November 2007 Archives

Oh my. Well, this takes care of quite a lot of our holiday shopping...

From GIZMODO: Those of you who fear they've got on the wrong side of Vladimir Putin just might find the Polonium Pen a must-have. Basically a hand-made ion chamber with LED read-out, the Polonium Pen will sniff out excessive doses of the radioactive element in your cocktail, dim sum, or caviar when held over the suspect glass or dish.

There are a few downsides, though. Firstly, the Polonium Pen is extremely fiddly to make. If the wire probe that feeds into the ion chamber touches anything remotely conducive, it won't work. Secondly, the electronics must be shielded by a metallic cover to keep them safe from stray electric fields. And thirdly, the ion chamber is so small that only significant amounts of radiation can be detected. That swings it, then.

Yes, somebody actually figured out how to make one of these.

From the cheeky editors of the FT: The Russian football team has successfully employed a foreign coach because there was no suitable domestic candidate. Why should the Russian state not behave in the same way? The Russians seem to be keen on the smack of firm government, but also want a president who understands business and isn’t too corrupt. The obvious solution is to import a Singaporean.

It is interesting that they make this leap of logic - just at the beginning of the month we featured a comparative piece on this blog from Dr. Chee Soon Juan, leader of the Singaporean opposition, whom I had met at an International Bar Association conference. The citizens of both Russia and Singapore suffer from the same damaging myth: that economies grow fastest in the absence of democracy. See the FT piece after the cut.

Thanks to some colleagues of mine in Russia, I'm pleased to be the first to offer this exclusive translation of a very important Kommersant interview with Oleg Shvartsman of FPG Finansgrupp. The information shared by Mr. Shvartsman is entirely unprecedented, shedding light onto the shadowy financial management of siloviki businesses and assets, including the the identification of Igor Sechin as the most important man in Russia (more powerful than Putin). This interview confirms the state's business methodology which I have been talking about for years in interviews and on this blog: Shvartsman says that they use various voluntary and coercive "instruments" to drive down the market value of the assets they wish to steal, thereby carrying out a "velvet re-privatization."

Anyone who boasts that Putin has "rescued" Russia from the thievery of the 1990s might want to reconsider after reading this rather shocking interview.

"For us, the Party means the power block headed by Igor Ivanovich Sechin"

// Head of Finansgrupp, Oleg Shvartsman, speaks about new voluntary-compulsory ways of consolidating assets in the hands of the state

Kommersant, № 221(3797), November 30, 2007

OLEG SHVARTSMAN, Director of FPG Finansgrupp, tells us about the business he heads involving relatives of members of the power block of the Presidential Administration, about the possible creation of a state corporation called "Social Investments", and about the "velvet re-privatization" it has been called upon to carry out. Our columnist MAXIM KVASHA reports from the conference in Palo Alto (USA).

There's a new audio slideshow by Catherine Belton featuring some terrific photographs up on the FT site - it's worth checking out. She talks with one middle-class Russian man whose living has improved greatly during the Putin presidency, who says that if Putin did not clamp down hard on the opposition as he is doing, that the economic growth would not be possible.

Little strokes fell great oaks – a case study

By Grigory Pasko, journalist

For several years now, I’ve had occasion to interact on a regular basis with one mid-level manager at a large Moscow company. Well, actually, I don’t really know what level it is – technical director of a branch of the company. He’s a specialist in automobiles. A real professional at what he does, and a person who knows how to manage people. A former military man. Apparently, it was just this circumstance that enabled him to have a non-critical attitude towards today’s Russian power. He considered that our power is normal; that Putin is doing everything right; that the opposition is not worthy of taking power into its hands… True, he would turn silent during the time of our discussions when I would ask him to give me examples of the efficiency of the power of the chekists in the development of the economy of the country, the solution of social problems, questions of planning and other things.

And so we would meet an continue our never-ending discussions…

There's more great material on Russia in the latest issue of the New Statesman that I can possibly fit in here. In a brief comment piece, Lilia Shevtsova argues that the Putinist authoritarian drift has provoked a number of fundamental paradoxes: the electoral process is being instrumentalized to undermine democracy itself, after years of building up the power of the presidency Putin will now have to weaken it, the heavy handed efforts to create stability in the process has actually generated instability, and how the elites simultaneously want to be incorporated with the West while isolating Russian society from it. It's an elegantly argued piece.

Below is the next installment of journalist Grigory Pasko's series of online video interviews with various leaders of the Russian opposition featured on our YouTube channel. Here Grigory interviews Anastasiya Udaltsova, the spokesperson for the opposition movement Vanguard of Red Youth. Also see his interview with Lyudmila Alexeyeva here.

Campaign finance is almost always an ugly issue even in the most transparent democratic systems in the world, but in the new one-party state of Russia, these fund raising efforts can quickly cross the line to resemble extortion threats. Last week blogger La Russophobe posted a translation of a letter from the ruling party to the Siberian Coal Energy Company, which ominously declares that the company's refusal to contribute funds would be interpreted as a lack of support for the president and his policies, a position which would be reported to the Kremlin and the local authorities. The consequences of not contributing to the campaign are left unsaid in the letter, but it does not take much imagination to think of ways this state could harm a business.

This story, which was also picked up the Independent today, is consistent with other strong-armed intimidation tactics such as threatening to fire state workers and professors and fail university students that do not come out to vote for United Russia. In other words, just business as usual.

Sure, you can have your face plastered across the city on billboards, complete domination of the airwaves, and a comprehensive pop culture presence that Coca-Cola and the iPod would be jealous of, but you haven't truly achieved a real cult of personality until you have your own spaghetti western online video. This one must be seen to be believed - even more incredibly, it's not a joke!

The Russia analysts over at Stratfor frequently use hyperbole, are generous with broad, sweeping statements whose logic you could drive a truck through, and are obsessed with the cloak-and-dagger power machinations of certain individuals within the Kremlin such as Igor Sechin, the mastermind of the Yukos theft, and Vladislav Surkov, the Gazprom-backed ideological innovator responsible for "sovereign democracy." Perhaps precisely for these reasons it is so much fun to read, even if many of the rumors are difficult to prove.

Today's analysis is no different, arguing that Igor Sechin is the main culprit behind the campaign against Finance Minister Alexei Kudrin (via the arrest of his #2 man Sergei Storchak), allegedly as part of his effort to gain control over Russia's enormous sovereign wealth fund. The article notes that Sechin's influence in the procuracy has waned (his lieutenant Salavat Karimov couldn't even get a job) while that of Surkov's has risen. The most surprising assertion in the article is that Sechin is beginning to target the holdings of Oleg Deripaska, who has become close to Surkov. The theory goes that Sechin is furious that Deripaska was passed the gift-wrapped prize of the oil company Russneft, which the government had previously seized from Mikhail Gutseriyev.

Russian President Vladimir Putin speaks during a nationwide TV broadcast in Moscow November 29, 2007. Putin signed a law on Friday suspending Russian participation in the Conventional Forces in Europe (CFE) Treaty, the Kremlin said. (REUTERS/RIA-Novosti/Kremlin)

Golos, an independent Russian NGO, reported that its election hotline had received 1,130 calls, with 43% of them reporting illegal campaigning practices and 51% complaining of officials abusing their office for electoral purposes. Local governors have “been given quotas of votes that have to be cast for United Russia.” According to a study by the Center for Journalism in Extreme Situations, United Russia received between 57 and 62% of all prime-time political television news coverage from Oct. 1 to Nov. 22. “This can't be called a fair representation.” A group of mothers of children who died in the 2004 Beslan terrorist attack have put up street signs pointing to the site of the attack that read, “Putin’s Course”. Despite their protests, many people in Beslan intend to support United Russia with their votes, some reportedly out of fear: as part the party’s campaign, according to one journalist, “people are told that they have to vote for United Russia if they want to keep their jobs.” As part of the election campaign, voters are being “coerced” into applying for absentee ballots by their employers to ensure high turnout.

A collection of electioneering case studies can be found here, and a Q&A on the Russian electoral system here. City administrations and election officials are reportedly outfitting polling stations with “various attractions” to encourage voters, including cheap food, coupon books, hair stylists and doctors. Vladimir Putin’s televised address this week, which analysts are calling a violation of Russian law, was followed by a speech from Vladimir Zhirinovsky, leader of the Liberal Democratic Party, or the LDPR, although a Communist official said Zyuganov only won airtime after filing multiple complaints to the Central Elections Commission about state television's lavish coverage of United Russia, and one national channel did not air the speech at all. The liberal Union of Right Forces called the speeches unfair: “Nobody approached us about airtime.” Meanwhile, Russia’s Central Elections Commission has opened its election headquarters to foreign observers to explain the preparations and logistics for Sunday's vote. According to the foreign ministry, Russia will invite the Organization for Security and Cooperation in Europe (OSCE), which had earlier refused to attend the December parliamentary polls, to be present as observers during next year's presidential elections.

“The police reaction to our peaceful march shows that the stability the authorities are so proud of doesn't really exist,” said Garry Kasparov, on his release from prison where he served five days for taking part in an unsanctioned march. The failure of the government to abide by its own laws and Constitution, he said, “could result in a catastrophe for the whole country.” Could part of Putin's dilemma be that Mikhail Gorbachev struggled to define a role for himself after his resignation and the collapse of the Soviet Union in 1991?

State-controlled Gazprom is planning to operate a natural-gas entity in the US by 2014 as part of its strategy to expand its business outside of Russia. Oleg Deripaska, together with partners including Hochtief, has agreed to invest $20 billion in St. Petersburg from now to 2015 in an effort to upgrade infrastructure. Soaring prices for crude oil will propel Russia's oil windfall fund to the equivalent of $158 billion by the end of the year. Russia’s Vnesheconombank and Export Development Canada have reached an agreement on export insurance.

If the European Commission goes ahead with plans to limit investments of sovereign wealth funds into the assets in Europe, the restrictions will affect Russia’s Stabilization Fund. The government has just ruled to distribute 640 million rubles from the fund to various domestic operations. Putin has signed a law suspending Russia's participation in the Conventional Forces in Europe Treaty, in a move which “could allow it to deploy more forces close to western Europe.” The President has also approved amendments to a federal export control law designed to improve security and current legislation. Is Russia on track to achieve Putin’s goal of doubling the size of the economy?

Russia is heading towards implementation of a two-level Western education model. Starting from 2009, Russian students will be able do a Bachelor's degree with the option of continuing to a Master's.

Here's an interesting bit of exclusive news: a trusted colleague of mine has leaked to me copies of a series of worrying placards being printed right now in Moscow by the Nashi for distribution on Sunday following (or during) the successful elections. These items of propaganda urge Putin supporters to take to the streets in premature celebration, to defend the outcome before it is announced officially on Dec. 6. It is in many ways an open gesture of confession that even the Nashi don't believe that a real election is taking place.

The posters use highly incendiary language and aggressive caricatures in the name of the president, similar to an exhortation to riot seen in other countries far less developed than Russia. I'm considerably concerned about this development, and I warn all friends and colleagues in Moscow to exercise extreme care in the days between the election and the announcement of results. It seems that the murder of a Yabloko candidate, the arrest and jailing of Kasparov and others, and the ongoing violence at any opposition rally isn't enough to satisfy the Nashi. I fear the worst could still be yet to come.

We expect to post some scans of these materials on the blog within 24 hours.

Chancellor Angela Merkel is one of the more remarkable leaders in Europe today for her demonstrated willingness to stand by principles in foreign policy. Surrounded by cowardice in the SPD, who lambaste her for having invited the Dalai Lama to Germany, led by Frank-Walter Steinmeier who is one call away from carrying out the orders of Vladimir Putin, and business leaders like Wulf Bernotat who regularly berate the work of the European Commission to argue for Gazprom's rights to put their direct grip on consumers, Merkel's thankless stand on human rights stands out in contrast. From the IHT report "Merkel defends German foreign policy focused on human rights":

Chancellor Angela Merkel defended her controversial policy toward China and Russia on Wednesday, insisting that it could no longer be separated from domestic policy.

In a speech to the Bundestag, Germany's lower house of Parliament, to mark two years of the grand coalition of conservatives and Social Democrats, Merkel sharpened the explanation of her foreign policy.

Below is the first installment of journalist Grigory Pasko's series of online video interviews with various leaders of the Russian opposition featured on our YouTube channel. Here he speaks with the impressive Lyudmila Alexeyeva, head of the Moscow Helsinki Group, one of Russia's most well known human rights activists. Additional segments of the interview will be posted very soon.

We've been working hard here at the blog to always bring our readers new and interesting material on Russian and European business and politics, including a foray into a multi-platform format with diverse video and audio offering. Perhaps somewhat overdue, we're nevertheless proud to announce the launch of "Robert Amsterdam TV" - hosted on our very own YouTube Channel located here. We don't have too much material up yet, but we have many interesting videos in the 'pipeline' and look forward to bringing you original and exclusive footage. To help inaugurate our channel, we have one highlight reel featuring excerpts from a great BBC documentary about the first trial of Mikhail Khodorkovsky, and the beginning of an exciting series of exclusive online interviews by Grigory Pasko with leaders of the Russian opposition. 'Stay tuned' for much much more.

Libya continues to attract investment to its upstream sector despite tougher terms

By Tom Nicholls

The pace of upstream licensing in Libya is picking up: this month, Tripoli has agreed new deals with US companies Exxon Mobil and Occidental Petroleum (Oxy), and Austria's OMV. Last month, Italy's Eni signed up to a new, a wide-ranging energy investment programme. And, in the summer, BP returned to Libya after a 33-year absence in what chief executive Tony Hayward described as "BP's single biggest exploration commitment".

Exxon Mobil has signed a heads of agreement for an exploration and production sharing agreement (Epsa) with Libya's National Oil Corporation (NOC), the state-owned oil company. The agreement covers four deep-water blocks in the Sirte Basin. Virtually unexplored, the offshore Sirte area is thought to be on-trend with the onshore Sirte basin – the country's most productive basin, which has produced over 20 billion barrels of oil equivalent so far. The US supermajor describes the acreage as "one of the most prospective unlicensed areas in the Libyan offshore" and will undertake a five-year work programme.

Below is a trailer for the somewhat dated TV documentary "The Putin System," including interviews with former spy Oleg Gordievsky, Edmond Pope, and Zbigniew Brzezinski, among others.

[Also see Part I, Part II, Part III, and Part IV of this series]

Part V: Special Operation «Olympiad»

By Grigory Pasko, journalist

The Olympic state corporation

Just one week after Sochi was announced the capital of the 2014 Winter Olympiad, prices for “economy class” real estate had increased by 20%, and those for “elite class” by 30-33%. However, it is known that in certain districts, the construction of houses had already begun before it became known about the Olympic future of Sochi. Could this mean that those who began the construction knew about the city’s prospects?

The sports status of Sochi has attracted the attention of foreign investors. In the number of potential ones is already numbered Mercury with a desire to build a little town in the settlement of Esta-Sadok in Krasnaya Polyana with a hotel and Armani, Prada, and Dolce&Gabbana boutiques. Willing to receive contracts are the Austrian companies Skidata, SUFAG, Doppelmayer, and Strabag.

Reuters compiles all of slogans from parties running in Sunday's parliamentary (s)elections. My favorite is from the Communists, who wish to remind you of their existence (which is strange being that they are the #2 party).

UNITED RUSSIA
Leader: Boris Gryzlov, speaker of lower house of parliament
Opinion poll rating: 60.1 percent
Election slogan: "For Putin! For United Russia!"

COMMUNIST PARTY
Leader: Gennady Zyuganov
Opinion poll rating: 7.4 percent
Election slogan: "There is such a party!"

Robert Amsterdam is quoted in today's Globe and Mail article on Gazprom and Petro-Canada: However, critics of Mr. Putin's regime argue that Western companies such as Petrocan are essentially doing deals with the devil by lobbying their governments to soften any criticism of the Russian political scene in order to land contracts there.

Lawyer Robert Amsterdam, who represents jailed former OAO Yukos chief executive officer Mikhail Khodorkovsky, said Petrocan's investment would be hostage to the political whims of Gazprom's masters in the Kremlin. "They could have an agreement. They could even begin digging and they would still have no guarantee of what is going on," Mr. Amsterdam said. "Gazprom is not a normal company; it is an extension of the presidential administration."

Interesting piece over at the Times takes a look at the United Russia TV campaign ads, which in many ways sound like a dialogue from a psychologist's chaise lounge: “Today we are successful in politics, economics, arts, sciences, sports,” says the announcer in one advertisement to a stirring brass accompaniment and images of Mr. Putin and other smiling Russians. “We have reasons for pride. We enjoy respect and deference. We are citizens of a great country, and we have great victories ahead. Putin’s plan is a victory for Russia!”

Is the president's party really worried that maybe citizens don't feel proud to be Russian? Is there any political party out there with ads that would actually glumly comment "we are ashamed of our shortcomings and poor international image"? I guess we wouldn't know, because no one else is allowed to have TV ads. The absence of ideology or even policy ideas in these ads is quite striking - who could disagree with them?

See the video with subtitles over here.

Golos, Russia’s only group of independent election observers, has been forced to reduce its activities ahead of the weekend’s elections after coming under intense pressure from the authorities after the head of Golos' two offices in the Samara region was charged with installing unlicensed software on the group's computers. Golos says the charges are politically motivated. Up to 20,000 activists from Nashi Vybory, a spinoff of the pro-Kremlin Nashi youth movement, intend to conduct nationwide exit polls during Sunday's State Duma vote. Top election official Vladimir Churov has dismissed complaints that governors and thousands of other state-paid workers have been told to round up votes for United Russia. The vote, he said, would be “the most free, most transparent and most suitable for [voters] ... because these are my first elections." Former Soviet leader Mikhail Gorbachev has called for Russians to vote for President Vladimir Putin's United Russia party in the parliamentary elections. “He has brought stabilisation to Russia. Not everyone would have been able to cope with the kind of legacy that he inherited from Boris Yeltsin. I did not think he would succeed but he did succeed in preventing total collapse in the country,” Gorbachev said. Speaking at the Kremlin, Putin said he has been “forced” to repeat his anti-Western rhetoric. “We have done everything to safeguard Russia from internal disturbances and to put it firmly on the track of evolutionary development.” The President’s pre-recorded television address urged the Russian public to vote for United Russia and opt for “stability and continuity”. Andrei Lugovoi is continuing his election campaign in Russia. "Putin's destiny may be to confirm that Russia cannot be modernised from above. Russia will need his failure to start looking for a democratic government and build a state that will accept constraints." Former world chess champion Anatoly Karpov was turned away when he tried to visit and offer moral support to Garry Kasparov, who is currently still in detention. A growing number of workers are turning to grassroots labor unions in light of the rising costs of living caused by inflation.

Former economic development and trade minister German Gref has been elected president of Sberbank following a shareholder vote. Ukraine has told Russia that it could charge more for Russian gas transit to Europe if Moscow imposed steep gas price increases. Nutritek Group, Russia's largest baby-food company, has agreed to sell its domestic milk and agrarian units to Russagroprom for $350 million. Russian scientists have completed the first stage of preparations for an experimental Mars mission simulation entitled Mars-500.

Conservative leader David Cameron will issue a “stark warning” that Russia's increasingly assertive foreign policy is jeopardising Britain's national security, and that Western forces, which could include British troops, must be sent into the Balkans to prevent Russia sparking a new European war, when he speaks at the Brookings Institution, a Washington think-tank. A Russian consulate has been opened in Kurdistan. An Israeli newspaper has reported that a senior Russian envoy has been trying to broker a deal between Israel and Syria on the future of the Golan Heights. Prime Minister Viktor Zubkov is on an official visit in Canada to discuss trade and energy issues. Azerbaijan plans to purchase arms from Russia. A "heated debate" between Russia and the US has "overshadowed" the start of a two-day meeting of ministerial talks in Madrid, at which Russia is set to push for reform of the Organization for Security and Cooperation in Europe.

American shareholders in Yukos, seeking compensation on their claim that the Russian oil company was stolen from them by the Kremlin, only have one legal step left to try before they must abandon the case. Russian billionaire Boris Berezovsky was convicted in absentia by a Moscow court of embezzling 214 million rubles from national airline OAO Aeroflot in the 1990s. “I'm not going to take part in a farce,” Berezovsky responded from London.

A Fabergé egg has sold to a Russian buyer for £9m, breaking a number of world auction records, at a sale of Russian art at Christie’s in London that took a record £39.1m ($81m). The International Herald Tribune's annual luxury industry conference, entitled "Supreme Luxury," is being held in Russia for the first time. “Fueled by an oil boom, the Russian capital seems as awash in cash as Dallas was in its heyday.”

The Russian government's theft of Yukos was in many ways a dress rehearsal. An experiment with a new methodology of using regulatory and tax pressure,faking the legal cover, spreading the spoils of the take to enough international partners so as to split up the complicity, and monitoring the international reaction or lack thereof. As a learning experience, it was quite effective, and now the Kremlin has gotten much better at it, developing a specialty in "partial nationalizations," a technique based on the assumption that if you leave your victim a nickel or two, he won't tell anyone you took his lunch money.

As Stanislav Belkovsky tells Reuters, "There have been no real victims recently. There are just different cash-out terms."

We of course beg to differ. After the cut is good story about the rush to close up two of the biggest deals involving Gazprom's siege of TNK-BP and Deripaska's foray in Norilsk before the relative certainty of the Putin era comes to close.

Gazprom executives are wont to frequently threaten Europe, especially in response to anti-trust and competition issues, saying "hey, if you guys don't like buying gas under our terms (or letting us own distribution assets), maybe we'll find some new customers elsewhere..." The Europeans, for the most part, haven't taken the threat too seriously, putting their trust into the captive pipeline market to drive a hard bargain with Russia. Perhaps they should think again.

Analysts are saying that we can expect a flurry of major deal making from Russian companies as the Putin era comes to a "close." Stefan Wagstyl at the FT writes about the acquisition plans of Gazprom, Oleg Deripaska's Basic Element, and Alexei Mordashov's Severstal.

Lou Dobbs at CNN takes a break from scaring people over harmless Mexican immigrants to talk about U.S.-Russia missile politics. It sure is getting harder and harder for Putin to claim that it is the Americans who don't want to work together on this one.... The correspondent describes Defense Secretary Gates as the eager "suitor" going after the partner that is "playing hard to get."

Steve Levine has written an excellent book about the race to exploit the Caspian's energy

IF THE history of the oil industry’s role as a force for democracy and civilisation around the world is your thing, don’t read this book.* There is lots of oil and much pursuit of empire in Steve Levine’s account of the rush to exploit the hydrocarbons of the countries bordering the Caspian Sea during the 1990s. There is also much greed and corruption. Despite the book’s title, though, no one is covered in much glory.

Levine was a foreign correspondent based in the region during the 1990s and watched as the fall of the Soviet Union triggered a scramble among Western companies to win contracts to produce and export the subsoil wealth that was suddenly freed from Moscow’s control.

The Union of Right Forces (SPS) began direct criticism of President Vladimir Putin on learning that the Kremlin would break a promise to deliver seats in the next State Duma, according to a senior party official. "The party is angry, and now the only chance it has to get into the parliament is to gather the protest vote. This is why SPS's stance has radically changed," he said. Communist and Yabloko officials said their parties had also been promised Duma seats if they promised not to criticize Putin. Around 450,000 police officers trained in “election laws” will be mobilized across the country to ensure order during Sunday’s elections. A 40-person delegation from the Parliamentary Assembly of the Organization for Security and Cooperation in Europe will arrive just days before the elections, and Japan has already dispatched its team, limited by Russia to just three officials. “When it comes to admitting independent monitors, only Britain has a worse record in the OSCE than the US, so Putin's charge of double standards carries weight.” Inflation could come to exceed 11% for the year in Russia. Russian Finance Minister Alexei Kudrin has asked investigators for an “immediate” meeting with his deputy, Sergei Storchak, who has been charged with embezzlement. Kudrin says the arrest has had a negative impact on the ministry's international negotiations. Will Putin resign from the Presidency in order to be eligible to run for a third term? Russia’s Interior Ministry is claiming that some members of the weekend’s March of Dissent were paid to protest.

Russia’s oil refining sector is being held back because so much of its oil is sent abroad. Despite heavy government taxes on exports, the current high prices mean that it is more profitable to export oil than to refine it domestically. “A significant part of the Russian government's foreign policy activities are in one way or another connected with the world energy market.” Oleg Deripaska’s holding company, Basic Element, has outlined ambitious plans to expand its already “sprawling business empire”, with infrastructure being one of its strategic areas of focus. Gazprom has agreed to buy gas from Turkmenistan at steeply raised prices next year and will pay even more in 2009, which could cause new tensions with Ukraine. Gazprom Neft, Gazprom’s oil arm has borrowed $2.2 billion from a group of foreign banks to boost production and refining. The BlackBerry will arrive in Russia for sale early next year, according to Mobile Telesystems. Alexander Medvedev implied that Gazprom may not open up its gas-rich Arctic regions to foreign investors, citing “psychological barriers”. Vladimir Potanin, the Russian oligarch, is reportedly trying to raise $15 billion from London investment banks to take control of Norilsk Nickel, currently also being eyed by Rusal. Volkswagen is opening a Russian factory to increase its share of the country’s automobile market. According to Estee Lauder, Russia's cosmetics market is experiencing “exponential growth”. Chinese offshore-oil producer Cnooc Ltd. will avoid investing in Russia “because the risks are too high.”

Poland’s new prime minister has surprised everyone by backing Russia’ bid to join the Organisation for Economic Co-Operation and Development. Former Soviet leader Mikhail Gorbachev has announced that the European Union will not have true global influence until it finds a way to achieve closer ties with Russia. Europe’s position as a power center “is important for the world balance, and if this doesn't happen, global processes will be even more unpredictable," he said. Prime Minister Viktor Zubkov and Finnish counterpart Matti Vanhanen met to discuss cooperation in energy, forestry and the high-tech sector. The United Nations’ annual Human Development Report included Russia, for the first time, in the group of countries with the most highly developed human potential. Any new nuclear pact between Russia and the US must set lower ceilings for nuclear arsenals and limit the development of new nuclear weapons, and current proposals are not constructive, says Foreign Minister Sergei Lavrov. Lavrov also said that refusal to acknowledge Iran's cooperation with the UN over its controversial nuclear program will reduce the possibility of finding an eventual solution to the dispute.

Salavat Karimov, who advanced the criminal case against former Yukos shareholders Mikhail Khodorkovsky and Platon Lebedev, has appeared in a Cyprus court as a witness in another case involving two companies that the Russian prosecutor claims were used by Yukos to launder money. Russia has test fired two SS-21 Scarab short-range ballistic missiles during a tactical exercise.

Yulia Latynina writes in the Moscow Times: The most serious economic consequence of Putin's presidency is that many of his friends have acquired tremendous wealth over the past seven years. If, for example, oil pumped by Yuganskneftegaz was previously exported by Yukos or one of its offshore subsidiaries, now the same oil is exported by Gunvor, which has capital reserves that are estimated to be about $20 billion. Gunvor is a Geneva-based oil-trading company co-founded by Russian businessman Gennady Timchenko, who is reportedly Putin's close friend.

Putin's reputation in the West took a serious blow after Yukos was dismantled and its CEO, Mikhail Khodorkovsky, was jailed. This means that either Putin generously let his reputation suffer in order to help Timchenko strike it rich, or else he jailed Khodorkovsky in order to channel Yukos oil to another friend.

After the cut, Anders Aslund argues that the Putin administration's theft of Yukos makes it more corrupt than Ferdinand Marcos of the Philippines and Zaire's Mobutu.

[Also see Part I, Part II, and Part III of this series]

Part IV: Special Operation «Olympiad»

By Grigory Pasko, journalist

Fools and roads, again

An obligatory feature of every Russian city is – fools and roads. There just seems to be no way to avoid them. The roads in Sochi are lousy. Of course they’re not as bad as in Samara, for example, but still… They say that in Stalin’s time, the best Soviet architects worked on Sochi’s urban design. If this is true, then I can’t understand: why didn’t they take the road infrastructure into consideration? Essentially, there’s only one road going through the entire city – Kurortny prospekt [Resort Avenue]. And the traffic on it is one perpetual traffic jam. Especially in those places where it is bisected by other roads, like near the hotel «Moskva» or beside the railroad station.

For his latest column, Gideon Rachman of the FT talked with Mikhail Kasyanov about why the Russian government is cracking down with such exceptional brutality before an election they seem guaranteed to win. Yesterday Bob commented on a couple of these theories on the blog, while Kasyanov simply points to the risk averse mentality of the KGB: The trouble is that in eliminating one minor risk - that the liberal opposition might do better than expected - Putin's government seems to be creating a bigger risk. According to Kasyanov (admittedly, not an impartial observer), Putin is keen to stick formally to the constitution and step down as president next year because "he wants to be viewed by you guys as a democrat." But when famous opposition figures like Gary Kasparov are being slung into jail, Putin's democratic credentials appear more and more tarnished in the west. Today's highly acerbic FT leader is - I think - fairly representative of how opinion in the west is shifting.

Quentin Peel wasn't going to let his colleague have all the fun, so he has chimed in to comment that democracy is failing in Russia because the people don't care, and have a conflicted understanding of what it means as a governing system.

After successful and award-winning stagings in London and New York, Sir Tom Stoppard's epically sprawling nine-hour triology "The Coast of Utopia" has finally opened in Moscow, where the writer was surprised by the reactions of Russian audiences to these extended portrayals of intellectual titans like Bakunin, Turgenev, and Belinsky (even the accompanying reading list for the play caused Isaiah Berlin's 1978 book of essays "Russian Thinkers" to sell out).

Journalist Arkady Ostrovsky, who translated Stoppard's play for adaptation, has an insightful piece examining how these philosophical debates of pre-revolutionary Russia still have major resonance in today's society:

Afterwards, the spectators argue not about the merits of the production, but about what has been said on stage. This surprises Stoppard: "It is as if people are responding to statements. They seem to imply that my plays fill some sort of gap-I don't quite believe it." He should.

From the moment Stoppard responded to the letter which led to my translating the plays into Russian, he talked about his fantasy of seeing them performed in Russia—"as a test for the play and a homage to the culture which inspired it". He wanted to know how his Russian characters, many of whom died in exile, would be received at home. In fact, bringing the plays to Russia turned out to be as much of a test for the country as it was for the plays.

Today the New York Times writes about fashion designer Denis Simachev, whose main gimmick is the incorporation of Soviet era symbols, cues and kitsch into apparel items that can cost upwards of $2,000. There are some priceless quotes in the story, such as the designer remarking that “People in their 30s see these kinds of symbols as reminders of happy memories, like going to pioneer camp where they lived together, ate breakfast together and played sports." Others don't have the same experience when they see Stalin's face emblazoned across trendy t-shirts: “Personally, I would never wear something by Denis Simachev because, for me, those symbols mean Stalinist terror, Communism, a K.G.B. spy system and the cold war,” said Alexandre Vassiliev, a fashion historian.

And so continues the complex process of Russia negotiating its understanding of recent history and national identity... Simachev isn't the first to discover how much merchandise you can move by using the president's image, but he is certainly right in knowing that Russians are tired of being told to be ashamed of a past for which they are not responsible.

There's a very interesting piece by Paul Betts in the FT today about Kazakhstan's skillfully shrewd strategies as a regional energy player: Given the experiences in Russia, the Kazakhs have woken up to the opportunities for renegotiation of the old contracts on a 38bn-barrel field and they appear determined to extract as much as they can from the western companies. They have not hesitated to use a dispute over rising development costs and production delays to threaten stripping Eni of its operational role.

Hey! Look at Russia! If they can push around energy companies with no consequence, then why can't we?! Call it a contagious case of resource nationalism. More excerpts after the cut...

New Yorker editor David Remnick, who once worked at the Washington Post bureau in Moscow and has written a book and many articles on the country, made a special appearance on NBC Nightly News, with even more content made available online. Blogging on Huffington, Rachel Sklar writes "Remnick's succinct, brilliantly simple yet detailed explanation of Russia's critical importance felt like an indictment of the Bush administration, which, in addition to eroding U.S. moral authority also happened to ignore the fact that Putin's Russia has nuclear weapons, borders on Iran and is run by an autocratic, power-driven leader whose soul may not have turned out to be so easily assessed."

About time for people to start calling attention to Russia's importance. See her text of the interview after the cut.

David Remnick remembers Yeltsin's contributions

Comments made by former Soviet leader Mikhail Gorbachev at the World Political Forum about the security imperative for the EU to bridge the gap with Russia in order to once again have influence on the global stage are making some news. Here's his argument - Europe has not had and will not have a "clear and independent" voice on international affairs without some type of close alliance with Russia, and without this support, the United States will achieve a level of "monopoly leadership" which will lead to more and more unpredictability, citing cases such as the conflict in the Balkans and the war in Iraq.

Where have we heard this before?

President Vladimir Putin is trying to blame the United States for the controversial refusal by the Organization for Security and Cooperation in Europe's human rights and democracy watchdog to send observers to monitor the Dec. 2 State Duma elections, calling it “another indication that many structures, including the OSCE, are in need of reform.” The OSCE's Office for Democratic Institutions and Human Rights dismissed Putin's allegation as "nonsense". A US State Department spokesman said US officials had talked to OSCE representatives, telling them "this is your decision," although the OSCE says they “do not take instructions from any government, and certainly not from the US government.” One journalist says the run-up to the election makes Putin look “increasingly desperate and threatened”; another says the recent speeches are redolent of “a psychiatric patient's medical history of phobias.” Kasparov has also implied that “Putin is far less secure than he appears to be.” The deputy leader of the Union of Right Forces says that negative attention by the Kremlin on the party “means that support for the party is higher than opinion polls indicate”. A senior election official says that election officials have been ordered to make sure that United Russia collects double the number of votes it is expected to win in State Duma elections, even if they have to falsify the results. The European Commission, France, Britain and the US have all criticized the police crackdown on opposition rallies over the weekend.

Inter RAO, the import and export firm of Unified Energy Systems has announced plans for an IPO in 2009. Sergei Chemezov, a Putin ally and head of state arms trader Rosoboronexport, has been appointed head of the state corporation Russian Technologies, formed by Putin in the last week. The Natural Resources Ministry's environmental safety watchdog has launched an inspection of subsidiaries of Russneft, following admissions of license violations. A new report from Rosstat suggests that the growth of profit for Russian business slowed in the third quarter of the year. Vimpelcom, Russia’s second-largest mobile phone operator, has offered to buy the Nasdaq-listed fixed-line operator Golden Telecom for $100 per share. Gazprom will study joint ventures with Dow Chemical at the US company's new facilities in Germany as well as in Siberia. The UK supermarket chain Tesco is reportedly planning to enter Indian and Russian markets. Oleg Deripaska has reportedly withdrawn his offer to buy a 25% blocking stake in Power Machines from electricity giant Unified Energy System.

The head of EastWest, one of America's foremost national-security think tanks, says that the US now has a “window of opportunity” to join with Russia and China to fight the proliferation of weapons of mass destruction. Belarus is to receive a $1.5-billion stabilization credit from Russia. The loan could have political implications as it “will put off the inevitability of reform there.” Foreign Minister Sergei Lavrov told journalists that recent suggestions made by the US on the anti-missile defense systems have lowered Moscow and Washington's chances of reaching a compromise. Separately, Lavrov has announced that Russia is ready to host a conference on Middle East affairs. The Foreign Ministries of Russia and Kazakhstan have signed a cooperation agreement on aircraft safety. Energy deals between Indian and Russian oil and gas majors in upstream and downstream sectors could be firmed up by February, and Moscow is reportedly seeking new contracts to continue civil nuclear construction work in India.

A collection of Russian artworks have sold for a record £25.7 million pounds ($51.4 million) at Sotherby's auction house in London, and a Fabergé egg owned by the Rothschild banking family is set to become the most expensive Russian decorative artwork ever auctioned, as Christie's in London holds a similar sale this week.

This one is over at Slate.com:

The New Dissidents

Why does Putin bother to arrest the "Other Russia" protesters? Because he can.

By Anne Applebaum

In the photographs of his arrest, Garry Kasparov—former world chess champion, current Russian opposition leader—is wearing a nondescript gray jacket and a somewhat retro wool cap. He is gloveless. By contrast, the Russian militiamen making the arrest are kitted out in full regalia: tall fur hats with metal insignia in the center, camouflage coats, walkie-talkies, black leather gloves. Squint hard, and the pictures—taken at this weekend's "Other Russia" protest rally in Moscow—could come from the 1960s or the 1980s, back when Soviet police arrested Soviet dissidents with some regularity.

Were it not such a serious situation, the jailing of opposition leader and chess grandmaster Garry Kasparov by the Putin regime would be richly ironic. For in what other nation are dissidents forced to go on hunger strikes while the price of bread and milk go through the roof?

It was one of the more interesting points raised in the interviews we published yesterday with his lawyers Karinna Moskalenko and Olga Mikhailova – Garry cannot eat nor drink anything the jailers offer him for fear of an all-too-well-known fate. Perhaps the state should thank Kasparov for sparing them the inflated costs of the gulag gourmet! We know all too well from the arrest of Sergei Storchak how many greedy hands of the siloviki are clutching at the state piggy bank – the spiraling prices of eggs and stale bread for political prisoners will likely not be tolerated much longer…

Sally Feldman of the New Humanist writes about a peculiar project in far-flung Republic of Kalymykia: "the carnival atmosphere in Kufa was a celebration of chess as a joyous assertion of freedom, it can also be a tool of oppression. In the tiny and desolate Russian republic of Kalmykia chess is rampant. Despite the region’s gruelling poverty and unemployment, its eccentric president, Kirsan Ilyumzhinov, has invested £25 million to build a “Chess City” complex on the outskirts of the city of Elista. He has also insisted on compulsory chess lessons for every child over six, with a special school for the most promising players. Widely regarded as a corrupt dictator, Ilyumzhinov is also president of the World Chess Federation, an honour scorned by his detractors.

“He’s a pathological liar with serious psychological problems,” said Semyon Ateyev, the director of the Kalmykia Bureau of Human Rights. “We don’t have any economic development, because he spends his whole time organising chess tournaments.”

Also, see lots of photos of Chess City here, and more information here.

I caught this one over at the Nation blog of editor Katrina Vanden Heuvel, who helped present the Committee to Protect Journalists International Press Freedom Award to Dmitri Muratov of Novaya Gazeta, one of Anna Politkovskaya's closest colleagues. Text of his acceptance speech after the jump.

Transitions Online has been putting out some great material on the Russian elections lately, including today's article by Ilya Tarasov and Peter Rutland about United Russia:

"But the party now faces an identity crisis of sorts. It was created by the Kremlin elite to gain control over the legislature and prevent it from interfering with the president’s agenda. That task completed, United Russia is at a loose end. In order to find a role in Russia’s evolving political system, United Russia must change from a “party of power” into a genuine ruling party. Otherwise, it will become irrelevant and even counterproductive for the political elite. It will fall prey to creeping bureaucratization and will become less attractive to its supporters. At the same time, if it continues as a party of power the legislature will become an even emptier shell, a mere extension of the presidential administration. The social-political forces that found expression through the electoral process will be driven elsewhere – onto the streets. The very image of a party of power is a liability, a reminder for the ordinary people that they are ruled by an elite."

[Also see Part I and Part II of this series]

Part III: Special Operation «Olympiad»

By Grigory Pasko, journalist

The Olympic Chekists

The creation of the state corporation «Olympstroy» was implemented in strict compliance with the standard chekist blueprints. What was the first thing they did? They appointed “their” people to all the key posts, of course. That is, the 2014 Olympic Winter Games began with the allocation of KGB and FSB employees to important posts.

And so, Grigory Rapota was put in as Putin’s plenipotentiary representative in the Southern Federal District. It is known that he had worked 30 years in the KGB, where, as the mass media wrote, he was engaged in “contacts with the special services of different countries”. (Essential experience for the Olympic movement, which envisions the struggle for peace and trust in the whole world). In addition to this, Rapota had worked in the State Company for the export and import of arms «Rosvooruzheniye» (not, we have to assume, at counting javelins, bows and arrows, and discuses was he engaged there); was the director-general of the Eurasian Economic Community.

Well, it's about that time of year when everybody pays a little attention to great Yabloko leader Grigory Yavlinsky, who is making yet another tireless run at the presidency. It has become almost painful to see a talented politician like Yavlinsky, who makes such brilliant and intuitive statements, wither away in a non-inclusive political system where selection and managed choices reign supreme over genuine competition of proposals. There's no telling how far he would go in a normal functioning democracy (or at least one in which he could get some more TV time). Some excerpts from recent profiles after the cut.

Dmitri Trenin, author of some books about Russian politics, has a series of online Q&A sessions with readers of the Financial Times. Although we generally like the analysis coming out of Carnegie, and believe that Trenin can occasionally offer some good insights, there are also instances of baffling absurdity in his statements, such as "Putin evidently cares for the system that he has built," "Putin is the only leader of the past 20 years who is serious about Russia's national interests," and "the Kremlin is concerned about the spending of the allocated funds."

For an analyst, Trenin sure has a lot of trust in that black box that contain's Putin's intentions, but then again he works in Moscow, where one surprise inspection from the tax or regulatory authorities can shut down any think tank.

An editorial on Russia's crackdown on protests in the Wall Street Journal today puts the Yukos affair into context: The pivotal event was Yukos. Before this case, it was hard to imagine that the Kremlin could ever go so far as to use a tax evasion case to destroy Russia's richest man, Mikhail Khodorkovsky, and its biggest oil company, Yukos.

But it did just that -- with impunity. Yukos's choicest bits were sold to a state-owned Russian oil company for a song, in the first of many steps by the Kremlin to reassert its control over the energy sector. Mr. Khodorkovsky, a Putin rival, is serving a 10-year sentence in a Siberian camp. In subsequent years, the courts were instrumental in forcing Royal Dutch Shell out of a multi-billion dollar energy exploration project and to pressure other international majors.

Former chess champion Garry Kasparov is detained by police during an opposition rally in Moscow, Saturday, Nov. 24, 2007. Riot police on Saturday broke up an anti-Kremlin rally of several thousand people, detaining some of the protesters, including former chess champion Garry Kasparov and other opposition leaders. (AP Photo/Misha Japaridze)

Russia has been gearing up for its next election with “protests, rallies and arrests.” Of the few hundred protesters who marched on Sunday against the rule of Vladimir Putin, 100-200 were detained. Nikita Belykh and Boris Nemtsov, both leaders of the Union of Right Forces party, were both arrested. Garry Kasparov, of the Yabloko party, was arrested during similar protests, by 2,000-3,000 people according to differing reports, on Saturday. Kasparov has since been imprisoned by a court for five days for organising an “unsanctioned” rally. His speech, delivered prior to his arrest, thanked everybody for “overcoming their fears” in turning up. Police said activists had moved into "a place of great historical and architectural significance" near the Hermitage and were "provoking disturbances".

Farid Babayev, a candidate on the Yabloko party’s State Duma ticket, has died from wounds inflicted by unidentified gunmen last week. "Farid Babayev became one more victim of the authoritarian regime of Putin, where the physical destruction of your political opponents has become the norm," said party leader Grigory Yavlinsky.

The State Duma is losing its power as a venue for arguments. "The next Duma will be just a bunch of voting robots, a faceless crowd without ideas," says independent Duma deputy Viktor Alksnis. A pre-recorded, pre-vote speech by Putin will be delivered on national television this week. March 2 has been set as the date for the next presidential elections. The Chairman of the Central Election Commission has ruled out the possibility that Putin might run for presidency. Russia's Deputy Finance Minister, Sergei Storchak, has been charged with fraud and attempted embezzlement. Boris Berezovsky, the Russian billionaire currently living in the UK, says he is funding opponents of Putin in the run-up to elections. A report on Nashi, the 100,000-strong, Kremlin-backed youth movement, can be found here.

Russian stocks “suffered a battering across the board last week,” challenging the perception that the country is a safe haven from the storm in the United States and indicating that it is very much connected to the world economy. Telenor of Norway and Altimo of Russia’s Alfa Group, both international telecoms companies, are fighting over control of Kyvistar, a Ukrainian mobile-phone company, with Telenor accusing Altimo of using underhand tactics. Turkmenistan is hoping to raise the price of gas it sells to Gazprom by at least 30% next year, which could contribute to rising costs already predicted for next year by Gazprom. Gazprom’s Sakhalin-2 will cease production for this year following weather damage. Mikhail Prokhorov has agreed to sell a strategic stake in Norilsk Nickel to Oleg Deripaska's United Company Rusal. Russia’s “high scientific potential” is sharply contrasted by the “technical backwardness of the Russian economy”. The Industry and Energy Ministry has explained the expected delay on the first stage of the Eastern Siberia–Pacific Ocean Pipeline. He also announced that Russia will start supplies of up to 36.7 million barrels of oil per year to China via Kazakhstan from 2008.

The prospective shortfall in Russian gas production "represents an urgent energy security concern for the European Union,'' according to a report by the UK Parliament's Foreign Affairs committee. The threat “is a greater one than the risk of Russia disrupting supplies for political reasons.” The report also urged the UK government to meet with their Russian counterparts to thrash out judicial issues. Russian Foreign Minister Sergei Lavrov will attend a Middle East peace forum in the US this week. Rosboronexport says that Russia may set a new record in sales of military equipment to foreign states, with exports estimated at over $5.5 billion in 2007.

It has been reported that five armed men wearing masks and camouflage burst into a hotel in Ingushetia early Saturday morning, dragged away and attacked three Moscow journalists from the Ren-TV station, and a human rights activist. Putin is behind ambitious plans to stage a “megabucks” Tour of Russia race that he hopes could rival the Tour de France. An article in the British press claiming that Andrei Lugovoi is “feted as a hero” in Russia contradicts this report from a Russian newspaper. Moscow’s Millionaire Fair of high-priced luxury goods has just finished. The city is the world’s fourth most expensive, according to a new survey.

One of the great strengths of this blog is that we actually have the resource of people who speak Russian, as well as our own correspondents in Russia. This allows us to offer you such exclusive breaking stories as the following, in which Garry Kasparov’s lawyer Olga Olegovna Mikhailova describes firsthand the circumstances surrounding Kasparov’s arrest and “trial”, in her own words:

Garry Kasparov and Karinna Moskalenko. Photo from last April (AP)

Earlier today I had the chance to speak with Karinna Moskalenko on the phone, who is currently in Strasbourg, about the arrest and incarceration of her client Garry Kasparov. The events of the past 24 hours have featured all the common trappings of a Kremlin sham trial, including numerous violations of due process, state interference with the defense team, rushed hearings, fabricated documents, and overt political pressures on the legal authorities. For now, Garry languishes in a cell, where he can't even eat or drink the water for fear of poisoning, and will likely be joined by about 20 more opposition leaders who could receive rigged sentences tomorrow.

Karinna is an exceptionally brave lawyer, who has faced disbarment proceedings in the past for efforts to defend human rights in Russia. She deserves our unreserved support in these difficult times.

I've just got off the phone with my colleague Karinna Moskalenko, one of Garry Kasparov's brave lawyers, who once again finds herself working throughout the night to free her client from an arbitrary detention.

Before posting my brief interview with her, I wanted to make sure that everyone understood what happened yesterday in Russia following the mass arrests of anti-Putin protesters. The State is using a summary administrative procedure to imprison political opponents – implementing the type of courts and "violations" that are meant to be used for traffic tickets and small monetary fines. All lawyers need to be alerted to this abuse of this administrative process for criminal sanctions, and as such, these decisions cannot be regarded with any legitimacy in rule of law courts.

In Garry's case - these administrative procedures were brought to bear against him with careful premeditation. According to Karinna and according to those that were present during the protest, hundreds of OMON were ready and waiting to carry out this specific act, like a pre-planned mugging.

I believe it is clear under both European and international law that using administrative proceedings to mete out punishments, which include incarceration, implicate Article 6 protections under the European Convention for a fair trial, which appear to not have been followed in this case.

There is a very simple way for those in the West who care about human rights to react to this event. Stop proclaiming Putin a “popular leader” while he uses his police power in a manner more typical of a despot than a democrat. When it comes to competitive elections and constitutional legitimacy, Vladimir Putin's legacy has earned the asterisk. He is the Barry Bonds of due process (yes, I had to go there).

It's just like a replay of last April, but perhaps even worse. According to some reports, more than 3,000 people marched in Moscow today against Putin - a protest which was quickly and in some cases violently suppressed by police. Garry Kasparov was thrown to the ground and beaten, and then sentenced to five days in jail on completely invented charges. This move against Garry marks an entirely new escalation - a demonstration of how far the state is willing to go to delegitimize and criminalize political dissent. Speaking to reporters in the courtroom before being hauled off to prison, Kasparov said: "What we see today is the implementation of Putin's plan. ... We should overcome the fear that the regime uses to sustain itself. For the Putin regime, our country is just a source of enrichment."

Given how often we are told by the Kremlin's apologists that Kasparov is unimportant, they sure seem to be quite terrified of him, and are willing to break every law and norm possible to prevent him from carrying out harmless civic actions.

After the cut, some video footage of the march and some photos. Tomorrow I hope to speak with some contacts in Russia and provide more information.

[Also see the first installment of this series]

Part 2: Special Operation «Olympiad»

By Grigory Pasko, journalist

The Imereti Valley

President of Russia Putin, who had so confidently presented «project Sochi» to the International Olympic Committee, did not say a single word in his speech about how the rights of local inhabitants are going to have to be seriously infringed upon during the course of the realization of grandiose plans. Building new facilities on already occupied lands – that means evicting the residents and destroying their homes. Like the old Russian saying goes – “when you chop wood, chips fly”. They say that Stalin loved it.

Upon Putin’s return to Moscow, someone obviously explained to him that the people living in the places of the future Olympic sites weren’t going to be very happy. Then the president said: “All questions associated with land use must be resolved in consideration of the interests of the people who reside there, within the framework of current legislation”.

There's a new test for Russia's famous axiom, "What Gazprom wants, Gazprom gets." The answer from the embattled LSE-listed oil company Imperial Energy: not so fast.

On Friday the company rejected a bid from Gazprombank to acquire a 25% stake, which caused their stock price to dip slighting in trading. Earlier this month it was revealed that this banking arm of the Russian government was behind this "mystery bid" for the company, which was generally seen as the Kremlin's peace offering to make all those pesky regulatory troubles go away (this energy firm is only just the latest of many private companies to come under the wrath of Rosprirodnazor's Oleg Mitvol over its reserves numbers).

There seems to be very little effort to hide the fact that Imperial Energy is undergoing a textbook partial expropriation by the Russian state. Obviously the regulatory authorities are inventing problems that can disappear as soon as the company in question sells a big stake to the state. Some analysts put it quite transparently: "a strategic partnership with Gazprombank would 'diminish the risks stemming from the company's long-lasting conflict' with the Natural Resources Ministry."

It's simply astonishing how so many companies allow and encourage this sort of conduct from the state, convinced that there is no point in fighting back. For the moment, the executives over at Imperial seem to have parried a blow from Gazprom, which will surely ruffle some feathers among the siloviki. However, word is that they will eventually find another area of cooperation with Gazprom and deliver a few concessions in order to bribe off the attacks of Mitvol. Still, it seems to be a far superior reaction than that of Royal Dutch Shell and BP, who have fared far worse in their efforts to placate their bullies.

Sergei Lukashevsky from Demos tells a reporter: "A bureaucratic machine has been unleashed and it strangles everyone, starting with the weaker ones. ... I do not believe that the powers that have a desire to stamp out civil society as such, but there is a terrible phobia tied to the 'colour revolutions.'"

PINR has a new defense briefing analyzing Russia's recent increases in military activity: One theme that seems to tie together much of Russia's policies and actions is also involved in the renewal of bomber runs and the new technological advances. Russia is set upon a course of gaining an energy monopoly, and has already set up a very effective infrastructure for transporting oil and natural gas into the Eastern European energy market. The new military developments are a show of power, as the bombers demonstrate that Russia can extend its influence, and back it up with force if necessary.

Residents of Manturovo settlement listen to Andrei Lugovoy, a former KGB officer named as a suspect in the murder of Alexander Litvinenko in London last year, during their meeting in the southwestern Russian Kursk region November 22, 2007. The meeting was part of Lugovoy's campaign as candidate for the nationalist LDPR party in next month's parliamentary elections. REUTERS/Denis Sinyakov (RUSSIA)

Former Russian prime minister Mikhail Kasyanov, head of the Russian People’s Democratic Union, says he is the target of a vast, pro-Kremlin conspiracy to undermine his goal of shaking up an authoritarian political system after a number instances of “harassment”. Andrei Lugovoi is using his new-found reputation (as suspect in the murder of Alexander Litvinenko, who died one year ago) to try and drum up support for his party, although to little effect. President Vladimir Putin’s references to the “enemy” in his political speeches “never reflect reality [and have] one main function: to mobilize supporters.” United Russia officially declared it wouldn’t take part in the election debates broadcast by local and federal TV channels, but some 13% of respondents questioned thought they spotted debating envoys of United Russia on TV in the first week of broadcast all the same. Russia's Interior Ministry has accused four Agriculture Ministry officials, employees of Rosselkhoznadzor, of accepting a bribe worth more than 16 million rubles. Three Russian generals have been fired, according to an aide to the defense minister, after Putin “criticized ministry officials for inefficiency.” The final word on the election monitoring row has been issued by the Russian foreign ministry, which accused the OSCE of “a flagrant unwillingness to follow the regulations established in Russian legislation and an attempt to impose a monitoring system that was a product of the office's own invention.” Russian Central Election Commission head Vladimir Churov said, “We have done our part, we have invited them and done everything for the beginning of the preparation of the mission's work.”

Putin is set to officially unite Russia's nuclear power producers into the United Nuclear Industrial Corporation in a move aimed at doubling the nuclear component of national power generation by 2030. Russia's power industry is enticing for investors “because it is one of the world's fastest-growing.” The Chief of Russia’s Federal Customs Service has confirmed intentions to differentiate between exporters and importers depending on how transparently law-abiding they are, and “granting preference to [the] bona fide”. Gazprom's plans to raise natural gas prices for Europe by at least 20 percent next year could generate more cash for a faster development of its giant Arctic fields, but could negatively affect future demand. Mercury Group, the Russian franchisee for European luxury-goods makers including PPR's Gucci unit, expects sales to rise 50% in 2007 as a booming economy fuels demand for luxury goods. Germany's E.ON has increased its stake in OGK-4 from 70.4% to 72.7%. Russian steel firm Maxi Group said its owner would sell a majority stake to Novolipetsk Steel by the end of the year after a deal to sell to billionaire Alisher Usmanov fell through. The growth of Russian insurer Ingosstrakh, controlled by Oleg Deripaska’s Basic Element, is seeing its growth “hampered by a shareholder dispute”. A recent report by the Institute for Strategy and Competitiveness at Harvard Business School says that Russia, despite being among the world’s leading emerging economies, remains “uncompetitive”.

A British professor and human rights lawyer, who has represented Chechens who have accused the Russian military of abuse, has been expelled from Russia for having the wrong type of visa. The Federal Migration Service denied any political motive. A spokesman said: “One should be careful about one’s visa. A foreigner visiting Russia with a tourist visa cannot work here.” President Putin and Italian Prime Minister Romano Prodi have “blessed” a joint venture between Gazprom and Eni to carry out a feasibility study into the South Stream pipeline. "The South Stream project has a strategic significance to ensure energy security for Europe," said Putin. The $14.8 billion project would send 30 billion cubic meters of Russian gas to Europe annually.
In some attempts at compromise on the missile defense question, Washington has reportedly agreed to concede and allow the Russian military to monitor missile facilities in Eastern Europe and postpone the start of the operation of a missile base in Poland. There is little optimism about whether or not this will make any difference, however, and Russia is said to be “disappointed” with the offer.

This sounds quite familiar. If anyone has further details, please let us know.

Telegraph: Russia expels British human rights lawyer

A British human rights barrister has been expelled from Russia for visiting the country on the wrong type of visa.

Bill Bowring, a professor at Birkbeck College, University of London, who has represented Chechens who have accused the Russian military of abuse, was told to leave after immigration officials ruled he should have been travelling on a business visa and not a tourist one.

The professor had already given several training lectures to local judges when officials questioned him at his hotel in Astrakhan, southern Russia. He was fined and ordered to return to London.

For all the quiet murmurings of disapproval in Europe following the interference and eventual undermining of the OSCE’s election monitoring mission, it looks like the Kremlin has yet again escaped from the scene of the crime, squeaky clean. The election, it seems, has absolutely nothing to do with the votes of citizens within Russia’s borders, but rather is taking place in foreign capitals as Putin campaigns for international legitimacy.

This was made exceptionally clear to me during a speech I made this week at an alternative investment summit about Russia for a corporate audience in London. I am of course exceedingly grateful to the organizers for the invitation to speak, and I found many of the offerings to be quite brilliant and valuable. Despite this, there was also an unfortunately pervasive sense of reluctance among my new colleagues to speak in honest and straightforward terms about the Russian reality.

In tomorrow's Financial Times, Philip Stephens has an intelligent article examining President Vladimir Putin's efforts to rebuild Russia's influence in its near abroad: Russia cannot reclaim the Soviet empire. It can, in Mr Putin’s mind, re-establish informal hegemony. Thus a friendlier government in Tbilisi would greatly strengthen Moscow’s recovering grip on the Caucasus and central Asia. It would also protect its monopoly of gas supply to Europe. A proposed gas pipeline under the Baltic should likewise help tame Poland and the Baltic states.

There's another Vladimir Putin running in the Dec. 2 parliamentary elections, and this one is a rather unknown lawyer in Stavropol running under the Yabloko ticket. An amusing story from Christian Lowe at Reuters: "Vladimir Putin would like to take his election campaign out into the countryside but there is a problem: his party cannot afford the petrol.

"If we could, we would go to every village," he said, sitting on a park bench in the Russian city of Stavropol during his lunch break. "We do not have the money.""

Here's great photo from Kommersant's article "Unity of Forum and Content." The photo shows the stage at at Luzhniki Stadium in Moscow, where President Vladimir Putin made his especially aggressive speech yesterday attacking opponents, being cleaned up following the first two dress rehearsals. You didn't think such priceless phrases such as "foreign-fed jackals" weren't passed on a test audience first, no?

Photo: Dmitry Azarov, Kommersant

This week the fiery commentator from the Moscow Times, Yulia Latynina, has a column about the "renegade" of the ruling United Russia party, who brazenly suggested on national television that the party's slogan should not be "Putin's Plan", and questioned whether or not the fate of the nation should be tied to one individual. Can you guess who it is? First clue: it might have something to do with Bulbov, Cherkesov, and the spy wars...

President Vladimir Putin addresses the crowd at the rally, organized by backers at a stadium in downtown Moscow on Wednesday, Nov. 21, 2007. Thousands of people gathered in a sports arena to show their support for Putin ahead of parliamentary elections, the latest in a series of choreographed events. (AP Photo/Ivan Sekretarev)

Farid Babayev, who leads the electoral list of the liberal Yabloko party in the southern Dagestan region, has been shot and seriously wounded by an unidentified gunman “in what appears to have been an assassination attempt.” At an event organized by the ‘For Putin’ movement, Vladimir Putin made an aggressive attack on his opponents, both political and foreign. "Our opponents all want to see us disunited. Some want to take away and divide everything, and others to plunder." He also made vague references to “jackals” in foreign offices. Fuller account of the proceedings can be found here and here. Voter apathy in Russia is being fueled by the existence of a “one-party poll”. Analysts say that interest in party politics is at an all time low, “partly due to a concerted set of moves on the part of the Kremlin to stifle real political debate and partly due to the belief that voting will change nothing.” Several co-authors of Russia’s Constitution have warned that using legal loopholes to allow Putin to run for a third presidential term would threaten the legitimacy of the country's fundamental law. "There are countries like Iran and, perhaps, Libya, where there are national leaders who are above presidents," said one. "But one sees nothing like this in a democratic country." Lawyers and colleagues of Deputy Finance Minister Sergei Storchak, facing charges of attempted embezzlement, have mounted a fierce defense, calling for his immediate release.

Imperial Energy, the UK oil explorer accused by Russia of inflating reserves, fell 6.4% in London trading after it rejected an offer from Gazprom’s banking unit, Gazprombank, to buy a minority stake. Shareholders of state-controlled VTB Group, the Russian bank that completed the world's biggest initial public offering in May, asked the Russian government to buy back shares that have, since the IPO, lost their value. A 1974 Central Asia-Center gas pipeline that runs from Turkmenistan via Uzbekistan and Kazakhstan to Russia will be modernized to pump 230 million cubic meters of gas per day. Analysts expect Ukraine to join the World Trade Organization ahead of Russia. Russia and Saudi Arabia have begun the next round of talks on Russia’s WTO accession. The Moscow International Currency Exchange is expanding into the countries of the CIS, beginning with a 5% stake in the Kazakhstan Stock Exchange. Russian and Uzbekistan may sign an agreement on integrating the Chkalov Tashkent Aviation Production Association into the Associated Aviation Construction Corporation in a “politically motivated” purchase.

Gazprom and Italy's Eni will sign a deal confirming their plan to build a new pipeline to supply Russian gas to Europe. Analysts interpret the plan as an attempt by Gazprom to undermine a rival plan by Azerbaijan to supply southern Europe via Turkey through a pipeline known as Nabucco. The deal is to be signed as part of Italian Prime Minister Romano Prodi's visit to Russia to meet with Putin. Putin and Prodi will focus on “bilateral trade and economic cooperation.” The United States has submitted a formal proposal to Russia for cooperation on missile defense in eastern Europe, as well as a proposals to modify the SORT and START nuclear treaties. The countries are divided over the “form and content” of the agreements. Iran is pursuing “a further expansion of cultural, political and economic relations with Russia,” according to an Iranian envoy.

The Vostochny Cosmodrome, which will be built in the Amur Region, will be ready for its first manned space launch in 2018. First Deputy Prime Minister Sergei Ivanov said that the new base should act as a spur to revive the Russian space industry. The state-run Tretyakov Gallery has filed a lawsuit against Culture and Press Minister Alexander Sokolov for saying that a recent exhibition by the gallery in Paris, which included a photograph of two policemen kissing, "brought shame on Russia."

Yesterday I wrote in the German magazine Stern that the SPD is probably the European political party most captured by the Kremlin's influence. Is there no one left among the old guard of the social democrats that doesn't have the wool over their eyes? This Zeit commentary from Helmut Schmidt is an alarming reminder of how effective Putin's rhetoric is.

From Spiegel:

How Dangerous Is America? By Gabor Steingart in Washington, D.C.

Helmut Schmidt, the former German chancellor who initiated the US arms buildup against the Soviet Union during his term in office, considers today's Russia to be less dangerous than the United States. This is as surprising as it is provocative.

In reference to the United Russia rally which I blogged about below, here's an interesting bit of news: in attendance was one Mr. Mikhail Timofeyevich Kalashnikov, the 88-year-old designer of Russia's third most popular export after oil and gas, the famous Kalasnikov assault rifle, AK-47. This is not a joke. Apparently one of the world's most well known weapons designers gave a short speech endorsing the continuation of Russia's current political path ... it must be good for business. I would assume he knew the lyrics to the Soviet songs being played during the rally much better than the nashi.

See also: Chavez can't find 100,000 new Kalashnikov rifles from Russia, and the arms manufacturer that took on a stake in AvtoVAZ and renamed the most popular jeep after the rifle.

There are times when it can be an interesting exercise to examine the statements of politicians and try to separate what they actually believe from what they just say in order to get things done. In the case of Vladimir Putin, we had all better hope that it is the latter. If the Russian leadership actually believes in the recent outrageous claims they have made, I fear that we may be dealing with some entrenched delusions of persecution that could only be possible in the nest of spies that is the Kremlin.

For those who haven't been trolling the Russia news all day, Putin has lashed out at the West both on security issues and domestic politics, accusing them and the opposition of a plot.

In the new issue of Condé Nast Portfolio, there's a great extended feature and photo slideshow about Vladimir Putin's ambitions with the energy reserves of Sakhalin Island, which have brought outstanding prosperity to some islanders while leaving others in the lurch. A fairly standard item of magazine journalism of a provincial backwater going through vast and rapid economic changes, but some excellent images are offered. Some highlights after the cut.

The LNG plant of the Sakhalin II energy site. (Photo: Donald Weber)

Steve Burt, a Sakhalin Energy manager in charge of part of the ambitious trans-island pipeline project, has one of the hardest construction jobs on earth. The pipeline crosses 1,100 waterways and 21 seismic zones along its roughly 500-mile route. (Photo: Donald Weber)

The discovery of more gas in Azerbaijan could be good news for the Nabucco project. But an agreement between OMV and Gazprom makes it irrelevant

By Derek Brower

THE BUREAUCRATS must be scratching their heads. Having long-trumpeted the Nabucco pipeline as a project central to the EU’s energy diversification strategy, they could be forgiven a smile when news from Azerbaijan arrived last week about a major new gas discovery in the Caspian Sea.

As anyone who has watched the Nabucco saga over the past year knows, the pipeline’s biggest problem has been sourcing sufficient gas to fill it – and fulfil its promise to break Gazprom’s near monopoly on gas supplies to Central Europe.

Russia's President Vladimir Putin stands before a meeting at the presidential residence in Novo-Ogaryovo, outside Moscow in this April 2007 (File photo. REUTERS/ITAR-TASS/PRESIDENTIAL PRESS SERVICE)

The Supreme Court has rejected a request from the Union of Right Forces party to remove President Vladimir Putin from United Russia's candidate list for the elections. “We never expected a positive outcome," said party leader Boris Nemtsov. "All we wanted was to register the fact that Putin uses the special services and the courts to repress the opposition, like in Belarus and Turkmenistan." The opposition party has become a target of attack by state television channels. United Russia representative Andrey Isaev appeared in a news story directed against the party, blaming it for the 1998 financial crisis in the country and calling URF campaigning “a shameless deception and the dirtiest politics”. Russia’s scuffle with the OSCE should not come as a surprise because “the thought would never even enter the minds of US politicians or voters that their elections need to be monitored by outside organizations.” Despite uncertainty on election monitoring, the European watchdog will send at least 40 parliamentarians to observe the proceedings. “Putinism, as it is now evolving, fundamentally challenges American assumptions that the 21st century will see the inevitable triumph of western values.” While Putin’s anti-Nato comments contain “a clear element of sabre-rattling for domestic purposes,” the Kremlin is genuinely “alarmed by what it regards as a Nato plot to contain Russia.”

Prime Minister Victor Zubkov has announced that Russia has all the prerequisites for developing its chemicals and petrochemicals industry, outlining a new program to attract investment to the sector. Russia’s Industry and Energy Minister Viktor Khristenko, together with chiefs of Russia’s biggest oil companies, have discussed freezing retail prices for petrol. According to a Deutsche Bank research note, Gazprom deputy CEO Alexander Medvedev says the price of gas to Europe will rise to $300 to $400 per 1,000 cubic meters next year. Petro-Canada is urging Gazprom, as its potential partner, to approve a plan to build a $3.5 billion liquefied natural gas plant on the Baltic Sea to capitalize on the decline of the product's supply in North America. Finance Minister Alexei Kudrin says that, if strong growth continues, direct foreign investments could account for 2.7% of the country’s GDP this year. The Russian Federal Financial Markets Service, however, has expressed concern over a lack of major investors in Russia's financial market. Japan's Mitsubishi Motors Corp will announce plans to build a factory in Russia, with production set to begin in 2010. The company signed a letter of intent with the Russian government last December to consider local assembly. Japan’s Sumitomo Corp aims to take a stake in Russia’s Elga coal mine. Russia and the US have agreed on a plan to dispose of 34 tonnes of surplus plutonium from Russia’s weapons program. The US will contribute $400m to the project. Royal Dutch Shell has set the price of developing Russia’s Arctic gas fields at “several hundred billion dollars”.

Vietnam and Russia have held an Economic Co-operation Forum, during which Vietnam's position as as an attractive destination for Russian direct and indirect investment in Asia was confirmed. Lebanon's Parliamentary Majority leader, Saad Hariri, is urging Russia to help the country overcome its current political crisis.

Sotheby's, the world's second-largest art seller, will offer as much as $75 million of 19th- and 20th- century Russian works next week in London, the auction house's biggest Russian sale to date.

File this piece of news under WTF: The Russian government's English-language overseas news network, Russia Today, wants you to make them your preferred source for cable and satellite news.

Coming up next: Cambodian state television's "Pol Pot was kind to his students as a college professor. Did you know this?" and Italy's "Mussolini played the violin to relax. Did you know this?" campaigns.

Sometimes I think that the Kremlin's new propagandists at Russia Today are just having way too much fun.

We've been carefully following the story of Sergei Storchak's arrest and the alleged campaign to undermine Finance Minister Alexei Kudrin. We are fortunate to have just received "hot off the press" an exclusive analytical dispatch on the situation from a frequent reader and informant of ours, who is a well connected Russian government adviser in Moscow. For many understandable reasons, he wishes to remain anonymous, as the article speculates who is behind this indirect attempt to seize control of the state budget at a time of extraordinary yet well concealed instability in the Russian government as the managed elections approach.

Our contributor's article raises some interesting questions: Is there a connection between Storchak's arrest and the spy wars? What does the timing tell us about who wants to seize power from whom? What indicators should Kremlin-watchers keep their eyes on to know what's going on in this case?

Dr. Yevgeny Volk writes the following in his article "Who's Who in Russia's Parliamentary Elections": Under the electoral code, every State Duma aspirant must declare his or her income and holdings. United Russia candidates' incomes, at least by Russian standards, are significantly higher than those of most other parties. President Putin's 2006 annual income of $80,000 ranks among United Russia's lowest. Then again, Samara Provincial Governor Vladimir Artyakov earned $57 million last year; Duma deputy Vladislav Reznik made $47 million; another deputy, Vladimir Gruzdev, made $38 million. Putin is presented as being much poorer than most provincial governors, whose annual incomes are significantly higher than $1 million.[9] These incomes are substantial by Russian standards; Russia's average monthly salary of $600 is comparable with the U.S. poverty line.

Here's some news footage of Russia's Doomsday Cult, which we have blogged about.

Here's an interesting one from a WSJ blog: "In 1941, the British Secret Service asked the game’s British licensee John Waddington Ltd. to add secret extras to some sets, which had become standard elements of the aid packages that the Red Cross delivered to allied prisoners of war. Along with the usual dog, top hat and and thimble, the sets had a metal file, compass, and silk maps of safe houses (silk, because it folds into small spaces and unfolds silently). Even better, real French, German and Italian currency was hidden underneath the game’s fake money. Departing allied soldiers and pilots were told that if they were captured they should look out for the special editions, identified by a red dot in the Free Parking space. Any sets remaining in the U.K. were destroyed after the war. Of the 35,000 prisoners of war who escaped German prison camps by the end of the war, “more than a few of those certainly owe their breakout to the classic board game,” says Mr. McMahon.

The game also played a role in the Cold War, with communist countries declaring the game capitalist propaganda and banning it. Despite such edicts and Marxist-inspired alternative games such as Hungary’s “Save” or Russia’s “Manage,” smuggled versions of the capitalist diversion were hits behind the Iron Curtain."

We have no doubt that many of the young gazoviki grew up mastering the game of Monopoly. In addition to the Soviet-approved board game "Manager", there were actually six more Russian editions of the game, listed here. Pity that rubles and real property deeds are quickly becoming indistinguishable from the toy versions.

From the Washington Post, "Reporting Against the Odds":

IT WAS NO surprise when authorities shut another independent newspaper in Vladimir Putin's Russia this month, but the pretext was particularly illustrative of the cynicism of Mr. Putin's regime. The Samara edition of the Novaya Gazeta newspaper had offended those in power by fairly covering the political opposition, so police swooped in on Nov. 8, confiscated the newspaper's lone remaining computer (having seized the others last spring) and indicted its editor for allegedly using a counterfeit version of some Microsoft software. For one of the world's leaders in intellectual piracy, this was indeed rich.

Today Germany's largest-circulation news magazine Stern has published a by-lined article by Robert Amsterdam analyzing the Kremlin's capture of the Social Democratic Party (SPD). Full English translation after the cut.

President Vladimir Putin, center, meeting Russian Orthodox Church top priests in the Moscow Kremlin on Monday, Nov. 19, 2007, with Russian Orthodox Patriarch Alexy II. (AP Photo/Pool)

Konstantin Kosachyov, head of the Duma’s international affairs committee, says Russia will increase the number of invitations to monitors from the Parliamentary Assemblies of the European Council, the OSCE and CIS. Elsewhere it was reported that the OSCE may not be invited to monitor Russia's presidential poll in March unless it adopts proposals that would weaken observation missions. At a meeting to commemorate the 90th anniversary of the restoration of the Moscow Patriarchate, President Vladimir Putin said he hoped that Orthodox Christians would vote in the upcoming State Duma elections. At least 5,000 supporters of President Vladimir Putin will attend a demonstration in his honor at Luzhniki Stadium, according to the leader of the “For Putin” movement, Pavel Astakhov. Deputy Finance Minister Sergei Storchak, one of three deputies to Alexei Kudrin, will be charged by next week with attempting to embezzle $43.4 million from the federal budget, according to the Investigative Committee. The Union of Right Forces offers Russians the possibility of voting “against Putin retaining his authority.”

Russian foreign direct investment reached $19.6 billion by the end of September, almost double the figure for the previous year. Prime Minister Victor Zubkov has announced that Russia’s business community is currently refusing to co-fund state investments in research and development. A Ford motor plant in Leningrad has been shut down in response to a planned workers’ strike. A new report from the World Bank says that Russia must control inflation and allow for appreciation of the ruble if it wishes to see a continuation of its robust economic performance. The report described the surge in inflation as "the most notable monetary development in 2007.” Yugraneft, an affiliate of Sibir Energy, is seeking billions of dollars in damages in a London lawsuit against billionaire Roman Abramovich and his company Millhouse Capital, arguing that it was cheated out of its Russian assets when its interest in Sibneft was “illegally diluted”. The board of Moscow utility Mosenergo has decided to prepare for the sale of global depositary receipts representing shares now owned by the state. Through state-controlled Unified Energy Systems, the government owns 21.16% of Mosenergo. Severstal has extended its offer for gold and molybdenum miner Celtic Resources. It already holds 45.6% of the company. General Motors says the Russian auto market will soon be the largest in Europe. Executives at the Sakhalin-2 oil and gas project are almost ready to open up the vast new energy source. The Urals Mining Company won an auction for the right to develop the Sverdlovsk emerald deposit with a bid of 12 million roubles, double the starting price. Russian Railways (RZD) will build a high-speed rail link with Finland to boost passenger and cargo traffic with the European Union country. With its own health service, its own doctors and its own clinics, RZD is known as “a state with a state”.

Putin has defended Russia’s decision to suspend its participation in the Conventional Forces in Europe Treaty, saying that it was a necessary response to NATO’s “muscle-flexing” near its borders. Russia, he said, would rethink the moratorium if other countries ratify an amended version. Iran is in talks to buy 30 Tupolev passenger aircraft worth more than $1 billion. Putin has grouped companies like Tupolev and Sukhoi into one giant, state-controlled holding called the United Aviation Corporation. The Russian Federal Military Technology Cooperation Service will permit China to re-export Russian RD-93 fighter jet engines. Turkmenistan will press ahead with a planned gas pipeline through Russia despite reports the project has been put on hold due to a pricing dispute.

A Russian journalist has died in the Chinese border town of Heihe after falling from the sixth floor of his hotel.

It's not a very good week for German corporate social responsibility, as the Nigerian government has opened up a probe into an alleged 12 billion euros in bribes handed out by the industrial conglomerate Siemens to officials in Nigeria, Libya, and Russia. However the corrupt bureaucrats of the Kremlin must have been disappointed to learn how much more their African counterparts were able to squeeze out of the Germans - apparently officials from Olusegun Obasanjo's administration were responsible for taking the majority of the bribes: "That made Nigeria a clear gold medallist in this Siemens bribery contest, with Russia a distant second with only 2 million euros shared by 38 people."

According to a new WSJ report, Siemens paid bribes to officials in Nigeria and two other countries between 2001 and 2004 to help snag huge telecom equipment contracts. The Oct. 4 ruling names four former Nigerian telecommunications ministers, as well as other officials in Nigeria, Libya and Russia as recipients of 77 bribes totaling €12 million, or about $17.5 million.

After the cut are the names of the Russian officials and amounts paid by the mysterious Siemens employee named "Mennenga." Anybody out there know who this is?

[Editor's introduction: Our Russia correspondent, the journalist Grigory Pasko, recently went on assignment to Sochi, the Black Sea resort city that has been slated to host the 2014 Olympic Winter Games. Sochi, which has always been a favorite vacation spot for Russians, has been declared a priority development zone by the government, and is currently being flooded with money - far from all of which actually gets spent as intended. The opportunities and likelihood for corruption in the Sochi infrastructure projects are unparalleled. Over the next few days, Grigory Pasko is going to offer our readers an exclusive series of direct reports about what's really going on in Sochi these days.]

Part I: Special Operation «Olympiad»

By Grigory Pasko, journalist

The Sochi airport building is a small one-floor affair, somewhat ghastly looking, not at all designed for spending any length of time in. And don’t even think about accessing the internet – there isn’t any.

They announced that my flight would be delayed by seven hours – a perfectly normal occurrence for modern Russian aviation with its motley collection of small-fry airlines that don’t carry any liability whatsoever before passengers for their delays.

To make a long story short, in my search for a comfortable place to work on my computer while I waited for my flight, I found myself in the airport’s VIP lounge. There was already a group of businessmen sitting there: they were having a heated discussion about the rosy prospects for business in Sochi. They were speaking loudly and were so engrossed in their conversation that it was impossible not to hear their every word.

AEI's Leon Aron has published a long interesting a review of the book "For Prophet and Tsar: Islam and Empire in Russia and Central Asia" in the New Republic this month: Poskrebi russikogo i naydyosh tatarina: scratch a Russian and you will find a Tatar. The origin of this quip is uncertain (attributed to Napoleon, it is found in Michelet, Pushkin, Dostoevsky, Marx, and Lenin); but its accuracy has made it into something of a Russian proverb. This past summer the adage even found its way into one of Vladimir Putin's long, surly, preening, and occasionally vulgar monologues disguised as a press conference.

The observation about Russia's largest Muslim people is literally true of some of Russia's most distinguished families, who trace their origins to the Golden Horde conquerors. Rasputin's assassin, Prince Felix Yusupov, was from one such family; Vladimir Nabokov, whose ancestor Nabok Murza was a fourteenth-century Russianized Tatar prince of Moskovy, was a scion of another. And the reference to the Tatars certainly is correct in a larger historic sense. Outside of Spain, where the Muslim presence was ended by expulsion at the end of the fifteenth century, the thirteen hundred years of Islam's continuous presence within its current borders make Russia Europe's oldest and largest Muslim nation.

He was arrested last Friday, but no one really knew why. Today it's reported that Deputy Finance Minister Sergei Storchak is suspected of embezzling $43 million in state funds. A statement from the Prosecutor General's Office (who can totally trust for reliable information), says that the official was involved in "an organized group to embezzle budget funds under the pretext of covering expenses for Sodexim" and that "The investigation possesses evidence that if Storchak had been left a free man, he could escape the investigation and the trial, engage in criminal activities, threaten witnesses... and destroy evidence."

Sodexim was apparently involved in organizing a Russian medical equipment exhibition in Baghdad five years ago, and there is speculation that this investigation somehow involves Russian-Iraqi debt deals.

Several have come out in defense of Storchak, including Andrey Kostin of VTB: "I know him as a very professional person and I very much hope it will be fair treatment. I still hope that there is some kind of probably misunderstanding. I mean his role in whatever crime that happened is probably not one that can be considered because he is one of the leading professionals in the field of external debt."

Watch this space for more news...

Activists of the youth wing of the People's Democratic Union, an opposition group of ex-Prime Minister Mikhail Kasyanov, hold portraits of Russia's President Vladimir Putin during a protest in Moscow November 17, 2007. The activists were denouncing what they call a Putin personality cult. REUTERS/Denis Sinyakov

With several weeks still to go before the Dec. 2 parliamentary elections, voting has already begun for the reindeer herders of Russia, despite criticism of the canceled OSCE election monitoring mission. One editorial said "By stiff-arming the OSCE, the Kremlin isn't hiding its electoral imperfections as much as flaunting its contempt for the very concept of a free society." A statement from the U.S. State Dept. backing the OSCE decision to withdraw the mission reasoned that "Invitations with such conditions undermine the integrity of ODIHR and its ability to adequately perform its responsibilities, which we and other countries have vigorously supported as the international "gold standard" in election observation."

A a new movement founded in the provincial town of Twer is calling itself "Pro-Putin" and claims to have collected 30,000 signatures in support of President Vladimir Putin serving a third term, although the constitution prohibits it. "We see an opportunity for Vladimir Putin to stay on as head of state," said Pawel Astachow, one of the movement's 600 founding members. A more creative effort to circumvent the constitution was put forward by the NGO "Women of Vladivostok," who said that Putin's wife Lyudmila Putina should be nominated to allow continuation of policy, prompting Vladimir Voitovsky to quip “This is some sort of ladies’ fuss about the election. It’s all just for fun.”

Meanwhile the Communist Party is looking to make huge gains from the state's squeeze on the democrats. The 94-year-old party leader Gennady Zyuganov said that "When Putin came to power there were seven oligarchs. Now there are 61" and told a joke about Roman Abramovich: Roman arrives in heaven only to find his way blocked by St Paul. St Paul asks Abramovich: "Do you own Chelsea, five yachts, and a 5km stretch of beach in the south of France?" Abramovich replies: "Yes". St Paul replies: "I'm not sure you're going to like it in here."

The Guardian has published the full, unedited text of an interview with Alisher Usmanov about his share in the football team Arsenal, relations with the Russian and Uzbek governments, his support of Vladimir Putin, and his previous arrests and trials. He said "I do wonder about the thought process which makes you think that a person who spent 6 years in prison after a framed-up case by the KGB, has any relation to KGB. The answer to each and every question like this is simple: I have never been a KGB member."

In sport, the British celebrated vicariously through Israel after their defeat of Russia, throwing their national team a lifeline in the Euro 2008. Even the FM David Miliband joined in with an official gesture of gratitude: "Now every Englishman is cheering the Israeli nation for their great service to help us." Although some Israeli players praised the historical legacy Russia's Dutch coach Guus Hiddink, whose family played a major role in helping Jews during the Holocaust, others speculated that the defeat of Russia was going to have negative political ramifications in the two nation's relations.

The Doomsday Cult continues to stay holed up in a cave near Penza, awaiting the apocalypse. Authorities have left some food and supplies near the cave's entrance. Cult leader Pyotr Kuznetsov has been allowed to talk to the media from the secure psychiatric hospital in the Penza region where he's being held: "We were divinely instructed to move into two caves. The local people created too many problems, they constantly drank and fought each other. So we decided to leave."

Alexei Kudrin, whose #1 colleague in the government Sergei Storchak was arrested on Friday, announced that he expects $45-$50 billion in annual foreign direct investment over the next three years. Other investors are looking to cash in on huge infrastructure projects, as the president has backed plans to pour $191 billion in the power and railway sectors. "If you are looking for access to the story, the steel sector is one of the few liquid stories you can play," said Michael Kavanagh, a metals analyst at UralSib. Greece and Turkey have inaugurated a new gas pipeline from Azerbaijan which will act as an alternative to Russian-controlled supply. Gazprom Neft has appointed two high ranking executives from the Italian energy firm ENI to its board, which acquired a stake in the group from controversial Yukos auctions.

Today’s news on the brazenly harsh deadline set in the Khodorovsky case speaks for itself – the prosecutors aren’t even pretending to play by the rules any more. Both Khodorkovsky and Lebedev are now both under the gun: they have about 36 days to carefully examine more than 30,000 pages of trumped up charges.

The procuracy in this case is evidently indistinguishable from the board of directors at Rosneft, who have determined that it is in the interests of the power to ensure that this process is well under way during the lead up to the presidential selection in March.

Sakhalin blogger Tim Newman has the following to say about Exxon Mobil CEO Rex Tillerson, the lion of the energy sector:

Amongst all the talk about peak oil, increased energy demand, dwindling hydrocarbon reserves, and dependence on unstable regimes which appear daily on the TV, radio, and in the international press, the opinions of Rex Tillerson do not enjoy any special prominence over those of journalists, minor politicians, environmental activists, and laymen commentators. Yet insofar as he is able to describe in a few brief sentences the exact problem faced by the world’s energy comsumers, there are few who deserve to be listened to more keenly on the subject.

I couldn't agree more. Tillerson's straight talk on resource nationalism in these high-tension days is a breath of fresh air.

A remarkably entertaining letter to the editor of the FT recommends that the United States invade Canada before Russia or China gets the idea: "Conquering Canada would be easy - on any day, there are more tyres on cars in Manhattan than there are Canadians. As with Iraq, it is simply a matter of showing that Canada is harbouring weapons of mass destruction and building nuclear weapons. Falsified discovery of "yellowcake" from Niger will not be necessary as a pretext for invasion. Canada has dangerous "yellow snow", secretly deposited by Canadian men in winter. "Don't eat the yellow snow" is a warning every child is given from birth."

Check out the rest after the jump.

I would say I'm shocked by this headline, but it seems almost anything can happen in Russia near an election: "Russian Police Detain Deputy Finance Minister." It appears that Sergei Storchak, who oversees Russia's massive stabilization fund, was detained by police outside the Ministry the Finance as part of a third-party criminal investigation. With any arrest of a Russian official comes the speculation - is there a movement being organized against Finance Minister Alexei Kudrin by hostile factions among the Kremlin elite? Storchak was most recently in the news for voicing strong opposition to a proposal from the Bank of Russia to convert the Stabilization Fund to other currencies. To put it lightly, converting $146 billion dollars can dramatically transform an economy, making many winners and losers. Kudrin has no shortage of potential opponents - if so inclined, one can even look back as far as the Kozlov murder to try to find an Austro-Russian money-laundering conspiracy theory.

The latest curious news I recall Kudrin being involved in (apart from the workaday economic nationalism with that whole IMF deal) comes from last May, when the president surprisingly suggested that the Stabilization Fund should start dealing in domestic securities to pump up the stock market. Kudrin, who is often applauded for his sober management of Russia's petrodollars, openly disagreed with the president's reasoning, arguing that the proposal would hike inflation and trigger stock market speculation. Needless to say, it is not often when officials openly disagree with the president on record, yet Kudrin was promoted again last Sept. in a cabinet shuffle. We used to have a direct link to his speech from the Kremlin website, but now it looks like it has been mysteriously removed.

Long story short - does the Storchak arrest reveal a campaign against Kudrin by parties seeking access to the gigantic state piggy bank he so carefully guards? Back in April, the FT wrote "But Yaroslav Lissovolik, an economist at Deutsche Bank, says Mr Kudrin's reforms should at least steer Russia through coming elections without a pre-poll spending splurge, or candidates making ruinous promises." Perhaps not.

Surely more facts will rise to the surface very soon, but all we know for now is that nobody like this is ever arrested for the actual substance of the charges. There is definitely a much bigger story going on here. Yesterday it was Leonid Reiman, today it's Sergei Storchak. Which Russian official will fall tomorrow?

Following our earlier post on a Grani.ru political poster of Vladimir Putin congratulating Vladimir Putin as the next president, a frequent Russian reader sent in a number of other posters from the same contest (these have appeared online elsewhere back in September). The jury of the competition included artists, writers, journalists, and public figures: Elena Bereznitskaya-Burni, Andrey Bilzho, Alexey Venediktov, Igor Irteniev, Vladimir Korsunsky, Roman Leibov, Sergey Parkhomenko, Lev Rubinstein, Irina Hakamada, Grigory Chkhartishvili, Viktor Shenderovich, Irina Yasina. Also on the jury was the poet and artist Dmitry Alexandrovich Prigov, who died in July of this year. Two posters share the first place prize: "Flipping the Bird" and "System Error."

[“Flipping the bird”]. The text reads "200-Infinity" The artist is a 24-year-old web designer from Moscow named Dmirty (he did not desire to give his surname). The main prize – 2500 dollars – he divided with 27-year-old video engineer Maxim Zakharov from Kaliningrad, who is the artist of "System Error"

Eric Reguly of Canada's Globe and Mail has a great blog post up about Gazprom, arguing that "A deal with Gazprom, in effect, is a deal with the Kremlin. There may be nothing wrong with that. But there is something wrong with allowing one company, whether it's Russian, American or Tahitian, from gaining so much influence over one market." Look out for those Tahitians - they might just corner the black pearl market in French Polynesia. Check out Reguly's article after the jump.

The winner from a political poster contest over at Grani.ru:

From Charles Krauthammer's article in today's Washington Post: In Germany, Gerhard Schroeder is long gone, voted out of office and into a cozy retirement as Putin's concubine at Gazprom.

Everybody has their eyes on the Belgian company Distrigas, which will soon become ripe for the picking as Suez will be forced to sell its majority stake as part of its merger requirements with the EC. Among the potential suitors (which is practically everyone) is the monstrous EDF, whose chairman Pierre Gadonneix openly stated his interest in the company at the Rome conference, along with plans to invest outside of Europe for the first time in the United States and Russia. Panic quickly insued, and trading of Distrigas shares was suspended on the Euronext Brussels (it's illegal under Belgian law to make such statements). There are major concerns over who will be the next owner. Suez will hold a "transparent" auction to swap assets for the stake - no cash accepted. The Belgians are terrified that the French state, through EDF, will end up controlling their energy sector, but there are also other outcomes to watch, such as Spain's Gas Natural (which is keen) and Italy's Enel (which is feigning disinterest).

While Europe's energy titans squabble, I of course am keeping an eye on the quiet contender, Gazprom. In many ways, Distrigas would be an ideally positioned energy asset to own, and I imagine the executives at the Korporatsiya are salivating over it.

The Organization for Security and Cooperation in Europe’s Warsaw-based office will not be able to monitor balloting in the upcoming election. “Despite repeated attempts to attain entry visa into the Russian Federation for [...] experts and observers, entry visas have continuously been denied. [...] It is with regret that [...] it will be unable to deliver its mandate under these circumstances.” Two-thirds of voting-age Russians “do not believe that December's elections to the State Duma will be conducted honestly.” Hundreds of activists met in Tver to formally establish the “All-Russian Council of Initiative Groups to Support Putin” movement, to help ensure that Vladimir Putin continues running the country after the completion of his second presidential term. Organizers of the session said the movement “is not affiliated with any party,” but the grass roots members reportedly admitted “that they are members of United Russia and were sent to the sessions by NGOs close to regional authorities.” Another component of the For Putin movement, the web site Zaputina.ru, claims that 54,000 visitors have signed up to urge Putin to continue in power. The movement claims to have the support of 30 million people. “We are not campaigning for a third term. We respect the opinion of the president but suggest a position that will keep him as the national leader.” It is thought that United Russia will probably win two-thirds of the seats in the next parliament - enough to change the constitution. The State Duma holds its final session today, leaving behind it “a legacy of Kremlin-sponsored laws that have pushed political dissent to the brink of extinction.” “If politics is a world of paradox and scandal, then Vladimir Zhirinovsky is the poster boy.” Viewpoints on the forthcoming elections can be found here.

Gazprom has revealed how it charges for gas, in a bid for transparency that “is likely to kill off talk of political motives behind price increases.” The company has upgraded gas reserves in the giant Shtokman field to 3.8 trillion cubic meters, and is to create an operating company, which will plan, finance and build Shtokman's first phase, by Dec. 20. Ukraine and Russia have agreed principles of natural gas pricing for the medium term. Merrill Lynch has bought a 10% stake in Trust Banking Group, a company formerly controlled by Mikhail Khodorkovsky. The current managers bought it from Khodorkovsky’s Menatep Group in 2004 “to distance it from the billionaire and his now-bankrupt Yukos.” Anatoly Chubais, the head of Unified Energy System, insists that he will resist Gazprom's efforts to snap up large chunks of the power sector, which is “threatening to undermine the government's large-scale reform of the industry.” Chubais is currently overseeing the breakup of the UES electricity monopoly in a bid to make the sector competitive. Deputy Finance Minister Andrey Vavilov wants Russia’s stabilization fund money invested in Western stock market indexes. Nordic banks “are expanding into new markets including Russia and Ukraine” to boost growth as the expansion of the Baltic economies slows down. SABMiller, the London-listed brewer, highlighted the growth potential of the Russian beer market, saying that “Russia is one of the most exciting markets in the world.” Investment firm Prosperity Capital Management said on Friday it has postponed the London listing of its Russian electricity fund, New Russian Generation, due to poor market conditions. Russia's fourth-largest oil producer, Surgutneftegas, plans to increase production with a $3 billion investment plan this year.

As it has already signaled, Russia has announced that it will suspend its compliance with the key Cold War arms treaty, the Conventional Forces in Europe (CFE) treaty. The moratorium is understood by NATO officials as legitimate. The European Union’s Russia policy is “now in tatters”. British Foreign Secretary David Miliband has expressed support for Russia and Ukraine joining the World Trade Organisation. According to NASA officials, when the space shuttle fleet is retired in 2010, the United States will be dependent on “an increasingly hostile Russia” for five years to give American astronauts access to the International Space Station. Russia's lower house of parliament has ratified an intergovernmental agreement on restructuring Cuba's $166 million post-Soviet debt to Russia.

Australia has been named as the world’s worst polluter. Russia was ranked lower than China and the US, with 661m tonnes of CO2 output per year. 29 members of a Russian sect have taken up residence in a remote cave in order to wait for the end of the world.

Very interesting news: Nezavisimaya Gazeta, citing a source close to the presidential administration, reported Thursday that Putin was planning to resign after the Duma elections and become a deputy, giving him the legal right to run in the March presidential election.

This week the Wall Street Journal broke a pretty big story: Russia's Minister of Telecommunications is alleged to illegally own a large chunk of the country's telecom industry through offshore accounts in the British Virgin Islands. The report states that the BVI police has told the U.S. Department of Justice that there is "overwhelming evidence" that Mr. Leonid Reiman, a close friend and ally of Vladimir Putin, owns these assets through the IPOC International Growth Fund Ltd., a fund that suspected of being a huge money laundering vehicle. This is not the first time Mr. Reiman has been involved in controversy. More info after the jump; more info forthcoming.

UPDATE: The FT has just weighed in also (see below)

These are just some of the divisive economic issues that have stalled out EU-Russian relations, preventing a deepening of the partnership. A new analysis from Stratfor argues that despite rapidly growing trade between Russia and the EU, Moscow's aggressive use of business as a political lever has provoked deep resentment among many member states who are willing to throw down the veto on any talks. The analysts write, "The Kremlin's continued use of politics in choosing its economic relations will come back to bite it."

The atomic monster and its resurrection

By Grigory Pasko, journalist

On 13 November, the State Duma considered in the third, and final, reading a draft law on the creation of the state corporation «Rosatom». It is to this organization that the shares in OAO «Atomic energy industry complex» («Atomenergoprom») and the property of federal state unitary enterprises (FGUP) found on the balance sheet of the agency will be transferred. In such a manner, the new structure will combine under one roof all the enterprises of the atomic energy industry and nuclear weapons complexes of Russia.

In February of this year, Vladimir Putin signed a document with a rather long-winded name – “On the peculiarities of the management and disposition of the property and shares of organizations implementing activity in the realm of the use of atomic energy and on the introduction of amendments into individual legislative acts of the Russian Federation”. Earlier, this document had successfully – and, most important, rapidly – passed through all the parliamentary steps.

The main content of the document was the division of the Russian nuclear complex into two independent directions – military and civilian.

According to reports, a cult of about 30 "simple Christians" have holed up in a cave to await the doomsday, which they believe is approaching next May, in Penza region of central Russia. Police have been dispatched to prevent anyone from interfering with the cult, which has threatened mass suicide, reportedly by blowing themselves up. The group was inspired to seal themselves off in the cave by their leader Pyotr Kuznetsov, a 43-year-old diagnosed schizophrenic now under arrest. According to the MT, Kuznetsov's group believes that the Orthodox Church has become too commercialized with its own tax code and business activities, and the sect represents the real Church.

Apparently the newfound religious freedom since the fall of the Soviet Union has led to a widespread growth of influence of religious cults and sects - even a traffic cop who claims he is Jesus is reported to have attracted 5,000 followers in Siberia. A surprising number of Russians refuse new passports and taxpayers' personal identification numbers, saying the figures contained "satanic" combinations of numbers.

Someone might want to let the Penza cult know that the apocalypse is scheduled for March 2, 2008, not May.

Here's a new think tank analysis from Maj. Gen. (ret.) Kees Homan MA, LL.M of the Clingendael Security and Conflict Programme:

Putin is testing Western resolve

It seems as if, quite suddenly, arms control is back on the international political agenda, as U.S. and Russian leaders are clashing over conventional forces, missile defences, nuclear forces, and missiles in Europe.

Russia has threatened that it might suspend the implementation of the 1990 Conventional Armed Forces in Europe (CFE) Treaty, which caps the amount of tanks and other major weaponry deployed in Europe. Moscow is frustrated that NATO member states refuse to ratify a 1999 revision of the accords because Russian military forces remain in Georgia and Moldova. However, as a result the blocked Treaty cannot be reviewed and updated to deal with the impact of the latest security challenges to force levels, missions, activities, technologies and equipment.

For many first-time visitors to Russia, the first thing they notice is the rather dramatic difference in the number of people smoking. Just in time for World No Smoke Day, Rospotrebnadzor has released statistics that makes Russia the #1 smoking country in the world, reporting that 65% of men and 30% of women regularly puff away their days. This is an unmitigated tragedy from a public health perspective, and is certainly no help to the rash of deadly fires in Russia: according to the New York Times, "High rates of alcoholism and smoking are also factors, fire officials say, because intoxicated people are often unable to escape fires, or inadvertently set them." On the other hand, perhaps the elevated number of smokers is a sign of this mass affluence we keep hearing so much about?

People walk past an election poster of the main Kremlin-loyal party, United Russia, near Red Square in Moscow November 14, 2007. The Russian words read "for Putin" and is part of a slogan that runs "Moscow votes for Putin!". REUTERS/Denis Sinyakov (RUSSIA)

The Union of Right Forces has asked a court to disqualify President Vladimir Putin from a parliamentary vote next month, saying that his job gives him an unfair advantage. Nikita Belykh, leader of the party, said that the grounds for the suit were Putin's “repeated violations of the law.” The party is planning to take part in a ‘Dissenter’s March’ organized by Other Russia, in response to “what they say is a Kremlin-orchestrated campaign to bring the party down,” and Anton Bakov, an independent State Duma deputy in charge of the party’s election strategy, is quoted as having said, “Vladimir Putin is personally beating us. But we are not scared. We will not be moved. Go to hell, Mr. Putin.” Moscow authorities have banned the Other Russia opposition coalition from organizing marches in the capital on November 24. It is permitted, like the other opposition parties, be allowed to hold rallies, but organizers have vowed to go further, and the ‘Dissenter’s March’ is planned to reach the offices of the Central Elections Commission. According to VTsIOM, the Communist Party is the only opposition party guaranteed a place in the next State Duma, having a stable 7% base of support; Duma representation would “dramatically increase” the party’s significance. The current State Duma is set to squeeze through a controversial bill in its final session this week. The bill, intended to speed up preparations for the 2014 Winter Olympics in Sochi. The bill, dubbed the “Olympic Law,” has met with opposition from local residents, who say it could lead to thousands of people being moved from their homes without proper compensation. The authorities are still struggling to control inflation - the government could extend its restrictions on grain exports. Russia’s Finance Ministry has warned that forming a state monopoly to produce and sell alcohol could provoke a rise in bootlegging of spirits.

The country's transportation fuels market is facing its biggest crisis in almost 20 years as severe shortages, caused by the rush to export and capital on current prices, are forcing some retailers to close their filling stations. Gedeon Richter, eastern Europe's biggest drugmaker, will buy 80% of Russia's Akrihin for $127 million. Russia's gold and foreign exchange reserves increased by $7.3 billion to a new record high of $455.2 billion. The country’s sovereign wealth fund “will not invest in risky financial assets immediately” next year when it is split into reserve and growth components.

Russia is increasing pressure on the European Union over the much-debated US missile defense shield, threatening to site short-range nuclear missiles in a second location on the EU's border if the US refuses to abandon its plans. “Any discussion of targeting Western Europe with missiles, from any party, is a) anachronistic; b) unwelcome and c) unhelpful,” said one NATO spokesman. Russia has withdrawn all of its troops from Georgia ahead of schedule. Although they are uncomfortable with sanctions on Iran, the “bottom line” for Russia and India is that they will “not support another nuclear weapons state in the region.”

The first ship in a new series has been completed for the Russian Navy. “High-tech hunters” are reportedly closing in on a group of cybercriminals known as the Russian Business Network, or RBN. The head of the local transportation police has been killed in the Southern Russian republic of Ingushetia.

Tom Friedman makes the case for the gas tax in the New York Times:

You’d think that one person, just one, running for Congress or the Senate would take a flier and say: “Oh, what the heck. I’m going to lose anyway. Why not tell the truth? I’ll support a gasoline tax.”

Not one. Everyone just runs away from the “T-word” and watches our wealth run away to Russia, Venezuela and Iran.

Perhaps voters didn't like the president's preemptive claim of victory and "moral right" the other day. The latest poll shows that United Russia has slipped nine points, but still clings to a level of support that most parties in genuine competitive democracies could only dream of.

Popular fascination with the byzantine networks of Russian organized crime seem to be reaching new heights, as demonstrated by the popular film Eastern Promises, offering moviegoers an imagined peek into the smoky backrooms of elite London restaurants, where gangsters bearing star tattoos engage in shady deals and horrific violence. It's a pretty good thriller, yet the movie never goes anywhere near the three Ps of politics, poisonings, or Putin. Garry Kasparov has probably done the most to bring the mafia paradigm to bear upon today's Russian political scene, and today this continues with a new report from Stratfor. The analysts write: "Unlike the normal situation in civilized societies, there is no clear distinction in Russia between criminal enterprises and the government." I imagine that Hollywood is not yet done exploiting this goldmine of material.

Here are some fun archival videos from Edward Griffin's 1985 documentary featuring long interviews with KGB defector Yuri Bezmenov, who talks about the Soviet "strategy of subversion" of the free press in the West, the machinery of state propaganda, and the instrumentalization of "useful idiots" abroad.

Last May, one blogger tracked down a copy of a 1967 copy of Look magazine which Bezmenov brags he manipulated into running a glowing story entitled "Russia Today." It is somewhat amusing that the Kremlin's new state-run fake TV news organ carries the same name. Check out these videos while you can before they get taken down (as they have been in the past).

We can think of quite a few "useful idiots" taking on this very role today...

Many more videos after the jump.

[Editor's note:At first sight, it may seem odd to post an article about something as frivolous as the Russian football (soccer) championship on this blog, but as Grigory Pasko points out below, in today’s Russia, even football has a political component. Historically the championship has always been won by one of several Moscow powerhouses such as CSKA or «Spartak», but now that there’s a “St. Petersburg team” in the Kremlin, we should have guessed that it was only a matter of time before St. Petersburg’s «Zenit» would end Moscow’s dominance by miraculously wining its first-ever football championship, on November 11. Not surprisingly, Russia’s new flagship team is proudly sponsored by such fine Russian corporations as «Gazprom», «Sibur», «Gazprom Mezhregional», «Sogaz», «Gazprombank», and «Gazpromneft» (all «Gazprom» subsidiaries, if you haven’t guessed), and has a “special relationship” with that other «Gazprom»-sponsored team, FC Schalke 04 of Germany’s Bundesliga.]

Bilateral relations. FC Schalke 04 (the ones in the in blue «Gazprom» jerseys) host «Zenit» (in the white «Gazprom» jerseys) in a friendly on 20 January 2007. The Russian «Gazprom» team won 2-1.

Once again about the national pride of the Great Russians

By Grigory Pasko, journalist

The recently-crowned Russian football champion, St. Petersburg’s «Zenit», are a “Russian” team in name only. Judge for yourselves: the team’s best players have names like Fatih Tekke (Turkish), Radek Širl (Czech – he scored the winning goal in the championship game), Alejandro Dominguez (Argentinian), Nicolas Lombaerts (Belgian – he replaced the Norwegian Erik Hagen in the starting lineup), and Kamil Čontofalský (Slovak)… Nor can you call the coaching staff Russian, either – both manager Dick Advocaat and his assistant Cornelius Pot hail from the Netherlands. So all the proud cries we’re hearing these days about “the great victory of the great Russian team” are at a bit far-fetched at the very least, and groundless at worst.

But the people need circuses to go with their bread. Bread continues to be available (albeit now at twice the price of only a few months ago) thanks to the high price for crude oil on world markets. Those same petrodollars also go to buy circuses from the west, by way of the acquisition of foreign coaches and players for Russian professional sports teams.

Here's an interesting one about the oil price crisis from an American perspective at the Washington Post: So the tightened gap between supply and demand has shifted power to producers. "Will competition for scarce resources lead to political or even military clashes among major powers?" asks a report by the National Petroleum Council. "Will bilateral arrangements among nations become common as governments attempt to 'secure' energy supplies outside of traditional market mechanisms?"

Here is what we might do: Raise fuel economy standards for new cars and trucks; gradually increase the gas tax (possibly offset with tax cuts) to induce people to buy those vehicles; expand oil and natural gas production in Alaska, the Gulf of Mexico, and off the Atlantic and Pacific coasts. These steps would, with time, temper the power of oil producers while also checking greenhouse gases. But many liberals, conservatives and environmentalists oppose parts of a sensible compromise. The stalemate hurts mainly us.

Back on Nov. 5 we posted a rush translation of the decision by a Dutch court to void the illegal sale of Yukos assets. Now we are updating that text with a full translation which has been carefully vetted by translators and lawyers. The original link has been updated.

A couple of days ago we blogged about an award ceremony prepared by the Russian government to celebrate their most famous Cold War atomic spy, who brought nuclear secrets to Moscow direct from the Manhattan Project. Now Russia is holding ceremonies to celebrate another spy, this time the British double agent George Blake, who "delivered a double humiliation to Britain at the height of the Cold War, first by reportedly betraying dozens - hundreds, some say - of Western agents while working for MI6 and then by staging a daring escape from his London prison in 1966." It seems fair to assume that Russia is giving the UK a poke in the eye for their honorary event for Soviet turncoat Oleg Gordievsky, the latest in an endless series of tit-for-tat gestures between feuding governments.

It is interesting to note that so many political challenges between Russia and the West always seem to come back to obsessively debating the historical narrative of the Cold War.

Read more about the incredible story of George Blake here - Siberian Light also has some new developments.

President Vladimir Putin has rebuked United Russia for lacking any clear political ideology and attracting “all kinds of crooks”, saying he only chose to join it because there were no other realistic options. “As usual, the president said the right thing,” responded Oleg Kovalyov, a senior party leader. A fuller account of Putin’s discussion can be found here. The statements, made alongside the declaration that he has a “moral right” to maintain influence, are Putin’s “baldest affirmation yet that [he] has no real intention of resigning from politics.” It is also being reported that Putin could “become the speaker of the upper house of parliament” after his second presidential term ends. Activists from pro-Kremlin youth groups Nashi, Young Guard and Young Russia, backed by police, are in the final stages of training to prevent an Orange-style revolution in the lead-up to the Dec. 2 elections. Lieutenant General Vladimir Shamanov, a general accused of human rights abuses in Chechnya will be appointed commander of the Defense Ministry's department for combat training. The Central Bank says it could back down on its policy of preventing the ruble from appreciating, in a sign that it will shift its attention more seriously to battling inflation.

It is being reported that Gazprom could build a power station in Britain as a joint venture with German power company E.ON. A lawyer for the Federal Customs Service has accused the Bank of New York of artificially delaying the hearing of a $22.5 billion case called by the service against it. A spokesman for the bank said, “We continue to believe the suit is without merit and will defend ourselves vigorously.” Russia’s dispute with Germany’s Lufthansa Cargo is “edging towards a compromise.” Russian Timber Group, the country's second-largest wood harvester, has postponed its initial public offering due to the “difficult investment climate.” Magna International, the Canadian auto parts producer, has said that reports that it is planning to construct an automobile plant in Russia are “speculative”. Teorema, a St. Petersburg property developer, plans to hold an initial public offering in London to finance “high-end residential and commercial projects.” Italian oil company Eni SpA says that Algeria and Russia will become “key energy suppliers” to the European Union as it becomes more dependent on natural gas to meet its energy needs. Gaz de France is reportedly in talks to acquire Unified Energy System's TGK-10 utility.

Analysts say that Iran is likely to turn to Russia and China for the warplanes needed to replace its obsolete US jets as it seeks to bolster its air defence. Russia is reportedly “tightening its grip” on the seized Kurile islands off the north coast of Japan. Putin has honoured George Blake, a “notorious British traitor”, as one of Russia’s greatest spies, at a time when “Anglo-Russian relations have hit a post-Cold War low.” Ukraine and Russia have set up a joint working group to deal with the environmental disaster after the Kerch Strait oil spill. Russia’s State Duma has passed a bill authorizing religious universities to grant state certificate degrees. Video-sharing site YouTube has launched a Russia-based counterpart.

We weren't the ones to say it this time, although the name of the E.ON chief has appeared on this blog before. Now it looks that Mr. Wulf Bernotat has taken his lobbying on behalf of Gazprom a bit far, especially in his mission to make sure that there is no unbundling in Europe, inspiring an op/ed from the Financial Times which critically remarks that the German executive, who has placed his bets on the Nord Stream pipeline, seems to think that Brussels poses a larger threat to Europe's energy security that Russia's state-held firms. Of course the British should be following Mr. Bernotat also. Check out the story after the jump.

Last Friday in my FT column I wrote about Eni CEO Paolo Scaroni's backing of the South Stream pipeline project with Gazprom as being detrimental to European energy security, as it decreased diversity of suppliers and competition by damaging the Nabucco project. Now, in the same pages of that publication, Mr. Scaroni is quoted as warning that Europe has been "sleepwalking" into a "staggering" dependence on natural gas.

Listening to the Eni chief talk about energy dependency is like getting parenting advice from Britney Spears - you'd be crazy to take it seriously.

Tatiana Yankelevich, the daughter of Elena Bonner (Andrei Sakharov's widow) and director of the Sakharov Program on Human Rights at The Andrei Sakharov Archives and Center at Harvard University, has published an op/ed today with the McClatchy-Tribune News Service calling up Condoleezza Rice to act upon two recent European court decisions in favor of Khodorkovsky, Lebedev, and Yukos to pressure Russia for their release. She writes: "Exhibiting a little backbone at this important juncture would show Putin that both the EU and the United States are more than happy to do the business with an emerging democratic Russia, but are wary of strengthening ties with a Russia where the rule of law seems to be slipping once again behind an iron curtain of authoritarianism."

Our top correspondent here at the blog and the former political prisoner, Grigory Pasko, today is featured in a full page profile in Le Monde. After the jump, the text in French. Translation forthcoming.

Groveling ever higher (if such a thing is possible)

By Grigory Pasko, journalist

Mikhalkov-Tsereteli's letter has already been discussed by everyone and anyone with the least bit of desire to do so. They have assessed it almost unequivocally: it is a manifestation of groveling before the lord and master, who has appeared to them in Putin. It would seem that after such a letter you could hardly expect yet another, even more impressive kowtow before Putin. Well, to all those who thought so, I must tell you you were wrong. It turns out – you can.

It turns out that in the nearest future, a civic movement «For Putin» is going to be formed in Russia (and perhaps even beyond its boundaries, since – as the Russian press assures us – over there, on the other side, Putin’s popularity rating is also soaring off the scale). The founding congress of this movement is set to take place in Tver Oblast [just north of Moscow Oblast on the road to St. Petersburg—Trans.] on 15 November. Gathering there will be representatives of initiative groups from all the regions. It is known that one of the organizers of the movement is a former officer of the KGB (or the FSB, it’s all the same thing), and currently a lawyer, Pavel Astakhov. Astakhov’s claim to fame is that he participated in the “spy” trial of the American Edmond Pope and the Russian scientist Anatoly Babkin and served as counsel to colonel Budanov, who had murdered the Chechen girl Elsa Kungayeva.

A few video newsclips of the aftermath of the tragic oil spills in the Black Sea.

Also you can see a New York Times video here, a EuroNews video here, and an ITN video here.

In the Russian language, the word “boi” signifies not only a military engagement, but also a large quantity of broken dishes. It is precisely in this latter sense that I have used it in the title of my article [Translator’s explanation: The original title of this article is “Morskoi boi”, which translates literally as “Sea battle” (and also happens to be the Russian name for the popular table game known as “Battleship” in English). The play on words, which does not translate, lies in this illogical double meaning – “Broken dishes at sea”.]

After the jump, the Polittechnologist takes a look at the eco-disaster in Russia's Black Sea.

Now this is quite a statement from the Russian president, made today during a visit with road workers in Krasnoyarsk, Siberia: "If the people vote for United Russia, it means that a clear majority of the people put their trust in me, and in turn that means I will have the moral right to hold those in the Duma and the cabinet responsible for the implementation of the tasks that have been set as of today. ... As the old saying goes, victory belongs not to those who have might on their side but to those who have truth on their side. This has deep meaning."

I think the president's comment, which can be read as a preemptive declaration of his intentions, speaks for itself. It appears Putin continues to be under enormous pressure to explain his role following the election of a new president, meaning that the warring board members of the Korporatsiya are still very nervous despite the president's assurances that although he may leave the presidency, his iron fist shall not.

Here's an interesting comment from a Reuters article on resource nationalism:

With supplies tightening, experts said, competition among consumers to lock up future crude is rising, with top consumer the United States facing tough challenges from emerging economies, such as China.

"Chinese companies are in a much better position to deal with energy producers and to sign deals with them," said Anne Korin, co-director of the Institute for the Analysis and Global Security, a nonprofit energy think tank.

"If Saudi Arabia, or any country, does a deal with an American company, it is pestered about the fact that women have no rights and there is no religions freedom. With the Chinese, they give you money, you give them oil, end of story."

President Vladimir Putin has been quoted as saying that a convincing victory for United Russia in the upcoming elections would give him the "moral right" to maintain strong influence in Russia after he steps down next year. The first week of pre-election debates on Russian television channels has failed to spark viewer interest. The Organization for Security and Cooperation in Europe said its observers cannot begin work monitoring the December 2 election because Moscow has not issued their entry visas. “Restrictive” new visa rules mean that foreigners will have to apply for their visas in their home countries or in a country where they can stay 90 days or more. Alexander Aksyonov, head of the visa registration department, said the new rules were in line with those in 33 countries that had the same rules for Russians traveling on business visas.

It has been forecasted that Russia's economy will grow 7.5% in 2007. The Central Bank has officially increased its annual inflation forecast from 8% to 10-11%. The risks of doing business in the country “are now increasingly understood,” but Russian banks, particularly those with a regional reach, “remain extremely attractive.” Shares in French steel-tube producer Vallourec rose sharply after a report that Alisher Usmanov's Metalloinvest had agreed to buy French investor Vincent Bollore's 3.97% stake in the firm, even though the story was denied by both parties. The Moscow Arbitration Court has completed bankruptcy proceedings against Yukos and the RTS stock exchange has stopped trading in the company’s stock; the corporate case is still likely to be heard by the European Court of Human Rights in Strasbourg, however, according to legal experts. Billionaire Oleg Deripaska says Canadian auto-parts giant Magna International Inc. is bound to double in size as it drives into Russia. “Magna is going to be a $50 billion company and I want to be there when that happens.” Russian regional power producer TGK-12 has launched its secondary offering of shares in Moscow, intending to raise $351.2 million. The Russian government is to have a controlling interest in the diamond mining giant Alrosa after its share issue. Gazprom will produce enough natural gas to supply “everyone'” and has a “significant” capacity of reserves, according to Alexander Medvedev.

Russia’s highest military official, Yury Baluevsky, says that the US is certain to aim its planned anti-missile shield at Russia eventually, adding “we can easily prove it.” He also said he does not believe “that the Russian military is obliged to defend the world from the evil Americans.” President Vladimir Putin and Indian Prime Minister Manmohan Singh had a positive meeting this week. "We agreed that there are enormous opportunities for cooperation." Singh said. Joint projects are to include a military transport aircraft and a join mission to the moon. The US attitude toward Georgia “too easily falls into the tired Cold War paradigm of "what is bad for Russia is good for the United States."” Russia’s Energy Minister, Viktor Khristenko, is using the World Energy Forum, an international gathering being held in Rome, to push the country’s reliability as an energy partner.

Putin has “surprised historians” by bestowing a posthumous title of Hero of the Russian Federation on George Koval, a deep-cover agent of Soviet Military Intelligence. New weapons based on nanotechnology will be designed in Russia “within 15 years” with the aim of combating radiation, chemical and biological terrorism. Local authorities have already placed the blame for the Strait of Kerch disasters on the captains of the ships who, in turn, claim that they did not receive the first storm warnings until their ships were already sinking. “Hundreds of dying birds covered in oil” have been washed up close to where the Russian tanker broke up. The spill “could pollute the Black Sea for 15 years.”

Nobody really knew what to expect when the Turkmenbashi, Saparmurat Niyazov, died last year - such is the confusion and opacity of closed societies. With the appointment of the new president of Turkmenistan, the former dentist and health minister Gurbanguly Berdymukhammedov, a lot of people were guessing in which direction would the country lean - toward an opening to the West or into the waiting embrace of Moscow? Surely Beijing isn't asleep at the wheel with its its energy interests in Central Asia either. The geopolitical ramifications of Turkmenistan's foreign relations cannot be underestimated - sitting atop one of the world's largest natural gas deposits, Ashgabat is a key regional energy player which has the power to really tip the scales. So far, we have seen nothing but confirmation that Berdymukhammedov understands this as well as anyone, and his decisions indicate that the Turkmen strategy will continue to dance and balance in order to extract the maximum concessions from her many suitors. Tomorrow, as hundreds of foreign officials flock to an oil and gas conference in Central Asia, all eyes are on Berdymukhammedov's next moves. The FT has got the story....

Everybody who is anybody is spending today at the 2007 World Energy Congress in Rome, including Alexander Medvedev of Gazprom. Speaking to reporters on the sidelines, he talked about all the power generating assets that his company was looking forward to buying in Europe, as well as taking on a bigger stake in TNK-BP, a rumor which again the British side has denied (the inability to speak transparently about Gazprom's interest in TNK-BP is almost Russian in its fantastical denial).

Isn't it interesting that Gazprom always seems to be so interested in investing in countries whose national energy champions are painfully exposed to the Russian state, like BP and ENI? As the authors of the new report by the European Council on Foreign Relations point out, "Russia has strengthened its political relationships by recruiting big business to act as a lobbyist for the Russian cause inside key EU countries." Perhaps they are also counting on their "lobbyists" to help them navigate and overcome the political opposition to Kremlin-owned energy in the UK and Italy?

At the beginning of November, President Vladimir Putin posthumously awarded a Hero of Russia medal to the American-born spy George Koval, who was the only KGB man to infiltrate the Manhattan project. Koval, who worked under the codename "Delmar", died in Moscow back in 2006, and there has been no other official reason for the timing of this posthumous award. According to the Kremlin press release, despite his position on the top secret project, "Mr Koval managed to send descriptions of the sites back to Moscow, along with information on their areas of work and the processes and production volumes of the elements in question." The most information about Mr. Koval has been collected by the New York Times (see excerpts after the jump), and many other news agencies have picked up on it, including the AP which carries the headline: "In time of raised tensions, Moscow honors its Cold War spies." Here's another strange coincidence: according to the Times piece, at one point Koval was assigned to a top secret Dayton facility which oversaw the production of Polonium 210.

What is Moscow trying to say to its people and to the world by celebrating a long dead Iowa-born atomic spy?

Perhaps the kneejerk reaction would be to assume that the Kremlin wants to play the nationalism card as much as possible before the elections, or simply wanted another jab in the eye of the Americans, who have known about Koval for years but have not disclosed the breach. One blogger I just found sees it a different way: "The Soviets went to great lengths to present themselves as the orgininators of their own bomb. By admitting that the bomb had been acquired through espionage, the status of Soviet science is somehow diminished, and with that the entire concept of having a bomb being correlated with a scientifically advanced society is tarnished. ... it is becoming more evident that the ability of the Soviet Union to develop a nuclear weapon in such a quick span of time is largely due to espionage, rather than scientific activities."

Today a column I wrote is featured in the Moscow Times:

Monday, November 12, 2007. Issue 3783. Page 10.

The Basmanny Court of Human Rights

By Grigory Pasko

Not long ago, when he was in Portugal at the EU-Russia summit, President Vladimir Putin announced that he planned to set up an institute in the EU that would monitor human rights in Europe. Putin's aide on EU affairs, Sergei Yastrzhembsky, reported to journalists that the new organization would focus on monitoring Europe's track record on freedom of the press, as well as the rights of ethnic minorities and immigrants. Particularly noteworthy was the fact that the institute would be staffed exclusively by Russian citizens.

Bloggers Alfred and John Donovan of royaldutchshellplc.com have unearthed some pretty interesting sounding "secret minutes" from a Sept. 2001 meeting of the company's Committee of Managing Directors (CMD). The documents leaked show that in their discussions of a potential Sakhalin-China pipeline, the Shell executives expressed "considerable concern" about the role of Gazprom in the joint venture. That website says they will publish these leaked documents later today - we wonder if the Shell executives had the foresight to predict six years ago that Gazprom would end up stealing control of the project from them.

Roger Cornish, the Managing Director of Interconnector UK Ltd, a company which controls the pipeline supplying the United Kingdom with 25% of its natural gas, writes a letter to the FT to remind readers that Gazprom has already been a holder of British energy assets for more than a decade. Derek Brower noted this on the blog back in April.

Young people pretend to worship a giant election poster of the main pro-Kremlin party United Russia during their one minute-long flash mobbing event just outside the Moscow Kremlin, on Sunday, Nov. 11, 2007. The poster reads: 'Moscow votes for Putin!' (AP Photo/Sergei Grits)

Russia's upper chamber of parliament could propose extending Russia's four-year presidential term to seven years. Dozens of regional political groups calling for President Vladimir Putin to stay on after his second term finishes next year are reportedly planning to meet this week to unite into a national movement, in a move that is likely an attempt to “boost United Russia's popularity.” A Kremlin-ordered opinion poll released by VTsIOM indicated that support for United Russia has dropped 6 percentage points over the past two weeks, possibly due to “higher food prices [...] and the novelty of Putin's decision to lead the party in the vote wear[ing] off.” The government will not enforce a Central Bank directive to close down thousands of automated payment terminals while a committee of officials is given a month to find a compromise. Luc van den Brande, a senior member of the Council of Europe, the major European human rights body, has launched an outspoken attack on Russia's elections three weeks before they take place, saying he had serious doubts that they would be free, fair, open, democratic or transparent. Only 11 out of 85 parties that wanted to stand in the December 2 poll had been allowed to do so, he said, with almost all of Russia's democratic opposition kept off the ballot paper. “The election is as ersatz a contest as any fought during the Soviet era.”

Gazprom has reached a preliminary deal on raising the price of gas supplies to Ukraine by $30 per 1,000 cubic meters. "The most important thing is that this price is acceptable for Ukraine," said deputy chairman Alexander Medvedev. “Gazprom’s unusual boardroom lineup is the result of a deliberate policy introduced by Putin of appointing trusted Kremlin insiders to head Russia’s largest state companies.” A special report on oil and gas audits can be found here. Billionaire Oleg Deripaska says Russia’s economy would benefit from a drop in energy prices. Hyundai Motor, South Korea's largest automaker, will build a vehicle factory in Russia to help meet surging demand. Alisher Usmanov's Metalloinvest has denied it is preparing a bid for French steel tube maker Vallourec after a it was reported it is readying an offer. “This information doesn’t correspond to reality.” Thanks to oil prices, Russia “now has the world’s third-largest currency reserves, worth more than $430 billion.” The downside of cashing in on rising oil prices, for Russia, is “the need to manage the inflationary pressure they create.”

A clash between Russia and its major gas customer the European Union is likely to get worse, jeopardising supplies. Russia’s influence in Lithuania, Estonia and Latvia has “evoked stress in the Baltics” regarding potential corruption. Swiss President Micheline Calmy-Rey met with Putin in Moscow, praising increased investment and growing economic ties. It was also requested that Russia ease visa regulations. The United States and Russia will commemorate their bicentennial of diplomatic ties this year. Poland's prime minister designate Donald Tusk has expressed optimism that Polish ties with Russia can improve, while relations remain strained on a number of issues including energy and missile shields. Indian Prime Minister Manmohan Singh is in Moscow. The two sides are expected to sign an agreement under which Russia would build four nuclear reactors in India, and have made significant progress on the creation of a joint venture for the production of titanium dioxide and other titanium products.

A severe storm has broken a small Russian oil tanker off the Ukrainian port of Kerch, spilling up to 2,000 tons of fuel oil in what environmental official Oleg Mitvol described as a serious environmental disaster. “This problem may take a few years to solve. Fuel oil is a heavy substance and it is now sinking to the seabed,” he said. At least six Russian vessels were hit by the same storm. Over 350 Russian policemen and Interior Troops servicemen have died this year while on duty. By 2050, there will be “fewer than 100 million Russians, compared with 142 million today.”

Seek not a repentant executioner – there is no such thing

By Grigory Pasko, journalist

Russia. The late 1600s. A gloomy, overcast morning. Standing next to the bloody scaffold is an executioner holding an axe in his right hand, bitterly wailing: “Dear people! For the love of Christ, forgive me! I am a sinner! I have hewn off innocent heads left and right, for which I now deeply repent…”

Have you been able to picture this scenario in your mind? Me neither. Because it never happened. Here’s what really happened. As the historians write, “Peter [the Great] himself, after suppressing the Streltsy mutiny, personally chopped off the heads of four of these elite musketeers. His partner, prince Romodanovsky, also chopped off four heads, while Alexander Menshikov boasted that he had personally chopped off 20 heads! Peter organized the execution of the Streltsy like a theatrical production. The blood of the beheaded Streltsy poured into the unearthed coffin of the boyar Miloslavsky, whom Peter regarded as the ideological inspiration for the Streltsy movement. The coffin itself was brought to the place of execution on a sleigh harnessed to a team of pigs. The heads of the executed Streltsy were raised on poles and displayed for all to see."

Not since the lead up to the Iraq War when Donald Rumsfeld divided “old” and “new” Europe like a sledgehammer, has the EU faced a more divisive challenge than that of Russia. Such is the point of departure for a very valuable new report published by the European Council on Foreign Relations, a new Soros-backed think tank which is dedicated to promoting European unity. I highly recommend you read it.

Despite Europe having three-and-a-half-times the population of Russia, ten times the military spending, and an economy 15 times as large, there remains an enormous reluctance among EU members to exercise any power vis-à-vis Russia. The authors of the report have collected data from a wide range of interviews with high ranking bureaucrats and diplomats across European governments, and offer a “power audit” to help guide policy and remind Europeans that they aren’t quite as weak as they may think.

Vladimir Pribylovsky tells RFE/RF that the two murders by poisoning Konstantin Druzenko and Sergei Lomako are part of the spy wars between Viktor Cherkesov and Igor Sechin: "This is connected. ... I have few doubts that this happened in the context of the [siloviki] war. And I don't see peace breaking out."

How much would it be worth to you? One U.S. couple dropped $160,000 for a dinner of "cabbage, herring and vodka" with the former Soviet leader. The charity money will go towards to children's hospitals in Moscow.

Last night the voting wrapped up for the 2007 Weblog Awards, and perhaps as expected, the miracle did not occur for this blog to cover the considerable gap for victory. The crown for Best European Blog (Non UK) goes to the accomplished folks over at Retecool, a Dutch blog. Out of the other competitors, I have really enjoyed checking out both European Tribune and The Van Der Galiën Gazette, both of which have been added to the blogroll. I want to thank everybody who took time to vote for us, and I look forward to giving it another shot in the future.

Today we received the following press release from WorldPublicOpinion.org which reports on a new poll from the University of Maryland that finds that large majorities of both Russian and American citizens favor drastically cutting back on nuclear weapons, and taking cooperative steps to ban the production of weapons grade nuclear materials. Sounds good to me - if only our governments would listen.

Petrobras’ latest oil find transforms Brazil’s upstream prospects

By Tom Nicholls, journalist

Brazil’s Petrobras claims to have discovered a new oil province – “comparable to the most important oil provinces in the world”.

It says the discovery – called the Tupi accumulation – may boost Brazil’s current 14bn barrel oil and gas reserves by more than 50%. But even though this represents huge upside for Brazil’s oil reserves, Tupi represents just a “small part” of the new frontier, Petrobras claims. The news is a massive boost not just for the partners in the project but for the prospects for other oil companies operating offshore Brazil.

On Oct. 25, French philosopher and renowned political commentator André Glucksmann published an article in Le Monde of great importance to us entitled "Sakharov-Khodorkovsky: Same Fight." Then on Oct. 29, we were pleased to have Mr. Glucksmann as a guest speaker during the concert for human rights held by the Association of Art in Support of Civil Liberties, which also featured speeches by Grigory Pasko, Karinna Moskalenko and many other distinguished guests. We hope to post audio recordings of the speeches soon, but for now, after the jump is the English text of Glucksmann's comments.

It's a pretty good question: why on earth would Russia seek to ban, limit or otherwise obstruct international election monitors if the incumbent party were expected to win a landslide election anyways? Is this just a stubborn demonstration of sovereignty, or is the Kremlin actually afraid that the carefully managed election could be compromised and that the “referendum on Putin’s Plan” might actually fail? Russia Profile asks Stephen Blank, Ethan S. Burger, Eugene Kolesnikov, and Andrei Seregin what they think of that question. We all know what kind of outfit Russia Profile is (just take a look at the Lugovoi banner ads for government-sponsored Russia Today), but I include Burger's response below for those interested.

(Photo: AFP)

Today the FT published their 2007 Energy supplement, which includes a plethora of important information on the energy industry and the geopolitics of security of supply. The newspaper is quite timely with this report, coinciding with a number of panicked news headlines announcing a new gloomy report from the IEA, and bold claims of the world's first "demand-led energy shock." As noted below, the special section also carries an article by Bob. After the cut, I share some of the best bits from Ed Crooks, Catherine Belton, Dino Mahtani and others.

SRB has posted a translation of a letter from Mikhail Khodorkovsky which was leaked to Ekho Moskvy, in which he comments on the elections. The story made the news in France and Germany, but in English I haven't seen anything besides this AFP article. I didn't initially post anything about the letter because it was not intended to have been a public communication - just a private correspondence. Thus these words shouldn't be interpreted as though Mikhail is issuing a statement. I fear there will be some misunderstanding over this as usual, and I see the point of the very first commenter, Kolya, who remarked that "The commenters here are a cynical crowd and Mikhail Khodorkovsky is a loaded name. However, if you ignore who wrote the letter and just judge it according to its merits, are there any valid criticisms to it?"

Today Robert Amsterdam has a by-lined article published in the Financial Times about energy security, as part of the Energy 2007 special supplement.

Rolling over to Kremlin’s manipulation

By Robert Amsterdam

Published: November 9 2007 04:36 | Last updated: November 9 2007 04:36

On September 25 the Financial Times published a letter from Alexander Medvedev, Gazprom’s deputy chairman, trumpeting his company’s dedication to deepening Europe’s “energy security”. When Russia and other petro-states are eager to market themselves on this concept, we have a serious problem of definition. Whose security, we must ask, are we talking about?

The Energy Charter Treaty could resolve the impasse between Europe and Russia. So why won’t the Commission endorse it?

By Derek Brower, journalist

EUROPE’s muddle on energy policy gets worse by the month. After two years of steadily declining relations with its most important energy supplier, Russia, things reached a new low with the Commission’s recent proposal for “reciprocity” between supplier and consumer.

On the face of it, it seems like a sound policy. If Gazprom wants to invest in the EU’s liberalised energy sector, it should allow European firms to do the same in Russia’s. But it has problems. The first, according to international lawyers, is that it has no legal basis. The second is that Russia will not accept it, and Moscow has interpreted it as a thinly-veiled means of protectionism.

Vladimir Putin speaks during his meeting with leaders of Russia's Muslim community in Moscow's Kremlin November 8, 2007. REUTERS/RIA Novosti/KREMLIN (RUSSIA)

Police have seized 14 million copies of the Union of Right Forces’ officially approved campaign booklet. Party leader Nikita Belykh said that the police justified the confiscations by saying it was “necessary to examine the campaign materials for content possibly violating extremism or anti-monopoly laws.” The government has delayed legislation that would define the country's strategic economic sectors and set rules for foreign investment until next year, supposedly due to time constraints. The State Duma's International Affairs Committee have unanimously approved the candidacy of Dmitry Rogozin as Russia’s permanent representative to NATO. “There has been wide speculation that a NATO posting for Rogozin would be a Kremlin attempt to send him into political exile.” Dissent is “still alive” in Russia, with popular magazines, television programs and radio shows providing “sometimes surprising outlets for contrary opinion” - Russia’s Esquire magazine reportedly published a recent political parable about a “Fish-Eyed King”. A special report on Valentina Matviyenko, the St Petersburg politician who “cannot stand any opposition”, can be found here. Russia's Muslim leaders called on President Vladimir Putin to ensure that political parties do not resort to nationalism and xenophobia during election campaigning, “like it happened at the previous election in 2003.” A “new Russian history is being forged.”

A round-up of Russian economic activity for October of this year can be found here. British-based company Timan Oil & Gas has signed the first step of a potential agreement with Zapsibgazprom, a subsidiary of Gazprom, under which Timan would receive investments of up to $500 million. Analysts believe that the deal would be a “guarantee against potential difficulties that the foreign companies apprehend for Russia’s activities.” Gazprom has denied key pipeline access to Arcticneftegaz, a unit of the Italian firms Eni and Enel, preventing it from starting gas production at two Siberian fields. Gazprom declined immediate comment. Enel will launch a bid on outstanding shares in Russian electricity company OGK-5, but “is not interested in further acquisitions in Russia.” According to Rosprom, Russia has so far eliminated 9,500 tons of chemical weapons - 24% of total stockpiles.

Indian Prime Minister Manmohan Singh will meet with Putin next week for an annual summit, giving the countries an opportunity to “smooth over problems” with defense relations. According to one analyst, “Many in Russia still view India as the land of elephants and snake charmers.” Mutual hostility with Georgia "seems likely to deepen as long as the Mr Saakashvili remains in power and the Kremlin persists with pressure tactics.” The calling of a January election by the Georgian president is a “tactical victory” for Russia. Three Georgian diplomats have reportedly been expelled from the country. Russia and Bulgaria have signed a declaration to build a new gas pipe. Russia will deliver 6.2 billion cubic meters of natural gas to Romania this year, a 20% increase on last year's figures.

Russia's highest court has refused to recognize the executed last czar Nicholas II and his family as victims of political repression. German tennis player Tommy Haas is investigating allegations that he was poisoned during September's Davis Cup semi-final defeat against Russia in Moscow, and a Czech player, Jan Hernych, said he was offered bribes to throw two matches in Russia last season. Russia has dismissed the former claims as “complete rubbish”.

Yesterday I published a post on Russia's moratorium of the Conventional Forces in Europe Treaty. Today I received many emails about it, and below I share one comment from a close, unnamed Russian colleague:

The suspension is not about ratifications - it is about flank limitations. To put simply, Russia wants more troops in the South than is allowed by the treaty - and that is a major concern. Baluyevsky said so yesterday. It is much more important than Kosovo or Iran. A serious concession on flank limitations might make the treaty acceptable. Iran is a bargaining chip, and Kosovo is an issue apart, more inportant for Russia as a symbol than to the US as a matter of pragmatic policies. It is Clinton administration left-over, for Bush it is not that important - he just needs to be seen to get something there. A compromise may be in the books.

The real issue is Iraq - flank limitations.

The way it is done (the moratorium) is significant. Putin is dismantling the cold war settlement. The first was YUKOS. Emboldened by the lack of reaction, he proceeds cautiously with the moratorium. There are two elements to moratorium: it is unilateral and it is reversible, as Kosachev took pains to point out yesterday. The reversible part, I think, is not meant to mark the moratorium as a bargaining chip, (marking bargaining chip as a "bargaining chip" makes it loose much of its value), but as a precaution if Americans would decide to take the stand against the new revision of the cold war settlement. They will not, of course. Other things will follow soon - let us wait for the next spring. All this is a grand preparation for fulfillment of Putin's life mission - the ultimate reversal of the cold war results - restoration to Russia of most of the territories of the former Soviet Union.

This is a pretty good one from the Economist, which finally gets around to writing about the Kremlin-approved history manual for public schools. See some original translations here and here.

“The attitude towards the past is the central element of any ideology,” Yury Afanasyev, a Russian liberal historian, has written in Novaya Gazeta. Indeed, in Russia arguments about history often stir greater passions than do debates about the present or future. What kind of country Russia becomes will depend in large part on what kind of history it chooses. And that is why the Kremlin has decided that it cannot afford to leave history teaching to the historians.

Do you believe in miracles? I hope so, because a Dutch site and some other political blogs are really beating us out by a large margin over at the 2007 Weblog Awards. Please stop by and vote again, as we would be grateful for your support and would love to get above 300-400 votes. Getting the nomination itself has been a nice surprise, and I am really glad to know that we are contributing value to the Russia debate over here. OK, that's all for my shameless plug of the day, back to blogging.

He just can't get a break.

The Lede blog over at the New York Times reports on the poisoning of German tennis star Tommy Haas, which naturally gets blamed on the Russians with little to no evidence. Seems like a typical media knee-jerk reaction with no grounds.

Abdul-Khakim Sultygov, who coordinates the pro-Kremlin party's policies on interethnic and interreligious relations, is calling for a nationwide Civil Council to formalize Putin's role as National Leader after he leaves office. He proposes that, following the December elections, all political parties, officials, government bodies and public groups pledge allegiance to Putin in a so-called Pact of Civil Unity. The first televised debates of the parliamentary election campaign have been aired on Russian TV.

Talks between BP and Gazprom on the possibility of Gazprom buying into BP's Russian venture, TNK-BP, have intensified. Shell has announced an initiative in Russia to build a "huge-scale long-term liquid gas and oil project" in Yamal, in the country’s Arctic north. The project will involve five other companies. Microsoft aims to become the country's third-largest online advertiser in the next three years by providing localized services through its Msn.ru portal. “Our strategy is to take a leading position in Russia's online market.” Russia is currently demonstrating strong growth in internet usage, with its internet community growing by 23% in the last year. Auto giant Daimler has become the first non-Russian carmaker to launch its own financial operations to cash in on the car sales boom, having set up a banking services unit in Russia. Baltic Beverages, the Russian joint venture owned by Carlsberg and Scottish & Newcastle, has unveiled a 31.7% rise in 9-month 2007 profit, putting Carlsberg under pressure to increase its offer for S&N. Enel, the Italian electricity giant is pouring up to $6 billion into Russia “in an attempt to make money in the last vast untapped power market on the continent.” Russian investor Alexei Mordashov, who owns Severstal, is in talks to acquire a controlling stake in German travel and tourism company TUI. Experts estimate that German E.ON holds gas and electricity assets in Russia worth $25-26 billion.

Sergei Lavrov, the foreign minister of Russia, called the current unrest in Georgia, where a state of emergency has been called, “a domestic issue for Georgia and its people.” Georgian President Mikheil Saakashvili said that Russia sponsored and instructed protesters as part of a plan to “overthrow the government.” In turn, State Duma Speaker Boris Gryzlov said that Georgian allegations were “dictated by US secret services.” There has been further coverage of yesterday’s report from the European Council on Foreign Relations. Joschka Fischer, who jointly chairs the council, said “Today it is the Kremlin that sets the agenda for EU-Russia relations.” Western policy should focus on “the transparency and deregulation of state-dominated monopolies such as Gazprom,” rather than on Russia’s sovereign wealth fund. Swiss President Micheline Calmy-Rey will make a two-day visit to Moscow this week to discuss “bilateral political ties and practical cooperation.”

Thousands of payment terminals, used by Russians to pay utility bills, could be shut down due to a new Central Bank directive stating that all payments must be processed through commercial banks.

Following President Vladimir Putin's live broadcast Q&A session in mid-October, Robert Amsterdam published an entry on this blog which today led to an interesting cover story exposing a rather major factual mistake during the state broadcast.

The caller, a 70-year-old mechanic from Novosibirsk named Alexander Sibert, asked Putin the following question live on air: "In an interview not so long ago, former U.S. Secretary of State Albright said that it is not fair that Russia alone should have control over Siberia’s colossal natural wealth. My question is: what consequences can such statements have, and what is your view of such statements?"

Clearly delighted to be thrown another softball to hit out of the park, Putin responded in part "I am not acquainted with this particular statement by Mrs Albright, but I know that some politicians do share these ideas. I think such ideas are a sort of political erotic fantasy: they procure a certain pleasure, perhaps, but are unlikely to ever produce positive results."

I can't be 100% sure that Bob was the first one to point out back on Oct. 23 that Albright never said such a thing, and that the closest she had come to talking about this subject was a 1998 speech talking about foreign investment, but so far I haven't seen anything to refute this scoop. But it's interesting that the same news later appeared in an article by RFE/RL on Nov. 5 for which Bob interviewed, then followed up by today's Moscow Times article, which does the tough work of actually tracking down Mr. Sibert.

(UPDATE: Lyndon from Scraps of Moscow points out that Yulia Latynina was on top of this story a day after our blog post, so perhaps the scoop parade is unwarranted!)

The article, below the jump, is a must-read, and we hope this blog can continue to give good scoop for our journalist readers.

Below are three parts of a documentary titled "The Rise and Fall of the Russian Oligarchs" produced by the program Human Edge for Canadian television. The documentary vastly simplifies the Khodorkovsky case, and commits many of the common mistakes and misinterpretations of the facts seen elsewhere (for example, they seem to believe that there are no longer any powerful private businessmen in Russia). Much is lost when one tries to bring this story of contemporary Russia to a broad audience, and anyone who reads this blog probably already knows much more than is shown here. Although it is a significantly flawed doc, it's worth checking out for some terrific archival footage. See the beginning of the third part for a strikingly different image of Vladimir Putin in his first campaign (videos after the jump).

Today the Duma voted 418-0 in favor of a new law scrapping Russia's obligations to conform with the Conventional Forces in Europe Treaty (CFE), an agreement which traces its roots all the way back to Nixon and Brezhnev.

(Photo: AFP)

Nobody should be too surprised: President Putin threatened this moratorium in an April 26th speech as a response to the U.S. plans for missile defense sites in Europe, and now he is putting his money where his mouth is. "I believe that the right course of action is for Russia to declare a moratorium on its observance of this treaty until such time as all NATO members without exception ratify it and start strictly observing its provisions, as Russia has been doing so far on a unilateral basis," Putin said, referring to the Fifth Expansion members such as Estonia, Latvia, Lithuania, and Slovenia.

If approved by the president, the law will take effect December 12, one week after the parliamentary elections. So begins the month-long countdown...

File this one under foregone conclusions: "$100 oil would have a big political impact" by Gideon Rachman in the Financial Times. Mr. Rachman argues that the implications include more spending by Hugo Chavez abroad and more money for Hezbollah from Iran, worsening human rights from oil exporters like the Sudan, and a dramatic increase in anxiety for Europe to construct a common policy toward Russia. But as long as countries like Germany and the Netherlands continue prioritizing bilateral deals, argues Rachman, the common EU policy won't get anywhere. A real bouquet of predictions here. Excerpts after the jump.

Here's an interesting little tidbit: apparently BP's CEO Tony Hayward held one intense meeting with Russian energy executives over the fate of the TNK-BP joint venture during yesterday's Champions League match between Gazprom-sponsored Schalke 04 and Abramovich's Chelsea club (the match was an 0-0 draw). Hayward seems to have inherited a long history of direct pandering to the Russian government from his predecessor Lord Browne, who before the infamous gay sex scandal put up a bid for stolen Yukos assets and threw away $1 billion to save Rosneft's failing IPO in London. Presumably they were instructed by the siloviki to make these inadvisable moves, or else face losing their controlling stake in the Kovykta field due to regulatory gangsterism. Now with the future of TNK-BP in the lurch, that appeasement strategy seems to have worked out brilliantly.

Such a pity that this season England is losing to Russia both on and off the football pitch. Expect Gazprom to hold the reigns over at TNK-BP very soon.

How much damage to Berlin and Moscow's privileged relationship has been caused by Russia's bullying of German airline Lufthansa? Last week we initially reported on the air cargo scandal, publishing a translation from the German press about how the Russians muscled the German airline into relocating their Asian cargo hub from Kazakhstan to Siberia by banning flyover permission. Now we are beginning to see some political fallout, and it looks like Moscow may have overplayed its hand.

Russian soldiers dressed in historical uniforms march in Red Square during a military parade in Moscow, November 7, 2007. Moscow marked the anniversary of a historical parade in 1941 when Soviet soldiers marched through Red Square to the front lines of World War II. REUTERS/Sergei Karpukhin (RUSSIA)

Thousands of Communists will march today to commemorate the 90th anniversary of the Bolshevik Revolution. The November 7 holiday was cancelled under Boris Yeltsin, suggesting that “the authorities want to make it clear that revolutions are not an acceptable way to transfer power.” United Russia’s recent refusal to take part in election debates could have been because party members hold the opinion that election campaign debates are nothing but "squabbles." Central Elections Commission chief Vladimir Churov said that excessive numbers of "so-called foreign observers" would "at the very least" be tantamount to foreign interference.

“No country has reveled in its oil wealth like Russia.” Dutch energy firm Gasunie has signed a long-awaited deal with Gazprom to take a 9% stake in the controversial Nord Stream pipeline, of which the latter owns the majority stake. The deal will give Gazprom the option to buy a reciprocal 9% stake in the much smaller BBL pipeline, which connects the Netherlands to Britain. Workers at the Ford plant near St. Petersburg plan to hold a one-day work to rule over wage demands and could hold a full-blown strike in two weeks, according to the plant’s labor union.

Russia's lower house of parliament has voted in favor of Vladimir Putin's bill to impose a moratorium on the Conventional Forces in Europe (CFE) Treaty. Russia's Defense Ministry had said it might reinforce its troops near its western borders if the moratorium went ahead, although the chief of Russian General Staff says that the decision “will not mean the immediate build-up of military groups in Russia's western regions or the Caucasus.” A new report from the European Council on Foreign Relations says that the EU should unite behind a new strategy to secure its interests with Moscow. The USA reportedly intends to deploy more elements of its missile defense system to the south of Russia in addition to the missile base in Poland and the radar station in the Czech Republic. Deals signed between Russia and China include contracts with Atomstroiexport and Tekhsnabexport for constructing two new units at Tianwan Nuclear Plant worth over €4 billion, and others to help China develop another uranium enrichment facility on its eastern coast. Chinese President Hu Jintao describes Putin as his "good friend." Russia will spend as much as $53 billion on machinery for nuclear power plants through the end of the next decade as it seeks to rely more on alternative energy. Ahead of Indian Prime Minister Manmohan Singh’s visit to Russia, a top-level Indian Navy delegation will visit Moscow to discuss the delay and price escalation in the Admiral Gorshkov aircraft carrier deal, “perhaps the most thorny issue between the two countries.”

Madeleine Albright has responded to the claim that she once said that Siberia held too many resources for Russia alone - a statement dismissed by Vladimir Putin on his live call-in session last month. “I did not make that statement, nor did I ever think it,” she said. The Federal Migration Service confirmed that foreigners with old residency permits were being barred from leaving the country under newly enforced regulations, supposedly the reason behind the prevention of a French activist leaving the country earlier this week.

Surely by now you have noticed the very large advertisement in the upper-left-hand corner of this blog, modestly and graciously asking you for your vote for my blog for the 2007 Weblog Awards for the Best European Blog (Non UK). Nevertheless, I thought I would extend my shameless campaigning with series of reminders, hopefully persuading you to call upon colleagues, friends and family for a little favor.

So far, I'm proud to see that more than 223 people have voted for the blog (of which there must be a few whom I don't know!) - but unlike a Russian election I wasn't able to select my competitors, so it will really take a rally from my faithful readers to push us up to the level of those other highly popular blogs. It takes just a couple of seconds to vote, and there's no registration required. Each person can vote once every 24 hours, so I hope you'll remember to keep visiting and help bring more attention to the English-language Russian blogosphere.

Earlier today I was enormously flattered to see a post over at Siberian Light encouraging readers to vote for us. Thanks, Andy! Regardless of how this turns out, I'm grateful for everyone's continuing interest and support.

Best,
Bob Amsterdam

Earlier tonight the Chinese Premier Wen Jiabao concluded his official state visit to Russia, capping off a number of business deals, advances in trade talks, and various big promises over economic and energy integration. The most important agreement between Moscow and Beijing was for the construction of two nuclear reactors - continuing one of Russia's strongest years in uranium diplomacy.

There was notable enthusiasm among both parties to really let the world know just how they like each other - but how much of this was substance and how much was just for show?

Canada's Only Magazine reports on an amusing imagined encounter between one of Russia's greatest writers and two marketing managers of mass consumerism. In the battle of Russian art vs. modern Western commercialism, apparently the customer is the biggest loser of market failure in the books business. "Two men burst into the study, one tall and thin, one short and stout, both wearing cheap suits and expensive gold watches. Before Dostoevsky can utter a single objection they set up a PowerPoint display showing a pie chart, a flow chart, a graph chart and a picture of two kittens in a teacup."

Grigory Pasko has brought to my attention to a recent issue of VESTNIK ATOMPROMa, a Russian “magazine about the nuclear industry”, which has been published by an enigmatically named Federal state unitary enterprise «Firm of commercial advertisement and scientific-technical propaganda» only since April 2007. Clearly, the real organization behind the magazine is the historically extremely secretive Rosatom – Russia’s Federal Agency for Atomic Energy, formerly known as Minatom.

The cover of issue No.5, dated September 2007 (available online on Rosatom’s website), sports a full-page photo of Rosatom head Sergei Kiriyenko having an intense discussion with his boss, Vladimir Putin, against a backdrop of the Russian and Australian flags. The cover story, entitled “The Australian Success of Russia”, naturally has nothing but praise for the controversial Australia-Russia Nuclear Cooperation Agreement, which we’ve been discussing here on the blog for several months already. The article actually shows several photos of the environmental devastation caused to Aboriginal lands by the giant open-pit operation at Rio Tinto’s Ranger site in the Northern Territory, but you’d never guess from this breezy text, a single paragraph of which simultaneously manages to suggest that the dirt-poor Aboriginals are wealthy and to belittle their religious beliefs as mere childish superstition standing in the way of human progress:

I've long argued that the legal manipulation carried out during the state's theft of Yukos and other abuses of courts (see the spy-mania trials) by the Federation has had enormously negative implications for rule of law and development of the legal system. One of the clearest signs of this rapidly deteriorating independence of the judicial system is Russia's dramatic rise in corruption and bribery. This fall international watchdog Transparency International ranked Russia 143 out of 180 in the Corruption Perceptions Index, while other indications and informal reports show that bribery continues unabated. Given the more recent high-profile extortion by the Russian government of energy companies like Royal Dutch Shell, BP, Imperial, and Russneft by regulatory authorities, there is also credible evidence behind the theory of "centralized corruption" - as officials willing to wet their beaks go higher and higher up in hierarchy, the Russian government becomes a "one-stop shop" for bribery (credit due to Laura Citron at nEUrosis for that one).

Today Anne Applebaum observes that although not even Russians are celebrating the 90th anniversary of the Bolshevik Revolution this week, "Western weakness for other people's revolutionary violence, the belief in the glamour and benevolence of foreign dictators, and the insistence on seeing both through the prism of Western political debates, are still very much with us" - as demonstrated by supermodel Naomi Campbell's private visit with Venezuelan President Hugo Chavez.

Brian Whitmore of RFE/RL has a great new article called "Spinning the Kremlin", which takes a look at political branding efforts of the Kremlin. The article paints a frightening picture of an increasingly sophisticated and polished state propaganda machine. Whitmore writes: "Gone are the presenters in boxy gray suits, the monotone cadences, and poor production value that characterized communist-era news broadcasts. Such an approach would fall flat in today's Russia, where an increasing number of people are plugged into a global media culture. "In the society of the spectacle, your spectacle has to be spectacular," says Andrew Wilson, author of Virtual Politics: Faking Democracy in the Post-Soviet World."

The report notes how the Kremlin's communications efforts not only target the mass market through slick, high-budget television documentaries and convincing pro-government news programs, but also reach into social media, with government-backed bloggers (such as Pavel Danilin) who flood message boards and other content portals to "blackout" any promotional efforts by the opposition. The meta-narrative continues to grow more and more elaborate, say many of the sources in the article.

The article also quotes Robert Amsterdam, and makes a kind mention of this blog. More excerpts after the jump.

The Organization for Security and Cooperation in Europe has confirmed that it will monitor the State Duma elections, in spite of the severe restrictions imposed by Moscow. The number of observers will drop from 450 to just 70. Russian Foreign Minister Sergei Lavrov earlier this year described the OSCE’s election-monitoring body as a "politicized" organization. Vladimir Putin stirred national feeling in his speeches over the weekend, saying that forces outside of Russia sought to plunder the wealth of its resources. "Some say we have too many natural riches, that they have to be split up. They, themselves, have no wish to share their own, by the way.” A special report on the new “Kremlin marketing strategy” can be found here. Putin’s network of contacts will “help him wield power” next year. The Health Ministry is to begin working out a strategy for healthcare development that will run from 2009 to 2019. “The misconception that one party is enough to represent all social groups is currently dividing the majority of Russians.”

Russian authorities temporarily lifted a ban on overflights by Lufthansa Cargo after German officials agreed to hold talks on moving the airline's central Asian transit hub from Kazakhstan to the Siberian city of Krasnoyarsk. Caterpillar Inc., the world's largest maker of earthmoving and mining equipment, will increase investment in emerging markets including Russia, in order to drive earnings growth. Russian billionaire Oleg Deripaska is “likely” to win the bidding for RTB Bor, Serbia's largest copper mining and smelting complex.

Jonathan Evans, Britain’s chief domestic intelligence official, said that MI5 was being forced to divert resources from antiterrorism work “to defend the UK against unreconstructed attempts by Russia, China and others to spy on us.” He made a particular example of Russia, saying, “Since the end of the cold war we have seen no decrease in the numbers of undeclared Russian intelligence officers in the UK.” Carine Clement, a French citizen working for the NGO the Institute for Collective Action, whose husband is a State Duma deputy, was prevented from leaving Russia after border guards at Sheremetyevo Airport questioned her residency permit. She believed she might have been stopped “to keep her from speaking about Russian housing scams at a conference that opened Monday in Brussels.” A think tank for freedom and democracy proposed by Russia to be set up in one of the European capitals could start work as early as 2008. "We are considering the capitals of Belgium, Germany and France at present," said presidential aide Sergei Yastrzhembsky. "It has to be a public institution. It must not be a state-run or a commercial body." Chinese Premier Wen Jiabao is in Moscow for the close of the 'Year of China in Russia', and the opening of the second Russian-Chinese economic forum. Contracts worth a total of nearly $3bn are expected to be signed at the forum. The countries have apparently been unable as yet to agree on a price for crude oil.

A Russian MI-8 Hip Helicopter has been shot down in Liberia, killing its three passengers.

Ariel Cohen of the Heritage Foundation has published an important new energy paper examining what needs to be done to solve Europe's near total lack of coherence on a common energy security policy. The familiar trends and patterns of Russia's energy policy disaggregation, cooperation and co-optation are once again in evidence.

Excerpts from Cohen's paper about how the Kremlin works to lock in demand, lock in supply, and eliminate competition can be found after the jump. It's no big surprise that Austria plays a key role in strategy energy dependency.

There's another book review of Steve LeVine's "The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea" on EurasiaNet. Registan also reviewed the book, and Steve has done some innovative marketing with some popular YouTube videos. Levine's a great reporter, and demonstrates his skills at the detail-level description of the oil extraction business in the Caspian. EurasiaNet has only one complaint - that the Russian side of the story is under-emphasized. Some excerpts from the review after the jump.

IQ2U.S. has a 12-part (!) new debate series up on YouTube which pits Claudia Rosett, Bret Stephens and J. Michael Waller in an Oxford-style debate against Nina Khrushcheva, Robert Legvold and Mark Medish. The debate is moderated by journalist and blogger Edward Lucas. The motion: "Russia is our enemy again."

Below is the introduction to the debate, as well as the Mark Medish argument, who in the past has expressed support for the situation of Mikhail Khodorkovsky. In this debate, he sensibly calls upon listeners to REJECT the motion, because such an approach lacks historical perspective and misinterprets the complexity of geopolitical engagement with Russia. You can find all the videos in this debate series as well as a compelling Q&A session here.

Attached here is the full PDF translation of the decision from a Dutch court which declared the Russian government's liquidation of Yukos assets (YUKOS Finance BV) to be illegal. The court ruled that the bankruptcy receiver Eduard Rebgun, who last March was nominated to the board of Rosneft (the principal state beneficiary of the destruction of Yukos) alongside Igor Sechin, had no legal grounds to liquidate these assets, which included a 49 percent stake in Slovak pipeline operator Transpetrol and $1.5 billion in cash. The decision is well worth reading to gain insight into how the Russian Federation failed to legitimize their claim to Yukos before a true rule of law court.

The democratic transformation of the post-communist group of nations in Eastern Europe and Eurasia has lost a lot of steam in recent years. Since the color revolutions and other successful transitions to representative governments and open societies, many other nations have experienced rising trends of authoritarianism. What's behind this? An interesting essay from the think tank Foreign Policy Research Institute points to a newly aggressive Russia, Europe's expansion fatigue, American ineptitude in its civil society programs, and a general, widespread disillusionment with democracy as a governing principle. Of all the emerging democracies, hybrid regimes, and outright autocracies, author Adrian Basora notes that "The most serious—and hardest to reverse—setbacks have been in Russia and in its eight “sister autocracies” already discussed. Their total population is 220 million, and their landmass and resources are far larger than those of the non-autocracies. By these measures, therefore, the democratization glass is still more than half empty."

When the New York Times first reported that Mikhail Gorbachev posed for a Louis Vuitton ad, we didn't really have anything to add to this peculiar development (many other blogs talked about it, including SRB). In this series of Vuitton ads, Gorby's company included celebs like Andre Agassi and Catherine Deneuve, but the Times journalist noted that "Of the group, Mr. Gorbachev appears the least comfortable. He is holding on to a door handle, as if the bag contained polonium 210."

Maybe it did. Today New York Magazine reports that the photo contains a big surprise (click the above image to enlarge):

Well, we just now happened to take a closer look at that material, and Ho … lee … crap. It's a Russian book or magazine, strategically posed so that the title is upside-down but readable: “Litvinenko's Murder — They Wanted to Give Up a Suspect for $7,000.” Litvinenko, of course, is the Russian ex-spy whose death — by polonium-laced sushi — has been widely attributed to Putin's goons. We have no idea what the business with the $7,000 is (maybe it's the price of the bag?), and nor do we want to know! The very fact of Litvinenko's name in the middle of the meticulously composed Annie Leibovitz shot is enough of a jaw-dropper. Is Gorby sending the world secret messages through luggage ads?

Let's ignore for the moment this reporter's ignorance (sushi?!), and consider the fact that Gorbachev knowingly did an international advertisement with a hidden message over one of the Kremlin's most uncomfortable subjects. Regardless of what that message is, and where you stand on that whole messy, tiresome dispute, this is a significant gesture from the former head of state. People keep talking about the mystery and enigma of Putin, but really it's Gorbachev who takes the cake. Nobody really understands what he is up to. One the one hand, he has made numerous speeches and public comments in support of the ruling administration, yet also holds book launch events for Anna Politkovskaya. He blasts the hubris of the U.S. foreign policy, yet also has been appointed head of the Union of Social Democrats, "to fight corruption and help bring democratic principles to Russia."

Gorbachev is looking like a survivor and a realist. There's no doubt that his foundation could be shut down by the state within 24 hours, and he certainly wouldn't want to find himself in court next to PricewaterhouseCoopers arguing that the government has violated the constitution.

(By the way, as the Guardian reported this weekend, the magazine in question showing up in the Louis Vuitton ad is The New Times, from which we have featured original translations here and here. Being that the Vuitton ad doesn't really contain a clear political message, the publication itself is probably the one to benefit the most from this clever game.)

Jonathan Evans, head of MI5, told Reuters he is tired of throwing away resources on Russia's spy games when there are other serious security threats from terror groups like al-Qaeda:

"Since the end of the Cold War we have seen no decrease in the numbers of undeclared Russian intelligence officers in the UK -- at the Russian embassy and associated organizations conducting covert activity in this country," Evans said.

"So despite the Cold War ending nearly two decades ago, my service is still expending resources to defend the UK against unreconstructed attempts by Russia, China and others to spy on us," he added in his first public speech since taking over as head of MI5, the domestic spy agency, in April.
...
"They are resources which I would far rather devote to countering the threat from international terrorism -- a threat to the whole international community, not just the UK."

The Yanks have complained about the same thing in the past, while President Putin again talked about the threat of the "unipolar world" this weekend.

Medvedev "worships Putin like a father figure, or at least like an older brother" says Valery Musin to the MT (AP Photo/Mikhail Metzel)

Russia has long maintained a rich texture of public archetypes for its leaders. Mikhail Gorbachev was the "chatterbox", Boris Yeltsin the "macho", and Vladimir Putin the "soldier of the empire". Today the Moscow Times has an interesting profile of Deputy Premier Dmitry Medvedev, who is crafting his image as "The Smart Kid" to position himself for the presidential succession.

Welcome to RA 2.0 - the new three-column redesign of the blog.

Hopefully this new design will make the blog easier to navigate, and help you find what you're looking for. Please take note of the following new features:

1.) A new Google-powered search function in the upper left - this is much faster and more accurate than our previous search tool, and can help you dig up specific information for research purposes.

2.) The new "Key Articles" sidebar in the upper left. Here we plan on listing direct links to our high value original articles from Robert Amsterdam, Grigory Pasko, Derek Brower, Tom Nicholls, Dee Prince, and other special guests and features (such as these two great translations). Often times some of our best material gets lost in the shuffle of short news clips and comments, and we hope to make this more visible.

3.) We are starting to use extended posts (where the majority of the article is found under the "Read More" link), which hopefully makes the page much easier to scroll.

We're happy to hear your thoughts, suggestions, and criticism of these changes!

As always, thanks for reading RA, and be sure to drop us a quick vote for the 2007 Weblog Awards!

Thanks,
James
Editor

Foreigners and ethnic minorities were expecting violence during the celebrations of People’s Unity Day which “has been marred by nationwide rallies held by Russia's mushrooming ultranationalist and neo-Nazi groups.” Among the events held on Unity Day was a 5,000-strong nationalist march, attended this year by a white supremacist from Texas. Counter-rallies were held by pro-Kremlin youth groups and the Yabloko party. "Only by uniting our efforts can we achieve results in developing our country and ensure that it take an appropriate place in the world. That is why, the idea that inspired this holiday seems to be very important to me and deserves support," Vladimir Putin said of the holiday, introduced by the Kremlin in 2005 to replace the communist holiday of November 7 celebrating the 1917 Bolshevik Revolution. Jokes made about the President in a Communist Party newsletter circulated in Novosibirsk sparked an investigation by the FSB security service. “You can't criticise Putin on television or in the mainstream media, so now you can't criticise United Russia either,” said one analyst. Campaigning for the Russian parliamentary election officially begun over the weekend. A 500-strong protest called “The March of Empty Casseroles” was held in St. Pe