appearance of
the cars, the qualifications and health of
drivers and for taxi meters to be installed.
Alexei Gerashchenko, spokesman
of the city’s transport committee, said
the taxi industry is ridden with problems.
“For instance, a client should be able
to find out how much he will have to
pay before he sits in a taxi,” he said.
“Taxis should be equipped with tamperfree
taxi meters so that clients are not
cheated.”
The city has 1,500 to 2000 official
taxis or cars providing taxi service on a
legal basis, he said.
Meanwhile, the rest of the city’s
demand is fulfilled by chastniki, (private
drivers) or gypsy cabs, who give
rides illegally.
President Vladimir Putin himself
once considered supporting his family
in this way after he resigned from
the KGB during a 1991 hardline
coup, the Associated Press quoted
him saying.
“Honestly speaking, I thought
about becoming a taxi driver,’’ Putin
recalled, saying he considered using
his own car, a Russian-made Volga
sedan that he bought in East Germany,
the AP cited Putin said as saying
in the book, “Vladimir Putin:
Road to Power,’’ written by journalist
Oleg Blotsky.
Gerashchenko said daily demand
for taxis in the city is 4,000 to 5,000
cars.
A person who flags down a chastnik
does at least two things wrong —
assists someone to evade the taxman
and puts his life at risk, he added.
“When such clients go for a chastnik
they can never be sure about the
mechanical condition of a car, the
health of the driver, the driver’s skills
or knowledge of the city,” he said.
However, most people in the city
still prefer to use illegal driver because
they are usually cost half the
price of official taxis.
“I have never been afraid to wave
down a gypsy cab,” Svetlana said.
“But even if I was I would have no
other choice because an official taxi is
too expensive for me.”
Svetlana said a trip from Nevsky
Prospekt, where she works, to Grazhdansky
Prospekt, where she lives,
costs a maximum of 200 rubles
($6.90) by gypsy cab. An official taxi
would charge no less than 400 rubles
for it.
An official of the St. Petersburg
Taxi Transport Association, who didn’t
want to be named, said legal taxis
charge more because their service is
more reliable and because they have
to pay taxes and other statutory fees.
If City Hall’s plans come into force
the number of illegal drivers will most probably decrease because there will
be more controls.
Matviyenko said the city should
create a situation in which “all illegal
taxi drivers realize that there will be
no illegal rides.”
Svetlana said she was “really upset”
to hear such news.
“Gypsy cabs save me every time I
feel sick or too tired after work to
spend 1 1/2 hours in public transport
to make my way home,” she said.
Valentin Gorelov, 30, a gypsy cabdriver,
said he gives rides in the
evening after his regular job is finished
to make extra money for the family.
“I have two kids, and if I don’t give
these rides, it will be very hard for us
to live a more or less decent life on
the salary that I have,” Gorelov said.
The representative said that the
city’s taxi market has been in chaos
over the last decade.
“In the end it is the clients who
suffer,” he said. “We do need some
regulations.”
Yelena Doronina, an analyst with
the local branch of the Federal Service
for Supervision of Transportation,
said the illegal taxi market was
flourishing because “nobody has yet
taken on the task of organizing it. Besides,
there is no legal basis for this
market,” she said.
See editorial, page 14

TITLE: Doubts Raised Over Funding to Fight AIDS
PUBLISHER: Staff Writer
TEXT: Doubts are being raised about how a
group of nongovernmental organizations
that promote prevention and
treatment of HIV/AIDS in Russia will
handle an $88 million grant to the country
from international donor the Global
Fund.
“It appeared doubtful [after a review
of the proposal] that this consortium
was competent enough to implement
a project of this magnitude at the national scale,” organizers of the 12th
AIDS, Cancer and Related Problems
Conference, held in St. Petersburg at
the end of May, said in a joint statement.
The conference, one of the most respected
of its kind in Russia, expressed
concern just a month before the Global
Fund is scheduled to decide on a reported
$200 million-plus, fourth-round
grant and in the wake of President
Vladimir Putin’s criticism of NGOs in
his recent state of the nation speech.
“A different objective has been a
priority for some of those organizations,
namely, getting financing from
influential foreign and domestic foundations,
while others serve dubious
group and commercial interests,”
Putin said.
Urban Weber, the Global Fund’s
Russia director, refused to comment on
Putin’s remarks.
The Global Fund to Fight Aids, Tuberculosis and Malaria was set up after
a meeting of the G-7 leading industrial
powers and Russia in Okinawa in 2000.
It has collected private and public funds
to battle the diseases.
A spokesman for AIDS Foundation
East-West, a member of the
NGO Consortium that is to receive
$88 million, said the consortium
works directly with the government
and that Putin’s comments were not
aimed at it.
The $88-million, third-round grant
of the Global Fund will be used to expand
and fuel programs already operating,
Marty Bell, AIDS Foundations
East-West’s head of mission in Russia,
said in response to the conference’s allegations.
“There’s no risk of us not being able
to carry it out,” he said.
The grant will fund about 30 different
programs, Bell said.
Awarded last November, the grant is
scheduled to be signed off on sometime
this month, then disbursed to the consortium,
Weber said.
According to Global Fund guidelines,
a Country Coordinating Mechanism,
consisting of both government
ministries and NGOs, must apply for
the grant. Since Russia did not have a CCM at the time of application last
May, the consortium was permitted to
apply in its place.
“Only in the absence of this [CCM]
do we accept proposals from other
coalitions,” Weber said.
Andrei Kozlov, director of the
Biomedical Center, which sponsored
the conference, questioned the legitimacy
of five organizations, two of
which are foreign, being permitted to
act in place of a CCM.
The members include the Open
Health Institute, founded by the
Soros Foundation’s Open Society Institute,
AIDS Foundation East-West,
AIDS Infoshare, Focus-Media and
U.S.-based Population Services International.
“These NGOs which applied and
‘sort of’ received this grant have been
working in their areas for only a short
time,” he said. “Some of them became
organized recently and have not made a
major impact; they cannot represent
Russia. But the Global Fund is giving
this huge amount of money — this
raises questions.”
“When they came [to the conference]
and they presented the text [explaining
the programs], they used words
which are not Russian, which means
that the text was written by a foreigner
and it was then [translated] into Russian,
also by a foreigner,” Kozlov said.
“There are bodies in Russia which can act on behalf of Russia,” Kozlov said.
“Why are international organizations
sitting in Moscow trying to represent
Russia?”
Kozlov and conference participants
questioned the ability of the consortium
to implement its projects and the
NGOs’ ability to be effective outside of
Moscow.
“The process of the selection of the
regions where the project will be implemented
is mistrustful because five of
the nine members [of the selecting committee]
are representatives of the consortium,”
the conference statement
said.
“If five members vote for the region
... then it’s going to be their decision,”
Svetlana Palamodova, research manager
at the Biomedical Center, said.
“They are basically going to be distributing
money according to their political
interest.”
The selection process will not happen
until after the money is disbursed
and a questionnaire, developed by the
NGO Consortium as well as the Health
Ministry, can be sent out to the 89 regions.
The funding will then be allocated
on the basis of the regions’ scores,
Bell said.
Conference participants also expressed
concern on several other issues,
including the way the grant is budgeted.
“$19 million is indicated to be used
for drugs, but only one million of it is planned to be spent on antiretrovirals;
$10 million is budgeted for administrative
costs,” the conference statement
said.
Bell could not comment on the figures,
other than to say they sounded
not “quite right.” He reinforced the legitimacy
of the consortium and its intent
to work as a whole to Russia’s
benefit.
“There’s a transfer of information
between the East and the West and the
West and the East,” Bell said. “Everyone’s
going to benefit from the lessons
learned and from some of the mistakes
that have been made in other countries.”
Once the contract is signed for the
third round, a two-year disbursement
plan totaling $31 million will be decided
by the Global Fund’s board.
“If implementation is successful,
then we will extend the contract for the
other remaining three years,” Weber
said.
Russia has since formed a CCM, of
which the NGO Consortium is a signing
member, in preparation for the
fourth round of the Global Fund,
scheduled to be decided at the end of
this month.
Although Weber refused to comment
on the amount, one source put the
sum at $230 million, half of which will
be allocated to HIV/AIDS prevention
and treatment.

TITLE: Svetlana Village Offers Therapeutic Refuge
PUBLISHER: Special to The St. Petersburg Times
TEXT: SVETLANA, Leningrad Oblast - Some 160 kilometers east of the hustle and bustle of St. Petersburg, nestled in the fertile, river-crossed lands surrounding Lake Ladoga, exists a small, unassuming community named Camphill-Svetlana. 
 
Usually called simply Svetlana, the village is home to an international group of nearly 40 people who are transforming the landscape for Russians with disabilities.
 Svetlana, a fully-integrated community for people with special needs, is the only one of its kind in Russia. It was founded in 1992 as a joint venture between a group of Russians and the Camphill Village Trust of Norway, and is affiliated to the international Camphill organization.
 Almost 100 village communities in Europe, the United States, Canada, Africa and India are members of the organization that was launched in 1939 by Austrian pediatrician Karl Koenig. Camphill aims to establish communities where each person contributes to village life to the best of their ability, regardless of any mental or physical handicap.
 "The idea behind Svetlana Village and all Camphill communities is to recreate social life," said Svetlana's British director, Mark Barber. "In modern society, people are increasingly lonely and living ever-more anti-social lives. The wonderful thing about Camphill is that it's such a positive attempt to recreate the world. Many people, both those with special needs and volunteers, have found their salvation here."
 
 <strong>
FARMING IDYLL
 </strong>Traditional village life revolves around the farm, and Svetlana Village is no exception. Its farm has a barn housing 10 dairy cows and several pigs, an adjoining dairy to process milk, cheese and other products, a garden, grain fields, a herb workshop and an earth cellar. A bakery and doll workshop are also on site. 
 
People with special needs, who are referred to as &quot;villagers&quot; live together with volunteers, referred to as &quot;co-workers&quot; in three separate houses, where they share meals and various household duties like food preparation and cleaning. A fourth house is under construction thanks to a donation from the Village Trust of Norway.
 The disabled, who were reasonably well looked after in Soviet times, have little support in contemporary Russia. 
 Children with special needs can be a huge burden for already financially-strapped families, and doctors often encourage parents to leave their children in the care of understaffed and overcrowded <i>internaty,</i> institutions where they receive little, if any, personal attention. 
 Svetlana doesn't advertise, so information about the village travels by word of mouth. Interested families independently approach Svetlana and the village isn't able to accept any applicants from institutions. 
 &quot;We've tried to take people from internats, but legally we have no way to keep them,&quot; Barber said. &quot;Unfortunately, we're in this position where we can only take people from parents or guardians.&quot; 
 A group of long-term coworkers assesses prospective applicants for their suitability for living in Svetlana's relatively unstructured environment. 
 
 <strong>
INTEGRAL ROLE
 </strong>Barber insists that Camphill-Svetlana is not merely a community for people with disabilities, but rather a community where they play an integral role. 
 
&quot;When villagers arrive, we don't look at their abilities and decide where they fit in,&quot; he said. &quot;Instead, we look at what the village needs. 
 &quot;In this way, they are not constantly reminded of their disabilities. In fact, it's quite the reverse, a great deal is expected of them. They sense that and that's why amazing things happen here. They aren't just invalids doing some useless therapeutic work.&quot;
 Wheelchair-bound Lena came to Svetlana from Tashkent, Uzbekistan, in 1999 and works in the bakery, where she actively engages others in lengthy conversations about philosophy and politics. 
 &quot;When I got here for the first time, it was hard to get used to living without my family,&quot; she said. &quot;At home, my family helped me do everything and here I had to learn how to take care of myself. This is especially hard for someone in a wheelchair.
 &quot;In my opinion, this is the best place in Russia for the handicapped. It's not perfect, because there are still several areas in Svetlana that are not wheelchair accessible. However, I wish there were more places like Svetlana and I hope this place lasts forever.&quot;
 
 <strong>
FARMER IN CHIEF
 </strong>Minka, who has Down Syndrome, is something of a celebrity in the village. Thanks to his flamboyant, charming personality, he regularly takes part in Svetlana's cultural events and is an active participant in the weekly village meetings held every Monday night. 
 
One long-term coworker remembers when Minka first arrived in 1997. 
 &quot;He was assigned to help milk the cows each morning. At first, Minka was very frightened of the cows. He was just supposed to hold the cows' tails while I milked them. Within a couple of months, he started milking the cows independently and eventually he was the one waking me up at 6 a.m., pails in hand, ready to get to work.&quot; Today, Minka proudly calls himself &quot;Farmer in Chief.&quot;
 The coworkers hail from Germany, Switzerland, the Netherlands, England, Russia, and the United States. Although volunteers generally come to Svetlana to work with people with special needs or simply to experience life in a rural community, many are also here to study farming, specifically biodynamic farming, which is practiced in all Camphill villages. 
 
 <strong>
SPIRITUAL CONNECTION
 </strong>Biodynamics, a form of organic farming developed by German philosopher Rudolf Steiner in 1924, views the farm as a self-sustaining organism within the surrounding ecosystem, where both livestock and humans are emphasized as an important component. 
 
&quot;In traditional agriculture, the goal is to extract from the earth,&quot; said Barber. &quot;In biodynamic farming, the goal is to heal the earth. One of the great tragedies of our age is that we've lost a spiritual connection to the land. Biodynamic farming re-establishes that connection. In fact, this is the same concept in our work with the handicapped. We hope that by helping these people with special needs we will also heal ourselves.&quot;
 Barber is one of several coworkers who have lived in Svetlana for years and have started families there. Others come for shorter periods of six months to a year. As Svetlana is considered a &quot;life-sharing community,&quot; both coworkers and villagers are welcome to stay as long as they like.
 Gamlet Saakyan, a coworker from Armenia, has lived and worked on the farm with his wife, Yelena, and his five-year-old son, Ilya, since 2000. 
 &quot;The great thing is my son doesn't notice the difference between villagers and coworkers,&quot; he said. &quot;He treats everyone the same. It's wonderful to see.&quot;
 
 <strong>
WELCOMED BY LOCALS
 </strong>Sven Dietsche from Freiburg, Germany is fulfilling his year of compulsory alternative service to the German military at Svetlana. He's been in charge of the cheese workshop since his arrival last summer, where he makes hard cheese, brinza, and <i>tvorog</i> (quark cheese) with villager Yulia. 
 
Dietsche was by no means an accomplished cheesemaker before he arrived in Svetlana. &quot;I was introduced to the cheesemaking process in one day and the next day, I was on my own,&quot; said Dietsche. &quot;After a few months alone, Yulia came to work with me and it's been a great experience for the both of us. At first, it was really frustrating, because Yulia didn't understand what was going on and couldn't remember the steps. Now, she tells me what to do!&quot;
 Dietsche and several villagers go to the nearby market in Volkhov every Sunday to sell their wares. 
 &quot;We weren't very welcome there in the beginning,&quot; Dietsche recalled. &quot;We'd get a lot of stares and few people stopped at our stand. Now, we've become quite famous. The locals like to come by to chat with me and the villagers and ask questions about Svetlana.&quot;
 Mary Millsap from Fort Worth, Texas, arrived deep in the winter, with no Russian-language skills. She has been working in the bakery since last February, where she bakes bread, cookies and pies for 40 in one household oven. 
 &quot;When I got here I could only say <i>do svidanya </i>(goodbye), but the villagers have taught me little by little,&quot; she said. &quot;They've developed a special way to communicate with me using simple words and hand signals so that I understand. They are extremely patient.&quot;
 
 <strong>
FINANCIAL WORRIES
 </strong>Although Russian authorities gave Camphill-Svetlana the land it occupies free of charge, the village does not receive any regular contributions from either the Russian government or private foundations and does not charge residents to live there. 
 
 &quot;This place wouldn't exist without the help of the Camphill Village Trust of Norway,&quot; Barber said. &quot;We don't currently pay rent, but this could end at any time. We don't receive any money or subsidies from the government, except for the villagers' state payments-about 1,000 rubles [$34.50] per person a month.&quot;
 Last year, Camphill-Svetlana covered 30 percent of its operating costs independently - a landmark achievement in its 12-year history. But to survive Svetlana relies on donations from private organizations or individuals and is seeking stable funding sources.
 &quot;Our electricity bill alone can run up to 1,000 euros [$1,220] a month,&quot; said Barber. &quot;We will not in the foreseeable future be able to fully cover our costs without help. However, foreign sponsors are increasingly asking why the Russian business community cannot begin supporting such a project on their home soil.&quot;
 Gifts in kind are also most welcome. Svetlana has but only one vehicle, a dilapidated Russian Niva jeep, which, between trips to the repair shop, is loaded up with goods for the Sunday market and is unable to meet the needs of the community as a whole. Lack of transportation also precludes the village from organizing field trips to St. Petersburg or the surrounding area, much to the chagrin of many of the younger villagers.
 At the end of the day, the glue that holds Camphill-Svetlana together against all odds is the hardworking people who treat each member of the community with respect and kindness. 
 &quot;The thing about these people with special needs is that they have amazing social skills,&quot; said Barber. &quot;I think normal people are socially handicapped in a way. In the last 30 to 40 years there have been many attempts to create communities. Usually, they end badly. One of the great secrets of Camphill is that at the center of the community there are these people with special needs. And that is what somehow makes it possible for us all to live together.&quot;
 <i>For more information about Camphill-Svetlana, see www.camphillsvetlana.org. If you'd like to make a donation or volunteer, contact Mark Barber: dsvet1@yandex.ru. </i>

TITLE: Kantorovich: Mathematics Applied to Economics
PUBLISHER: Special to The St. Petersburg Times
TEXT: Leonid Kantorovich, the St. Petersburg scientist who was awarded a Nobel Prize in 1975, bridged the theoretical world of mathematics and the practical world of economics, research that sometimes put him at odds with the Soviet state.
 
The methods he developed were universal - useful not only in a planned economy such as the one he lived in, but also in capitalist countries where free markets operated. 
 When Kantorovich was presented with his Nobel Prize for Economics, the Swedish Royal Academy's Professor Ragnar Bentzel emphasized the importance of Kantorovich's scientific work for the world's economy.
 &quot;The basic economic problems are the same in all societies, regardless of whether these are characterized by capitalism, socialism or other types of political organization,&quot; Bentzel said.
 Kantorovich was already a professor at the age of 20, a member of the Soviet Academy of Sciences at the age of 52 and a Nobel Prize winner at 63. He invented linear-programming and is considered the father of Russian econometrics - the application of mathematics and statistics to economic problems.
 Born in 1912 in what was then St. Petersburg, Kantorovich died in 1986, in what was still Leningrad. His father, a doctor, died when Leonid was only 10 years old, leaving his mother, Paulina, to raise him alone. 
 Leonid was almost an infant prodigy with a broad range of interests, including politics and modern history. While still in school, he received scholarship for gifted children and he was only 14 when he enrolled in the mathematics department of the Leningrad State University. 
 He said later that this was &quot;the very time when his first interest in sciences and the first displays of self-dependent thinking manifested themselves.&quot; 
 He quickly established himself as an authority on mathematics, even among his much older classmates. 
 One of them was Solomon Michlin, who would go on to become a professor and member of two foreign Academies of Sciences. In his memoirs he described the Kantorovich of those days: &quot;I remember my first vivid impression of Leonid - a bit shortish with blushing cheeks. He was very much like a boy. I could not understand what this small boy was doing at the university. I was quite grown-up, almost 20 years old, while he was only 14. I remember how astounded we were less than a year later when Leonid's first works were published. For us third-year students it seemed incredible and impossible.&quot; 
 Leonid soon became well known among Leningrad and Moscow mathematicians for his research on abstract mathematics. After he graduated at age 18, he decided to stay on and continue his research, combining it with teaching. 
 He lectured at the Institute of Industrial Construction Engineering and in two years Kantorovich became a professor at the institute. After another two years, he became a professor at his alma mater. 
 One of his students Sergei Chesnokov, later a professor at the Higher School of Economics in Moscow, would later write: &quot;When Leonid Vitalyevich [Kantorovich] came to his first lecture a couple of students shouted at him: &quot;Hey, you, you'd better take your seat, the professor is about to come.&quot; 
 In 1935, when the system of academic degrees was restored in the Soviet Union, Kantorovich received his doctorate without having to defend a thesis. The focus of his work started to shift from theoretical toward applied mathematics. 
 His most renowned achievements at that stage lay in functional analysis and numerical analysis. He published papers on the theory of functions, the theory of complex variables, descriptive set theory and many other fields of mathematics.
 But the work that was most fruitful and that he received the most praise for was on partially-ordered spaces. Kantorovich started this research in 1935 and by 1937 was teaching a special course called &quot;Functional analysis based on the theory of partially-ordered spaces.&quot; These spaces would eventually be named after the scientist; today they are called Kantorovich-spaces or, briefly, K-spaces. 
 Kantorovich married in 1938 and remained with his wife, Natalya, until his death. They had two children - a daughter and a son, who both later chose careers in mathematical economics.
 Many of Kantorovich's contemporaries and students emphasize his amazing ability to work on several different problems at a time and organize the activities of many people on the problems. This may be one reason why most of his books were written with a coauthor. 
 In his first book on applied mathematics, &quot;Approximate Methods of Higher Analysis,&quot; written together with Vladimir Krylov, Kantorovich outlines the methods of using functional analysis in solving real world applications. This work received major critical acclaim from scholars and was Kantorovich's first step towards integrating theory and application. 
 His second step became even more oriented to practical applications: towards the end of the decade Kantorovich began his first economic research, the field in which he would have his main and most renowned achievements and that would bring him fame and honor. 
 In his autobiography, Kantorovich describes the starting point as accidental. In 1938, he acted as a consultant for the Laboratory of the Plywood Trust. The laboratory wanted to minimize the use of its resources to produce the maximum of goods and services.
 This piqued Kantorovich's interest in using applying mathematics to economic problems. Economically, the problem was to determine what mix of a limited number of inputs would yield the maximum output. To solve this problem the scientist invented a new type of analysis later called linear programming. 
 The problem he had solved for the Plywood Trust turned out not to be just an occasional and specific one, but one that occurred frequently. Kantorovich found many different economic problems could be resolved using the same mathematical formula. These problems include distribution for workplace equipment, the best use of an area for sowing, finding out how to cut up materials in the most economic way, use of complex resources and distribution of transport flows. 
 New methods of maximizing the output in all those areas eventually found their reflection a brochure &quot;Mathematical Methods of Organizing and Planning Production&quot; (1939). Yet, the conclusions Kantorovich made in this book were met with skepticism.
 His next paper, &quot;The Best Use of Economic Resources,&quot; which developed the use of linear programming for resolving macroeconomic problems, caused even more distrust. In this paper Kantorovich advocated the need to partially decentralize the rigidly planned Soviet economy and showed that even planned economies should consider using prices to allocate resources. 
 His proposals were considered useless and, moreover, &quot;anti-Marxist.&quot; It was not published in the Soviet Union until 1959 and it was perhaps only because the Soviet Union was at war that saved Kantorovich from being repressed for the paper. Nevertheless, it was for this paper that he would be awarded the Nobel Prize some 30 years later. 
 The cold shoulder officials and scientists gave to his economic works resulted in Kantorovich shifting his focus back to mathematics. During the war he was a professor at the Higher School for Naval Engineers, and after being evacuated and returning to Leningrad, he advised on calculations that would be used in the development of the Soviet atomic bomb. 
 His mathematical research of that time is summarized in a large article called &quot;Functional Analysis and Applied Mathematics,&quot; for which he was awarded the State Prize. It was the final step in connecting theoretical and applied mathematics, an idea that mathematicians and economists once considered contradictory, Kantorovich would later write in his biography.
 During World War II, Kantorovich also became interested in computation problems, which produced some recommendations on how programming might be automated and also on computer construction.
 Afterward, as the Soviet Union struggled to recover from a costly and deadly war and mobilized to reconstruct its economy, officials' interest in economics and Kantorovich's work grew substantially. 
 Kantorovich became a corresponding member of the U.S.S.R. Academy of Sciences, was invited to head one of the departments in the Siberian branch of the academy in Novosibirsk and finally in 1959 published his &quot;The Best Use of Economic Resources.&quot; The paper caused controversy among Soviet economists and was noticed by western scientists. As a result, Kantorovich's work on linear programming began to be published in Europe and the United States. Kantorovich started to gain recognition all over the world. In 1964, he finally became an academician, received the Lenin Prize, the Soviet Union's top prize, for developing linear programming. 
 He began teaching a special course on economic cybernetics at Leningrad State University and even organized a postgraduate course for specially gifted students. Some factories, including the city's Yegorov subway wagon factory, tried using linear programming in their everyday life. 
 Kantorovich was given honorary doctorates by many European universities, including those in Glasgow, Cambridge, Munich, Nice, and Paris, was made a member of foreign Academies of Sciences and received countless invitations to international conferences on mathematics and econometrics. The Soviet government, however, refused again and again to let him go abroad. Only in 1975, the year he was awarded his Nobel Prize, was Kantorovich allowed to cooperate with foreign academics.
 Kantorovich shared the prize &quot;for the contributions to the theory for optimal allocation strategies&quot; with American Tjalling Koopmans, who developed linear programming in the 1940s independently of the Russian scholar. 
 Back in Russia with his Nobel Prize, Kantorovich continued to research and promote linear programming methods but now at the Institute of National Economic Planning in Moscow, where he had been working since 1971.
 All his rewards and degrees notwithstanding, &quot;Leonid Kantorovich was always friendly, understanding and sometimes even timid with his colleagues, friends, students and family&quot; Chesnokov recalled. 
 &quot;Up to the last days of his life Leonid Kantorovich was exuberant and full of plans and productive ideas,&quot; his student Semyon Kutateladze says in &quot;L.V. Kantorovich: the man and scientist,&quot; a paper he compiled together with Kantorovich's son Vsevolod.
 Kantorovich even dictated a vast commentary on his life that was eventually issued as a report titled &quot;My Path in Science,&quot; which was presented to the Moscow Mathematical Society. 
 He was buried at Novodevichy Cemetery in Moscow, his fundamental input in mathematics and economics having put him among the top scientists of the 20th century. 
 The method of linear-programming he invented was later rediscovered and developed in the works of other scientists - above all by George Danzig. The method is now used to solve problems not only in the field of economics but also in physics, chemistry, geology, biology and many others.

TITLE: IN BRIEF
TEXT: Markova Suit to Lapse
ST. PETERSBURG (SPT) — Governor
Valentina Matviyenko intends to
withdraw her lawsuit against Anna
Markova, who ran against her in gubernatorial
elections last year, Interfax reported
Monday.
The governor’s press service was
cited as saying that the slander suit had
been addressed by Markova, who had
said that the statements in contention
had been made during an election campaign
and were not intended as personal
attacks on Matviyenko.
Markova had apologized and the
apology had been accepted, the reported
said.
Hospitals to be Sold
ST. PETERSBURG (SPT) — City
Hall plans to sell major hospital buildings
located in the historical part of
town with a condition that any investor
will build premises of equal value for
medical use in the city’s suburbs, Interfax
reported Monday quoting Governor
Valentina Matviyenko.
“All the financial resources, including
every single kopek, coming from investment
projects initiated on territories
of current hospitals will be spent on
health care,” Matviyenko said.
“This program aims to create better
conditions for medical organizations,
for citizens,” she added.
Investors will be required to first
build new premises to which to relocate
a hospital and then to start working on
the vacated site, the governor said.
Businessman Killed
ST. PETERSBURG (SPT) — Businessman
Dayar Bakshiyev was killed in
St. Petersburg on Monday morning, Interfax
reported, quoting the Nevsky district
prosecutor’s office.
The businessman was shot at 1:35
a.m. at 12 Yelizarova Prospekt, the residential
building where he lived, the report
said.
Starovoitova Trial
ST. PETERSBURG (SPT) — The
city court has resumed hearings into the
murder of Galina Starovoitova, the liberal
State Duma deputy assassinated In
November 1998 on the staircase of her
apartment on 20 Griboyedova Kanal,
Intefax reported Monday.
The hearing was postponed in May
for a month because the judge
Valentina Kudryasheva had other cases
to hear, Interfax reported.
Chernenko to Leave
ST. PETERSBURG (SPT) — Vice
governor Andrei Chernenko who was
responsible for relations with foreigners
and security in the city, has been appointed
to head the Federal Migration
Service by President Vladimir Putin, Interfax
reported Thursday.
Chernenko moved to St. Petersburg
last year to become a deputy presidential
envoy to the Northwest region.

TITLE: Police: Killers 'Not Skinheads'
PUBLISHER: Staff Writer
TEXT: Hooligans, not racist extremists, killed a nine-year-old Tajik girl in St. Petersburg on Feb. 9, the city prosecutor's office said Friday.
 
&quot;We consider hooliganism as the main motive,&quot; Chief city prosecutor Nikolai Vinnichenko said at a news conference.
 Police have caught five young people implicated in the case and charged them under the article 213 part 2 of the Criminal Code that deals with &quot;malicious hooliganism.&quot; Three of the five were arrested. Two were released on condition that they do not leave the city.
 However, several other participants are still being sought.
 The brutal murder of Khursheda Sultanova by a group of drunken teenagers drew nationwide attention. The group attacked the girl, her father and her 11-year-old cousin in the center of St. Petersburg, when the family was on the way home after a walk in the Yusupov Garden.
 Khursheda was stabbed many times and died from blood loss. Her father was beaten up but survived. The cousin fled.
 Vinnichenko said the investigation showed that the attack by the group of teenagers - about a dozen people aged from 14 to 20 - was unplanned.
 The teenagers, who mainly knew each other by nicknames, gathered in the garden and drank alcohol. Then they saw the Tajik family and started chasing them, he said.
 Investigators who had searched the suspects' homes and talked to witnesses had found no link between the group and skinheads. Skinheads usually identify themselves by wearing particular clothing, symbols, or shouting racist epithets. However, none of these things applied to the suspects, Vinnichenko said.
 Vladislav Piotrovsky, deputy head of the city police, said most of the suspects came from underprivileged families and had problems at school, some of them have criminal records and some have had psychiatric problems.
 Vinnichenko, who refused to name the suspects, denied rumors that some suspects were sons of high-ranking officials or policemen.
 That rumor appeared when, soon after the murder, investigators detained a different group of suspects, including some who were related to city police. However, no evidence that group was involved in Khursheda's murder was found, he said.
 Khursheda's wounds all came from one knife. Her attackers also had bats, he said. The viciousness of the attack on Khursheda could be because the teenagers were drunk and under &quot;a group psychosis,&quot; Vinnichenko said. &quot;We do not rule out that they were on drugs, too.&quot; 
 Asked why Khursheda was killed and not her father, Vinnichenko said it could have to do with her putting up a fierce fight. &quot;The girl shouted very loudly all the time,&quot; he said. &quot;Her father lost consciousness almost immediately after he was hit, and did not resist. Her cousin ran away.&quot;
 The investigation is still going on. Most of the suspects are trying to shift the guilt from themselves to the others.
 &quot;They are the kind of youths who have very perverted ideas of fairness, responsibility, and betrayal,&quot; he said. Vinnichenko also commented on the case of Libyan student, Mohammad Al-Hammaly, a son of the cultural attache at the Libyan Embassy in Moscow, who was attacked last Monday in St. Petersburg, and died from knife wounds last Tuesday.
 The murder of the student had nothing to do with nationalism, and was also hooliganism, Vinnichenko said.
 Two people asked Al-Hammaly, and his brother for a smoke, and then started beating them up. The attackers didn't display any signs of being skinheads like &quot;shaved heads, leather jackets or uniforms&quot;, and they &quot;didn't shout out any racial threats,&quot; Vinnichenko said.
 Vinnichenko also criticized Pavel Rayevsky, head of St. Petersburg police press service, for saying earlier that he did not rule out the involvement of skinheads in the case.
 Vinnichenko denied city prosecutors and police are trying to hide that racial attacks occur in the city.
 The killers of Azeri melon trader Mamed Mamedov, killed in 2002, were accused of racial motives and sentenced to long terms of imprisonment, he said.
 The killers of a six-year-old Tajik gypsy girl, murdered in 2003, were also charged with a racial murder, he added.
 However, Yury Vdovin, deputy head of the St. Petersburg's branch of international human rights organization Citizens' Watch, said he had no doubt that the city authorities are trying to use the murders of Khursheda and Al-Hammaly to &quot;prove that there is no extremism in the city.&quot;
 &quot;I'm afraid such behavior may just worsen the 'disease',&quot; Vdovin said.
 &quot;It's being done to create a positive image of St. Petersburg for foreign tourists,&quot; he said. &quot;But I'm sure foreigners would feel safer if they just felt that the police will take good care of them.&quot;

TITLE: St. Isaac's Dome a Prototype For Washington's Capitol
PUBLISHER: Staff Writer
TEXT: A symbol celebrating an autocrat's military prowess served as a model for the home of American democracy, a new exhibition in St. Petersburg's St. Isaac's Cathedral shows.
 
The dome of the cathedral, one of the largest in the world, alongside Rome's St. Peter's, London's St. Paul's, and Florence's Santa Maria del Fiore, served as a model for Washington's Capitol building, experts on both sides of the Atlantic say.
 The dome will be the focus of the world's attention as the coffin of former U.S. president Ronald Reagan, who died on Saturday, is placed under it for two days' lying-in-state this week ahead of funeral services.
 The dimensions of the domes on St. Isaac's and the Capitol are very similar - the cathedral's is 24.4 meters in diameter and 12.2 meters high while the Capitol's dome has a diameter of 26.8 meters and 11.9 meters high. 
 St. Isaac's Cathedral was commissioned in 1818 by Alexander I to celebrate his victory over Napoleon. It took more than 40 years to build.
 French architect Auguste Ricard de Montferrand devoted his life to the project, and died the year the cathedral was finally consecrated, in 1858.
 St. Isaac's Cathedral is unique in many aspects, including the way it was built. Its grand columns were erected before the rest of the cathedral. The Capitol, where both the House of Representatives and the U.S. Senate meet, has been reconstructed and restored several times.
 The first cornerstone of the future Capitol was laid by President George Washington in 1793 and a series of architects worked on the monument.
 By 1850 more space was needed and Thomas Walter, a prominent Philadelphia architect, was appointed to expand the Capitol and provide larger permanent chambers.
 The dome was considered too small for the vastly enlarged Capitol and it was decided to create a fireproof iron dome. Using metal for the body of the dome was an idea that Walter borrowed from Montferrand.
 In recent years African Americans have complained that the Capitol was built using slave labor.
 It was Alexander Bodyalov, a Russian historian resident in Washington D.C., who noticed the similarities between the two domes when reviewing material on St. Isaac's in the Library of Congress.
 Irina Varygina, spokeswoman for the State Museum St. Isaac's Cathedral, said Bodyalov figured out that when designing the new dome for the Capitol, Walter had studied Montferrand's experience and used his technology. 
 The exhibition running in St. Isaac's until Aug. 28 was prepared with the help of the U.S. Consulate General in St. Petersburg, the Library of Congress, and architects of several other American states' capitols.

TITLE: Police Probe British Council
PUBLISHER: Staff Writer
TEXT: MOSCOW - The Interior Ministry's department for economic and tax fraud announced Monday that it has been investigating the British Council, the cultural department of the British Embassy in Moscow.
 
The department has sent police officers to the British Council's 15 offices in Russia and ordered it to submit financial records by Wednesday, the department's head, Lieutenant General Sergei Veryovkin-Rokhalsky, told reporters Monday.
 The department appeared to have targeted the British Council over the revenue it earns from its English-language courses, which the British embassy says have been operating with the knowledge of the Foreign Ministry. 
 &quot;Their financial records are very big,&quot; Veryovkin-Rokhalsky said. &quot;If they don't submit the appropriate financial documents on time, we will fine them.&quot; 
 &quot;There's no agreement now between Great Britain and Russia concerning the activity of this organization on the territory of the Russian Federation,&quot; he said. He added that the council charges $300 per month for its English-language courses, a figure that the British Embassy disputed on Monday.
 &quot;We were surprised and concerned by these actions,&quot; said British Embassy spokesman Richard Turner in a reaction by telephone Monday. &quot;We are working closely with the Russian authorities to resolve the problem.&quot;
 &quot;As [the embassy's] cultural department [the council] doesn't need an agreement,&quot; he said. 
 The British Council has complained to the Foreign Ministry about the investigation, he said, because the ministry has known about the offices since 1994.
 


TITLE: Reagan Hailed For Part in Ending Cold War
AUTHOR: By Vladimir Isachenkov and Jim Heintz

PUBLISHER: The Associated Press
TEXT: MOSCOW - He stunned the Soviet Union with his tough rhetoric, calling it an &quot;evil empire&quot; whose leaders gave themselves the &quot;right to commit any crime.&quot; His famed Star Wars program drew the Soviets into a costly arms race they couldn't afford. His 1987 declaration to Soviet leader Mikhail Gorbachev at the Berlin Wall - &quot;Mr Gorbachev, tear down this wall&quot; -was the ultimate challenge of the Cold War. 
 
Ronald Reagan's determination to destroy communism and the Soviet Union was a hallmark of his eight-year presidency, executed by means of a harsh nuclear policy toward Moscow that softened only slightly when Gorbachev came to office. 
 Reagan, who died Saturday at the age of 93, is vividly remembered in Russia today as the force that precipitated the Soviet collapse. 
 &quot;Reagan bolstered the U.S. military might to ruin the Soviet economy, and he achieved his goal,&quot; said Gennady Gerasimov, who served as top spokesman for the Soviet Foreign Ministry during the 1980s. 
 Reagan's agenda toward Moscow started shortly after the start of his first term - and marked a major departure from the mild detente of the Jimmy Carter administration. 
 In 1981, Reagan backed his rhetoric with a trillion dollar defense build-up. U.S.-Soviet arms control talks collapsed, and the two nations aimed intermediate-range nuclear missiles at each other across the Iron Curtain in Europe. 
 The deployment of the U.S. missiles in Europe rattled the Kremlin's nerves, because of the shorter time they needed to reach targets in the Soviet Union compared to intercontinental missiles deployed in the United States. 
 In an even bigger shock to the Kremlin, Reagan in 1983 launched an effort to build a shield against intercontinental ballistic missiles involving space-based weapons. 
 The Strategic Defense Initiative, or SDI, dubbed Star Wars, dumped the previous doctrine of Mutual Assured Destruction that assumed that neither side would start a nuclear war because it would not be able to avoid imminent destruction. 
 Even though Reagan's Star Wars never led to the deployment of an actual missile shield, it drew the Soviets into a costly effort to mount a response. Many analysts agree that the race drained Soviet coffers and triggered the economic difficulties that sped up the Soviet collapse in 1991. 
 &quot;Reagan's SDI was very successful blackmail,&quot; Gerasimov said. &quot;The Soviet Union tried to keep up with the U.S. military buildup, but the Soviet economy couldn't endure such competition.&quot; 
 Gorbachev said Sunday he was distressed by Reagan's death.
 &quot;I take very hard the death of Ronald Reagan, a man whom by fate sat with me in perhaps the most difficult years at the end of the 20th century,&quot; Gorbachev told reporters at the Gorbachev Foundation, a non-governmental analytical institute that he has run since 1992. 
 Despite Reagan's often-forceful statements against the Soviet Union, Gorbachev said he also had a personal warmth that bolstered their relations. 
 &quot;In terms of human qualities, he and I had, you would say, communicativeness, and this helped us carry on normally,&quot; Gorbachev said. &quot;I deem Ronald Reagan a great president, with whom the Soviet leadership was able to launch a very difficult but important dialogue,&quot; Gorbachev said earlier Sunday on Ekho Moskvy radio, Interfax reported.
 Gorbachev was quoted as calling Reagan &quot;a statesman who, despite all the disagreements that existed between our countries at the time, displayed foresight and determination to meet our proposals halfway and change our relations for the better.&quot; 
 Gorbachev listed Reagan's accomplishments as helping to &quot;stop the nuclear race, start scrapping nuclear weapons, and arrange normal relations between our countries.&quot;
 &quot;I do not know how other statesmen would have acted at that moment, because the situation was too difficult. Reagan, whom many considered extremely rightist, dared to make these steps, and this is his most important deed,&quot; he was quoted as saying. 
 Yelena Bonner, the widow of Soviet dissident Nobel Peace Prize winner Andrei Sakharov, praised Reagan for his tough course toward the Soviet Union. 
 &quot;I consider Ronald Reagan one of the greatest U.S. presidents since World War II because of his staunch resistance to communism and his efforts to defend human rights,&quot; Bonner said in a telephone interview from her home in Boston. 
 Former Soviet dissident Vladimir Bukovsky, 61, remembered Reagan fondly for his humor and his toughness. &quot;His phrase, 'evil empire,' became a household word in Russia,&quot; said Bukovsky, who now lives in Cambridge, England. &quot;Russians like a straightforward person, be he enemy or friend. They despise a wishy-washy person.&quot; 
 Retired General Vladimir Dvorkin said that trying to field a response to Reagan's Star Wars had &quot;certainly contributed&quot; to the Soviet economic demise but argued it didn't play the decisive role. 
 &quot;The Soviet economy was extremely inefficient and nothing could save it,&quot; said Dvorkin, a senior Soviet arms control negotiator during the 1980s. 
 Bonner said her husband -who had played a key role in designing Soviet nuclear weapons -believed that deploying U.S. missiles in Europe was necessary to bring the Soviet rulers back to the arms control talks. In 1987, Reagan and Gorbachev signed a treaty that for the first time eliminated the entire class of intermediate-range missiles.
 
 <i>
Associated Press writer Gerald Nadler in New York contributed to this report. </i>

TITLE: Samara Market Blast Linked To Business Dispute; 10 Die
AUTHOR: By Simon Saradzhyan

PUBLISHER: Staff Writer
TEXT: MOSCOW - A powerful blast shook an outdoor market in the Volga region city of Samara on Friday, killing 10 people and injuring about 60 in what law enforcement agencies said could have been either a terrorist act or a business dispute.
 
A bomb containing about 1 kilogram of plastic explosives was attached to the back of a metal container at the Kirovsky open air market in Saratov district on Friday afternoon, police said. 
 Eight people died at the scene, a ninth man died on his way to hospital and a tenth person died in intensive care Saturday, Russian news agencies reported. A total of 60 people required medical assistance, with 37 still being kept in local hospitals Sunday afternoon. 
 The blast ripped through a line of metal containers that market traders used to keep and sell furs from at around 1:05 p.m., sending splinters flying. One woman was lifted into the air and thrown across a fence, Kommersant reported Saturday, citing a witness. 
 More people could have been hit by splinters of the container, which was ripped apart by the bomb, if a train of fuel tanks had not shielded about 20 people waiting on the platform at the Paytiletka railway station, located across the railroad tracks from the market.
 While both prosecutors and police said they were looking into whether the blast was a terrorist attack or was aimed at market traders, they are treating the blast as likely arising from a dispute over control of the market. 
 The 2.2 hectare-market was opened in 1993 by local firm Vega-S, according to a June 2003 article posted on the Gorozhanin news web site. Vega-S had operated the market until 2002 when Kuibyshev Railroads, which had leased a land plot adjacent to the railroad to Vega-S, decided to terminate the lease, according to Gorozhanin. 
 Instead the railroad company decided to lease the land where the fur merchants and a parking lot were located to Sammos, a Moscow-based company. Vega-S contested the decision in local courts and has been feuding with Sammos, Kommersant reported.

TITLE: Oligarch Tapped by Saakashvili
AUTHOR: By Simon Saradzhyan and Lyuba Pronina 

PUBLISHER: Staff Writer
TEXT: MOSCOW - Russian business tycoon and ethnic Georgian Kakha Bendukidze was last week appointed Economics Minister by Georgian President Mikheil Saakashvili. 
 
Political and business leaders in Moscow and Tbilisi welcomed the choice of Bendukidze, 48, a well known champion of the liberalization and deregulation of the Russian economy, calling it a bold attempt to kick-start the stalled Georgian economy and attract Russian investment into the country.
 After the announcement, Bendukidze told reporters in Moscow that he planned to introduce &quot;ultra-liberal&quot; reforms and lure more Russian investors to his homeland, which has an annual GDP of $4 billion and has more than half of its population living below the poverty line.
 &quot;I call it ultra-liberalization,&quot; said Bendukidze, who is the biggest shareholder in the flagship of Russia's machine building industry, United Heavy Machinery, or OMZ, and reportedly controls a leading construction company in Georgia.
 Georgian Prime Minister Zurab Zhvania revealed the appointment at a news conference in Tbilisi last Tuesday.
 Saakashvili had called President Vladimir Putin on Monday to tell him of Bendukidze's appointment. The news was &quot;a bit unexpected&quot; for Putin, Saakashvili said, according to news agencies.
 Bendukidze left for Tbilisi on Wednesday to take up his new job, and had already stepped down from his chairmanships at OMZ and the Russian Union of Entrepreneurs and Industrialists to avoid conflicts of interest.
 Reaction from government officials in Moscow and Tbilisi appeared uniformly positive.
 &quot;He is an economist of global scale,&quot; Zhvania said, explaining that he had headhunted Bendukidze at a Russia-Georgia business forum in Tbilisi last week, and had spent four hours convincing him to take over from 27-year-old Irakli Rekhviashvili as economics minister.
 Zhvania said he hoped Bendukidze would boost what he described as &quot;deplorable&quot; trade figures between Georgia and Russia, currently an average of $250 million per year.
 For the Russian government, Economic Development and Trade Minister German Gref and Deputy Prime Minister Alexander Zhukov warmly welcomed the appointment.
 Gref said he had an &quot;exclusively positive attitude&quot; toward the appointment, which would &quot;deepen economic ties between Russia and Georgia and synchronize the process of economic reforms&quot; between the two countries.
 At the Tbilisi forum last week, Gref said Russia could help Georgia double its GDP and potentially increase trade between the two countries to $8 billion per year, RIA-Novosti reported.
 Zhukov said that Bendukidze was a &quot;supporter of decisive reforms... and now has the opportunity to implement his ideas.&quot;
 But some analysts cautioned that Georgia, which already relies on Russian companies for gas and electricity supplies, would become even more economically dependent on Russia.
 &quot;They are already strongly dependent and this dependency will grow... but are there other options for Georgia?&quot; said Karine Gevorkyan, a researcher with the Caucasus department of the Russian Academy of Sciences Oriental Studies Institute.

TITLE: MTS to Expand in the Regions
PUBLISHER: Staff Writer
TEXT: MTS, one the leading mobile service operators in Russia, Ukraine and Belarus, announced plans for drastic expansion into the regions and the restructuring of management.
 
MTS will invest over $1 billion in the company's expansion this year, said president of MTS Vasily Sidorov at a St. Petersburg press conference on Monday. 
 The company's shares, traded on the New York Stock Exchange, went up five times, and the Financial Times rated MTS among the world's 500 largest companies, Sidorov said. The company's further development involves restructuring of management system to form three levels of management: a corporate center in Moscow, and ten macro-regions subdivided into regions. The restructuring should centralize the company's management.
 Providing services to over 21.3 million subscribers, MTS is owned by T-Mobile, a Deutsche Telecom affiliate, and AFK Systema, one of Russia's largest financial and industrial groups, specializing in hi-tech. 
 Currently operating in over 60 Russian regions, MTS is planning to launch its GSM standard network in at least ten more regions this year, including Kemerovo, Stavropol, Ulianovsk, Magadan, Chita, Mordovia, Buriatia, Chuvashia, Yakutia and Kamchatka, Sidorov said. The company is also starting GPRS services in Austria, Germany, the U.K., Czech Republic, France, Hong Kong, Israel, Poland, Portugal, Thailand and the Philippines. The GPRS coverage will include SMS services. 
 The company's investments in the North-Western macro-region this year will amount to $72 million, as compared to last year's $115 million, said Konstantin Boiko, the newly appointed director of the macro-region and Telecom XXI, an MTS affiliate company that holds licenses covering the area. &quot;Most of the North-Western MTS team is formed. MTS expects its costs to go down as a result of the restructuring that is to be completed by October,&quot; Sidorov said. 
 The growth in mobile phone use in the North-West was reported at an average of 48 percent, with 67 percent in St. Petersburg and the Leningrad Region. The company's sales in the North-West amounted to $210.5 million in 2003, which marked a 166 percent growth from 2002. Corporate revenues grew by 1,463 percent and reached $57.8 million. The North-West can be characterized as a highly competitive market, where prices are quite low, and the rate of migration of subscribers from one operator to another is high, Boiko said. 
 MTS is planning to implement client-saving programs to prevent further migration. &quot;Our strategic task is to raise subscriber loyalty,&quot; Boiko said. 
 As of May 2004, MTS has occupied a 35 percent share in the North-Western market, Boiko said, adding that the share is growing steadily. MTS installed 1,464 stations in the North-West, roughly two thirds of them located in St. Petersburg. MTS mainly uses Ericsson as its station supplier in the region. Equipment supplied by Siemens is installed in Vologda, Kaliningrad and Pskov.
 There will be up to ten macro-regions formed in Russia, where MTS is licensed everywhere except Penza and Chechnya. The North-West is the second macro-region formed after Moscow and will include St. Petersburg, Leningrad Region, Arkhangelsk Region, Vologda Region, Kaliningrad, Murmansk, Novgorod, and Pskov regions, Karelia, Komi Republic and Nenetsk Autonomous Region. The macro-region has a total of 2.3 million MTS subscribers. 
 The next macro-region to emerge will encompass Central Russia. The Far East, Siberia, the Urals, the South, South-Eastern and North-Western Volga macro-regions will follow. 
 &quot;We have signed agreements with both Vimpelcom and Megafon on the exchange of resources. We can't rule out future cooperation with Skylink, either, even though it is a niche company,&quot; Sidorov said.
 &quot;We follow a double line of relations with MTS. While we mostly view MTS as our competitor, we have also entered a number of joint projects with them, which can classify us as partners. For example, we launched the mutual SMS exchange service,&quot; said Artyom Minaev, PR specialist at Vimpelcom in a telephone interview from Moscow Monday.
 &quot;We have much respect for MTS as a competitor. It is largely thanks to that competition that Vimpelcom is constantly stimulated to progress,&quot; he added. 
 Vimpelcom, which is MTS' main competitor, plans to invest an estimated $920 million in the company's development this year, 80 percent of which is directed at the regions, Minaev said. Focusing on the regions is the current trend for operators working on a federal scale, he said.
 Vimpelcom's regional branches were not purchased from other operators but started from scratch, using the company's standard methods, which made the integration smoother, Minaev said. Vimpelcom is a centralized structure, encompassing 7 macro-regions all across Russia, with the exception of the Far East, where Vimpelcom remains unlicensed. 
 The company is traded on the New York Stock Exchange since 1996 and has received top ratings with such publications as Forbes and BusinessWeek. Vimpelcom's main shareholders are Telenor and Alfa Group, owning 25 percent plus 13 shares and 25 percent plus 2 shares respectively.

TITLE: Land Law in Action
PUBLISHER: Staff Writer
TEXT: The Leningrad Oblast Legislative Assembly has passed a law on agricultural land sales in the region, banning such land from being purchased by foreigners, as determined by federal legislation.
 
The law specifies that no less then 1 hectare of land can be sold at one time, with the total amount of land offered not exceeding 10 percent of the total agricultural area of a district. 
 The land is to be used for agricultural purposes only, and not converted for other uses. &quot;Fears that rich people will buy all the land and force local residents out of their houses are unfounded,&quot; said Kirill Polyakov, a Leningrad Oblast spokesman at a briefing last week as quoted by information agencies.
 &quot;Under the law people will be forced to sell the land back, should a purchase exceed norms determined by the legislation,&quot; he said.
 The Leningrad Oblast also retains the right of priority in open tenders for agricultural land plots, allocating 10 million rubles ($345,000) for this purpose.
 &quot;We would have to get two or three hectares to develop a greenhouse,&quot; said Alexander Vasilyev, financial director of Leto, a vegetable producing company in a telephone interview Friday.
 Leto currently has 24 greenhouses, most of which are located along the Pulkovskoye Highway, on territory belonging to the city. But in the nearfuture the company plans to extend its business to the Leningrad Oblast, presenting a $9.4 million project to renovate greenhouses with a total area of 72 hectares.
 &quot;We work on the edge of being profitable and currently face quite tight competition from Belorussian producers,&quot; he said.
 By passing the land law local authorities have done nothing except bringing local law to accordance with federal legislation, said Vladimir Leonov, the Legislative Assembly lawmaker quoted by Rosbalt last week. &quot;This is an absolutely complacent decision that doesn't add anything to federal legislation. [Lawmakers] had an opportunity not to pass a regional law that approves the federal law and contradict the Constitution,&quot; Leonov said.
 &quot;Citizens and their associations shall have the right to have land in their private ownership,&quot; Article 36.1 of the Constitution says. 
 According to federal legislation put in force in January 2004, foreign citizens can only rent agricultural land for long-term periods. However, the law does not prohibit Russian entities that buy properties from being 100 percent foreign owned.

TITLE: Marriot Officials Voice Brand Expansion Plans
PUBLISHER: Staff Writer
TEXT: ST. PETERSBURG - Marriott International, which officially opened its sixth hotel in Russia on Friday, is planning to establish a string of its brands across the country within the next few years, a company official said.
 
Speaking at the official opening ceremony of Renaissance St. Petersburg Baltic Hotel, Karl Kilburg, senior vice president of the Continental Europe division of Marriott International Lodging, said the company intends to promote several of the Marriott's brands in Russia, including Ritz-Carlton Hotels, Marriott Hotels, Courtyard by Marriott and Renaissance Hotels &amp; Resorts.
 Marriott International Inc. is a leading worldwide hospitality company, headquartered in the United States and represented in 64 countries and territories worldwide. Marriott Lodging operates or franchises over 2,400 hotels and resorts across the globe.
 Renaissance St. Petersburg Baltic Hotel is Marriott's first project in St. Petersburg but the company is looking closely at the local market. Governor Valentina Matviyenko, who attended the opening ceremony Friday, made an enthusiastic and welcoming speech. 
 &quot;As soon as this hotel is completed, the Marriott and Baltic Construction Co. will start on a second hotel [in the city],&quot; she said, without elaborating. 
 Owned by a subsidiary of the BSK, the hotel is located in Pochtamskaya Ulitsa just off St. Isaac's Square and offers 102 spacious rooms in a former 18th-century mansion, which previously served as the private residence of Mikhail Yakovlev, a schoolfriend of national poet Alexander Pushkin in the 1820s and 1830s.

TITLE: IN BRIEF
TEXT: <b>$161 Million Loan 
 </b>

ST. PETRESBURG (SPT) - The city administration plans to receive the first part of a loan from the European Bank for Reconstruction and Development by the end of 2004. 
 The loan of $40 million is to be used for the St. Petersburg Economic Development project, Vice-Governor Mikhail Oseyevsky said Friday at a press conference. 
 "We plan to receive the first part of the loan by the end of the year, while an agreement for the total amount of $161 million will probably be signed over the summer," he said. 
 
 
<b>Electrolux Factory
 </b>

ST. PETERSBURG (SPT) - Sweden's Electrolux Group will build a plant in St. Petersburg to produce washing machines, the city's Deputy Governor Yury Molchanov told a conference Thursday. Investments into the construction are expected to amount to 70 million euros. 
 According to Molchanov, the plant is expected to be launched in January 2005 and will produce washing machines under the Electrolux and Zanussi brands. 



TITLE: Ex-Premier Convicted in U.S.
PUBLISHER: Combined Reports
TEXT: SAN FRANCISCO - A U.S. jury convicted a former Ukrainian prime minister last week on criminal charges of using his position to extort tens of millions of dollars from his country and then launder it through Californian banks.
 
A grim-faced Pavlo Lazarenko, 51, who became a multimillionaire while in power during Ukraine's economic depression in the 1990s, said he would appeal the rare case against a former foreign leader in the United States.
 Lazarenko becomes the first foreign leader to be convicted in a U.S. court since Panamanian leader Manuel Noriega in 1992. Noriega is currently serving a 30-year prison sentence on drug-trafficking charges.
 &quot;There were so many serious judicial mistakes that it's not worth commenting upon,&quot; Lazarenko said as he left the federal courtroom with his adult son.
 &quot;The 9th Circuit will put everything right,&quot; he added, referring to the 9th Circuit Court of Appeals where his lawyers will seek to appeal the verdict.
 Ukraine's prime minister from 1996 to 1997, Lazarenko was found guilty on all 29 counts against him, including conspiracy to launder money, money laundering and fraud as well as transportation of stolen property.
 He has previously been convicted in absentia by a Swiss court of money laundering and has been charged with murder in his home country.
 Although prosecutors called him a flight risk and wanted to send Lazarenko immediately to prison, Judge Martin Jenkins allowed him to remain under house arrest at a San Francisco apartment for now.
 The judge will consider a date for Lazarenko's imprisonment in the coming weeks and he also set a September date to hear remaining legal points of contention in the case.
 &quot;The verdict is legally and factually wrong,&quot; said defense attorney Doron Weinberg. &quot;There are serious legal questions that remain to be resolved.&quot;
 Ukrainian President Leonid Kuchma's office said in response to the verdict that they would still like to see Lazarenko face trial in a Ukrainian court. 
 &quot;The Prosecutor General's Office waits impatiently for Lazarenko to return home,&quot; said Vasil Baziv, the deputy head of Kuchma's staff. 
 Once a Kuchma ally, Lazarenko later became his opponent. In 1999, he sought political asylum in the United States; instead, he was arrested and put on trial. 
 Ukrainian authorities also launched legal proceedings against Lazarenko for alleged misuse of office, bribery and the siphoning of some $60 million. Lazarenko's trial could serve as a lever for Kuchma's allies to clamp down on Yulia Tymoshenko, a key opposition leader and potential presidential candidate, ahead of the Oct. 31 presidential vote. She is implicated as an accomplice in an earlier alleged massive fraud allegedly involving Lazarenko. 
 
 <i>
(Reuters, AP) </i>

TITLE: IN BRIEF
TEXT: <b>Meat Ban Lifted
 </b>

ST. PETERSBURG (SPT) - Russia has lifted a ban on meat imports from the European Union from June 5 to June 10, an official with the North-Western division of the Veterinary Service said on Monday. 
 On Friday the European Commission said the ban, imposed over a dispute about food safety certificates, could soon be lifted after Commission President Romano Prodi had spoken to Russian Prime Minister Mikhail Fradkov. 
 "We have started accepting [EU meat] shipments from June 5, following an order from the Agriculture Ministry," the official, who declined to be named, told Reuters. 
 "We will accept shipments accompanied by old certificates until June 10," he said but declined to say if imports could be stopped again after June 10. Agriculture Ministry officials could not be immediately reached for comment. 
 Moscow had demanded the European Commission issue a single food safety certificate to cover all EU meat imports, which are worth 1.3 billion euros a year to European producers, before barring them as of June 1. 
 EU spokesman Reijo Kemppinen insisted that such a certificate was legally impossible, but EU officials suggested ways might be found to better standardize the existing national certificates and give Moscow greater guarantees that all EU countries are applying the same standards. 
 
 
<b>Moody's Gets Interfax
 </b>

LONDON (SPT) - Moody's Investors Service, the only one of the three global credit-rating companies to give Russia investment-grade ratings, increased its stake in the country's Interfax Rating Agency to a majority for an undisclosed amount. 
 The company will be renamed Moody's Interfax Rating Agency, the ratings unit of New York-based Moody's Corp. said in an e-mailed statement from London. In November Moody's bought about a fifth of Interfax Rating, the statement said, giving no other details of the transaction.
 Moody's is building its presence in Russia after increasing the government's debt rating by two levels in October to Baa3, the lowest investment-grade level. The change opened the way for some investors who aren't allowed to buy speculative-grade or junk bonds to purchase the debt. Standard &amp; Poor's and Fitch Ratings both assign junk ratings to Russia.
 "We are increasing our stake today to be in an even better position in terms of providing the highest quality credit rating and research services available in the Russian marketplace," Moody's Corp. CEO John Rutherford said in the statement.
 Interfax Rating is an affiliate of Interfax Information Services Group, a Russian news and data provider.
 
 
<b> Yukos: Cash for Tax?
 </b>

MOSCOW (Bloomberg) - Yukos, Russia's biggest oil exporter, is generating sufficient cash to pay a $3.4 billion tax bill and meet its debt obligations, said Moody's CEO John Rutherford.
 That assessment comes after Yukos said last week that the company has about $1 billion cash on hand, too little to pay the tax bill, and may go bankrupt by the end of the year.
 "Yukos continues to generate large cash flows which could certainly pay any tax liabilities Yukos might have and also repay the debts outstanding," Rutherford said at a news conference in Moscow on Monday.
 Mikhail Khodorkovsky, Yukos's biggest shareholder, was jailed last year on tax evasion and fraud charges. Before that, Yukos was considered a possible partner for ExxonMobil or another of the world's largest oil companies. A Yukos bankruptcy would make it harder for President Vladimir Putin to say he's creating a stable environment for foreign investors.
 "We don't have the cash to pay the bill," Yukos's chief financial officer Bruce Misamore said Thursday during an energy conference in Scottsdale, Arizona.
 Yukos last year borrowed $1 billion from banks including Citigroup and Soci&eacute;t&eacute; G&eacute;n&eacute;rale, and another $1.6 billion in a loan organized by Soci&eacute;t&eacute; G&eacute;n&eacute;rale and backed by Group Menatep, which owns 44 percent of Yukos.
 Yukos, Russia's second-largest oil producer, was told by creditors over the past month that they may seize export revenue to cover interest payments on both loans, declaring a default.
 In other comments, Moody's said that it regards Russia's finances "favorably." It is the only rating company that has given the country's sovereign debt an investment grade rating.
 "In general, Russia is doing well and continues to do well and we notice that," said Jonathan Schiffer, an analyst at Moody's, at the news conference. 
 Russia's situation is "very favorable" as regards a possible improvement in ratings for the country's debt, he said. 



TITLE: Finnish Entrepreneur Makes Local History
PUBLISHER: Staff Writer
TEXT: Sauli Valmaa has been doing business in Russia for 30 years. 
 Over this period, he has not had time to learn Russian, but he did manage to build Sautek - a company specializing in construction machinery and transportation - and become the first foreign national to receive an award for his contribution to Russia's transportation industry from the country's Ministry of Transport.
 Always accompanied by his loyal interpreter, Valmaa has become a living legend in St. Petersburg's construction world.
 
&quot;I may be Russia's first businessman,&quot; said Valmaa, who originally came to the Soviet Union in 1974 to work on the construction of a highway linking the former empire with Finland. The highway that stretched from the Finnish border needed dozens of tons of sand, which Valmaa transported. He had also invented a machine that watered the sand, pressing it down prior to asphalt pouring. The machine was ten times more powerful than existing analogues. 
 &quot;It was forbidden to hire Russians at that time,&quot; Valmaa said. Finnish companies in charge of construction hired exclusively Finnish contractors. Valmaa, who continued to live in Finland, frequently traveled across the Soviet border in order to control his growing business. Ten years after he had first come to Russia, he already owned several companies specializing in construction projects in Russia. Valmaa's firms were involved in the reconstruction of roads, plants and hotels, including the Astoria Hotel, doing everything connected with construction machinery, from digging to staff transportation. 
 Valmaa had never been constrained by national borders, he said, but the opening of borders in 1991 marked the beginning of a new era, calling for new decisions to be made. Valmaa perceived the change as a signal to expand his work in Russia and enlarge the staff. &quot;It never even crossed my mind to go to the Baltic states instead. They appeared too small for me,&quot; he said. 
 &quot;My friends in Finland were surprised, but I had always believed in Russia. While most people didn't have much trust in this country, I believed in it even when it was still under Brezhnev,&quot; Valmaa said. &quot;I don't see anything in Russia that would make working here exceptionally difficult. Russia has hardworking people and is developing along its course,&quot; he said, adding that the work quality of Russian workers is rising.
 &quot;Russians have learned to build,&quot; Valmaa said. &quot;In the early 90s, there used to be very few professionals skilled in quality construction, and I used to rely predominantly on Finns. Today, all of the 160 staff members working at Sautek are Russian,&quot; he said.
 &quot;I don't see the point in looking for personnel abroad now. People work better when they are home,&quot; said Valmaa, confessing that for him home is where he has got a pillow and a blanket. &quot;I am accustomed to living at construction sites,&quot; he said over coffee and jam pastries in his wagon-like office in Olgino. 
 Both the office, lovingly decorated with small paintings and glass chandeliers, and Sautek's impressive territory, which Valmaa surveys ten times a day to check on his workers, created the impression of a small Finnish island recovered by Valmaa in what has become Russian territories. 
 Valmaa cancelled his registration in Finland, but still holds a Finnish passport. He nearly became a Russian citizen one year ago, he said, when the passport and visa authorities introduced a regulation under which all foreign nationals residing in Russia were obliged to report their departures abroad in advance and pay a fee to return. Luckily, the regulation was abolished in late 2003, Valmaa said.
 &quot;The time has come to serve the right god - the god of progress,&quot; Valmaa said. &quot;The economy is suffering from political decision making. The time has come to pay attention to international practices,&quot; he added. In Valmaa's opinion, efficiency should be the goal. While most western businessmen working here are willing to pay the duties, customs officials pile up obstacles in their way, slowing things down. 
 Collecting papers that would take one day in Finland may take up to one month in Russia, Valmaa said. &quot;The tradition of receiving approvals here is unbelievable. Bureaucracy is under constant development, and more attention is paid to the development of bureaucracy than to the development of business,&quot; he said. 
 Valmaa believes it is international cooperation that should help Russia shape a more &quot;user-friendly&quot; legislative system. &quot;There is no profit in isolating a country from the rest of the world,&quot; Valmaa said. 
 When asked whether the degree of corruption has gone down over the past several years, Valmaa said that a certain degree of corruption is needed in a country where people are not yet paid higher salaries, as it creates personal interest in seeing things move. In Valmaa's view, no progress is possible without personal interest.
 At Sautek, whose annual revenues amount to 3.5 million euros, salaries and taxes are paid on time. &quot;We suffer from the bureaucracy, but it is simply more natural for me to go by the law. What I care most about is the client,&quot; Valmaa said. It is absolutely essential for a western businessman to have an accountant with good legal expertise in Russia, he pointed out. 
 Quality is the number one target, size is less important, Valmaa said when asked whether he plans to expand to Russia's other regions. Devoting all his time to work, he has no ambitions to build an empire for his children to inherit. &quot;One can't put such a burden on one's children's shoulders,&quot; he said, adding that &quot;everyone works for his own pleasure.&quot; 
 &quot;He is addicted to work. To me, he is the model of how one should work,&quot; said Boris Yaroshko, head of the St. Petersburg branch of the Russian Transport Inspection, who has known Valmaa since 1992. 
 &quot;I saw what he started from in Olgino - it was a deserted landfill. He started with some five vehicles,&quot; Yaroshko said. Valmaa currently has about 80 vehicles and a customs department located in the company's territory. &quot;I don't know how he managed to achieve this much, especially in the Russian market. He started from being a simple driver. And his enthusiasm has not changed a bit,&quot; Yaroshko said.
 &quot;Nothing about Valmaa is either typically Finnish or typically Russian. In all respects, he is quite special,&quot; said Juha Vatto, vice-president of YIT Construction Ltd. in St. Petersburg, and Valmaa's acquaintance for more than 20 years. 
 In Vatto's opinion, Valmaa's secret is his extreme energy and his talent for &quot;counting money.&quot; 
 &quot;He is always on the run, and does not have time for anything else but work,&quot; Vatto said. 
 &quot;If I were to advise anyone on the ways to start a business here, I would say that the main thing is to spend a lot of time in Russia. That will make all the stereotypes melt,&quot; Valmaa said. &quot;If it had not been for the help that Russians gave me, I would not have made it,&quot; he added. 
 &quot;The Finnish ways of business management won't fit here,&quot; Valmaa said. &quot;Russia is the most democratic country in the world in the way that every stranger I meet has the right to decide my future,&quot; he said.

TITLE: Russian Tourists Demand World's Attention
PUBLISHER: Staff Writer
TEXT: With greater numbers of Russian travelers heading to spend their holidays and money abroad, Russia is widely considered to be an emerging market with the highest potential in many countries' tourism industries.
 
Last year, Russians left a handsome $10 billion sum while vacationing abroad, and, according to the Russian Union of Travel Industry, last year the number of Russian tourists increased by 500,000 from 2002, and by almost 1.5 million from 2001.
 Naturally, the highest growth is noticed in countries where Russians don't need an entry visa. Thus in Tunisia the number of Russians plummeted by 169 percent in 2003.
 However, the general pattern of Russian travel is changing. Russians are showing an increased interest in new places, and look for new angles when visiting already familiar countries.
 &quot;The structure of Russian tourism in Italy is becoming more and more diverse,&quot; said Tatyana Bozhko from the Italian National Tourism Board in Moscow. &quot;Naturally, beach tourism and classic excursion routes are still very popular but there are now requests for gastronomic trips, musical festivals and sport events.&quot;
 According to the research done by Comcon-St.Petersburg, the five most popular destinations for Russians in 2003 were Turkey with 12.9 percent of foreign travel, Germany with 10.3 percent, Egypt with 8 percent, Finland with 7.1 percent and Poland with 6.9 percent. France and Greece were very close with 6.3 percent and 5.3 percent respectively.
 In St. Petersburg the numbers were slightly different, Finland holding the prime position with 26.8 percent, Germany second with 16.8 percent, and Turkey, France and Bulgaria each attracting 9.4 percent.
 Maria Topolskaya, a commercial representative of the Societe Des Bains De Mer in Moscow, an umbrella group of top tourism businesses in Monaco, said that Russians are becoming a very pleasant clientele, distinguished and demanding yet not at all arrogant and uncouth.
 &quot;Monaco is very interested in Russian tourists, especially now that they are showing good taste and manners and speak foreign languages,&quot; Topolskaya said during a presentation on Monaco in St. Petersburg last week. &quot;They spend substantial sums of money on various extras, indulge in entertainment and tend to choose luxury accommodation.&quot;
 The research conducted by the Russian Union of Tourism Industry shows that Russian tourists spend a minimum of $500 a week on services, amusements and souvenirs alone, excluding transportation and accommodation expenses.
 Many industry professionals agree that in Europe Russians are now largely seen as a partial substitution for the American tourist market, which shrank after the September 11 attacks. 
 &quot;Depending on the season, Russian visitors make up 7-9 percent in our hotels, which compares very favorably to the results from 2001, when we had a maximum of 3-4 percent of Russians,&quot; Topolskaya said. Monaco is annually visited by 4 million travelers.
 Many countries confirm their declared interest in the Russian market by opening national tourism offices and increasing promotions. The Moscow office of Switzerland Tourism is reaching out to Russians through a string of regular events for the tour operators and the media, while a Russian language Internet portal offers all possible information, including live web cams on popular resorts.
 &quot;We increase the space for our booth at Moscow International Tourism and Travel exhibit every year, and in 2005 we have 400 square meters,&quot; said Maria Makarova, marketing manager for Russia and CIS at the Switzerland tourism office. &quot;We invest money in PR projects organized by travel agencies or seminars organized by the Embassy or Swiss International Airlines.&quot;
 The efforts are bringing encouraging results. The number of overnight stays among Russians traveling to Switzerland reached 250,000 in 2003, which is a nine percent increase from 2002 and a 15 percent hike from 2001. 
 France is also expecting a boom of Russians in the near future. Paris received 300,000 Russians last year, and is expecting the numbers to reach 500,000 in 2005. Top hotels in the French capital teamed up with limousine services, shopping outlets and entertainment enterprises like Crazy Horse and Moulin Rouge at the Paris Committee, recently established by the Paris Tourism Board to target Russian clientele.
 The Middle Eastern Market is actively focusing on Russians as well.
 The Jordan Tourism board opened an office in Moscow this year, granting the rights to represent Jordan to the consulting company TMI in order to strengthen their success. The country's national carrier Royal Jordanian has already established itself in the Russian capital, while the government established a friendly visa policy. Jordan is one of a very limited number of destinations where Russians can obtain a visa upon arrival.
 &quot;The main task of the office at the moment is to inform Russians in more detail about the diversity of the destination,&quot; said Natalya Kuznetsova, project manager at the Jordan Tourism Board in Moscow. &quot;There is a clear demand in the Russian market for a greater variety of options, and we see a tremendous potential here, as Jordan offers what strongly interests Russians - a juxtaposition of recuperation by the Dead Sea and Red Sea with exploration of historical sites and religious sanctuaries.&quot;
 In Russia, tourist destinations are often presented by national and regional tourist boards as well as by local and international tour operators, although there are exceptions. 
 Australia is being promoted solely by several travel agencies. The Australian National Tourism board doesn't have an office in Russia and isn't taking part in tourism fairs in the country. 
 &quot;Only about 5,000 Russians visit Australia every year, with the reason behind such low numbers being not so much the high cost of the trip as lack of promotion from the state,&quot; believes Anna Tumanyan, head of the Moscow office of the Australian Travel Club agency based in Sydney. &quot;Naturally, not everyone can pay $2,500 or more for the trip, but if the country showed a bit of interest in promoting itself in Russia, the numbers of Russian tourists would be much higher.&quot;

TITLE: RosBusinessConsulting Declared Investor Safe
PUBLISHER: Staff Writer
TEXT: MOSCOW - Investors jittery about the risk-fraught Russian media sector need not be wary of buying into RosBusinessConsulting as its news coverage is too dull for the Kremlin to care, RBC CEO German Kaplun said Friday.
 
Previewing RBC's second roadshow later this month, Kaplun said the software, information technology and business television specialist will offer 15 million new shares to help fund expansion, in an emission expected to raise up to $20 million.
 Russia's answer to Bloomberg, RBC is an information agency that started as a news wire, opened up an IT department that now accounts for a third of its revenues and last year opened the country's first dedicated 24-hour business television channel.
 RBC also recently teamed up with U.S. business channel CNBC in a joint programming venture.
 Hoping to finance the purchase of an undisclosed IT firm with its second share emission, Kaplun told investors not to worry about state interference in RBC. &quot;We're safe because we never comment on political affairs,&quot; he said.
 RBC TV is gradually garnering viewers, mainly by cable in Moscow and St. Petersburg. Last year, television accounted for 12 percent of RBC's $3.7 million net profit, on sales of $48.5 million.
 In 2004, the company predicts earnings of $10.8 million on sales of $71.13 million.
 With a core audience of 1.6 million, RBC says its ambitions are not great enough to warrant an NTV-style takeover. &quot;We have a niche audience and we'll never become a channel of national importance,&quot; Kaplun said.
 The company's five core shareholders will place 11.16 million existing shares with selected Russian and international investors at the same time as 15 million new shares are issued, of which the core shareholders will receive 11.16 million.
 The shares will be priced June 16, with the trading of newly placed existing shares beginning the next day.
 The percentage of RBC's free-float shares will rise to 36.1 percent from 26.5 percent, the company said. RBC's shares were down 3.5 percent at 55.50 rubles late Friday.
 RBC became the first Russian company to go public on local bourses in 2002 when it raised $13 million on the RTS and MICEX exchanges. The company's placement managers expect the second emission to sell at a price toward the bottom half of its spread, &quot;what with the way the market is performing right now,&quot; said a company official, who asked not to be named.
 The shares of most companies listed domestically were distributed during privatization through auctions and other mechanisms, not initial placement offerings. Several high-profile companies, such as Wimm-Bill-Dann, went public on foreign exchanges.
 Cosmetics company Kalina generated $25 million at its IPO on MICEX in April. It was preceded by the largest-ever domestic IPO by Irkut, bringing the aircraft maker $127 million in March.

TITLE: The Paradox of Ronald Reagan
PUBLISHER: The Los Angeles Times
TEXT: Certainly no more improbable star has crossed the U.S. political firmament than Ronald Reagan, the former governor of California and 40th president of the United States. Reagan left the presidency in January 1989, the only modern president to emerge from office more popular than when he entered. He was the eternal optimist, amiable but stubborn. He put a happy face on even the grimmest realities, often relying on dubious anecdotes and statistics. He romanticized the past and drew on an essential American optimism for the future. Reagan was perhaps the ultimate television president, a man schooled not in gritty precinct politics but in Hollywood movie acting.
 
Instead of enjoying his twilight years as an adored elder statesman of the Republican Party, however, he began a long descent into the nothingness of Alzheimer's. As the disease advanced he was increasingly out of sight, yet his conservative ideology became a permanent fixture of politics. 
 Reagan's fiercely protective wife, Nancy, kept the descent of his mind mostly private. But in a speech in May she pleaded with President George W. Bush to loosen the reins on stem cell research, which could lead to therapies against Alzheimer's. She sadly described her husband as being &quot;in a distant place where I can no longer reach him.&quot;
 His death at 93 came Saturday.
 As president, Reagan was genial and ever-smiling, ignoring unpleasant facts, dreaming up hopeful fantasies. He was supremely suited to take advantage of the electronic media that now dominate and shape modern political dialogue, placing image over substance. He brought to his White House tenure the grit, drama, pathos and courage of a Wild West movie hero, surviving an assassination attempt and a bout of cancer. Even his detractors said that Reagan, who was notoriously detached and inattentive to the details of the presidency, was essentially playing his best role ever. &quot;He is the ideal past, the successful future, the hopeful present, all in one,&quot; wrote the historian Gary Wills. Bush's admiration of Reagan is evident in his similarly sunny, uncomplicated style.
 The mark of Reagan's presidency was its paradoxes. Having campaigned as an implacable foe of government deficit spending, he left behind a federal debt that was nearly triple the figure at his inauguration. He succumbed, as Bush has, to the fallacious &quot;supply side&quot; economic notion that government revenues rise if taxes are cut. He reviled the Soviet Union as an &quot;evil empire&quot; but ultimately met repeatedly with Soviet President Mikhail Gorbachev and worked out a detente that led in the end to the fall of communism.
 A New Deal Democrat in his youth, Reagan was in the vanguard of the Republican conservative revolution that is today the Republican establishment. Although he vowed to shrink government and eliminate cabinet departments, he wound up adding one, the Department of Veterans Affairs.
 Hero though Reagan was to so many Americans, his legacy is marred. Economically, the Reagan years were epitomized by a freewheeling entrepreneurialism and free spending. But the affluent got more affluent and the poor got poorer. The number of families living below the poverty line increased by one-third. The Reagan administration's zeal for the deregulation of industry helped create the savings and loan debacle, which left taxpayers holding the bag for billions of dollars in losses. All of this presaged a recurring malaise among American workers, who continue to see jobs lost to corporate downsizing and outsourcing.
 His administration's resistance to federal hegemony in social issues led to significant retreats in civil rights. And Reagan's political caution on the AIDS scourge - an attitude driven by the connection to homosexuality - allowed valuable years to pass before the federal government took an assertive role in researching and preventing the disease. 
 The old Reagan has been gone for years, hidden within an irreversible fog. But he changed U.S. politics for the long term. Enduring as well is his image: the cowboy hat, the genuine smile, hand aloft in greeting. Even his politics were friendly compared with today's, a lesson to those who hope for as big a legacy.
 <i>
 This comment appeared as an editorial in the Los Angeles Times. </i>

TITLE: Reform Must Not Kill Private Taxis
TEXT: City Hall's plans to clean up the city's taxi industry are driven by good intentions.
 
It would be good if all drivers were polite, spoke English, drove cars that meet safety standards, used a meter wherever they go and paid their taxes.
 But most of all that would be good for foreigners; it could be quite bad for those whose interests City Hall is here to serve first of all: the citizens of St. Petersburg. 
 The city would benefit from tackling the taxi mafia who plague foreigners at airports and railway stations. These threatening, pushy, leather-clad men who mutter &quot;cheap, cheap&quot; and then demand $50 for a ride across town are rip-off artists.
 Disoriented newcomers, often tired after a long flight or train journey and with a poor understanding of the signs or the language, find them difficult to resist. The experience of being taken for a ride leaves them with a bad taste in their mouths and a negative attitude toward the city.
 If City Hall wants to deal with this, then it should regulate those operating from those places.
 However, most of the taxi activity in the city is by private drivers, or gypsy cabs, who offer their services for short trips across town for reasonable prices. Rip-offs are infrequent because there is a market for such services and competition. This is free-market competition at its barest.
 If a passenger does not like the fare offered, they don't have to take it. In all probability, the next driver, especially if he is going their way anyway, will do it at a lower cost.
 Gypsy cabs operated in Soviet times and were a way of earning a little extra money and satisfying the demand that the state was not able to satisfy. Overheads and management structures were non-existent and kept costs down.
 They are still doing the same thing, but City Hall appears to want to tie this grassroots business up in red tape and turn the driver and the passenger who uses the service into criminals.
 The red tape might generate a little more revenue for the government, but by putting the price up, fewer people may take taxis.
 And aren't there far more serious matters for the authorities and law enforcement officers to be dealing with at this time than creating an echo of the Soviet-era regulation of the economy outside state control.
 Judging by the number of complaints The St. Petersburg Times receives, the police would do better to clean up their own act and purge their ranks of corrupt members. There are also plenty of real criminals to catch.
 Rather than monitoring private taxi cabs, the traffic police, who would undoubtedly see policing a new taxi regime as another way to cash in, should be seen more often sorting out the Gordian Knot that is the city's traffic jams.

TITLE: Bureaucrats Spoil Efforts to Make State Orders Honest
TEXT: A huge scandal broke out at a city government session last week.
 
It emerged that the new procedure for allocating state orders, or <i>goszakazy,</i> in St. Petersburg, approved by a government resolution on Dec. 23, 2003, is being openly sabotaged at lower levels of the administration, where officials prefer to keep working as they always have. The declared goals of the reform have so far not been achieved and the basic flaws of the previous system remain.
 Evidence of this is provided by an analysis of the purchases conducted over five months this year, submitted by Vladimir Blank, chairman of the economic development, industrial policy and trade committee. Only 16 percent of the budget for state orders went on items purchased through open competitions. Out of 26.8 billion rubles ($985 million), 22.5 billion rubles was spent without any competitive procedure - the purchases were made from a &quot;single source'&quot; method and through &quot;overpriced bids.&quot; This prevented a transparent process of choosing a provider and accordingly, the saving of resources.
 The leaders in this practice of making purchases without open tenders are the Senior Budget Resource Managers (SBRM), branches of the administrative committee - only 2.4 percent of their allocations were made as a result of open tenders. The committees are openly violating the requirements of the new system for state orders. SBRMs have the right to enter into contracts independently for sums up to 5 million rubles ($172,000) - decisions on larger purchases are taken by the Interdepartmental Commissions and Government Commission. They deliberately split up the purchases into lots at a price not exceeding this limit. The limit on what portion of funds can be allocated in this way -10 percent - is simply ignored.
 The practice of concluding additional agreements, which has been banned by the government, continues. This is the most common way of falsifying tenders: SBRM hold the tender and conclude a contract with a supplier offering the lowest price, then introduce an addition - either a product or services - bought at a higher price. 
 Another ruse is for a committee, under a specious pretext, drags out the formulating of documentation for a tender. At the end of the year it emerges that resources have not been allocated, the budget law has been violated and something has to be done. There is no time to hold the tenders by all the rules. The committee announces that some <i>force majeure</i> in circumstances has sprung up and there is no other option than to distribute the orders without competition. This is done, and it goes without saying, in favor of &quot;their&quot; firms for whose sake the whole operation takes place.
 Competition among candidates for state orders is limited by the preservation of a points system for evaluating candidates, which creates discriminating conditions and blocks access to &quot;outside&quot; firms. 
 Blank believes that if competitive procedures were widely applied, the city budget could in a year have saved more than 1 billion rubles. But in five months only 234 million rubles has been saved.
 Governor Valentina Matviyenko asked Blank to take measures to eliminate shortcomings in the orders system, establishing terms for its abuse and for the inefficient expenditure of money. She insists that the practice of additional agreements - &quot;a loophole for unscrupulous people&quot; - must be stopped, that control over cost-estimate documentation be tightened so that they are not artificially inflated and that SBRM be forced to prepare documentation and conduct purchases at the start of the financial year so that in October and November &quot;money isn't scattered into who knows what.&quot;
 Russia has always been full of ideas, but extraordinarily lacking in effective mechanisms for realizing these ideas. A mechanism is needed that will force officials to obey the rules on purchases and severely punish failure to observe them. 
 For example, the finance committee shouldn't finance purchases that are over a limit unless a tender has been held. And the chairman of the committee fined in this way should resign. A corresponding motion should be presented July 20 by the working group under Vice Governor Mikhail Oseyevsky.
 
 <i>Vladimir Gryaznevich is a political analyst with Expert Severo-Zapad magazine. His comment was first broadcast on Ekho Moskvy in St. Petersburg on Friday. </i>

TITLE: Chris Floyd's Global Eye
TEXT: <b>Animal House
 </b> Every now and then the mask slips, and we see the true face of the system that marshals the world. For an instant, the heavy paint of sober wisdom and moral purpose falls away, and there, suddenly, with jolting clarity, is the snarling rictus of an ape.
 
Last month gave us two such moments: a quantum collision, where past and present co-exist temporarily, their overlapping images phasing in and out of synch, now Nixon now Bush now Kissinger now Rumsfeld, mouths, eyes, snarls morphing and shifting, with only one image holding constant between the eras - the twisted, shivered bodies of dead innocents.
 First was the release of long-secret phone transcripts from Henry Kissinger's heyday as Richard Nixon's National Security Adviser. Most stories about the release centered on the Nixon Gang's panicky efforts to deal with bad publicity from the rape-and-slaughter rampage by U.S. troops in My Lai, Vietnam. As in the current Iraqi prison scandal, the great statesmen were concerned wholly with &quot;containing&quot; the PR damage, not stopping the systematic atrocities - which were, after all, being carried out at their command. Then as now, rump-covering was the order of the day.
 But virtually ignored in the pile of power-talk was an extraordinary historical snapshot of a war crime in the moment of conception. It's 1970. Nixon is angry: The Air Force is not killing enough people in Cambodia, the country he has just illegally invaded without the slightest pretense of Congressional approval. The flyboys are doing &quot;milk runs,&quot; their intelligence-gathering is too by-the-book: There are &quot;other methods&quot; of getting intelligence, he tells Kissinger. &quot;You understand what I mean?&quot; &quot;Yes, I do,&quot; pipes the loyal retainer.
 Nixon then orders Kissinger to send every available plane into Cambodia - bombers, fighters, helicopters, prop planes - to &quot;crack the hell out of them,&quot; smother the entire country with deadly fire: &quot;I want them to hit everything.&quot; Kissinger tells his own top aide, General Alexander Haig, to try to implement the plan: &quot;He wants a massive bombing campaign in Cambodia,&quot; Kissinger says. &quot;It's an order, it's to be done. Anything that flies on anything that moves.&quot;
 That's how the system works, beneath the mask. A blustering fool issues an order - and thousands upon thousands of innocent people die. An entire country is ripped to shreds, and into the smoking ruins steps a fanatical band of crazed extremists - the Khmer Rouge - who murder a million more. 
 Just hours after the transcripts' release, the image of Kissinger in 1970, calmly ordering mass death, morphed into the picture of Pentagon chief Don Rumsfeld addressing West Point graduates in 2004, exhorting the Army cadets to a life of moral purpose - without a single mention of the rape-and-torture gulag he's strung across the world at the order of his own hell-cracking master, George W. Bush. Rumsfeld also issued this warning: The illegal invasion of Iraq is just &quot;the beginning&quot; of what is no longer merely a &quot;war on terror&quot; but is now an all-out death-struggle with what Rumsfeld called &quot;global insurgency,&quot; Reuters reports.
 Note carefully the change in rhetoric - the change in target - from &quot;terrorism&quot; to &quot;insurgency.&quot; An &quot;insurgent&quot; is someone who rises up to resist or overthrow a ruling power. George Washington was an insurgent; so was Pol Pot. But a perceived <i>&quot;global</i> insurgency&quot; can only be aimed at a <i>global</i> power. What Rumsfeld is clearly saying is that anyone anywhere who resists the world-spanning will of the American Empire will be subject to &quot;the path of action.&quot; That's the blood-and-iron terminology that Bush himself used to describe his policies in the official &quot;National Security Strategy&quot; he issued - just months before killing more than 10,000 civilians in Iraq.
 No doubt the definition of &quot;global insurgent&quot; will prove to be every bit as elastic as &quot;terrorist,&quot; in a world where Iraqi prisoners - 70-90 percent of them completely innocent, according to the Red Cross - were &quot;Gitmo-ized,&quot; treated just like the alleged terrorists in America's lawless Guantanamo concentration camp; a world where even U.S. citizens simply disappear into the maw of military custody, held without charges, indefinitely, on the president's express order. If America controls your country and you don't like it, you're an insurgent. If you're an American who doesn't like to control other countries, you too are an insurgent. And the war against you is &quot;just beginning.&quot;
 &quot;Global insurgency. Crack the hell out of them. The path of action. Anything that flies on anything that moves.&quot; They should chisel these words on the White House walls, teach them in every classroom - for <i>this</i> is the system, the true constitution of the American Establishment, the great and the good, the best and brightest. This is what they do, what they've always done. From the Indians to the Iraqis, whatever gets in the way of their power and privilege - individuals, tribes, whole nations - gets trampled, broken, ruined, slaughtered.
 Yet there's nothing uniquely &quot;American&quot; in these criminal policies, and the hypocrisy surrounding them. It's how elites have behaved from time immemorial, from the days of the apes: baring their teeth and pounding their chests, ruling through fear and violence, beating, biting, raping, whatever it takes to keep them at the top of the tree. They disguise their savagery - even from themselves - with masks of pomp and piety, but what moves them is the spirit of the beast, the blind gut-lust for dominance, the ape-remnants that live on in our brains. They're too weak, too stupefied with corruption to rise above this inherent bestiality.
 What should you do with such dangerous creatures in a civilized society? Why, put them in a cage, of course.
 
 <i>
For annotational references, see the Opinion section at www.sptimesrussia.com </i>

TITLE: America Plans State Funeral For Reagan
PUBLISHER: The Associated Press
TEXT: SANTA MONICA, California - Former U.S. president Ronald Reagan was remembered with jelly beans, flowers and American flags on Sunday at memorials in his hometown and outside the mortuary where the former president's body lay.
 
Reagan will be memorialized at the first presidential state funeral in more than three decades, a ritual rich in traditions from the country's earliest days. His remains will be flown to Washington on Wednesday to lie in state in the Capitol Rotunda. The funeral, undoubtedly attended by world leaders, will be at Washington National Cathedral on Friday. President Bush will speak at the funeral.
 Tokens of remembrance were left in Santa Monica for the nation's 40th president, who was 93 when he died of pneumonia, as a complication of Alzheimer's, at his home on Saturday. &quot;Thank you for changing the world,&quot; said a handwritten note.
 The family's spokeswoman said former First Lady Nancy Reagan was thankful for thousands of expressions of sympathy over the death of her husband, and despite her sadness was relieved he was no longer suffering.
 &quot;I can tell you most certainly that while it is an extremely sad time for Mrs. Reagan, there is definitely a sense of relief that he is no longer suffering, and that he has gone to a better place,&quot; Joanne Drake told a press conference outside the mortuary where Reagan's body lay.
 In a piece written for Time magazine before Reagan's death, Nancy Reagan remembered her husband as &quot;a man of strong principles and integrity&quot; who felt his greatest accomplishment was finding a safe end to the Cold War.
 &quot;I think they broke the mold when they made Ronnie,&quot; she wrote in the article appearing Monday. &quot;He had absolutely no ego, and he was very comfortable in his own skin; therefore, he didn't feel he ever had to prove anything to anyone.&quot;
 On Monday, the Reagan family was due to travel in a motorcade with the body to the presidential library in Simi Valley, northwest of Los Angeles. After a private ceremony, the body was due to lie in repose for public visitation through Tuesday.
 On Wednesday, the body will be flown to Washington, D.C. The family accepted an offer from President Bush to use one of his jets, normally used as Air Force One, for the trip. The body will then be driven to the U.S. Capitol for a state funeral. Reagan's body will then lie in state in the Capitol Rotunda through Thursday.
 Friday morning, a motorcade will take the casket to the National Cathedral for a national funeral service. It will then be flown back to California for a motorcade to the library for a private interment service.
 Reagan will be buried in a crypt beneath a memorial site at the library, a library spokeswoman said. A curved wall adorned with shrubbery and ivy lines the memorial and is inscribed with a three-line quote from Reagan. &quot;I know in my heart that man is good. That what is right will always eventually triumph. And there's purpose and worth to each and every life,&quot; the inscription reads.
 Reagan died at 1 p.m. Saturday and his body was taken to a Santa Monica funeral home. A shrine that sprouted outside grew to include a cowboy hat, personal letters, flags, candles and jelly beans.
 Hand-written cardboard signs read: &quot;Because of you, we are proud Americans,&quot; &quot;God bless you, Ron, and God bless America&quot; and &quot;Good night, Mr. President.&quot;

TITLE: Iraqi Gas: 5 Cents 
 A Gallon
PUBLISHER: The Associated Press
TEXT: BAGHDAD, Iraq - While Americans are shelling out record prices for fuel, Iraqis pay only about 5 cents a gallon for gasoline - a benefit of hundreds of millions of dollars subsidies bankrolled by U.S. taxpayers.
 
Before the war, forecasters predicted that by invading Iraq and ousting Saddam Hussein, America would benefit from increased exports of oil from Iraq, which has the world's second largest petroleum reserves.
 That would mean cheap gas for American motorists and a boost for the oil-dependent American economy. More than a year after the invasion, that logic has been flipped on its head. Now the average price for gasoline in the United States is running $2.05 a gallon - 50 cents more than the pre-invasion price.
 Instead, the only people getting cheap gas as a result of the invasion are the Iraqis.
 Filling a 22-gallon tank in Baghdad with low-grade fuel costs just $1.10, plus a 50-cent tip for the attendant. A tankful of high-test costs $2.75.
 In Britain, by contrast, gasoline prices hit $5.79 per gallon last week - $127 for a tankful.
 Although Iraq is a major petroleum producer, the country has little capacity to refine its own gasoline. So the U.S. government pays about $1.50 a gallon to buy fuel in neighboring countries and deliver it to Iraqi stations. A three-month supply costs American taxpayers more than $500 million, not including the cost of military escorts to fend off attacks by Iraqi insurgents.
 The arrangement keeps a fleet of 4,200 tank trucks constantly on the move, ferrying fuel to Iraq.
 Iraq's fuel subsidies, which are intended to mollify drivers used to low-priced fuel under Saddam, have coupled with the opening of the borders to create an anarchic car culture in Baghdad.
 Cheap used cars shipped from Europe and Asia are flooding into Iraq. A 10-year-old BMW in good condition costs just $5,000. Since gas is so cheap, anyone with a car can become a taxi driver. Drivers jam the streets, offering rides for as little as 250 dinars - about 17 cents.
 Iraq has no sales tax, no registration, no license plates and no auto insurance. Some would argue there are no rules of the road. Cars barrel the wrong way on the highway. They swoop into surprise U-turns. They ignore traffic signals.
 Analysts say the U.S. gas subsidies can't last forever - and Iraqis may be in for an unpleasant shock when they end. In the meantime, however, the American taxpayer continues to foot a huge bill.
 &quot;The U.S. taxpayer has a right to be indignant, and Iraqis have to be warned about the long-run damages of this,&quot; said Anthony Cordesman, an Iraq analyst with the Washington-based Center for Strategic and International Studies. &quot;The minute the aid goes out, the party is over. And there's going to be a hell of a hangover.&quot;

TITLE: Islamic Charities Bankroll Terror Cells
PUBLISHER: The Associated Press
TEXT: NAIROBI, Kenya - Al-Qaida has siphoned millions of dollars from Islamic charities that help poor Muslims in Africa and Asia, and U.S. and Saudi government efforts to cut the flow have largely failed, western diplomats and former charity workers say.
 
Working with sympathizers inside the charities, al-Qaida has for years used humanitarian funds for terror attacks in Kenya, Tanzania and Indonesia, U.S. and other western officials said.
 In one case, donations to the Al-Haramain Foundation to support Islamic preachers ended up in the pockets of a suspect in the November 2002 bombing of an Israeli hotel in Kenya, a western diplomat said.
 A wholesale fish business financed with Al-Haramain funds also steered profits to the al-Qaida cell behind the August 1998 bombings of the U.S. Embassies in East Africa, U.S. officials said. The officials, most of whom spoke on condition of anonymity, cited intelligence garnered from informants, interrogations of suspects, documents seized from charities and communication intercepts.
 Al-Haramain, based in Saudi Arabia, provides the clearest example of a charity that has stayed open despite repeated attempts to shut it down overseas, including fresh moves this past week by the Riyadh government.
 At its height, Al-Haramain raised $40 million to $50 million a year in contributions worldwide, the vast majority going to feed hungry Somali orphans, educate poor Indonesian students and help sick Kenyan children.
 U.S. officials have privately conceded that only a small percentage of the total was diverted and that few of those who worked for Al-Haramain knew money was being funneled to Osama bin Laden's terrorist organization.
 But officials say money from Al-Haramain and other charities continues to be a major source of funds for al-Qaida.
 The latest move against Al-Haramain came Wednesday when Saudi officials, under U.S. pressure, moved to dissolve the charity and create a commission to filter all contributions raised inside the kingdom to support causes abroad.
 But Al-Haramain has deep roots - and wealthy benefactors - in countries where its branches are accused of helping finance al-Qaida. As pressure on the group has mounted in recent years, its foreign branches have increasingly turned to supporters outside the kingdom for money, said a U.S. intelligence official, speaking on the condition of anonymity.
 &quot;Vetting Saudi money is a start - it'll stop some money from getting to al-Qaida,&quot; said the official. &quot;But it's no solution.&quot;
 In 2002, the U.S. government blacklisted Al-Haramain's Bosnian and Somali branches - mandating the government to seize its assets and shut it down. A year later, the Saudi government, under U.S. pressure, demanded the charity close all its overseas branches.
 This January, Al-Haramain branches in Indonesia, Kenya, Tanzania and Pakistan were put on U.S. and U.N. blacklists.
 Al-Haramain's acting director, Dabbas bin Mohammed al-Dabbasy, said in May that all the charity's overseas branches were closed.
 Yet in Kenya and Somalia the charity still appears to be running.
 U.S. investigators believe the group is using new names in Kenya, having simply shifted its funds to fresh bank accounts, the intelligence official said. The official declined to provide names for fear of tipping off Al-Haramain officials who may believe they are working undetected.
 The official said many Islamic charities that have been ordered shut down or are being investigated for terrorist ties are reopening under new names or staying open in areas where there is no government crackdown.
 Charity is a central facet of Islamic ethics. In Kenya and Somalia, where many Muslims are devout and extremism hasn't taken deep root, al-Qaida operatives and sympathizers inside Al-Haramain presented themselves to philanthropists as good Muslims looking to do God's work.
 In Pakistan and Indonesia, where extremists have found a broader audience, Al-Haramain advertised donations as a form of jihad, or holy war, although it did not always say the money would be used for terrorism, the intelligence official said.
 With al-Qaida's recruiting efforts meeting only modest success in eastern Africa, the terrorist network used money from charities for logistical and operational expenses, U.S. officials said. In Pakistan and Indonesia, however, the charity money is used for recruiting as well.
 Governments in countries like Kenya that were once reluctant to investigate charities for fear of angering Muslims have become more willing to aid U.S. moves to cut terror funding.
 But even in the best circumstances, tracking money &quot;is a painstaking, time-consuming endeavor,&quot; said Ted Dagne, an Africa specialist at the U.S. Congressional Research Service. U.S. investigators &quot;have had years to develop the skills it takes to do this kind of work - and we still have a lot to learn.&quot;

TITLE: World Leaders on Stage at D-Day Ceremony
PUBLISHER: The Associated Press
TEXT: ARROMANCHES, France - Near the five beaches where waves of Allied soldiers stormed ashore 60 years ago, world leaders put aside their differences Sunday to commemorate the D-day invasion that broke Nazi Germany's grip on continental Europe.
 
President George W. Bush and French President Jacques Chirac used the opportunity to reinvigorate the flagging U.S.-European bond cemented during World War II. Chirac, a leading critic of the U.S.-led war in Iraq, thanked America for its part in the June 6, 1944, invasion of Normandy, one of the boldest military operations ever and one that led to the defeat of Hitler.
 &quot;France will never forget,&quot; Chirac said. &quot;It will never forget those men who made the supreme sacrifice to liberate our soil, our native land, our continent, from the yoke of Nazi barbarity and its murderous folly.
 &quot;Nor will it ever forget its debt to America, its everlasting friend.&quot;
 Earlier, Chirac welcomed Bush at the American cemetery in Colleville-sur-Mer, where 9,387 fallen U.S. service members are buried. There, Bush tried to ease the strain in the trans-Atlantic alliance.
 &quot;The nations that battled across the continent would become trusted partners in the cause of peace. And our great alliance of freedom is strong, and it is still needed today,&quot; Bush said. &quot;America would do it again for our friends.&quot;
 Under gloriously sunny skies, Chirac pinned Legion of Honor medals on veterans from 14 nations in a pomp-filled ceremony at Arromanches, near the midpoint of the five code-named beaches where about 156,000 Allied soldiers stormed in from the English Channel.
 As Allied flags fluttered in the wind, Chirac, Bush and leaders of more than a dozen countries and hundreds of dignitaries gave a standing ovation to the veterans, ranging in age from 79 to 94.
 &quot;To you, on behalf of all French men and women, on behalf of all the heads of state and government gathered here today and of all freedom-loving people, I express our gratitude, our pride and our admiration,&quot; Chirac said in a passionate speech to the former combatants.
 The world leaders attending the festivities included Russian President Vladimir Putin, British Prime Minister Tony Blair and German Chancellor Gerhard Schroeder - the first German leader to attend a D-day commemoration in Normandy. Britain's Queen Elizabeth II also attended.
 Schroeder's participation symbolized Germany's transformation from mortal enemy to trusted partner.
 &quot;France's memory of June 6, 1944, is different than that of Germany,&quot; Schroeder said. &quot;Nevertheless we share the same common conviction: We want peace.&quot;
 The waves on Normandy shores ran red with blood on D-day as Allied soldiers scurried across heavily mined and obstacle-covered beaches. Other flew into the back country in gliders or dropped in by parachute, with some getting snagged in trees or buildings.
 There is no definitive D-day death toll, but estimates range from 2,500 to more than 5,000. Bodies still are unearthed along the Normandy coast.
 Britain's Queen Elizabeth II began the commemorations at Juno Beach by thanking Canadian soldiers, who were assigned to capture it during the invasion.
 &quot;Britain had been directly threatened by the enemy, but you came across the Atlantic from the relative security of your homeland to fight for the freedom of Europe,&quot; she said.
 Several thousand people, including hundreds of British veterans, crowded between rows of white gravestones during a British-French memorial service at a British cemetery in Bayeux.
 &quot;On behalf of my generation, the younger one, I thank you,&quot; Blair told Australian veteran Gordon Church, 96, who landed on Gold Beach.

TITLE: Sharon Wins Vote on Settlement Plan
PUBLISHER: The Associated Press
TEXT: JERUSALEM, Israel - Prime Minister Ariel Sharon pushed his plan to remove settlements from the Gaza Strip through his Cabinet, but agreed no action will occur for nine months, when another vote to dismantle the settlements will be taken.
 
Sharon called the 14-7 Cabinet vote a victory, but the Cabinet added conditions that cast doubt on actual implementation. Because of the delay on a final vote, no settlements could be removed until March.
 The delay also gives settlement supporters in the government time to try to sabotage the pullout - not an unrealistic goal, since Sharon's government has been weakened by the withdrawal debate. He had to fire two ministers to get his way in the vote.
 There is also talk about early elections by the fall. A first test was to come Monday, when Sharon's government faces parliamentary motions of no confidence, which he was expected to win. 
 Palestinians were skeptical that the plan would be implemented.
 &quot;If approving this fragmented plan took the Israeli government this long, I wonder how much time it will take to implement it,&quot; said Palestinian Cabinet minister Saeb Erekat.
 Such a removal of settlements would be historic. No Israeli government has ordered removal of authorized settlements since the first Israelis settled in 1968 on land captured in the 1967 Mideast war.
 The United States welcomed the Israeli Cabinet's approval of the pullout plan. &quot;We urge that practical preparatory work to implement the plan now proceed as rapidly as possible in Israel,&quot; White House press secretary Scott McClellan said. Sharon, once a patron of Jewish settlements, is staking his credibility on the plan. While opinion polls show a solid majority of Israelis support the plan, he has struggled to get it approved by his government. His Likud Party rejected it in a non-binding referendum on May 2.
 Sharon wants to trade Gaza, where 7,500 Jewish settlers live amid 1.3 million Palestinians, for the main settlement blocs in the West Bank, where most of the 230,000 Jewish settlers live.
 Israeli Foreign Minister Silvan Shalom was to travel to Cairo on Monday for talks about implementing the pullout plan. 
 Egypt has offered to train Palestinian security forces and help them take control of Gaza once Israel leaves. Egypt, which borders Gaza, is keen to see the Sharon program passed, in the hope it will bring quiet to the volatile area.

TITLE: Smarty
 Falls Short
 Of Crown
AUTHOR: By Beth Harris

PUBLISHER: The Associated Press
TEXT: NEW YORK - Smarty Jones is going on vacation. 
 
The small chestnut colt who captured the public's fancy has earned a rest after a grueling five-week stretch in which he came up one length short of winning the Triple Crown. 
 Smarty Jones won the Kentucky Derby and Preakness, but was overtaken in the stretch by 36-1 long shot Birdstone on Saturday in the 1 1/2 -mile Belmont Stakes. 
 Trainer John Servis plans to give Smarty Jones three or four weeks off. &quot;I'll let him rest up and put him on a schedule for the Breeders' Cup [in October],&quot; Servis said Sunday after getting his first good night's sleep in quite a while. 
 &quot;We're not done. We've got a lot more things ahead of us.&quot;
 After the break, Smarty Jones could run in the Pennsylvania Derby at his home track near Philadelphia as a thank you to the local fans. Then there's the Breeders' Cup in Texas. 
 Owners Pat and Roy Chapman want to run Smarty as a 4-year-old next year. As expected, Smarty's rivals went after him with a vengeance in the Belmont. They forced him into the lead with a mile to go and pressed the pace so much that the colt was tiring when he hit the top of the stretch. 
 When jockey Stewart Elliott tried to urge Smarty home to victory, he had already run too fast and Birdstone blew past him. 
 &quot;Stew was a little upset. He felt he would have settled if those guys hadn't pressed him so hard,&quot; Servis said. &quot;He knew they were just sacrificing their horses. He had horses breathing down his neck.&quot;
 And Servis didn't blame any of the other jockeys for their tactics. 
 &quot;If you got a horse going for the Triple Crown, he's got a bull's-eye on him. Those people have nothing to lose,&quot; he said. &quot;You pull out all the stops.&quot;
 Winning trainer Nick Zito didn't mind being a bit player in Smarty's big show. &quot;Smarty Jones was a worthy star,&quot; he said. &quot;The average person was there because of Smarty Jones. He has done a lot.&quot;
 Zito, who won his first Belmont in 12 tries, apologized to Servis after the race. Winning jockey Edgar Prado expressed regret at spoiling Smarty's party, as did Birdstone's owner Marylou Whitney. &quot;I don't know of anyone who would be more deserving than Nick,&quot; Servis said. 
 The Chapmans plan to tour Kentucky horse farms in the next few weeks in search of a future home for Smarty Jones once his breeding days begin. They want a place that will allow easy access to fans. &quot;If he had settled, he would have got 1 1/2 miles,&quot; Servis said. &quot;You would have had a Triple Crown winner, I guarantee that. In my heart, I feel he was the best horse.&quot;

TITLE: Lakers Stumble at First Hurdle
 In Eastern Conference Champs
AUTHOR: By Greg Beacham

PUBLISHER: The Associated Press
TEXT: LOS ANGELES - While the Lakers stumbled and strained through the second half of their first home loss in the playoffs, a few scattered cries eventually grew to a small chorus from the flummoxed crowd. 
 
&quot;Shoot! Shoot! Shoot!&quot;
 That's easier shouted than done against the Pistons' stifling defense - and the Lakers have a whole new respect for the bruising Eastern Conference champions after Detroit's 87-75 victory in Game 1 of the NBA Finals on Sunday night. 
 &quot;I don't know if we could ever defend better,&quot; Pistons coach Larry Brown said. &quot;We contested shots. We did an unbelievable job, and I think that's what it's going to take.&quot;
 Kobe Bryant heard the chants, firing up 27 shots of mostly dubious quality while scoring 25 points. But though Shaquille O'Neal went 13-for-16 on the way to 34 points, he didn't get the ball nearly enough in the second half. 
 &quot;That's a good team, and we have to rise up and meet that challenge,&quot; O'Neal said. &quot;We know that now.&quot;
 The Lakers' struggles also sparked another mini-controversy in a season chock-full of them. 
 Coach Phil Jackson said he thought O'Neal looked tired in the second half. 
 &quot;Tired of waiting,&quot; O'Neal responded. &quot;I don't think a person going 13-for-16 is a sign of being tired by any means.&quot;
 Chauncey Billups scored 22 points for the Pistons, who weren't much better on offense than the Lakers. But Rasheed Wallace scored six of his 14 points in the fourth quarter, and Detroit poured its energy into a defense that kept the ball away from O'Neal. 
 Though the Pistons have exactly six games of NBA Finals experience on their roster, they were not intimidated by the Lakers' star-packed crowd or the nine championship banners on the arena wall. 
 They still believe they're tough enough to end the West's streak of five straight series victories in the NBA Finals. 
 &quot;We're never scared,&quot; said playoff scoring leader Richard Hamilton, who had just 12 points on 5-of-16 shooting. &quot;We're going to go out there and have each other's back.&quot;
 Only an incredible defensive team could shut down the Lakers, and the Pistons certainly put another chokehold on another powerful opponent. They blanketed Los Angeles on nearly every possession, forcing difficult passes and tougher shots by the sheer force of their athleticism. 
 Shaq scored nearly every time he got the ball low in the paint, but the Pistons attacked Los Angeles' entry passes and also forced O'Neal to commit six turnovers. He got just eight shots in the second half, while Bryant missed 10 of his 15 - and also clanged consecutive 3-pointers in the fourth quarter to kill the Lakers' last attempt at a rally. 
 O'Neal went 8-for-12 from the line, but didn't shoot a free throw in the second half as the Lakers failed to find him underneath. He still was angry after the game until getting a hug and a kiss from his wife and daughter on the way out of Staples Center. 
 The rest of the Lakers got no more than a handful of open looks. From Ben Wallace's dangerous presence in the middle to Billups' harassment of Gary Payton and Derek Fisher, the Pistons were all over the Lakers. 
 By the final possession, the Lakers didn't even try: Payton dribbled out the final 10 seconds of his first finals game since 1996 with pure disgust on his face. 
 Game 2 in the best-of-seven series is due to be played Tuesday, with Game 3 in Auburn Hills on Thursday. 
 &quot;It's a seven-game series, and there's always Tuesday,&quot; Bryant said. 
 Payton and Karl Malone, the Lakers' ringless duo, both went scoreless in the first half. Malone had the worst playoff game of his 19-season career, scoring four points on 2-of-9 shooting, and Payton - who had three points - bettered his career playoff-low by one point. 
 &quot;Four points is terrible,&quot; Malone said. &quot;My little boy can do that.&quot;
 None of the Lakers' supporting cast scored more than five points, while eight Pistons got at least that many. Except for Hamilton's shooting struggles against the defense of childhood rival Bryant, the game was almost ideal Detroit basketball. &quot;It's unbelievable the feeling we have right now, but there's no way we can dwell on it,&quot; Billups said. &quot;We have to come in and start worrying about Game 2.&quot;