February 2008 Archives

The Washington Post has an editorial today which strongly opposes a recent decision by the Belgian Olympic Committee to expressly forbid its athletes from making political statements in Olympic venues. Britain and New Zealand also appear to be muzzling their athletes, lest anyone get offended about human rights in the host countries of the games:

In making its Olympic bid, China repeatedly argued that placing the Games in Beijing would "help the development of human rights." Yet China's human rights record has in many ways worsened (as in the appalling arrest of dissident Hu Jia recently), and China has continued to abet repression in Burma and Sudan. Belgium's and Britain's orders to athletes not to comment on China's poor behavior may actually embolden Beijing. They also set a bad precedent for authoritarian regimes that may host the Games in the coming years -- including Russia, which is hosting the 2014 Winter Olympics.

If China can get foreign governments to censure their own citizens, then Russia will clearly expect to have similar success.

Over the past two years, we've worked hard on this blog to feature materials and individuals outside of the mainstream English-language media, with translations of Russia-related articles and opinions from various other countries. With the approach of the elections this weekend, we continue to monitor the global reaction. Below is a translation of an article by journalist Nils Kreimeier from the Financial Times Deutschland, which takes aim at some of the central myths of Vladimir Putin's legacy.

Source: Financial Times Deutschland, February 29, 2008, Page 27

An End to Legends

At the end of his presidency, Vladimir Putin is considered the man who made Russia strong again. But the story of the nation’s saviour is a fairytale

By Nils Kreimeier

The generally accepted balance of Russian President Vladimir Putin’s term in office reads – in Germany as well – something like this: Putin may have curtailed democracy and human rights, but he has created stability, prosperity, and a new self-confidence for his country. And he ended the chaos that prevailed in Russia in the 1990s. This has little to do with reality. Here are the five biggest myths about the Putin era and a description of what reality looks like.

Dr. Fraser Cameron of the EU-Russia Centre has a new opinion article in European Voice which takes a critical look at the legacy of Putinism, focusing especially on the tragic failure of the administration to take advantage of record high energy prices to diversify the economy, build infrastructure, and address outstanding health and demographic issues. Instead, Dr. Cameron argues, this oil- and gas-fed influence was used to consolidate power, weaken institutions, and engage in an unnecessarily confrontational foreign policy. See the full article after the jump.

Dr. Fraser Cameron of the EU-Russia Centre (left) with Russian human rights leader Lyudmila Alexeyeva - who has appeared in several video interviews on this blog.

Way back in May, I blogged about what could be learned about Operation Successor from the speculative futures market trading on the gambling site Trade Sports, where users could buy and sell the political futures of individuals such as Dmitri Medvedev, Sergei Lavrov, Vladimir Putin, and even the outsider high-odds bet of Garry Kasparov for the next president. Now, according to a Reuters report, it seems that the bookies are cutting off all wagers given that there is no more uncertainty.

My first thought: what took them so long to suspend betting? My second: why not take wagers on the margin of victory? The latter question is one of great curiosity, as the Kremlin will be at pains to make it look as legitimate as possible while at the same time demonstrating overwhelming majority. I highly doubt that they would be so foolish as to imitate the organized elections of Fidel Castro and Saddam Hussein, both of whom had the remarkable ability to turn out 95% of the vote in their favor - however if abstention were to lead to a victory of only 65% or so (a landslide victory in any normal democracy), the bureaucrats would have to push some numbers around.

An opinion piece on Dmitry Medvedev, written by popular Russian author Victor Erofeyev, has appeared in today’s New York Times. With so much negative attention from the Western press focused on Sunday’s presidential elections, it is surprising to see such a beacon of optimism regarding both Vladimir Putin’s rule (“for the majority of Russians, Mr. Putin will enter history as a positive figure”), and Medvedev’s future role in the country - Erofeyev hails him as “the last hope for me and for the Russia I love”.

Given the New York Times’ recent, rather blasé approach to Russia’s future president, could this article demonstrate a change of tack? Or does the article take on a different meaning in light of the fact that Erofeyev is apparently "the son of a high-ranking Soviet diplomat who worked closely with Stalin"?

Read the full article here.

Today's newspapers are full of speculation about Sunday's presidential elections and the dynamics of the future roles of Dmitry Medvedev and Vladimir Putin following them. Much of the attention is focusing on voter turnout, with low numbers expected due to the election's already having the appearance of a "foregone conclusion".

Following remarks today by the head of Russia's electoral commission, who admitted that media coverage for Sunday's presidential election has been (somewhat paradoxically?) "fair but unequal", The Economist has published some data on Russian presidential candidates' comparative mentions in the media this year.

Read the full piece here.

Dmitry Medvedev turned Gazprom, “a Soviet-era industrial basket case that made $670 million in 1998 into one of the world's biggest industrial concerns, with profits reaching $25 billion last year. Gazprom is far more than a mere energy provider: it is a crucial political resource that has financed Mr Putin's dream of restoring Russia's international prestige.”

The first joint project of Zarubezhneft and PetroVietnam could be the development of four blocks of fields in Yamal-Nenets Autonomous District, which has aggregate resources of 78 million tons of oil. "But the partners will have to compete with Rosneft and LUKOIL in the battle for the fields."

Russia’s envoy to the UN says that the UN Security Council will not sanction using force against Iran over its controversial nuclear program.

Gazprom's CEO Aleksey Miller says there's still no resolution in the issue of Ukraine's gas debt. While Ukraine announced mid-week it had settled the bill for gas supplied in 2007, it is still not paying for this year's gas. Gazprom maintains that it will cut natural gas deliveries to Ukraine by 25% next week unless outstanding disputes are settled.

Read an in-depth report on Russia's economy from The Economist here. Russia’s central bank has announced that it is suffering “not insignificant” losses as a holder of securities in US home finance firms. Finnish utility Fortum has committed to pay $3 billion for Russia's TGK-10, a “record price”. Russia's antimonopoly watchdog has cleared a deal by French carmaker Renault to buy 25% of Russia's biggest auto maker AvtoVAZ, and the estimated $1 billion deal will be signed today.

TODAY: Russia says that EU mission in Kosovo was “illegal”. The divide beween Russia’s rich and poor is increasing. Head of the electoral commission says coverage has been “unequal but fair”. Voters pressured to turn out on Sunday.

Russia has made a statement at the UN Security Council meeting saying that the deployment of an EU mission in Kosovo was illegal, and that the resolution authorizing the United Nations to administer the Serb province in 1999 remains in force. One article says that Medvedev’s trip to Serbia this week could “further stoke a dangerous nationalism in response to Kosovo's independence declaration.”

One article examines the increasing divide between the wealth of Russia’s cities and the poverty of their surrounding areas. An MP for the pro-Putin United Russia party is quoted as saying, “If we combine the increas[ing gap between rich and poor] with some kind of liberal economic reforms [...] it could lead to an uprising.” In another, a small-businessman says that “there are rumors predicting financial meltdowns, devaluation. People are afraid of losing their savings”.

For quite a long time, I have lamented the near total lack of any discussion about policy positions toward Russia by the U.S. presidential candidates - and then, when we finally get a question posed by NBC's Tim Russert to Senators Hillary Clinton and Barack Obama about the challenge of dealing with the authoritarian threat, the result is disaster.

In some ways, Clinton's flub on Medvedev's name probably did a good service for attracting debate on U.S.-Russia relations - certainly producing more column inches about the question than if she had fired back a prepared vague platform statement about how to capitalize on the opportunity of new leadership.

Others have raised the point that the fumble of the Russia question shows that neither democratic candidate is particularly foreign policy focused - which although probably won't make a difference among U.S. voters in the primaries, it certainly gives Sen. John McCain a stronger edge in the presidential election.

Although it was disappointing to hear the audience laughter at Clinton's dismissal of Medvedev's name with a curt "whatever," it is clear that at least she was well briefed on Russia, and at least got the gist of the issue right: Vladimir Putin and his related allies, networks, and methods remain the focal point for the next U.S. government to address in the short term, while doing everything possible to make it clear that increased independence by Dima would be greeted warmly. Clinton is right to point out that just because Putin is moving down the hallway to another office, does not mean all the outstanding difficulties and challenges of his administration don't remain.

Now let's see if the candidates can pick up the debate on this issue and carry it forward from here.

From an editorial by the Moscow Times:

Rossia television has laid to rest any lingering doubts about whether the level of propaganda on state television has returned to record Cold War highs. Konstantin Syomin, an anchor with "Vesti Plus," opined on the nightly news program last Thursday that Yugoslav Prime Minister Zoran Djindjic had deserved to be assassinated for "selling out" to the West.

Syomin described Djindjic as "a Western puppet" who "destroyed the legendary Serbian army." He accused Djindjic of "selling the heroes of Serbian resistance" to the International Criminal Tribunal in the Hague. Therefore, Djindjic "got a well-deserved bullet" in 2003, Syomin said.

One has to wonder whether even Soviet television anchors made such outrageous observations after the assassination of U.S. President John F. Kennedy, Moscow's Cold War foe.

Several stories in the US press today have focused on Dmitry Medvedev. The Wall Street Journal has compiled a series of extracts translated from Medvedev’s campaign appearance in Nizhny Novgorod, together with soundbites from past interviews and speeches. These include a comment made at the World Economic Forum in January 2007 which exemplifies the thus far very balanced approach we have seen from Medvedev that has caused journalists to cautiously view him as a potentially reasonable and neutralizing voice for Russia.

“We are not trying to make anyone love Russia, but we will also not allow anyone to do Russia harm. What we want is respect towards Russia's people and our country as a whole, but we will obtain this respect through responsible behavior and through our achievements, and not through force.”

It seems that strong US foreign policy rhetoric regarding Russia is not finding itself well received. A reporter at Russian newspaper Kommersant believes that Russians observing the US election debates this week would likely have been “greatly disappointed” by Barack Obama’s most recent stance.

When questioned about his stance on Russia during a television debate, Obama criticized the Bush administration for being “too soft with Russia”, and said:

“Just think back to the beginning of President Bush’s administration when he said -- you know, he met with Putin, looked into his eyes and saw his soul, and figured he could do business with him. He then proceeded to neglect our relationship with Russia at a time when Putin was strangling any opposition in the country when he was consolidating power.”

The Russia-Ukraine gas saga continues. Although 2007 gas debts have been paid, Gazprom now says it will cut off supplies next week unless the government signs documents on debt payment and future deliveries. Ukraine refuses to pay some $80 million for natural gas consumed in 2006 because Moscow is asking it to pay for those supplies at the 2007 prices.

Brussels likened Gazprom to a sovereign wealth fund (SWF) and warned of a new age of industrial espionage unless its funds were subject to greater scrutiny and disclosure rules.

Officials at Israel’s Ministry of National Infrastructures left for Russia this week, reportedly in order to meet representatives of Gazprom with the aim of making progress on an agreement for the supply of natural gas from Russia to Israel.

Russian electricity producer TGK-13 plans to float new shares in Russia and abroad. Mining firm Norilsk Nickel has been named in a $178 million pollution suit filed by Rosprirodnadzor, Russia's environment agency, in its largest ever claim against a metals company. New York-listed Mechel, Russia’s sixth-largest steel maker, plans to spin off its mining assets, including Russia's largest coal field, to create a company valued at $20 billion. Steel maker Severstal will invest $500 million in a new facility at its main plant to produce beams for Russia's fast-growing construction sector. Baring Asset Management says Russia is an attractive investment destination, and says that Dmitry Medvedev’s presidency would offer “significant potential”.

TODAY: Medvedev accusing of monopolizing airtime; inflation still a major issue; Russian MBAs increasing in popularity; Natalia Morari refused entry to Russia; billions of dollars to go into boosting Russia’s defense industry.

Central Election Commission Chairman Vladimir Churov says that the Central Election Commission will summarize presidential election results on March 7. A UK journalist has given special attention to the corruption and fervor driving the upcoming election...of Voronezh’s new mayor. Dmitry Medvedev has been accused of monopolizing Russian airtime in the run-up to the elections, after he “clocked 17.3 times more airtime on NTV than that combined for the other three candidates.”

The “shadow of inflation” continues to threaten Vladimir Putin's economic legacy and complicate the decisions facing chosen successor Dmitry Medvedev. “It’s the biggest macroeconomic problem Russia faces right now.” The popularity of the Russian MBA is increasing. One journalist examines the links between UK and Russian business schools under the headline “Politics is ignored when business is concerned.”

We got a write up in the Wall Street Journal on the YouTube censorship experience - thankfully the Lev Ponomarev video has now been reinstated. See previous coverage here.

More commentary is forthcoming.

YouTube Restores Video Appearing to Show Prisoner Abuse in Russia

By KEVIN J. DELANEY
February 28, 2008

Google Inc.'s YouTube video-sharing site Tuesday reinstated a video clip appearing to document abuse of prisoners at a Russian prison camp.

Lawyer Robert Amsterdam posted the video to YouTube in December with the explanation that the 2006 footage comes from a prison camp in Yekaterinburg and was discovered by Lev Ponomarev, co-founder of the Moscow-based Foundation for Defense of Rights of Prisoners.

WBEZ in Chicago is running their interview with Lev Ponomarev. Listen here.

Lev Ponomarev is with the All-Russian Movement for Human Rights and works with the “The Other Russia” coalition. Lev is a harsh critic of the Putin regime’s repression of democracy and the abysmal conditions in Russian prisons.

Last week, the Russian government charged Ponomarev with slandering General Yuri Kalinin, head of the Federal Penitentiary Service. The charges come from accusations made by Ponomarev that Kalinin is responsible for atrocities in the Russian prison system, especially towards political dissidents. Ponomarev is banned from leaving the country.

Jerome spoke to Lev recently while he was in Chicago to speak about human rights and democracy in Russia. And Lev told me what he thought of the elections process in Russia…

Today the New York Times is running a rather unremarkable editorial on Russia, which seems to suggest that the newspaper has nothing left to say about this new authoritarian state.

President Bush, and soon his successor, will have to come to terms with the authoritarian Russia that is — not the democratic Russia that recent American administrations had hoped would take root after Communism. They will have to deal pragmatically with the realities of Russian power, as the Nixon and George H.W. Bush administrations once did, seeking cooperation when possible over issues like Iran, Kosovo and arms control.

And, as in the Carter and Reagan administrations, America will need to champion Russia’s persecuted democrats, journalists and other embattled minorities: amplifying their voices and calling international attention to the very real dangers they face. Descending back into cold war rhetoric and reflexes will not help anyone. But neither will pretending that Mr. Putin and his allies are people of good will and democratic intentions.

In Russia, all the world is green - at least that's the impression you're left with from watching the Kremlin mouthpiece news channel Russia Today. Founded in 2005 by state news agency RIA Novosti, the government funded 24-hour channel features an impressively high production value, churning out flattering soft news pieces without even taking commercial breaks. If you live in the United States, you might be surprised to find it deeply tucked away in your cable TV listings.

But strangely, I am in complete agreement with Heidi Brown's opinion column in Forbes about the channel's strange appeal: I know I am watching propaganda, but it is well made propaganda.

Brown writes "Slick, fast-moving and well-produced (and with theme music suspiciously similar to the BBC's), Russia Today is mysteriously compelling. My boyfriend has begun watching it several times a week; he laughs at the earnestness with which the young Russian reporters--usually attractive and fluent in English--strive to conform to the official stance on various issues. And yet we find ourselves wanting to keep watching."

Full article here.

A news report from Russia Today focuses on a debate last night between US Democratic Presidential candidates Barack Obama and Hillary Clinton, which strayed into the territory of the upcoming Russian presidential elections. The Russia Today reporter said that Clinton was “seemingly savvy on the Medvedev question,” but focused on the fact that she struggled to get his name right. When asked to name the First Deputy Prime Minister, Clinton responded, "Meh, uhm, Me-ned-vadah -- whatever." The New York Times and LA Times have also picked up on the story.

The New York Times is reporting today on a curious development in Russian energy trading.

The news is that Russia has been “quietly preparing” to switch its trading in Russian Ural Blend oil, its primary export, from the dollar to the ruble. Oil trading is typically done in dollar transactions, and Russia’s major trading with Europe is conducted in dollar denominations. Given this, the initiative is likely going to appear to many as another audacious move by the Kremlin, by now noted for its projects of “swagger and ambition”.

It is thought that the move is partly related to the dollar’s current weak position, and Russia's drive to strengthen the ruble, which is “a new source of national pride after gaining 30 percent against the dollar during the current oil boom.” Dmitry Medvedev, speaking on economic policy this month, said that if Russia took advantage of the unease in the global economy, “the ruble will de facto become one of the regional reserve currencies.”

The article outlines the Kremlin’s tactics:

“In a sign of the government’s seriousness, a new glass-and-marble high-rise home for a ruble-denominated commodity exchange is rising this spring in a prestigious district in St. Petersburg, Russia’s second-largest city after Moscow. [...] The director of the St. Petersburg exchange, Viktor V. Nikolayev, said that the intention was to move slowly and gain market acceptance.”

Read the full article here.

Another gas row. Gazprom has, for the second time, threatened to cut fuel supplies to Ukraine, with a deadline of March 3, if an accord on the repayment of debt isn't signed. The new conflict is reportedly due to delays with the original debt payments and, according to one Russian newspaper, “the general unwillingness of Ukraine to stick to delivery procedures agreed on by presidents of both countries”. Yulia Tymoshenko is to make an emergency brief to President Viktor Yuskchenko this morning. It has been confirmed that Ukraine has paid off its gas debts for 2007, but a Gazprom spokesman said, “To pay off what is due for last year is not an exploit. There is nothing to be proud of.”

Gazprom has announced its acquisition of the Siberian Energy and Coal Company, also known as SUEK, marking a major foray into coal. The move, which expands Gazprom’s influence into the electricity sector, is part of a long-term industrial strategy to increase the use of coal in domestic electricity generation in order to free more natural gas for export.

Hungary's government has rushed to defend its decision to join Gazprom's South Stream gas pipeline, “which some observers fear will scupper plans for an EU-backed project to cut dependency on Russian energy supplies.”

Power to allow foreign investors to buy Russian companies will no longer belong to the Federal Security Service, but will be transferred to the prime minister, with the amendment to be approved by President Vladimir Putin - the next prime minister. A new report from international communications firm PBN says that Russian companies are expected to raise close to $30 billion this year in initial public offerings, despite the global financial crunch. The report, titled IPO Pioneers 3, also revealed that, in 2007, Russian companies raised more money in IPOs than companies from any other European country. VTB Bank has opened its first Shanghai branch. Russia’s middle class families - those with annual incomes of $125,000 to $250,000 - manifested record growth of 164% last year, according to new data from Rosgosstrakh. Metalloinvest, controlled by billionaire Alisher Usmanov, has agreed to sponsor Dynamo, the Moscow football club. A new generation nuclear-powered icebreaker is to be built in Russia by 2015, to operate on the North Sea Route.

TODAY: Election run-up sparks various media debates on Dmitry Medvedev’s future and the legacy of Vladimir Putin. Russian authorities make special efforts to ensure strong voter turnout. Czech prime minister supports US missile defense radar. Hillary Clinton struggles to name Putin's successor.

Dmitry Medvedev’s recent public speeches have “displayed a style of articulation that political allies and pundits say intentionally mimics that of the tough-talking Putin.” In an attempt to ensure a strong turnout for the election, Vladimir Putin will give a televised speech this week calling on citizens to vote. Voters are reportedly being offered perks at polling stations, including the chance to win a car, vote for Sochi's 2014 Olympic mascot, and concert tickets. The Kremlin has reportedly asked regional governors to deliver voter turnout of at least 65%. Opposition leader Garry Kasparov has called for Western nations to “snub” Medvedev following his expected victory in Sunday's presidential election. It is being speculated that Medvedev’s first top appointments as president could include his fellow law graduates. A summary of members of his “circle” can be found here.

Below is our exclusive translation of an important opinion article by Sonja Margolina published in the German newspaper Welt am Sonntag. The original article can be found here and on our German blog.

What We Can Learn from the Kremlin’s Prisoners

By Sonja Margolina
Welt am Sonntag, February 2, 2008, page 10

Sonja Margolina asks why there is hardly any protest throughout the West against the scandalous treatment of political opponents in Vladimir Putin’s Russia

Vassily Aleksanian had been sitting in a Moscow remand prison for two years, when news of his deadly illness became public. The 36-year-old Harvard graduate was previously a lawyer for the now nationalized oil corporation Yukos. “The examining magistrate for the Procuracy General, Karimov, recommended a deal after my arrest,” Aleksanian told the Supreme Court in January. “He said: The Procuracy General understands that your situation is grave and that you urgently need medical treatment. However, we need your confession, because we otherwise cannot prove the charges against Khodorkovsky and Lebedev. If you provide testimony that fits the investigation, we will set you free.”

Once again Hungary sides with Russia to the detriment of European energy security by backing a politically divisive pipeline. I wouldn't be so sure that Gazprom doesn't have some deals brewing with Austria to keep this positive tension going - a sure fire way to defeat the Nabucco. Am I the only one who sees the irony of the fact that Russia's leading presidential candidate is spending the week before the vote touring Southeastern Europe instead of campaigning back home?

From the Financial Times:

Blow to US as Hungary backs Russian pipeline

By Stefan Wagstyl in London, Kester Eddy in Budapest and,Neil MacDonald in Belgrade

Hungary yesterday backed a planned Russian gas pipeline crossing south-east Europe, a move that risks angering Budapest's western partners and could threaten the prospects of Nabucco, a rival pipeline supported by the US and the European Union.

Ferenc Gyurcsany, the prime minister, announced the move during a visit to Budapest by Dmitry Medvedev, Russia's first deputy prime minister and likely successor to the president, Vladimir Putin. The deal is expected to be signed in Moscow on Thursday.

An interesting article about the intrepid economist Ben Olken brings to mind many questions about how the assassination of Anna Politkovskaya fails or succeeds in changing Russia:

Olken wonders whether economic devel­opment and the path to democratization are shaped more by broad historical forces or by the actions of specific leaders—be they demo­cratically elected prime ministers or thuggish authoritarians. With the assistance of his fre­quent research partner Ben Jones, an economist at Northwestern, Olken has challenged broadly held assumptions by publishing a pair of papers asking how heads of state affect economic out­comes and democracy.

Building bridges -- and pipelines -- with Tehran should be a strategic priority for the EU

By Derek Brower, journalist

ONE COUNTRY holds the key in the EU's battle to secure alternative and secure sources of energy: Iran. With over 28 trillion cubic metres (cm) of natural gas in the ground -- around 15% of the known resource in the world -- Iran's reserves are only exceeded by Russia's 47.65 trillion cm. In theory, Europe is blessed to be within pipeline distance of both countries, as well as the large exporters of natural gas in North Africa. In reality, Iranian is out of reach.

Europe's biggest gas hope?

Joshua Keating of FP Passport is amused by the recent leak of the video showing Vladimir Zhirinovsky and Andrei Bogdanov's campaign manager getting into some on-air fisticuffs which erupted during a debate. Keating remarks that "Of course, with an opposition consisting of three mediocre candidates embroiled in lawsuits and shoving matches, Putin's managed election seems to be proceeding exactly according to script."

Today Amnesty International has released a new report entitled "Freedom Limited. The right to freedom of expression in the Russian Federation," which investigates how the Kremlin interprets and utilizes vague legislation to restrict rights to free expression, clamp down on journalists, and criminalize independent sources of influence and information such as NGOs.

According to Nicola Duckworth, Europe and Central Asia Programme Director at Amnesty International, "The rights to freedom of expression, assembly and association are a cornerstone for a functioning civil society. The Russian authorities are curtailing these rights as part of their strategy to counter so-called western influence. Without the right to freedom of expression, other basic human rights may be violated more easily. Silence is the best breeding ground for impunity – a powerful tool to undermine the rule of law."

Duckworth of course is assuming that there is any rule of law left to undermine in Russia.

The press release can be read here, a PDF of the report can be downloaded here, a wire report here, and an excerpt from the report regarding the harassment of a legal and human rights advocacy group run by Karinna Moskalenko, which has been targeted as a direct result of her involvement on the Khodorkovsky defense team.

Hungary will join Russia's South Stream gas pipeline project to transport Russian natural gas across the Black Sea to the Balkans and on to other European countries, after an agreement was signed by Dmitry Medvedev last night. Critics say the deal is being pursued by Moscow “to disrupt the European Union's attempts to form a common energy policy”. Serbia will also be involved in the deal.

Tax authorities have presented oil firm Slavneft, controlled by Gazprom and BP's Russian venture TNK-BP, with a back tax claim of $10 million.

Gazprombank, the banking arm of Gazprom, plans to secure a syndicated loan of $450 million before the end of March. The funds will be used to refinance debt and for corporate operating expenses.

French carmaker Renault is delaying a deal to purchase a stake in AvtoVAZ, Russia's biggest automaker, without giving precise reasons. The chief purchasing officer at the latter company was murdered last week in his apartment building, and one newspaper says “more than 500 people affiliated with AvtoVAZ have been murdered in contract killings since 1992.” Finland's Evli Bank has agreed to buy a 49.9% stake in corporate financing firm Avanko to expand in Russia. Russia will become Citigroup's second-most profitable market in Europe after Britain within two years, says the company’s chairman. According to Rosstat, the total volume of foreign funds invested Russia in 2007 was $120.9 billion. Mobile TeleSystems, the country's largest mobile-phone company, will bid for a stake in Ukrtelecom, Ukraine's 92% state-owned telephone company, in order to expand beyond the home market.

PHOTO: File picture shows the Renault logo on an empty podium at the company headquarters west of Paris. (AFP/File/Stephane de Sakutin)

TODAY: Will the Putin/Medvedev working relationship survive? EU to agree on principles for sovereign wealth funds. Russia’s military and healthcare under attack.

“The unfortunate reality is that duty rather than interest will take Russians to the polling stations this Sunday.” Analysts say that a breakdown in the working relationship between Vladimir Putin and Dmitry Medvedev in the roles of president and prime minister “could destroy the stability the arrangement is supposed to safeguard.” Estonian President Toomas Hendrik Ilves warned that, on the eve of its presidential election, Russia might be sliding into dictatorship, and said that the current mentality reminds him “of the Weimar republic”. Andrei Bogdanov, meanwhile, has been campaigning “with his grandmother”.

Yesterday the acclaimed author and highly regarded political commentator Mario Vargas Llosa published a long and powerful opinion column in support of Mikhail Khodorkovsky in Spain's largest daily newspaper, El Pais. Mr. Vargas Llosa makes reference to previous statements of support from French intellectual Andre Glucksmann, Elena Bonner and Anna Politkovskaya. Below is our translation of the article, which speaks for itself. Read the original Spanish version here.

Khodorkovsky in Siberia

By Mario Vargas Llosa, El Pais, Feb. 24, 2008, page 43

The former boss of the oil company Yukos is suffering a hard sentence for his chimerical aspiration to participate in Russian politics as a critic and democratic opponent of the new czar, Vladimir Putin.

Russia was quick to reprimand the insensitive Estonians for moving a monument to a Soviet soldier from the center of Tallinn to a military cemetery, but it looks like the power learned a thing or two from the incident.

It is noteworthy that the Russian government has never put up a monument to the millions of victims of Stalin's NKVD terror. The Solovetsy Stone was brought to Moscow at the initiative of the "Memorial" NGO from the site of one the the first outposts of the GULag, the Solovki Islands, and placed on Lubyanka Square in front of KGB headquarters, where a mighty statue of Felix Dzerzhinsky once stood. This simple stone has become a sacred place where people come to honor the memory of loved ones who disappeared in the middle of the night and perished during the purges and whose final resting places will never be known.

Now, the authorities want to move the Stone, ostensibly to construct an underground power station for the metro. The Stone will be put in a place with restricted public access. Temporarily. Or so the authorities say. The very idea that the paranoid FSB would allow civilian underground construction so close to its headquarters already seems suspicious. And what is to keep this temporary construction project from becoming permanent, as so often happens in Russia? What if the authorities decide that they actually prefer the new inconvenient location of the Stone and don't return this eyesore and reminder of the excesses of the organs back to its rightful place in front of their headquarters?

Such a scenario is very possible in today's Russia, and would represent a deep affront to the memory of the millions of innocent victims of the organs in years gone by. But the organs don't want people to remember, because they're intent on restoring the GULag system to its full glory by filling it once again with imaginary spies and "enemies of the people".

After the jump, a translation from the Russian press on this story.

Below is the second installment of Grigory Pasko's video interview series with ordinary Russian citizens during his travels in the summer of 2007, Moscow-Petushki. The title of the series is borrowed by the popular work of samizdat by Venedikt Erofeev, whose subversive stories of a traveling, conversing, and drinking intellectual in Soviet Russia were once considered to be a sharp critique of the government's strict control over private life and personal freedoms. It is notable that many of the people who Pasko interviews in this series knew that Dmitri Medvedev would be the next president of Russia back in the summer of 2007, and had therefore declined to participate in any vote.

In Russia they’re accusing an American clergyman of arms smuggling

By Grigory Pasko, journalist

In Moscow, not far from the pretentiously ostentatious building of the state corporation «Rosatom», is found the plain and inconspicuous construction in which the «Slavic legal center» has made its home. At the entrance, on the security guard’s desk, I see a pile of magazines entitled «Religion and law». I find out that these magazines are published by the center. Later, it becomes clear that the editor-in-chief of the magazine, Anatoly Pchelintsev, and I know each other, having met once previously.

Vladimir Ryakhovskiy, the managing director of the center, a former judge, now a lawyer, met me in his office. First we talked about the center: what it does, what cases the lawyers are working on, and so forth. It turned out that Ryakhovskiy and Pchelintsev were the lawyers in the famous case of the religious organization «Salvation Army» which was lost by Russia in the International Court of Human Rights (the essence of the case was that the Russian authorities had tried to prohibit the activities of this religious organization on the territory of the RF on the grounds that it could not call itself an “army”. An army, they had decided in Russia, could be only aviational, marine, or land).

Lev Ponomarev, who now facing criminal charges in Russia and has had his travel privileges revoked, is featured in a column by Jackson Diehl of the Washington Post today.

But criminality isn't limited to the Kremlin; it may be Russia's single greatest problem. Average citizens are frustrated by everything from the bribes necessary to obtain simple services to the extortion practiced by police and the susceptibility of judges to payoffs, as well as political orders. Promising the rule of law -- even if he doesn't apply it to Putin and his circle -- may be the juiciest pre-election promise Medvedev can make.

In any case, his pledge was seized upon by Lev Ponomarev, the courageous and pragmatic leader of the Russian movement For Human Rights, which is fighting an uphill battle to retard the country's return to Soviet-style lawlessness. Ponomarev was in Washington this month to lobby the Bush administration and the presidential campaigns; as he explained it, Russia's presidential transition offers a rare opportunity for outsiders to press Moscow to adhere to basic international standards.

OK, so here goes: The New York Times has published an article about another New York Times article which prompted strong responses from the Russian public. Yes, I think I've that right.

What happened is that someone came up with the interesting (and highly promoted) idea of creating a LiveJournal page for the newspaper and translating a long feature article by Clifford J. Levy, and soliciting some social media interaction and dialogue with the Russian blogosphere. An appealing idea, but it is always hard to know which comments are coming from genuine individual citizens and web users and which comments represent the Kremlin's astroturfing efforts (creating fake grassroots trends on comment boards) as we have seen in many other examples. Nevertheless, the variety of vibrantly pro- and anti-government reactions to the Times piece makes for good reading.

Deputy prime minister Dmitry Medvedev is in Serbia today, supposedly to focus on South Stream, a €10 billion ($14.65 billion) project designed to bring Siberian gas to Europe via the Black Sea, but also as a show of support after Russia supported the Balkan nation's opposition to the independence of Kosovo.

The Bush administration has urged the EU to “stop dithering” over the building of the $6bn Nabucco gas pipeline from the Caspian basin to central Europe, and reduce its growing dependence on Gazprom. “Gazprom is an instrument of Russian foreign policy, like American oil companies are instruments of American foreign policy.”

Gazprom has reported an agreement to explore and develop energy reserves in Iran, saying it will work with Iranian companies to develop the South Pars field, and will carry out about $110 million worth of exploration work in Libya after signing a production sharing agreement with the Libyan government.

SeverStal, Russia's biggest steelmaker, is to mount a $6 billion investment program in its home operations, including building several new plants and doubling output at one of its key factories this year. “Russia and China are two very exciting and high-risk markets which have offered the braver investor some great returns in recent years,” says one analyst. Russian power producer TGK-13, 56% owned by Unified Energy System, has delayed announcing its intention to float until later in the week. Russia’s avant-garde architecture “is back in vogue”.

TODAY: Orthodox Church endorses Medvedev; contract killings on the rise; BBC G7 poll on Putin; racially-motivated violence on the rise; increased media attention for Putin and Medvedev in run-up to elections.

Alexei II, patriarch of the Russian Orthodox Church, has endorsed deputy prime minister Dmitry Medvedev ahead of next week's presidential election, illustrating, according to one UK newspaper, “the unholy alliance the Church has forged with the Kremlin”. Mafia-linked assassinations are on the rise, according to Russia’s prosecutor general, who says “a wave of contract killings has hit the country.” A New York Times piece on Putin’s “iron grip”, published this weekend, has already received an overwhelmingly “sharp” response from Russian readers. The story, alleging that voters were forced into supporting Putin in the last elections, is similar to this piece on Medvedev.

Lionel Beehner at Huffington Post remarks on the near total absence of any Russia debate in the U.S. presidential campaign:

What's also remarkable is how little Russia has surfaced in the American presidential election--whereas it's pretty safe to say what Moscow's policy vis-à-vis Washington will be after next month's election (angry, hyperventilating, aggressive). None of the U.S. candidates have crafted any thoughtful policy on Russia beyond a few zinger catch-phrases that involve Putin's soul and Bush's gullibility--most of them have fizzled. I am unaware of what these presidential contenders' policies are regarding some sticky issues like missile defense, Georgia, Kosovo, or energy security. Would any of them pull the plug on an Energy Department program that employs Russian scientists at institutes that supply nuclear technology to Iran? Would any of the candidates agree to rollbacks in nuclear warheads, as stipulated under the Nuclear Nonproliferation Treaty and as elder statesmen like Sam Nunn, William Perry, George Schultz, and Henry Kissinger have advised.

The New York Times has published the first article of the pre-election series Kremlin Rules, entitled "Putin's Iron Grip on Russia Suffocates His Opponents."

The Federal Security Service, known by its initials in Russian, F.S.B., has interrogated the tolerance foundation’s workers, family members and friends. Its leaders, Stanislav Dmitriyevsky and Oksana Chelysheva, have received death threats. And as part of a smear campaign, the Volga regional television station showed Russian soldiers being beheaded in Chechnya and said the group had justified such killings.

In October, when the foundation held a memorial for Anna Politkovskaya, an opposition journalist killed in 2006, several foreign human rights advocates were arrested in Nizhny Novgorod. The police again raided the foundation’s offices, and the authorities froze its bank accounts, saying it supported terrorism.

“The ruling elite nowadays has no ideology,” Ms. Chelysheva said. “Their only aim is to obtain as much power as possible, to keep this power, by whatever means, and to profiteer off this power. In this respect, these people, who are so cynical, are much more dangerous than was the Communist Party of the U.S.S.R.”

Can Dmitri Medvedev become the moderate that everyone hopes he will be? Jim Hoagland of the Washington Post argues that this will depend upon his ability to uproot the siloviki, and Putin may allow them to be "tossed to the anti-corruption wolves of public opinion" in order to regain Russia's great power status:

Putin saved Russian provinces the trouble and expense of having primaries, which were all held in Putin's mind. With his encouragement, Medvedev has given "campaign" speeches that promise respect for the rule of law, more personal freedoms, a much-reduced state role in the economy and cooperation with other countries, including the United States.

I have just received news from Russia that prosecutors have launched an investigation against human rights leader Lev Ponomarev, who recently traveled to the United States to debrief journalists on torture and abuse in the country's prison camps. He is accused of committing slander against the Russian Federation, and is currently being prevented from leaving the country.

Lev has been featured on this blog numerous times, and he is a hero, a father, a dear friend and highly respected colleague of mine. Several months ago, he provided us with a secret leaked video of "preventative actions" by the Russian OMON beating prisoners, which we posted to our YouTube channel. After Bret Stephens article in the Wall Street Journal linked to it, the video received more than 30,000 views in three days, before being removed by the YouTube community after an organized effort from unknown Russian parties to censure and remove it. It is fair to assume that these selfsame online censors are related to this harassment of Ponomarev.

In clear violation of national and international law, the State's administrative resources are being deployed to sanction someone who has dared to speak the truth about human rights and democracy in Russia. This baseless and outrageous investigation against Ponomarev is a clear gesture of intimidation. Lev's brave work exposing the cruel and odious conditions within Russia's renewed gulag system will not and cannot be deterred by these cowardly attack campaigns.

I express both my complete solidarity and support for Lev, and I hope that you will do the same.

The following opinion article by Robert Amsterdam will be published in tomorrow's edition of the International Herald Tribune.

The real power struggle

By Robert Amsterdam

If Europe and the West want to understand what is happening in Russia, they should send observers not to the polling stations, but to Moscow's Basmanny Court, where the Constitution and rule of law are being unraveled on a daily basis.

Here, and not in any electoral race, is where the battle over the presidential succession is playing itself out. The contenders are a group of former KGB officers known as the siloviki, from the Russian word for strong.

Diagnosis: Pathological Lying

Lying as a method of survival for today’s power

By Grigory Pasko, journalist

In our family a nine-year-old child fell ill. Fever, coughing, stuffy nose… A typical picture at the end of winter, when a child’s organism is weakened, when there’s a deficiency of vitamins, when a slew of other kids just like him go to school with drippy noses and spreads infection… I started to phone the children’s polyclinic, in order to get a doctor to come by the house. All 35 minutes of my attempts the telephone at the other end was busy. I ended up having to go to the polyclinic myself.

By the office with the sign «Doctor house calls» stood a queue of five people. I waited my turn and then entered the office. Behind the desk sat one woman holding a telephone receiver in one hand, and writing data on sick children to whom a doctor needed to be sent in a thick notebook with the other. I will note right from the start: the entire time I was in her office, the telephone did not stop ringing.

Here is a new column RA wrote for Project Syndicate. It is being carried by The Daily Star, among other newspapers.

The Gazpromization of EU Energy Security
By Robert R. Amsterdam
Friday, February 22, 2008

The term "energy security" in Europe has been hijacked to empower suppliers and weaken importers, implying a drastic reduction in competition, rising political vulnerability, and the erosion of the rule of law. The fact that Russian President Vladimir Putin's likely successor, Dmitry Medvedev, is chairman of Gazprom leaves little doubt about the Kremlin's determination to maintain an iron grip on the energy sector. But the asymmetry in European Union-Russian energy relations must end.

In the Democrats' presidential primary debate last night in Austin, Texas, both Sen. Hillary Clinton and Sen. Barack Obama called for the release of political prisoners:

Sen. Clinton: "I’m going to be looking for some of those changes: releasing political prisoners, ending some of the oppressive practices on the press, opening up the economy. Of course the United States stands ready."

Sen. Obama: "It is very important for us to make sure that there was an agenda, and on that agenda was human rights, releasing of political prisoners, opening up the press. And that preparation might take some time. But I do think that it’s important for the United States not just to talk to its friends, but also to talk to its enemies. In fact, that’s where diplomacy makes the biggest difference."

They were both of course speaking about post-Castro Cuba, but nevertheless it stands to reason that they should require the same of Russia. However, the country was not mentioned even once last night.

This one comes from Reuters:

Putin introduced the 42-year-old Medvedev to leaders of the Commonwealth of Independent States (CIS) as "one of the candidates" in the March 2 election, but left no doubt he was more than that.

"The CIS is one of the key aspects of our foreign policy and he (Medvedev) was in fact a co-author of the policy that Russia had conducted there," Putin said.

"We should not have and we will not have any revolutionary changes specifically because Dmitry Anatolyevich (Medvedev) is a co-author of the policy," he said.

Total and StatoilHydro have landed a major deal with Gazprom to create a joint venture to develop phase 1 of the Shtokman Field. AP reports that "The new operating company, based in Zug, Switzerland, will plan, finance and build the first stage of the Shtokman development, which could eventually produce up to 100 billion cubic meters of gas per year. Gazprom CEO Alexei Miller said Shtokman's first phase was expected to produce about 11 bcm of pipeline gas annually. LNG production would reach 7.5 bcm annually." The recent meetings in Moscow between Russia and Algeria have once again raised speculation over the future OPEC-like gas cartel, and a grassroots Bulgarian movement in Bourgas is opposing a Russian backed pipeline. A spokesman for Lukoil says that the company hopes to resume oil shipments to Germany next month. Matthew Bryza, the U.S. Deputy Assistant Secretary for southeastern Europe, strongly stated that Europe needs alternatives to overpriced Russian gas: "We especially don't like them when they threaten at least the economic security of our most important allies. (...) When you have these gigantic rents generated because of the difference in price between Central Asia and Europe, some not so savory people get involved in the distribution of that money."

Lufthansa is in big political trouble once again in Russia, after tax authorities froze the accounts Tuesday over demands that the airline give up between $7.4 million and $10.3 million in outstanding payments. Renault has ponied up to buy a 25% stake in Avtovaz, a move to gain a strong foothold in one of the most promising automotive markets in the world. Kommersant reports "The first option for the deal, the purchase of 12.8 percent of the plant's stock with a subsequent increase, could take place after the redemption of reacquired stock. (Now 66.5 percent of the shares in the plant belong to its subsidiaries.) The second option is the immediate acquisition of 25 percent of the stock." The nephew of Mikhail Gutseiryev, who fled Russia after having his oil company Russneft seized by the state, has agreed to sell the top 50 lender Binbank to senator Vadim Moshkovich. Russia's new sovereign wealth is planning to snap up some Fannie Mae and Freddie Mac bonds, while explaining away the politics of their investment program.

TODAY: Russia's envoy lashes out at West over Kosovo, protests shall proceed despite ban, Tymoshenko talks gas with Putin, and the world reacts to the U.S. shooting down a satellite.

After Serbian nationalists set fire to the U.S. Embassy in Belgrade, Russia has reacted to the street violence. Ambassador to NATO Dmitri Rogozin told ITAR-TASS: "If the EU works out a single position or if NATO steps beyond its mandate in Kosovo, these organizations will be in conflict with the U.N., and then I think we will also begin operating under the assumption that in order to be respected, one needs to use force. And we, I think, will proceed from an assumption that to be respected, we have to use brute military force." A rep from the Foreign Ministry explained the street violence in Serbia as such: "What happened in Belgrade yesterday is regrettable. But we would want to draw your attention to the fact that the forces that supported the unilateral recognition of Kosovo's independence should have realized the effects of the move."

Russia’s finance community is officially head-over-heels in love with the president-to-be Dmitri Medvedev, whose soothing promises of legal reform and liberal institution building are music to their ears. A recent note to clients of Alfa Bank, for example, was boldly optimistic, effusively promoting Medvedev’s recent economic policy speech, stating that “given the format in which they were delivered, these priorities are not idle talk, but rather a declaration of the policy to be seriously approached for years to come. Even partially attained, they would significantly improve the sustainability of Russia’s long-term growth.”

What the bankers fail to mention is that during that same speech, Medvedev said that he would focus on “ensuring the independence of our legal system from the executive and legislative [branches]” and reduce the practice of “raiding” by state officials to force private businesses to sell assets at reduced prices. Sounds great, right?

Stratfor is reporting that Belorussian dictator Alexander Lukashenko has given a vitriolic interview with two Russian television stations in which he attacks Vladimir Putin as being a weak leader for allowing Kosovo's delcaration of independence to go forward. According to reports, Lukashenko "bluntly laid a challenge before Putin, saying the Russian president simply does not have what it takes to restore Russia as a great power."

In addition, Lukashenko also accused Gazprom of threatening to double prices for Belarus, not because it needed the money, but rather to politically weaken the government.

"He has a strong personal brand, undimmed self-belief, a devoted public following, a distinctive balding pate and - unlike Adam Applegarth - plentiful experience of bringing private-sector assets gently under the wing of the state."

Such is the case made by Andrew Hill at the FT that Vladimir Putin would be an ideal candidate for Ron Sandler to select to head up the newly nationalized UK bank Northern Rock. Naturally, we strongly disagree with Hill's contention that the assets were "gently" brought under state control...

A new article at the European Voice calls upon the European Union to get its act together with a common energy policy to achieve bargaining parity with Gazprom:

Imagine, say, winter 2015, and an announcement by Gazprom that it cannot provide the gas volumes it had promised. It then declares that it must re-negotiate terms with all of its European customers, who have in the interim failed to diversify supplies.

Gazprom could then effectively ‘cherry-pick’ customers for scarce supplies. Political co-operation could well become a factor. Bulgaria, Greece and Serbia, let’s say, get supplies equal to what they had been promised – a reward for their co-operation with Russia on other matters.

According to one UK newspaper, the Nord Stream project is either “the answer to Europe's energy needs, a multibillion-pound black hole, [or] a Kremlin conspiracy.”

Ukrainian Prime Minister Yulia Tymoshenko has met with Vladimir Putin and Prime Minister Viktor Zubkov, although it is being reported that they did not discuss the recent gas deal, apparently because it has been satisfactorily settled. “When we set to talking over these problems, it was found that they all are solvable, we have no deep contradictions and we have never actually had for any of them,” Putin commented.

Finnish utility Fortum has signed a pioneering deal to buy more than 5 million carbon dioxide emissions credits from Russian electricity producer TGC-1. Russia “has the potential to become the second biggest source of the credits after China.”

"If RusAl and Norilsk Nickel merge, Russia’s Federal Antimonopoly Service could demand the creation of a commodity exchange trading in non-ferrous metals." Vladimir Potanin's Interros, a key shareholder in Norilsk Nickel, is considering a possible "white knight" bid to merge its metals assets with those of Alisher Usmanov's Gazmetall, as Norilsk Nickel struggles to fend off a merger with RusAl “on unfavorable terms”. Norilsk Nickel also confirmed it has received a merger enquiry from an investment bank. Oleg Mitvol, the environmental official who has aggressively targeted foreign oil companies, is “struggling to hold on to his job” after a dispute with Vladimir Kirillov, head of the Natural Resources Ministry's environmental watchdog. A UN-sponsored meeting of 19 Asian and European countries has pledged to prioritize infrastructure projects worth $43 billion to revitalize the ancient Silk Road joining the two continents.

TODAY: Russia sets up new democracy think tank abroad; Adamov sentenced. Putin and Medvedev unveil $1bn aviation project; Medvedev is “ignoring” the presidential race; Russia expresses concern over US missile.

Hot on the heels of news that Kenneth Roth, the head of international rights group Human Rights Watch, was denied a Russian visa, comes a report that Russia has set up a new think tank with offices in New York and Paris to “monitor the situation on human rights and democracy in the West.” Meanwhile, a Russian journalist who wrote an article comparing President Vladimir Putin with Adolf Hitler could now face criminal charges, on grounds that this article contained calls “to change the present constitutional order”. After finding him guilty of abuse of office and defrauding Russia, Zamoskvoretsky District Court sentenced former Nuclear Power Minister Yevgeny Adamov to 5.5 years in prison. Adamov's lawyer said the case against his client had been fabricated.

The Reuters news blogger Oleg Shchedrov is obsessed with how Dmitri Medvedev fails to live up to the muzhik image, given that he didn't look like he was having very much fun inspecting Kalashnikov factories and sitting in Yakovlev training jet:

Dmitry Medvedev, a refined former St Petersburg lawyer picked by Putin as a preferred successor, does not look very macho right now. The first deputy prime minister in charge of social projects feels more at home among professors and students elaborating on open-source software or the benefits of judicial reforms.

On Wednesday, Putin has given Medvedev a chance to show himself as a “muzhik”.

A joint trip by the two to Zhukovsky, an air base outside Moscow where most of the Soviet war planes have been tested in the past 70 years, offered a lot of opportunities for Medvedev to stage a show of machismo.

A line of the latest military jets designed by Sukhoi and MiG with their cockpits open invited high-profile visitors to have a go. But Medvedev was visibly unexcited.

This looks like a case of the media forcing a non-existent issue (there really isn't all that much to gossip about in Russian politics these days anyways). Besides, could it possibly matter any less whether or not Medvedev looks sufficiently muzhik? What are voters going do, elect the curly-locked Kremlin plant Andrei Bogdanov?

Below is a featured exclusive translation from an upcoming issue of Lev Ponomarev's weekly human rights bulletin about access to medical treatment inside Russia's Federal Service for the Execution of Punishments (FSIN).

The All-Russia Public Movement «For human rights»
"Chronicles of Political Persecution in Present-Day Russia"
Issue No. 6 (124), 20 February 2008

Inhuman FSIN Medicine

Notes of a suspect

The incident with Alexanyan has shown society an example of something that has over many long years become the norm in SIZOs and colonies.

Mark Medish of Carnegie points out how Operation Successor Russia is making the job of the media very easy: "Medvedev’s impending victory makes the job of the domesticated Russian media easier. Like on-file obituaries, the post-election stories have already been written (subject to some minor final details, the electoral equivalent of the precise cause of death). The Putin succession was not bereft of drama, however. To the contrary, a colorful and contested presidential election process actually took place, though it wasn’t on the campaign trail or at the ballot box. The real Russian election occurred in a black box—namely, inside the soul of Vladimir Putin. To use an American analogy, one could say that the “superdelegates” in Putin’s head cast their ballots, and when all the debates were finished, the winner was Medvedev."

That's how the Associated Press has described the Russian blogosphere, where the postings "are sometimes barbed, frequently satirical and always unfiltered — a marked contrast to most of Russia's major media, where many reporters, editors and producers are wary of incurring the Kremlin's wrath."

The article includes links to Журнал Другого, Sean's Russia Blog, and La Russophobe.

When looking for insightful political analysis over complex issues of authoritarianism, resource nationalism, and human rights abuses, of course Western culture tends to look toward its rock stars. Ian Gillan of Deep Purple, however, boldly demonstrates that he is certainly no Bono in a by-lined article he authored for the Times about his private concert at the Kremlin. It surpasses belief how an aging rock star can be so blissfully unaware of even the slightest problems in Russia under President Vladimir Putin. At the very least, Gillan claims that he asked Alexei Miller to push back the deadline for the gas cut-off to the Ukraine by eight hours so as not to spoil the concert. Given that Miller listened to him, perhaps we should all ask Gillan to solicit Medvedev to release Russia's political prisoners?

See a video of the performance here.

From the Times:

A lot of Russian people of a certain generation learnt their English through hearing rock and pop songs on the radio. That’s how Medvedev got into Deep Purple. We used to play songs like Child in Time, which told them that there were people on the outside of their country who felt similarly disenchanted with their leaders. It’s quite refreshing now to see how things have loosened up in Russia.

The gig at the Kremlin was fun but it wasn’t wild. If people aren’t used to going to rock shows they don’t know what the protocol is. It’s quite hard to go mental when you’re in a suit and you’ve just come from the office. But playing for a more reserved crowd is nothing new for us. We’ve played in Japan where they’re very reserved. The applause comes on and off like a tap and they all stand up and sit down at exactly the same time. (...)

Alalam is reporting that Gazprom has reached terms with the Iranian state energy company for the development of "two or three" blocks of the massive South Pars natural gas field. Gazpromneft also landed a participation deal in oil refinery in Iran.

These deals are only the latest fruits of Russia's privileged relationship with Tehran.

Kenneth Roth, the executive director of Human Rights Watch, has been denied for the first time ever a visa to enter the Russian Federation, according to Kommersant. Roth was preparing to travel to Moscow to present a new 72-page report on Russia entitled "Choking on Bureaucracy: State Curbs on Independent Civil Society Activism." (we'll pull some cuts from that paper in a different post).

But there is a longer history of course. HRW has been tuning up its criticism of the Kremlin's abuses with the approach of the elections, and in recent comments the organization has been less hesitant to describe Russia as an authoritarian state. First, they joined the chorus of outrage over the treatment of dying Yukos prisoner Vasily Alexanyan, then there was the annual report which criticized countries which accept Russia's imitation of democracy, and then HRW intervened to review evidence of claims of torture by 59 defendants on trial for an armed uprising Kabardino-Balkaria, North Caucasus (and even published gruesome photos of the beaten prisoners).

There is no small irony in the fact that Roth was prevented by the bureaucracy from entering Russia to present a report on how bureaucracy inhibits civil society work. Way to prove him right, boys.

We were going to incorporate excerpts from this important article by Bret Stephens of the Wall Street Journal into a few other blog posts, but due to popular demand...

Ukraine's Prime Minister, Yulia Tymoshenko, arrives in Moscow today to meet with Russia's Prime Minister Victor Zubkov and to try and finally put an end to the countries’ gas disputes. Meawhile, Ukraine's state energy firm Naftogaz said it had paid off a second tranche of nearly $178 million of payment arrears for gas imports, which Gazprom had put in total at $1.5 billion.

Poland’s foreign minister says that the country will drop its veto on the start of talks on a new EU-Russia agreement if the 27-member bloc agrees to include energy security on its agenda with Moscow.

Gazprom has signed an agreement to drill and produce Iranian oil and gas in a deal that “highlights Moscow's deepening commercial ties with Tehran.”

Russia's fast-growing steel pipe industry “is in danger of overheating” as the country's biggest producers build more capacity than required to meet demand for oil and gas pipelines. Miner and steel maker Severstal will invest $140 million upgrading its Arctic coal mines this year, 4% more than last year. Kuwait “is determined to widen the scope of its economic relations with Russia”, said Kuwait's ambassador to the Russian Federation. Da Vinci Capital Management, founded by former Renaissance Capital banker Oleg Jelezko, plans to list its fund investing in ex-Soviet states in London in March this year to raise up to $200 million. Russia and Algeria have pledged “greater cooperation on energy and railroads.” Telecoms provider Effortel Russia has unveiled plans to spend $850 million over five years on a package of high-end services. Baltika Breweries, Russia's largest beer company, said profit climbed 21% last year.

TODAY: Algeria accuses Russia of trying to sell it “substandard” aircraft; Russian Nationalists oppose Medvedev; further harsh words traded over Kosovo; UK press speculates over Russia’s past and future.

One UK paper today debates the future of Russia, predicting that Vladimir Putin, as prime minister, will remain the architect of foreign and security policy, and that Medvedev will be left with a “somewhat humiliating role”. Russian Nationalists, meanwhile, oppose the idea of Medvedev’s leadership because they believe he is an “ethnic Jew”. The leader of a Russian ultranationalist youth group has been sentenced to three years in prison for yelling "Sieg heil" and "Kill the liberals" during a political debate.

Remember Oleg Shvartsman? The dimunitive, shiny-pated venture capitalist who blew the doors off the Kremlin by dropping the "velvet reprivatization" bomb in a Kommersant interview? It appears business has gone south for him and Finansgroup after he got caught up in the spy wars between Viktor Cherkesov and Igor Sechin, and this time it's not just Tamir Fishman dropping them like a hot potato.

Tomorrow's edition of the Moscow Times reports that the Volgograd, Voronezh and Samara regions and the republics of Chuvashia and Bashkortostan annulled the results of recent tenders won by Shvartsman's group to set up regional development funds. These funds would receive 25% of capital from the federal government, 25% from regional and local governments, and the rest from Finans-Trust.

It seems rather unfair that the first person to blow the whistle on the the Kremlin's methodology of state theft should be the one to suffer the business consequences, rather than the corrupt companies themselves. If only business transparency were the norm, rather than the exception in Russia, this development would not be news at all.

[see Part 1 of this series here]

Déja-vu in Brussels - Part 2

Grigory Pasko, journalist

By the way…

On 11 February 2008, the press secretary of Gazprom management board chairman Alexey Miller, Sergey Kupriyanov, said on the air on the radio station «Echo Moskvy» that there can not be any ecological problems with the Nord Stream gas pipeline, that each centimeter of the future route has been researched. But the procedure for obtaining permission under the EIA continues, and Nord Stream has done a great deal of work.

Right now as I am writing this, Nymex crude oil has just dropped back down $99.94 a barrel after briefly surpassing $100. Many analysts are pointing toward several contributing factors behind today's commodity rally, including a refinery outage, the dramatic Exxon-Venezuela asset freeze battle, a broken pipeline in Nigeria, and even today's news that the private Russian oil producer LUKoil has suddenly cut off supply to Germany allegedly due to a price dispute. What's going on here?

Lukoil's Vagit Alekperov (left), President Vladimir Putin (center), and U.S. Senator Charles Schumer (D-NY) (right) in 2003. Proximity to power is not enough of a reason to jump to conclusions. (Photo by Stephen Chernin/Getty Images)

As long as we've got some other Arctic news today, there's also an interesting op/ed in Ontario's Peterborough Examiner about the "acute embarrassment" of how far behind the United States is in developing a policy for the region at the level of Russia, Canada, and Denmark:

Faced with competition from its old cold war rival in Moscow, Washington may be more than willing to cut a deal that involves both defense and resource sharing.

The New York Times has a very interesting article today about a retired U.S. Navy officer, Alfred S. McLaren, who claims that the Russians stole his idea and plan for a polar dive under the Arctic ice cap, which of course resulted in the polemical flag-planting stunt, roiling relations with Canada:

Dr. McLaren’s plan drew on federal polar data and recommended specific sensors and methods to ensure a safe return.

“I wrote the procedures for the dive,” he said in an interview. The Russians, he added, “went for the territorial claim.”

Many newspapers picked up on Dmitri Medvedev's comments regarding the British Council spat from a long interview with Itogi the other day. Now JRL has offered some translated excerpts from the report with Russia's next president.

Itogi - No 8 - February 2008

SIMPLE TRUTHS
Excerpts from an interview with Dmitry Medvedev
Author: Andrei Vandenko

Question: A few words on the decision to close British Council offices in Russia, please...

Dmitry Medvedev: Try as I might, I cannot recall a single episode when the British government permitted Russian non- governmental organization to operate in Great Britain. I dare you try and register a Russian non-governmental organization in London. It will be a real pain. You'll have to answer all sorts of questions, offer all sorts of explanations, and all that. Compromises are needed. You were permitted to come and work here? Fine. Just behave yourselves. It is common knowledge after all that structures like the British Council (financed as they are by the state) perform all sort of functions, some of them quite clandestine. I mean compilation of sensitive information.

More news on an extremely complicated situation from Eurasia Daily Monitor:

Those concerned about Russian exploitation of a Kosova “precedent” overlooked the fact that Moscow remains more than content to exploit the existing, “frozen” situation in the unresolved conflicts. This it can continue doing effectively and at low cost to itself, as long as the West does not prioritize the resolution of the post-Soviet conflicts.

Indications are now multiplying that Moscow has blinked on its most specific threat: that to “recognize the independence” of Abkhazia and South Ossetia. Russia had singled out these two Georgian territories as prime candidates for “recognition.” This line of attack contradicted Moscow’s own claim that resolution of all secessionist conflicts in Europe and the world must follow a common “model” or “single standard.” Such selectivity about Abkhazia and South Ossetia reflected Moscow’s special enmity toward Georgia, the immediate territorial proximity (whereas Karabakh and Transnistria are not contiguous to Russia), and the Russian policy of allowing Armenia de facto a free hand in Karabakh, while Moscow claims de facto a free hand in the two Georgian territories.

A "clear majority" of west Europeans regard Russia as an unreliable energy supplier but remain resistant to paying more for alternative supplies from renewable energy sources.

Russia's largest crude producer Rosneft will spend around $1 billion on hydrocarbon exploration of the western Kamchatka shelf in Far Eastern Russia. Gazprom and Rosneft could work together to develop the Sakhalin-3 energy project.

Alexei Miller, Chairman of the Board of Gazprom, will arrive today in Kyrgyzstan for talks on the implementation of a number of joint projects. Ukraine, a key recipient of Turkmen gas through Gazprom, has pledged $300 million in construction projects in the central Asian state.

Russian steel and mining company Evraz Group, part-owned by Roman Abramovich, intends to buy up to 51% of Singapore-listed Delong Holdings for about $1.49 billion. Russia says itconsiders Vietnam “a prospective market”. Temporary restrictions have been imposed on wheat exports to Belarus and Kazakhstan. OboronImpex, a unit of Russian state arms exporter Russian Technologies, is considering selling a 16% stake in titanium producer VSMPO-Avisma. Inflation is the “main reason” for reduced savings in Russia.

TODAY: Medvedev accuses British Council of espionage; Kosovo leaves Russia isolated in Europe; former nuclear energy minister found guilty of fraud.

Dmitry Medvedev says he backs the decision to close down the British Council's outlets in St Petersburg and Yekaterinburg, and has “accused the British Council of espionage,” dashing “hopes for a swift resolution to the diplomatic crisis” between the two countries. “If someone allows you in their home, act decently,” he said. From now on, professional photography and filming in Moscow’s Red Square will require a permit from the Kremlin.

Gennady Zyuganov's campaign appears to be suffering...

Last summer our tireless Russia correspondent Grigory Pasko made several long journeys across the vast regions of Russia on various journalism assignments with a video camera in tow. Pasko took advantage of the opportunity to speak with many ordinary working citizens about life, society, and politics in Putinist Russia. These uncensored voices provide a rarely seen look into everyday life in Russia's regions that both the domestic and foreign media have shown no interest in covering. It is notable, Pasko told me earlier, that even as long ago as last summer, these truck drivers, construction workers, and mechanics already knew what the outcome would be of the upcoming presidential election - even half a year before Vladimir Putin officially anointed Dmitry Medevedev as his successor!

Below is the first of several video interviews which shall be posted this week:

This month BBC Radio 4 is featuring an excellent three-part series of reports by Tim Whewhell entitled "Dancing with the Russian Bear." Part 1 can be heard here, and Part 2, a segment all about Russia's "pipeline power" which I am currently listening to live, will likely get posted up to the internet shortly. The last segment is scheduled for February 25th.

The former Yukos general counsel Vasily Alexanyan (Aleksanyan, Alexanian) has been through a lot. After months of medical blackmail by the Russian government, during which time prosecutors ignored three separate orders from the European Court of Human Rights in order to force false testimony against Mikhail Khodorkovsky, the political prisoner was left nearly completely blind, his health destroyed, infected with AIDS, and suffering from cancer and tuberculosis. The Alexanyan case is arguably one of the most disgusting willful violations of human rights we have seen committed this year.

Martin Wolf's column on Russia from last week's FT has been provoking some strong reactions, including a letter to the editor from Ambassador Yuri Fedotov. Mr. Fedotov bitterly dismisses Wolf's criticism, citing economic growth indicators and stating that "Russia has entered the 21st century as a modern state open to the outside world, with the continued development of political institutions based on democratic principles."

This in itself is certainly not surprising, but it is Fedotov's conclusion that may raise an eyebrow: "By describing the current state of affairs between Russia and the west as a “cold peace”, I fear that Mr Wolf is reverting to the language and approach of an era that Russia has long since abandoned."

It seems odd for Fedotov to play the innocent victim card on the same day that president-to-be Dmitri Medvedev accuses both the British Council and foreign NGOs as being fronts for Western spies, hostile to Russian interests. Both Western journalists and Russian officials are eagerly playing this game of Cold War tit-for-tat - no one is on the sidelines.

Kosovo's declaration of sovereignty this weekend carries enormous meaning in terms of international legal precedent. Timothy Waters, who helped prepare the indictment of Slobodan Milosevic, has a column on the JURIST exploring the significance of this breaking news, and Russia's efforts to lobby the United Nations to deny independence:

Should Kosovo be recognized as an independent state? There are compelling arguments on both sides. The commitments the U.S., European States and Russia made in the Helsinki Final Act, for example, suggest that Serbia's territorial integrity must be respected, as does Security Council Resolution 1244, which created the international protectorate over Kosovo and laid the legal groundwork for the final status process. Russia further claims that 1244 only authorized a UN administration – and therefore the planned handover to an EU supervisory mission is illegal – and that the since the resolution is still in force and has not been superseded by any other Security Council action, the Kosovo Assembly’s action is in violation of 1244.

Rosneft, Russia’s largest oil producer, has announced plans to build several gas-fired power plants across the country before 2020 as part of an effort to recycle the country's waste gas and protect the environment. An arm of Rosneft has filed a legal claim against power producer TGK-11, threatening to split the company. Rosneft President Sergei Bogdanchikov expects BP will retain its participation in the Sakhalin-4 and Sakhalin-5 projects, and believes joint development of Sakhalin-3 resources with Gazprom is a possibility.

The new head of Transneft, the company managing the construction of an oil pipeline from East Siberia to the Pacific Ocean, is opposed to speeding up the project.

The Russian government has renominated a number of key officials to the boards of state companies, including Deputy Prime Minister Alexei Kudrin and Kremlin deputy chief of staff Igor Sechin. For the first time in the history of Russia’s mobile communication, its subscriber base has dropped - by 8 million since January. The country's biggest Internet firm, Yandex, plans to float shares in an IPO on New York's Nasdaq stock exchange later this year. Russian high-tech firm Sitronics will pay $116.9 million to raise its stake in subsidiary Kvazar-Micro to 87%, and intends later to take full ownership of the IT firm. Russian investment bank Renaissance Capital has built up a 10 to 15% stake in Kazkommertsbank, Kazakhstan's largest bank.

TODAY: Independence for Kosovo ruffles Russia. Nashi forms a children’s movement. Medvedev defends power of presidential role, even with Putin as prime minister. Protesters rally in support of Yukos prisoners. Polish prime minister Donald Tusk urges EU to work out a common policy for Russia.

Dominating the news today is Kosovo’s declaration of independence. Vladimir Putin pre-emptively warned that the declaration would be “illegal, ill-conceived and immoral”, and Russia’s Foreign Ministry are currently saying they expect NATO and the United Nations “to annul the decision”.

The Nashi youth organization last year set up a children’s movement called Mishki, which supposedly has “no political associations” but wants “to teach children to be in charge of their own lives”.

The Prime Minister of Poland writes in the FT about how Europe should handle Russia:

Europe must speak with one voice to Russia

By Donald Tusk

Russia is the largest and one of the most important of the European Union’s neighbours. The challenge is for the EU to work out a common policy on how to handle its neighbour – and to implement it consistently.

The new Lisbon treaty speaks of the EU’s responsibility to maintain the cohesion of its external operations, but only within the scope of the community’s responsibility. Beyond that, there is a growing tendency for member states and large corporations to act autonomously. There is no cohesion here. On the contrary, diverging interests and even rivalry are common.

Additionally, tensions that occur in relations with Russia usually involve individual countries, whether the issue is gas and petrol supplies, embargoes on farm products or the operation of cultural centres. What constitutes a problem for some enables others to strengthen their position.

Over the past week an unprecedented level of attention has been received by my YouTube channel, where for several months we have hosted a powerful video documenting torture and abuse of prisoners in Yekaterinburg. For more than 60 days, the controversial video had about 6,500 views, but after a Wall Street Journal article about Lev Ponomarev linked to it, within days there were more than 30,000 views and hundreds of comments.

However yesterday I received the following notification in my email inbox:

Dear Member:

After being flagged by members of the YouTube community and reviewed by YouTube staff, the video below has been removed due to its inappropriate nature.

Preventative Actions in Yekaterinburg Prison Camp: http://www.youtube.com/watch?v=kOmCdMcZz80

Please refer to our Terms of Use, Community Guidelines and the Help Centre for more information on what video material is not permitted on YouTube.

- The YouTube Team

I cannot help but assume how this censorship has come about, having seen and experienced other coordinated actions online involving the Russian government. Furthermore, there are thousands of videos readily available on YouTube which feature scenes of far more graphic nature than this exposé of Russia's misconduct.

I am in the process of appealing this censorship, given that I believe this is an extremely important issue of international public interest. I am also working on a re-posting of this video in multiple forums. I do encourage those concerned about human rights in Russia to vigorously express their concern over the removal of this video to the YouTube staff.

Simply erasing content from the internet does not erase the human rights violations committed by the Kremlin. It is up to us to prove this.

The FT is reporting today on the tough road ahead for Dmitri Medvedev to accomplish his boldly reformist agenda:

"We've tried to do this all before. A great deal was not implemented. Instead, they carried out completely different tasks which the country could have done without, such as increasing the role of the state and control over the electoral system and the media," said Yevgeny Yasin, rector of Moscow's Higher School of Economics and a co-author of Mr Putin's programme in 2000.

Mr Yasin said the sudden inflow of oil dollars as prices soared soon after Mr Putin came to power led the Kremlin to ditch most of the plan for liberal and institutional reform that he had helped plot. Instead of cutting back on the number of state officials, under Mr Putin the number has grown, as has corruption, Mr Yasin said.

Implementing his plan "is going to be Mr Medvedev's toughest task". (...)

U.S. Presidential hopeful Sen. John McCain had some strong words in reaction to Putin's annual five-hour press junket yesterday:

"I think that Mr. Putin is trying to restore the old Russian empire. Obviously he is perpetuating himself in power in Russia virtually indefinitely by this setup of having basically a protege, someone who is doing his bidding as president while he serves as the prime minister," McCain said.

"We knew the puppet show was going on, we just didn't know who the puppet was." (...)

"I'm not concerned that we will see a reignition of the old Cold War. Russia doesn't have the assets or the capability or anything else to pose the kind of challenge" that it did during the days of the Soviet Union, he said.

Oddly, Hillary Clinton was the only U.S. presidential candidate that Putin attacked yesterday... Read more from McCain on Russia here and here.

How young can a child be before the state begins to incorporate them in political indoctrination programs? Well in Russia, it seems that age has dropped down to just seven.

Everyone is well aware of the Nashi's activities organized by the state, and the recruitment of teens and pre-teens from the regions to come into Moscow to worship the president, celebrate his birthday, or even throw rotten fruit at foreign diplomats.

But the latest youth group demonstration organized in front of the Estonian Embassy drops to a new level. RFE/RL reports on a new group known as the Mishki (teddy bears), made up of thousands of Russian children aged 7 to 15. At this particular protest, there were about 20 of these children coloring a giant picture of the Bronze Soldier, in reference to the diplomatic fiasco between Estonia and Russia (which most people thought was over and done with months ago).

The utter confusion among the "politically active" children was sadly transparent:

This one comes from the FT:

“One of the key elements of our work in the next four years will be ensuring the independence of the legal system from the executive and legislative branches of power,” he said in a speech addressing business leaders gathered for an economic forum in Siberia.

Mr Medvedev said freedom – both economic and personal – would be a cornerstone of his economic policy for the next four years as president, which he said would also focus on the four “Is” – “institutions, infrastructure, innovation and investment”. (...)

But in a sign he could seek to pursue a more liberal economic strategy than Mr Putin, under whose watch the economy has undergone an enormous shift toward greater state control, Mr Medvedev called for a reduction of the number of state officials on the boards of Russia’s state controlled corporations.

“I think there is no reason for the majority of state officials to sit on the boards of those firms. They should be replaced by truly independent directors, which the state would hire to implement its plans,” he said.

A strong sign that Medvedev means what he says about removing the bureaucrats from state-held firms would be if someone like Alexei Miller, rather than Prime Minister Viktor Zubkov, took over the chairmanship of Gazprom. Getting the silovik-in-chief Igor Sechin away from Rosneft would also be quite the coup, literally.

What is a president to do with all the troublesome despots of the world like Hugo Chavez and Vladimir Putin? Freeze them out and refuse to engage, like President George Bush has done with the governments of Iran and Syria? Or set up regular diplomatic meetings despite enormous disagreements and conflicts of interest? One of the U.S. candidates, Sen. Barack Obama, often catches a lot of criticism for his inexperience, and for his calls to open up talks with a variety of unsavory autocrats of the world. But would it work?

These interesting questions are addressed by Michael O'Hanlon in the Wall Street Journal today, and he finds that Russia is often the example that breaks the mold: "A nice dual test of the theory that talking to extremist leaders can soften their behavior comes from how we have handled President Hugo Chávez in Venezuela and President Vladimir Putin in Russia this decade. In the first case, we played the usual game of trading insults and giving cold shoulders, and got nowhere -- seemingly validating Sen. Obama's argument. In the other case, our president looked into the foreign leader's eyes, saw a soul he thought he could work with, engaged in Texas ranch diplomacy and other such direct consultations, and was sorely disappointed by the trajectory of the relationship nonetheless. If the Bush administration failed on this one, it was not for Mr. Bush's lack of willingness to talk."

Probably, a more appropriate question is whether or not it is too late. The United States had an unprecedented opportunity to bring Russia into the fold after 9/11, but instead the situation was grossly mishandled by Washington. Moscow was insulted, and felt taken advantage of, and although I don't think that anybody owes Putin an apology, a fresh start from two new leaders will be very important in shaping the environment for an advancement in relations between the United States and Russia.

An oil deposit, which Russian state-controlled crude producer Rosneft is developing in East Siberia, will produce cheaper oil than Saudi crude. The company has dropped plans to sell convertible bonds to refinance debt, and says it will increase output by 50% by 2020 with the help of new assets and fields. The company is aiming “to become the world's top listed oil producer.”

Russia and Iran could set up a joint venture to start operating the Bushehr nuclear power plant in southern Iran within the next three months.

“Russia's relations with the West, however difficult, have never been more intimate. What passes for the rule of law in Russia makes Westerners blench, yet business thrives.” For the first time this year, the Central Bank of Russia has announced a decline in its gold and foreign exchange reserves. Russia’s largest business lobbies have called on the government to reduce the value-added tax to 10%, following a call from Vladimir Putin for an unspecified cut from the current 18%. German chocolatier Alfred Ritter, currently operating outside Moscow, announced that it will move production back to Germany because of high prices for quality ingredients. Putin has signaled that duties levied on wood exports won't be scrapped.

TODAY: Medvedev sets out his program; Russia could join WTO this year. Vladimir Putin’s Kremlin press conference dominates the news. Duma to extend presidential term?

Dmitry Medvedev has set out his program, pinpointing “freedom, private property and an independent judiciary” as the central tenets of his administration, and calling for tax reform. “The harmony between freedom and rule of law is the most important thing at this stage,” he said. It is also being reported in the UK that one of Medvedev’s priorities is to reduce the economic role of the state.

European Trade Commissioner, Peter Mandelson, has said that the "good progress" in talks between Russia and the World Trade Organisation could result in the country joining this year.

An impressive and powerful column from Tim Osborne of GML in the Moscow Times:

How to Steal Legally

By Tim Osborne

Nothing seems to dampen the authorities' enthusiasm to wipe out any trace of Yukos, which at one point was the country's largest and most transparent oil production company. More than 45 people connected to the company have been the target of legal action and the company's assets were expropriated. These actions against Yukos reveal a justice system that is infected with corruption and political bias. They have also demonstrated the complete breakdown of rule of law in Russia.

The Alliance for Liberals and Democrats for Europe, led by MEP Graham Watson, have unveiled a large countdown calendar board today displaying the number of days Mikhail Khodorkovsky has been held in prison, and the number of days until the Russian election on display in the European Parliament. See the press release below for strong expressions of support from Watson for human rights and political prisoners in Russia.

Putin's Russia is a blast from the past

Today in the European Parliament Graham Watson MEP the Leader of the Liberals and Democrats will unveil a calendar marking the number of days since Mikhail Khodorkovsky's imprisonment and counting down until 2 March 2008 - the date for Russia's so-called democratic elections for President.

Here is an interesting tidbit from an energy article: The former Bulgarian Prime Minister Ivan Kostov is arguing that the Moscow is pushing to stalemate the EU on Kosovo not out of concern over separatist precedent, but because they benefit from constructive instability in Southeastern Europe in terms of their energy strategy.

Russia's efforts to expand its presence in the region have stirred controversy. Former Bulgarian Prime Minister Ivan Kostov, for instance, said in an interview for the Focus news agency that "Russia is interested in keeping the Balkans unsafe. That's how it applies its strategies there."

"Russia is blackmailing everyone with Kosovo, posing threats to fan the frozen fire in places like Abkhazia and Transnistria. It is obvious that our insecurity is nurturing them," he said.

Many experts doubt that South Stream is a viable project, since it would cost at least twice as much as Nabucco and would simply divert some gas exported through Ukraine, instead of providing a new source of gas. "It is a political pipeline designed to counter Nabucco," says Alan Riley from London's City University.

And here we thought Kosovo was just a quid pro quo for Gazprom to swoop up NIS at a great discount.

This Martin Wolf column from the FT is a few days old now, but still offers some good stuff:

To my knowledge, vast stretches of Siberia are actually quite mountainous, but I won't dither with another man's metaphors. Energy Tribune reports on Russia's stagnating oil production after the jump.

Here is a letter to the editor of the FT by energy expert Jonathan Stern:

Important new Russian gas fields

Sir, Regular readers of the Financial Times have no expectation that your leader page will ever say anything positive about Russia but, whatever their opinions, your writers should at least make an effort to get their facts right.

Contrary to the assertion that “in 15 years, Gazprom has yet to open a single important new gas field” (“Gazprom at 15”, editorial, February 13), in 2001 the company began production from the super-giant Zapolyarnoye field, which now produces 100 bcm/year – more than the annual production of the UK North Sea at its peak.

From a Reuters story on Putin's last official address:

But there was no whiff of attraction when it came to a question about U.S. presidential hopeful Hillary Clinton and her comment that former KGB officers can't have souls.

"A state official must at least have brains," he snapped, one of several occasions when his easy-going facade slipped.

Given that some people say that Sen. Clinton has "given up" on supporting civil society and democracy in Russia, one would think she would be an ideal president for Russia.

RosUkrEnergo, the murky gas-trading vehicle half-owned by Gazprom, will continue to handle sales from Russia to Ukraine until a replacement, to be joint owned by Gazprom and Naftogaz, can be set up. First Deputy Prime Minister Dmitry Medvedev said that if Ukraine received gas not only from Russia but also from Central Asia, it would be necessary to keep the intermediary. Naftogaz has already paid off about $100 million of its gas import debts.

GAIL Ltd., India’s biggest natural gas distributor, and Itera Group plan to set up ventures to sell fuel and build chemical plants in Russia.

BP and Rosneft have begun an indefinite “lull” in drilling off Sakhalin island, as BP admitted the exploration program in the region “hasn’t been the huge success that some thought it might be”.

British banking giant Barclays, “whose investment-banking arm left Russia in 1999 nursing $250 million in losses,” could be poised to acquire small-size lender Expobank. President Vladimir Putin, at his last news conference as President, praised the economic success of Russia in 2007. Woori Bank, a unit of South Korea's third-largest financial services company, has signed a preliminary agreement to invest in the construction of roads, buildings and resources projects on the Russian island of Sakhalin. Russian agribusiness firm Razgulay said its 2007 revenue jumped 38% on high grain prices. The Deputy Chairman of the Central Bank of Russia confirmed that the Bank would not use further strengthening of the ruble to fight inflation in the first half of the year. Rostelecom says it is ready to sell 11% of Golden Telecom to VimpelCom.

TODAY: Medvedev wants 24-hour farming TV; advertising firms being coerced for billboard space in run-up to elections. News of Patarkatsishvili death hits the British press; Yushchenko to pass law on military bases following Putin’s threats.

President Vladimir Putin said that it would be "absolutely unacceptable" for him to stay in power after his second Presidential term ends. Presidential candidate Dmitry Medvedev has called for a 24-hour television channel on farming. Executives at two Russian advertising firms say they are being “coerced” by authorities into providing billboard space for United Russia.

This one is from the Boston Globe:

Freedom and fear: a Russian paradox

By Cathy Young

February 13, 2008

OPTIMISM is not an attitude one would expect these days from a human rights activist in Russia - not when, after rigged parliamentary elections in December, the country is in the middle of an even more farcical presidential "race"; not when media censorship is back and peaceful protesters are beaten and detained. And yet Lev Ponomarev, the executive director of the All-Russian Movement for Human Rights, sounded a surprisingly hopeful note in his talk last week at Harvard's Davis Center for Russian and Eurasian studies.

Following his column about Lev Ponomarev, Bret Stephens of the WSJ discusses the story on this video. The Journal linked to our video on YouTube, which received about 15,000 views within 24 hours.

In a new editorial, the New York Times takes aim at the Kremlin's favorite narrative that Russia was in hopelessly dire straits before Vladimir Putin took power, and that the solution to all the country's ills was to reign in the oligarchs by imprisoning Mikhail Khodorkovsky. The editors argue: "The Kremlin and its apologists always have the same explanation: look how bad things were; surely the most important thing is to rein in the oligarchs and restore political and economic stability. But that does not justify the setbacks to the rule of law, the systematic hounding of rivals and critics, the settling of scores, the constant snarling at the West or the massive state inroads into private enterprise. In five years, the state has increased its share of the stock market from 24 percent to 40 percent. These are Putin’s true legacy."

The presidents of Russia and Ukraine settled a row over gas debts just minutes before a Moscow-imposed deadline for Kiev to pay up or face supply cuts. The countries agreed to axe intermediaries in gas trade and RosUkrEnergo has been excluded, although the move “was in fact increasing Gazprom's presence on the Ukrainian market to 50% from 25%”. Ukrainian Prime Minister Yulia Tymoshenko described the deal as a "great victory".

Czech privately-held oil and gas firm Moravske Naftove Doly will build an oil refinery in Russia in a plan worth “several billion dollars”.

Russia and India are edging closer to a multibillion-dollar deal to build four more nuclear reactors in southern India that has been delayed because of international restrictions against New Delhi.

Sberbank, Russia's largest state-controlled bank, has started actively buying shares on the market. An embargo on travel and trade between Georgia and Russia that has lasted almost 16 months could end as early as this month. The flagship Moscow store of Finnish retailer Stockmann is under threat because of a legal dispute over its rental agreement. The Ford Motor Co will begin making the Mondeo at its plant in Vsevolozhsk, Leningrad Region, later this year. The income gap is growing in Russia, according to Rosstat, which shows a “16.8-fold gap between the richest 10 percent of the Russian population and the poorest 10 percent - the highest level in three years.”

TODAY: Putin threatens to target missiles at Ukraine but Russia wants a ban on the use of weapons in space; Russia’s ‘Corporate Raiders’; Boris Nemtsov suspends membership of Union of Right Forces.

Vladimir Putin will give his seventh and final annual news-conference as President today. One journalist, in a bid to prove that Putin is “a failure, not a success,” says that in important respects, Russia’s economic reform “has gone backwards, particularly with the ever-growing role of the state in vital segments of the economy”. Another says “the strange paranoia and vindictiveness of Mr. Putin are on display everywhere, notably in Russia’s frozen far east, where Mikhail Khodorkovsky, once Russia’s richest man, is languishing in a subarctic labor camp”. The story of another businessman who alleges his company was stolen from him by authorities (“Corporate Raiders”) can be found here.

Déja-vu in Brussels, Part 1

By Grigory Pasko, journalist

In Moscow

Recently, Polish prime-minister Donald Tusk visited Moscow and offered Russia a new variant for the construction of a new «Yamal-Europe» gas pipeline as an alternative to the «Nord Stream» gas pipeline. In the opinion of the Polish government, this will allow unsanctioned siphoning-off of gas and unpredictable increases by transit countries of the fee for the transit of the gas to be avoided. The Polish government has already attained approval of the project from the governments of Estonia, Latvia, and Lithuania.

However, before Tusk even left for Moscow, it was clear that Russia would not accept the alternative variant.

Russian president Vladimir Putin uttered the standard stock phrase about being interested in developing relations with Poland.

The position of Gazprom with respect to the Polish variant was voiced by one of the clerks of the gas monopolist: this variant is unacceptable for us. That’s it. End discussion.

End discussion?

It sounds like it was quite the bash: 6,000 people attending performances by Tina Turner, Deep Purple, and Alla Pugacheva (who managed to get both Dmitri Medvedev and Sergei Ivanov to get up and dance in front of the stage) to help Gazprom celebrate its 15th birthday. President Vladimir Putin was so happy with the party that he even extended the deadline to the Ukraine over the debt dispute, but then promised to aim nuclear missiles at Kiev if they joined NATO.

But some are less than impressed by the imported celebrities, balloons, and big promises:

After the jump are three short video interviews with our Russia correspondent Grigory Pasko. Also see Part 1, Part 2, and Part 3.

Once in a while the Russian president will say something that no rational-minded person would disagree with:

"A private company motivated to be effective will often be better manager than a government official who doesn’t always have an idea what is efficient management and what the effect must be.

We also need to simplify the tax system and minimise possibilities for arbitrary interpretation of the law. We need to introduce tax incentives for innovative development. Overall, we need to work towards further reducing the tax burden and setting a single VAT rate that is as low as possible.

We need to continue our work to establish an independent and effective judiciary that unquestionably guarantees entrepreneurs’ rights, including the right to protection from arbitrary action by bureaucrats."

Too bad it doesn't seem to be true in practice. Both the bureaucrat Viktor Zubkov and the silovik Igor Sechin have been respectively pointed toward assuming the chairmanships of Gazprom and Rosneft, leaving the energy sector under tight political, not commercial, stewardship. More of the same, in other words.

What to make of Sergei Ivanov's speech at the Munich security conference? Some think that he was playing "good cop" to Putin's "bad cop" - striking a conciliatory and reasonable tone on Kosovo discussions in contrast to Putin's pre-election bombast declaring a new arms race.

For example:

Lavrov: "Right away I would like to make a point: we do not intend to meet this challenge by establishing military blocs or engaging in open confrontation with our partners.
Russia’s way is different: we are consistently developing multivector cooperation with various nations both on a bilateral level and in the framework of key international and regional organizations. (...) We don’t export ideology anymore, you will agree with that. We export only goods and capital."

Putin: "We have seen how the lofty slogans of freedom and an open society are sometimes used to destroy the sovereignty of a country or an entire region. We have seen how, behind a veneer of clamorous rhetoric about free trade and investment, the most developed countries step up their protectionist policies."

Even Quentin Peel of the FT remarked that "for once, Mr Ivanov did not appear to be too smug." But the most important and interesting part of the Ivanov speech addressed the issue of the precedent that would be set by recognizing Kosovo sovereignty - which Ivanov argued would open a Pandora's box.

I've seen that many visitors today have made their way over from the Wall Street Journal site via my YouTube channel of the Lev Ponomarev video - for those of you who didn't, I highly recommend you see the Bret Stephens article after the jump. Also stay tuned for an exclusive Lev Ponomarev interview to be posted later today.

For those visiting this blog for the first time, I hope you are able to find something of interest. We have several other articles posted in the past by Lev Ponomarev, as well as last year's "Zek Week" series of original feature articles about prisons in Russia. This blog is also fortunate to feature original reporting from Grigory Pasko, a journalist and former political prisoner who knows a thing or two about life behind bars.

Beyond information about prisons, the blog is also a platform for dialogue on politics in Russia, updates on the Khodorkovsky case, energy analysis, original videos, and no shortage of other musings and news items. Enjoy, and come back often.

Claudia Cattaneo of the Financial Post has a great column on the Petro-Canada and Gazprom fiasco:

Marrying Gazprom like Russian roulette

Claudia Cattaneo, Financial Post

The best deal Petro-Canada will make this year is one it didn't do -- a partnership with Russian gas giant Gazprom.

After four years of courtship, openly encouraged at first by politicians from both Canada (when the Liberals were in power) and Russia, Gazprom abandoned Petro-Canada at the altar last week.

In an e-mailed statement from CEO Alexei Miller, Russia's flagship enterprise said it had cancelled plans to build a liquefied natural gas plant near St. Petersburg so it could concentrate on its Shtokman arctic gas field and its Nord Stream pipeline to Germany.

Geez, what a surprise!

The news yesterday was that Russia would cancel Iraq’s $12bn debt “without resurrecting earlier demands of preferential access to Iraqi oil fields in exchange”. The news today is that Russia is “counting on” Iraqi joint projects, and is to begin investing in Iraq’s oil and gas sector, with Lukoil seeking to regain its role in developing the West Qurna field.

Gazprom has agreed to delay by eight hours a deadline for Ukraine to negotiate a settlement for $1.5 billion in debt before shutting off a quarter of its natural gas supply. Talks have so far been unsuccessful. The company may close a deal to buy the Kovykta natural gas field in the Irkutsk region from TNK-BP this month. http://www.moscowtimes.ru/stories/2008/02/12/042.html Vladimir Putin’s anniversary speech for Gazprom emphasized that the state would retain control over the company.

The Natural Resources Ministry's environmental watchdog has recommended revoking the production rights of a unit of Sibir Energy, the London-listed oil company controlled by billionaire Shalva Chigirinsky, for "serious violations."

VTB, Russia's second-largest bank, is completing its acquisition of a 50% stake in an unconfirmed commercial bank in Azerbaijan. Russia's Alrosa has proven rough diamond reserves worth $109.3 billion. Belgian financial group KBC says its KBC Private Equity unit and venture capitalists will invest in Russia, each investing €10 million ($14.6 million) a year in medium-sized companies.

TODAY: Kremlin shuts down St Petersburg University for “fire safety violations”, sparking protests and accusations; draft proposals put forward for internet controls. Relations with Ukraine, Jordan and India are current priorities. Medvedev loves Deep Purple.

Russia’s Federation Council have put forward draft proposals for “legal control over the internet”, which would classify all web-sites with a daily audience of 1,000 or more as mass media, make registration mandatory, and then amend mass media laws.

Authorities have temporarily closed down The European University at St Petersburg (EUSP), one of the city's leading independent universities, for “fire-safety violations”. A spokesman for the Yabloko party commented, “This is a political decision. "That is perfectly obvious.” One UK newspaper reports that the Kremlin is being accused of an “unprecedented attack on academic freedom” in light of the closure, and points out that last year, “Vladimir Putin launched a vitriolic attack on the EUSP - which has close links with universities in the UK and US - accusing it of being an agent of foreign meddling.”

A columnist at the Moscow Times is not amused by Dmitry Medvedev's "rule of law" speech, which criticized the lack of respect for copyright laws by Russian citizens who buy pirated DVDs and CDs while at the same time Vasily Alexanyan was withering away without medical treatment.

This one comes from BBJ: "On one track, OMV seeks the support of EU institutions and legal mechanisms to force a takeover of Hungary’s private-owned MOL energy company, which has consistently bested OMV in the regional market competition. On the other track, OMV is teaming up with Russia’s Gazprom to turn the EU’s high-priority Nabucco gas transport project into a joint venture with Gazprom. Farther along this second track lurks a possible tie-up of OMV itself with Gazprom, in which case energy assets in a number of Central European countries, including Hungary, would fall under Russian control. The Austrian government supports both tracks of OMV’s policy in relation to the EU and Gazprom."

Somehow is looks like Austria is hedging its political portfolio to come out OK if Gazprom succeeds in completely taking over energy in the East. This non-committal position will become harder and harder to hold in the coming year.

Is it time to start a 24/7 Nabucco watch? The once-doomed natural gas pipeline project, designed to bring supply from the Caspian region directly to Europe, has recently gotten some positive nudges in the right direction - but the drama is far from over.

Today Nabucco got a positive ruling from the EU exempting Austria from competition rules regarding third party access to a section of the pipeline. Energy Commissioner Andris Piebalgs said: "The Commission decision on Nabucco shows our support for this project, which will boost Europe's efforts to diversify our supply sources and our gas supply routes. (...) The project is important not only for the countries involved but will also contribute to strengthening competition and promoting security in gas supply for the European Union as a whole."

But the biggest news came last week with German company RWE signing on to the project, providing an unexpected boon to the economic viability of the proposal.

We're big fans of the investigative journalism of Stern's Hans-Martin Tillack, and have posted numerous translations of his work in the past. Here Tillack takes a look at some of Nord Stream's odd partners and practices.

Gerhard Schröder’s Company and the Sect

By Hans-Martin Tillack

New trouble for ex-Chancellor Gerhard Schröder’s pipeline company Nord Stream: The Gazprom subsidiary has gotten mixed up with a flamboyant Berlin entrepreneur who maintains contacts to the LaRouche sect and acts as the supervisory board chairman of a company that does not exist.

Clearly, Manfred Boese is an important man. He has eight different stacks of business cards lined up on his desk. In GDR times, he was a prosecutor; today, the lawyer runs several companies and associations. Anybody who wants to visit him has to pass through the portico of Berlin’s splendid Palais am Festungsgraben, then take a right into Boese’s office, and then, for a start, wait half an hour. Her boss is in a conference with ministers from Russia, the secretary says.

Below is a statement from Mikhail Khodorkovsky.

11 February 2008

An announcement by Mikhail Khodorkovsky

The tragic situation surrounding Vasily Aleksanyan, my gravely ill former colleague and lawyer, has shown that there are a great many people in Russia who are not indifferent and that the foundations of civil society exist.

That gives cause for optimism.

I hope that the soulless bureaucrats who are prepared to let a man die, just in order to please their bosses, are fewer among us than those who are moved by conscience. I’m convinced that defending the rights of everyone who is in need of such support is the moral duty of all Russia’s citizens.

I am sincerely grateful to everyone who has reacted to these outrageous acts of inhuman torture, perpetrated on an innocent man who is at death’s door, in order to force him to give false testimony against others.

Since Vasily has now been transferred to a specialist civilian clinic I am calling off my hunger strike.

Mikhail Khodorkovsky
Chita pre-trial detention centre

The following article was sent to me from a regular reader who wishes to remain anonymous.

There may be Smoke on the Water in Moscow, but the only fires burning in many Russian towns are in wood stoves.

It has been reported in the press that Russian behemoth Gazprom intends to celebrate its 15th anniversary this Monday with a private command performance concert by rock dinosaurs Deep Purple in the Kremlin’s cavernous Palace of Congresses – formerly the site of all those pompous Party Congresses. Vladimir Putin himself will attend this latter-day secret policemen’s ball, which will also be something of a premature celebration of the promotion of Gazprom Chairman Dmitry Medvedev, who was as good as appointed president of the Russian Federation in December; all that remains is the formality of a show “election”, from which all the real alternative candidates have been ignominiously sidelined.

I'm pleased to announce that my blog has reached another milestone with the publishing of our 2,000th article in English. Just last August we hit 1,000, so it looks like things are speeding up - no doubt thanks to our new daily news blasts. The blog also features more than 900 posts in German, 250 in Polish, and 200 in French and Spanish.

I'd like to take a moment to thank our contributers for their hard work, and most of all, express my gratitude to our regular readers for their continued interest in these topics.

President Vladimir Putin has congratulated Gazprom on its 15th anniversary, saying that “the history of the company is a history of great, hard and coordinated work of a team of the like-minded”.

“There is a depressing sense of déjà vu about the latest energy dispute between Russia and Ukraine.” Prime Minister Yulia Tymoshenko said the previous Ukrainian government was responsible for incurring debts for the supply of Russian gas, and has called for them to be restructured. Gazprom is “ready to stop deliveries from 10 a.m. Moscow time on Feb. 12” following Sergei Ivanov’s statement, “We are no longer doing charity worth billions of dollars.” Ivanov says that Russia's plan to curb gas deliveries to Ukraine because of a dispute over payment won't hurt European consumers.

Dmitry Medvedev has asked the CEO of Transneft and Russia’s Minister for Industry and Energy to ensure the completion of the East Siberia-Pacific Ocean (ESPO) pipeline, putting it into the operation at the end of 2008. Transneft had initially said it would be unable to complete the pipeline until 2009.

Sergei Ivanov, speaking at an international conference on security, held in Munich, said that Russia needs $1 trillion in investment to modernize its economy. The chief executive of Norilsk Nickel, Denis Morozov, has flown to London to persuade institutional investors to back him in his fight against Oleg Deripaksa’s Rusal, which is putting the last touches to plans to buy a 20% stake in Norilsk for $4.6bn “in what is believed to be a precursor to a takeover.” Alexander Abramov, the former chief executive of Russian steel company Evraz and one of Russia's wealthiest steel magnates, is launching a $4bn investment fund based in Britain. Eldorado Group, Russia's largest electronics retailer, is planning an initial public offering to fund expansion in western Europe. France's Société Générale plans to complete a deal to consolidate a controlling stake in Rosbank this week. Moscow City Court will not release businessman Vladimir Nekrasov on bail, and has postponed the appeal hearing for Nekrasev’s consultant Semyon Mogilevich. Exiled Russian businessman Boris Berezovsky has begun a legal claim in London against former business partner Roman Abramovich regarding a sale of shares in 2000-3. Finance Minister Alexei Kudrin says that Russia’s role in the Group of Eight was gradually increasing and that limitations on foreign investment, including on sovereign wealth funds, could complicate efforts to overcome the current financial crisis. Kudrin has increased his forecast for economic growth and said inflation may slow.

TODAY: Putin declares onset of new arms race; Sergei Ivanov gives “conciliatory” speech. Putin’s Playground? Human rights issues; Aleksanyan moved to a specialized clinic. Russia to write off Iraqi debt; Japan angry over violation of airspace.

President Vladimir Putin has “used one of the last major speeches of his presidency” to declare the onset of a "new arms race", that would defend Russia from unnamed foreign powers who, he claimed, were bent on controlling the world's natural resources. Putin’s statements were indirectly tempered by First Deputy Prime Minister Sergei Ivanov, who yesterday said the West need not fear Russia's growing economic and political clout. One UK journalist, in a piece entitled “Putin’s Playground”, says that the fusion of political and economic power in Russia is complete.

The following is a translation from the French newspaper Le Monde:

Le Monde, Editorial February 8, 2008

Putin’s Vindictiveness

The vindictiveness of Vladimir Putin knows no bounds. In 2005, he went after Mikhail Khodorkovsky, one of the Yeltsin era’s main oligarchs and the richest man in Russia at that time who had wanted to go into politics. It was all too easy for the Russian president to eliminate a potential rival by accusing him of tax fraud. The accusation could have been convincing if it had not served as a pretext for a settling of scores. But it was not enough for President Putin and his supporters to push Yukos’ President aside after seizing his company, one of the world’s oil giants, in order to favour others closer to the government. An 8 year jail sentence in a camp in Siberia must have seemed too light of a condemnation. Mikhail Khodokorvsky is now prosecuted for money laundering. Once more, he risks a 22 year prison sentence.

Both have considerable oil resources, both are ruled by dictators and thieving cliques, and both are experiencing increasing instability. I've spoken often about the parallel political convergence between Russia and Venezuela as well as their mutual weaknesses and abuses in terms of rule of law. Today's New York Times article about President Hugo Chavez's waning popularity drives the point home:

The contrast between revolutionary language and the consumption of imported luxury items by a new elite aligned with Mr. Chávez’s government, known as the “Bolivarian bourgeoisie,” has led to questioning of the priorities of his political movement. “Chávez’s revolution has stalled, but it can move forward if he can solve some problems,” said Daniel Hellinger, a political scientist at Webster University in St. Louis who follows Venezuela. “I don’t envy him the challenge of trying to make the country’s government more effective in people’s daily lives.”

There's a great opinion article about the tragedy of Vasily Alexanyan by Trudy Rubin of the Philadelphia Inquirer. Rubin argues that even after the Yukos affair, "this blatant manipulation of courts and laws seems to have been insufficient for Kremlin bosses. Now they are willing to tolerate the effective murder of Aleksanian because he won't give a false confession." Rubin concludes that if president-to-be Dmitri Medvedev wants to make good on his promise to hold all accountable to the all, he will have to face the difficult challenge of addressing the abuses of executive powers over the courts.

Rubin: Vladimir Putin's successor must address misuse of Russia's laws

Trudy Rubin - The Philadelphia Inquirer

Another presidential campaign is under way this week - this one in Russia.

On March 2, Russians will vote in a pro-forma election for a successor to KGB man Vladimir V. Putin. The Kremlin has handpicked a former law professor, Dmitry Medvedev, though Putin may try to remain the power behind the scenes.

Medvedev, however, is trying to present a softer face than his mentor; he pledged in his first campaign speech last week to make everyone accountable before the law. Putin, by contrast, has used the law as a club to bludgeon opponents. If Medvedev means what he says, he ought to condemn a travesty of justice going on now in Moscow that makes Russia look as if it has reverted to the Stalin era.

Former political prisoner Mikhail Trepashkin writes in the Moscow Times about his experience in Building 6 of the Matrosskaya Tishina pretrial detention center, the same place where Vasily Alexanyan was being held: "In addition, the authorities institute 24-hour observation of detainees -- again, under the pretext of medical necessity, but the real motive is to apply psychological torture.

I remember very well when they brought in a detainee with the same illnesses from which Aleksanyan suffers. At some point during the night, the detainee suffered serious complications and started bleeding from the mouth. The other prisoners started banging on their doors, begging the authorities to summon medical help. No one responded. The detainee died the next morning, and we all saw how he was carried away on a gurney to the morgue, which is located on the premises."

La Russophobe has posted a translation of an interesting letter written by the Russian filmmaker Vladimir Sinelnikov to President Vladimir Putin published in Yezhednevniy Zhurnal. Two years ago, Sinelnikov was in a car accident with an FSB officer, following which he witnessed first hand some of the most craven abuses of power by a junior member of the state's massive spy bureaucracy - an experience which Sinelnikov extrapolates into a litany of all things wrong with Russia today.

The bravery of this letter is no small feat, and no doubt Sinelnikov has gotten himself into big trouble by writing it.

The highly respected Bill Burke White is guest blogging over at Concurring Opinions, and has done a terrific post entitled "International Law and the New Russia." Below is just an excerpt.

Indicative of Russia’s disregard for human rights and the failure of domestic institutions to constrain Kremlin excesses, is the fact that more than 20% of the current caseload of the European Court of Human Rights (ECtHR) comes from Russia. When Russia looses these cases, which it often does, the government seems happy to use some of its new oil wealth to pay Court imposed fines, but then defy the Court, refusing to change offending legislation and rarely allowing domestic courts to implement ECtHR rulings.

Perhaps most emblematic of Russia’s defiance of international human rights law may be the persecution, show trial, and inhumane detention of Mikhail Khodorkovsky, the former Chairman of Yukos and once Russia’s wealthiest and most powerful oil executive. After Khodorkovsky broke a tacit deal with the Kremlin not to interfere in politics by funding anti-Kremlin parties, he was arrested on tax evasion charges and convicted in what can only be described as a show trial, in which he was unable to present evidence, call key witnesses, or build a meaningful case in his defense. He has been serving a sentence in a remote corner of Siberia in truly inhumane conditions and his life has been routinely threatened. As Khodorkovsky would have soon become eligible for parole, the Kremlin is likely to ensure that he is convicted once again in a second sham trial on further tax charges in the coming months. His case is currently pending before the European Court of Human Rights, though Russia seems likely to once again disregard the Court’s ruling.

On the 11th day of Mikhail Khodorkovsky's hunger strike, we see more and more contradictory reports that fatally ill prisoner Vasily Alexanyan has been "spirited off" to a new facility to finally receive the medical care he was being denied for so long.

Yet there is a long pattern of lies from the government on this case that we should be used to by now.

According to a recent press release from his lawyers, they still have not been able to confirm that Alexanyan is receiving treatment. In fact, neither his lawyers or family have any idea where he even is after being sent away to a "secret location." Refusal to inform the lawyers about a prisoner's whereabouts and medical treatment is a violation of Russian law - the latest of many illegal actions by the prosecutors.

One blogger has already called these latest developments in the Yukos case "Russia's Guantanamo." An apt characterization indeed.

In a new article in the Wall Street Journal, Zenyo Baran and Robert A. Smith of the Hudson Institute explain how Gazprom has pushed the economically astronomically expensive South Stream pipeline to defeat two competing European proposals designed to increase energy security. Until energy security is viewed as a hard security issue, they argue, Europe will be outmaneuvered by Russia:

Many European nations are simply afraid of angering Russia. In the late 1990s the U.S., along with Azerbaijan, Turkey and Georgia, took the lead in building oil and gas pipelines from the Caspian Sea to Turkey. Moscow fiercely opposed these projects. At the time, Europeans claimed the projects weren't feasible and did little to support them. Yet today, the EU recognizes that these pipelines are vital to its energy security and that without them its dependence on Russia would be even greater.

Strong U.S. support was sufficient to counter Russian opposition and European reluctance in the 1990s. But it won't be enough today. Thanks to the high energy prices, Moscow is much stronger and more assertive now than it was in the 1990s. What's more, the EU lacks the resolve to challenge Russia's monopoly pressure.

Perhaps it is time for energy security to be more firmly integrated in the NATO treaty, as U.S. Sen. Richard Lugar suggested at the organization's November 2006 summit. That way, when energy is used as a political weapon to pressure a NATO member, the alliance would stand together in support of the beleaguered state. It may also be time to introduce energy into the NATO-Russia dialogue. These are topics that leaders must discuss at the NATO summit in Bucharest this April.

This clip from the Labour Party features David Miliband and Douglas Alexander talking about British relations with Russia, among other foreign affairs issues. Fast forward to 4:48 for the good stuff.

Ah, the sweet smell of elections season, when Russia's political environment blossoms into a stridently anti-Western minefield, hubristic enough so as to sufficiently distract the populace from the painful fact that they are deprived of basic electoral rights.

Ultra-nationalist Dmitri Rogozin, the "bruiser" elected as Russia's envoy to NATO, kicked things off this week by outright threatening Poland with the next "world war" if the missile shield sites are situated on its soil.

But that's just a warm-up. President Vladimir Putin, who is even more insulated than usual to make the most provocative statements, is leading the charge this week with renewed calls to develop new, high-tech weapons to confront NATO's expansion. As if to commemorate the one year anniversary of his blistering Munich Security Conference speech (how quickly some have forgotten about that one - take note, Time Magazine...), Putin laid out his "will" for his successor - and scared the hell out anybody listening.

Stratfor is very premature with their prediction of the next U.S. president (and the reasoning dismissing the Democrats is both brief and flawed), but they are quite right in remarking that foreign governments are already hedging their bets and preparing for several outcomes.

The word is that the possible election of Sen. John McCain would impact Russia above all others:

The deepest impact would be felt in Russia and Iran. McCain has become rather famous in Russia for saying that all he saw when he looked into Putin’s eyes were three letters: K, G and B. And Iran is more than a touch nervous about McCain’s assertion that the United States needs to think of its Iraq deployment in a manner similar to that of Germany or South Korea — a decades-long commitment.

Gazprom has threatened to halt fuel supplies to Ukraine unless the country settles a $1.5 billion debt or offers assurances that it will pay. Naftogaz Ukrayny, Ukraine's state fuel company, denied it owes Gazprom $500 million for additional natural-gas deliveries. Italy's minister for economic development said there was no concern over the safety Italian gas imports from Russia in light of the news.

Gazprom is planning to sign an agreement with ExxonMobil, the Sakhalin-1 project's main shareholder, on the sale and purchase of natural gas produced at the project.

Russian oil major LUKOIL will acquire control of 8 gas fields in Uzbekistan with reserves of 100 billion cubic meters from another firm, SoyuzNefteGaz.

The Central Bank of Russia is claiming that the liquidity crisis has strengthened banking finances. Prime Minister Viktor Zubkov has “refused to recognize even the signs of the impending collapse of liquidity,” commenting that the bank system “has proven stability and independence from the external environment.” A Levada Center poll says that inflation continues to be a worry for Russians. Shares in Volga Gas rose after a drilling update indicated that a 2.3 km hole in the Volga region of Russia has now been drilled down 100 metres without hitting bottom. Yesterday’s report that Sistema had offered to buy Uralsib Bank was “a technical error”. Russian steel maker Mechel is considering listing its mining division in Frankfurt in an initial public offering that could raise around $4 billion. Golden Telecom, Russia’s largest independent fixed-line operator, said it is in talks to acquire the 49% it doesn't already own of broadband Internet provider Corbina Telecom. TMK, Russia’s largest manufacturer and exporter of steel pipes, has dropped plans to create a joint venture with US Hydril.

TODAY: Russia run by the KGB? OSCE to boycott presidential elections. Aleksanyan to receive treatment in a civilian clinic. Polish Prime Minister in Russia for “rough” talks.

According to one sociologist, “an astounding 78% of the country's leadership has links to the KGB or FSB.”

As expected, observers from the Organisation for Security and Co-operation in Europe (OSCE) have announced that they will boycott next’s month’s presidential election - “the least competitive in Russian history” - because of “severe restrictions and concerns over the fairness of [the] poll.” “We have a responsibility to all 56 participating states to fulfil our mandate, and the Russian Federation has created limitations that are not conducive to undertaking election observation in accordance with it,” said a spokesman. Andrei Bogdanov's Democratic party is “widely seen as a Kremlin-controlled project to draw votes away from actual opposition candidates and give voters a tame liberal option.”

Even the cream of Russia’s penitentiary service, the flower of the State’s militocracy, can make a mistake once in a while. However, the dramatic error committed yesterday by the Siberian bureaucratic management, which allowed Neil Buckley of the Financial Times to conduct the first major interview in years with Russia’s most well known political prisoner, Mikhail Khodorkovsky, sets a new benchmark among the fiascos of this case.

Given the appearance, one would think that this series of stories and feature interview were planned far in advance. In fact, that’s not at all how it happened. According to my sources, there was a slight mix-up at the courthouse in Chita, and where the attendees are usually registered and allowed (or denied) entrance, Buckley breezed right through undetected. Some local bureaucrats, perhaps unaware he was with the Financial Times (Buckley speaks Russian), accidentally left the reporter alone in the courtroom with Khodorkovsky, even permitting what I believe is the first new photograph we have seen of him in many months. I wouldn’t be surprised if the gulag took in a couple new occupants following this mistake.

So either by serendipity or a colossal blunder, Khodorkovsky had the rare opportunity to speak his mind in an encounter with the international press.

From Reuters:

Dmitry Medvedev, likely to be Russia's next president, says the country's so rich from an oil-fuelled boom that billions can be doled out simply by a click of the fingers.

"Money today is not a problem at all: only click (your fingers) and there you are: two billion, three billion," he said, clicking his fingers for effect during a meeting with officials in the Far East region of Khabarovsk.

Marek Menkiszak, a Polish academic at the Warsaw University's Centre for Eastern Studies, is quoted by Interfax today talking about the central problems in EU-Russia relations: "I think the fundamental problem in Russia's approach to the West, America and its allies, is a lack of trust. In my opinion the Russian side misinterprets the intentions of many actions."

As if responding on cue, Sergei Lavrov launched (no pun intended) some aggressive attacks against his U.S. counterparts: "Such a threat [from Iran] does not exist. (...) That's why you would have to be very naive to assume that the American missile defense base in Europe is aimed against anything but Russia. It's difficult to interpret it as anything other than a manifestation of imperial thinking."

Menkiszak thinks that this is just pre-election bluster that nobody should pay attention to, and indeed only hours earlier a senior Russian diplomat (Deputy Foreign Minister Alexander Losyukov) registered his "concern" and "suspicions" after Iran test-fired a long-range rocket on Monday.

Everyone knows that Russia doesn't want a nuclear-armed Iran any more than the United States does, so it appears that time is running out for Lavrov and Co. to continue playing this particular hand.

Here is Part 3 of the Grigory Pasko interviews - a brief discussion of freedom of press in Russia following the assassination of Anna Politkovskaya, and the future role of the internet. See Bob's intro to the series here.

The following is an exclusive translation of an important article from the German newspaper Die Welt about the case of Vasily Alexanyan (Aleksanyan, Alexanian). The original version can be read on our German-language blog here.

Putin abuses justice system in struggle against rival

Ex-manager Aleksanian under extreme pressure to testify against former oil magnate Khodorkovsky

By Manfred Quiring - DIE WELT, February 7, 2008

Moscow - Vassily Aleksanian is severely ill, he is suffering from lymph node cancer and is HIV positive. A Moscow court on Wednesday had no doubts about this either, after all a medical expert opinion was available. The doctors pointed to the urgent need for treatment. Nonetheless, the judge decided that Aleksanian must remain in remand.

Below is a short outtake from a recent Robert Amsterdam speech at the Russian, East European and Eurasian Center of the University of Illinois at Urbana-Champaign. In this short clip, Bob describes all the steps taken by the Russian prosecutors to create the appearance of legality. Given today's news, the comments are quite timely.

A radio interview following the event can be heard here.

$100,000 says we are running out of oil faster than you think, peak-oil group tells US consultancy

The Association for the Study of Peak Oil-USA (Aspo-USA) is so sure that world oil-supply growth will fall short of a recent forecast by a US energy consultancy that it says it is willing to bet $100,000 against it.

Last June, Cambridge Energy Research Associated (Cera) forecast that world oil production capacity will reach 112 million barrels a day (b/d) by 2017. Assuming the same ratio as today of oil produced to production capacity, this would mean actual output of something like 107 million b/d in nine years' time – a 20 million b/d increase from today’s 87 million b/d.

“Cera is forecasting an addition of 20 million barrels within a decade,” said Steve Andrews, co-founder of Aspo-USA. “We are betting you can’t do that with the drill bit.”

Aspo-USA has questioned Cera's record on forecasting

Vasily Alexanyan (Aleksanyan, Alexanian) is dying. This is a fact. He is dying because he has refused the offers for medical treatment from the prosecutors in exchange for false testimony against Mikhail Khodorkovsky and Yukos. I cannot overstate the importance of this tragedy, which explains more about the injustice, lack of rule of law, and ruthless persecution of these political prisoners than any argument I can put forth. What other government uses medical blackmail to create legal cover for their crimes?

Vasily Alexanyan before and after his detention, where he has been held for two years without trial, charges, or urgent medical treatment for AIDS, tuberculosis, and lymphoma. Now the authorities are rushing through a trial to secure a conviction to justify this manslaughter.

Khodorkovsky initiated a hunger strike in support of his friend and colleague, which helped raise international attention. A letter has been delivered to Vladimir Putin from 23 members of the European Parliament asking that care be provided. Both Russia's human rights ombudsman and representatives from the Orthodox Church have gently asked the same. Amnesty International and other human rights groups have spoken out. The chorus continues to grow.

Yesterday's unprecedented interview with Khodorkovsky has generated significant media coverage, so now even more eyes are focused on the actions of the procuracy. One can only hope that the current broad disapproval over this travesty will not disappear once the next stage comes to pass - for Moscow will use this experience as a litmus test of international reaction. A measurement of exactly how far away from the law they will be permitted to go without consequence.

The lack of investment reciprocity between Europe and Russia, especially in energy assets, is beginning to raise some concerns among officials - especially considering that the president-to-be recently called upon the business sector to go on aggressive spending sprees abroad.

Now all eyes are on Russia's modest brand new sovereign wealth fund, fueled by $32 billion in oil and gas profits. This amount represents a split from the massive $150 billion stabilization fund, which was mostly a rainy day fund specialized in investing in foreign debt. Control over these funds has been a great source of internal tension within the Kremlin, culminating last year with the arrest of Deputy Finance Minister Sergei Storchak, who along with Alexei Kudrin formerly held the keys to the most powerful instrument of political leverage outside of Gazprom.

No one seems to be certain whether the creation of this new sovereign wealth fund is a direct product of the spy wars, but there certainly are some outstanding questions to address.

Russian gas export monopoly Gazprom will sign a deal to buy the entire annual gas output from the Sakhalin-1 field of U.S. oil major Exxon Mobil in April-May. Gazprom has booked the band Deep Purple to fly from the UK to Moscow to perform at a special concert celebrating the 15th anniversary of the utility, as a “thank-you to Dmitry Medvedev, who steps down as Gazprom chairman next month." As a “farewell gift” to the company, Medvedev has committed state bodies to accelerate Gazprom’s access to the Chayanda field of Yakutia. Sibir Energy, a Gazprom subsidiary, has announced that it increased oil production in 2007 by 80% as output increased at the Salym field in western Siberia where it partners Royal Dutch Shell.

Russia plans to sell at least two of four large minerals deposits, including the Sukhoi Log gold and Udokan copper fields and the Sakhalin-3 oil and gas field, later this year.

“Exxon Mobil Corporation’s technology leadership has resulted in another world record-setting well at the Sakhalin-1 oil project in eastern Russia, enabling the production of more energy while reducing the impact on the environment.”

Renault, the world's fourth-largest carmaker, will share its technological expertise with Russia's Avtovaz when it completes its purchase of a 25% stake in the “troubled carmaker”. Norcross, an arm of Russia’s Kapital Insurance Group, has taken a 49% stake in Ateshgah Insurance, a joint venture between Azerbaijan and Russia. Russia's agricultural watchdog, RosSelkhozNadzor, says Moscow is ready to lift its ban on a number of Indian agriculture imports, including tobacco. Yevgeny Chivilikhin, co-founder of the Timiryazevsky trade center and prominent businessman, was killed in Moscow last night in what investigators believe was a contract killing. Rostelecom will reduce charges for long-distance calls in an effort to expand its client base. Société Générale has reportedly alerted the French authorities to a case of suspected money-laundering involving two Russian businessmen. The Federal Customs Service's $22.5 billion money-laundering lawsuit against the Bank of New York Mellon ran into trouble after the bank's lawyer accused customs service representatives of using a falsified document in the case.

TODAY: Conflicting reports on Vasily Aleksanyan’s situation. Russia expresses doubts over Iran’s test launch. US Energy Department is funding Russia’s support of Iran. Possible problems with Russia’s WTO accession.

It is being reported that Russia's prison service has bowed to international pressure and agreed to transfer Vasily Aleksanyan to a specialist clinic after the European Court of Human Rights in Strasbourg issued three instructions to the Russian authorities. However, Yelena Lvova, one of Aleksanyan's legal team, said she had not been informed of the decision to move her client to a clinic, and one UK newspaper is reporting that Aleksanyan has, in fact, been denied treatment, with another saying that he will not be transferred to a specialist clinic. Another Russian source says that Aleksanyan will receive treatment but will not be released from detention. The BBC has picked up on Mikhail Khodorkovsky’s interview with the Financial Times.

In tomorrow's edition of the Financial Times there is remarkable coverage given to the latest developments in the Khodorkovsky case. After the jump, some of the articles. Comments will be forthcoming from Robert Amsterdam.

The lead editorial argues the following: "The former oil tycoon describes himself as a political prisoner. Certainly the way he has been treated – in contrast to his fellow oligarchs who have scrupulously avoided playing politics – suggests that he is right. In Russia, politics is about a struggle for power, and Mr Putin holds sway. He is ruthless, even vindictive. The danger for Mr Putin is that he could turn the unpopular oligarch into a political martyr.

In his interview with the Financial Times, Mr Khodorkovsky suggests that the absence of any independent rule of law in Russia is the critical failure of the Putin regime. In the short term, of course, it is Mr Putin’s success: that is why Mr Khodorkovsky is behind bars. But in the long term the ex-tycoon is right: no prosperous market economy or fair society can flourish without the rule of law. That is a lesson foreign investors must heed."

Below is a partial transcript of Mikhail Khodorkovsky's interview with the Financial Times on Feb. 6 in a Chita court.

Transcript of Khodorkovsky interview highlights

Partial transcript of the FT’s interview with Mikhail Khodorkovsky, conducted by Neil Buckley in Chita regional court, Chita, Siberia. 6 February 2008

Financial Times: How long will you continue your hunger strike?

Mikhail Khodorkovsky: I said I would continue my hunger strike until the question is settled about an independent inspection into the conditions [of Vasily Aleksanyan] and whether he can be treated in the detention centre. And according to the results of that commission, some kind of action should be taken.

That’s what I’m saying. As far as I know, Russia’s human rights ombudsman Lukin he announced the same demands to the prosecutor.

Here is a particularly strange bit of news from Russia - the debut of a romantic film about the private life of Vladimir Putin, though the producers adamantly claim otherwise: “For the first time we have the chance to take a look at the life of a politician, from another angle,” reads a promotional brochure for the film, “This Kiss Is Off the Record,” distributed at a news conference in Moscow on Tuesday. “He is first of all a person. What is he like in life, in his family? What is in his soul? Is there room left in his heart for love?”

The Russian government, flush with cash from oil and commodities, has recently been sponsoring patriotic films, both historical epics and kitschy blockbuster-style films about heroic secret service agents.

Last year during a trip to Germany, Grigory Pasko agreed to tape some interviews for this blog to discuss his background, experience as a journalist in Russia, political trials under Putin, and numerous other subjects. With the presidential "elections" approaching, I felt that now is as good a time as any to share them. It goes without saying that I am extremely grateful to Grigory for his valuable contributions to the blog, and I deeply respect his ongoing courage in the face of enormous adversity. Stay tuned for more videos over the next few days, or check out our YouTube channel.

We've heard in the past about Russia's efforts to re-treaty the past, taking advantage of the new oil-and-gas fed leverage by scrapping previous arms and defense agreements with the West, and seeking to establish a new position in global defense capability.

Back on Nov. 7, the Duman voted 418-0 (talk about a rubber stamp parliament!) to suspend the Conventional Forces in Europe Treaty (CFE), which although in practical security terms isn't of enormous concern, most people point to the extraordinary damage that could be done with the sudden removal of basic confidence building mechanisms and oversight. Other Cold War security pacts are coming up to the chopping block also - including a much more frightening possible revision of the Intermediate Nuclear Forces (INF) Treaty of 1987.

During his last visit to Canada, Robert Amsterdam was interviewed twice on the radio by Dave Rutherford. Click the links below to listen.

CHQR in Calgary 770 AM - Jan 29, 2008

CHED in Edmonton 630 AM - Jan 31, 2008

There's an interesting FT piece today about the European reactions to Super Tuesday. Apparently the Germans love Obama but are concerned about McCain, as they believe he would take a tougher line on Russia than Berlin is comfortable with.

Tucked down deeper in the story was an early "warning" from a Russian official that the next president had better "tone down" the rhetoric:

Mikhail Margelov, the influential head of Russia’s senate foreign affairs committee, said the wins by Clinton and McCain were "an expected result" but he warned that any future US president would have to tone down the anti-Russian rhetoric once they took power. He said so far only Barack Obama had been neutral in speaking of Russia-US relations, while neither Clinton nor McCain had promised "any warming toward Russia."

"No matter who becomes US president, political necessity will force them to swap the pre-election rhetoric for a more business-like tone. Because if you measure the level of mutual responsibility and dependence of our countries then the path toward further confrontation is dangerous," he was quoted as saying by Interfax.

Both Clinton and McCain have made critical comments on relations with Russia under Putin. In a December interview with the Boston Herald, McCain said: "I looked into Putin’s eyes and I saw three letters -- a K, a G and a B.” Clinton has said Putin "doesn’t have a soul” because he was a KGB agent.

Robert Kagan of the Washington Post wonders if Europe is able to "bring a knife to a knife-fight" to deal with a "rich and resentful" old Russia:

Russia and the European Union are neighbors geographically. But geopolitically they live in different centuries. A 21st-century European Union, with its noble ambition to transcend power politics and build an order based on laws and institutions, confronts a Russia that behaves like a traditional 19th-century power. Both are shaped by their histories. The supranational, legalistic E.U. spirit is a response to the conflicts of the 20th century, when nationalism and power politics twice destroyed the continent. But Vladimir Putin's Russia, as Ivan Krastev has noted, is driven in part by the perceived failure of "post-national politics" after the Soviet collapse. Europe's nightmares are the 1930s; Russia's nightmares are the 1990s. Europe sees the answer to its problems in transcending the nation-state and power. For Russians, the solution is in restoring them.

Read the rest here.

What follows is a statement of support of former Yukos executive Vasily Alexanyan (Alexanian, Aleksanyan), who is being illegally denied urgent medical treatment in exchange for false testimony, signed by some of Russia's most preeminent human rights and civil society figures, including Lev Ponomarev, Lyudmila Alexeyeva, Vladimir Bukovsky, and Garry Kasparov.

Demonstrators stand with posters to support Vasily Alexanian, a former executive at the Yukos oil firm, in central Moscow February 6, 2008. The poster on the right reads, 'Free Vasily Alexanian'. REUTERS/Sergei Karpukhin (RUSSIA)

Oil giant BP is cutting 5,000 jobs following a year that its chief executive said he "will be glad to leave behind". The company’s talks with Gazprom over the Kovykya gas field have been stalled, meanwhile, “because it's Russia, because it's a complicated deal.” BP is also in talks with the Iraqi Government about a plan to boost oil production at the huge Rumaila field on the border with Kuwait.

The presidents of Russia and Uzbekistan will meet to discuss the development of the natural gas transportation infrastructure in the Central Asian region. It was agreed last year that they would modernize the 1974 pipeline.

Russia has called on Iran to suspend its uranium enrichment program pending the outcome of negotiations with the International Atomic Energy Agency over "complicated points" in its nuclear program.

Non-profit state-run nanotechnology corporation Rosnanotekh, created last year, has announced its business plans for the year. In the first quarter of 2008, Russian banks and companies will pay foreign creditors $35 billion, including $4.7 billion in interest. Sotheby's last night sold $230 million worth of art, the most it has ever made in a London sale of modern and impressionist works, as rising demand from Russians defied concern about investment losses. Limitless, the development arm of Dubai World, will set up a new residential development in Moscow jointly with RDI Group.

TODAY: Two political opponents of the Kremlin associated with Kasparov are harassed, one receives asylum, another is held in a psychiatric ward. Aleksanyan will not be released from jail for treatment. US worried that Russia could use financial clout to achieve political goals. OSCE may refuse to monitor next elections.

Roman Nikolaichik, an anti-Kremlin activist and parliamentary candidate for The Other Russia, is being held in an isolation ward at a psychiatric hospital in Busharevoin in what supporters say is “a return to a Soviet-era punishment.” Ukrainian officials have granted asylum to Aleksandr Kosvintsev, a Russian journalist who alleges that he was harassed in his home country after taking up a leadership role with a political opposition group affiliated with Garry Kasparov. A Russian court has suspended the trial of Vasily Aleksanyan, the ailing former executive of the dismantled oil giant Yukos, but refused to release him from jail for treatment. His lawyer said he could not get proper treatment in custody and the Moscow-based group For Human Rights denounced the ruling as a "demonstration of the government's inexorable cruelty."

Following Robert Amsterdam's speech at the Economic Club of Toronto last week, there has been some significant media coverage (see the CBC segment regarding Petro-Canada and Gazprom). One of the more extensive pieces covering the speech was just published today in Canadian Business by Jeff Sanford.

In Russia, a deal with the devil

By Jeff Sanford
Canadian Business Online, February 4, 2008

Robert Amsterdam, the London-based Canadian-born lawyer of imprisoned Russian businessman Mikhail Khodorkovsky, returned to his home country last week and blasted Canadian political leaders and businessmen who insist on doing business with the corrupt regime of Russian President Vladimir Putin.

In a speech to Toronto’s National Club — an institution founded shortly after Confederation for businessmen who considered themselves part of the “Canada First” movement — Amsterdam was unstinting in his criticism of those in league with state-owned, Kremlin-controlled companies like oil and gas giant Gazprom. “It’s distasteful to see Canadian politicians and companies having dealings with these people. They are selling out Canadian values,” the lawyer said.

This is actually an old gag, dug up for kicks on Super Tuesday. Daily Kos nailed this last summer, and even ran a poll over which one looked better. At the time of writing, Obama was winning with 64% over 36% for Vlad.

Here's an amusing parallel tying together a number of world leaders from Eugene Robinson in the Washington Post: "When you Google the phrase "unconstitutional third term," you get references to a rogue's gallery of strongman leaders -- Vladimir Putin, Alberto Fujimori, Olusegun Obasanjo, Islam Karimov, Hugo Chávez -- who in recent years at least have flirted with the idea of holding on to power beyond statutory limits. Now the name Bill Clinton pops up, too.

It may be unfair to Hillary Clinton, but the prospect of her husband's return to the White House -- albeit not as president but as prince consort, which would not violate the Constitution -- has inevitably become a campaign issue, and it's beginning to work against her."

The only one Robinson forgot is Argentinean President Nestor Kirchener, whose wife Cristina recently rotated into the chair of the presidency. Maybe Putin is starting to look good in comparison - at least he doesn't sleep with Medvedev...

Today is very important day in U.S. politics, which could prove to be definitive in shaping the foreign policies of the next presidency. You can be sure that the Russia is watching very closely - as it is arguably a much more interesting campaign season to observe that the local performance.

Most agree there is a lack of clarity on the candidates' Russia views. A few weeks ago, Robert Amsterdam published an opinion article in the Washington Times about the U.S. elections and Russia which argued that "So far, this wide field of candidates remarkably has been disappointing and unspecific on Russia policy with advisors cautioning to speak only about foreign policy issues like Iraq and Iran. But while we're asleep at the wheel, Russia quietly is becoming more volatile, especially in terms of the global security and economic stability."

But is it really possible to predict how these candidates will handle Russia?

A journalist at Forbes believes that the Serb's choice of Boris Tadic over the pro-Russia hardliner Tomislav Nikolic will diminish but certainly not eliminate the Kremlin's control over national politics. However the report states that all that really matters is the energy business, which Russia was able to sew up before the elections:

"Serbia, Bulgaria, some of the other central European states, they are all aware of the fact that they're entirely dependent on Russian firms for energy," said Jon Levy, an analyst with Eurasia Group. However, unlike Poland or Ukraine, Serbia has far less reason to fear Russia playing energy politics, or attaching political conditions to the supply of energy, Levy told Forbes.com.

A colleague pointed me toward this post from the Economist from Jan. 31st:

SOVIET propagandists during the cold war were trained in a tactic that their western interlocutors nicknamed “whataboutism”. Any criticism of the Soviet Union (Afghanistan, martial law in Poland, imprisonment of dissidents, censorship) was met with a “What about...” (apartheid South Africa, jailed trade-unionists, the Contras in Nicaragua, and so forth).

Russian Prime Minister Viktor Zubkov and Economic Development and Trade Minister Elvira Nabiullina have been approved as candidates for a new Gazprom board of directors.

Kazakhstan has raised its price for shipping gas to Gazprom by 27%.

Rosneft and state-run Vnesheconombank have signed a Memorandum of Cooperation, which outlines joint participation in projects aimed at the development of infrastructure, innovative technologies, and diversification of operations.

United Company RusAl will gain a foothold in China’s lucrative aluminum market, after it was reported it would partner with China Power Investment in building a 500,000-ton smelter in western China and a bauxite and alumina complex in Guinea. Artashes Terzyan, co-owner of Trust Banking Holding, has agreed to sell his shares in the holding company for units once controlled by jailed billionaire Mikhail Khodorkovsky. Russia's Southern Telecommunications Company plans to issue $143.1 million of credit-linked notes to refinance debt. Rambler Media, the British-registered owner of Russia's Rambler Internet portal, expects 2007 full-year revenue to more than double to $63-65 million from $30.6 million in 2006. Norilsk Nickel will consider a share buyback, to be funded by the sale of the energy assets that it failed to spin off into a $7 billion company last year.

TODAY: Medvedev outlines his vision for Russia. Vasily Aleksanyan goes on trial, is “nearly blind”. Moscow lawyer applies for political asylum in the US. Putin is in Dagestan, Zubkov is in Armenia.

Presidential candidate and Communist Party leader Gennady Zyuganov has urged Russia to concentrate on its internal problems rather than foreign policy at the moment, and criticized the upcoming elections. "Elections in Russia can't be fair, because privatization itself was unfair, because everything has been stolen and because thieves can't call fair elections." Meanwhile, Dmitry Medvedev is outlining his vision for Russia which “bears little resemblance to the country his patron, Vladimir Putin, governed for eight years,” promising support of non-governmental organizations and a strong fight against corruption. A summary of the other candidates’ television adverts can be found here.

Remember those bombastic military spectacles the Soviets used to hold on Red Square several times a year to strike fear into every bourgeois heart? Well, they're back, and they're bigger and better than ever. As the below article (in our exclusive translation) shows, the Kremlin is pulling out all the stops for the May 9 parade to celebrate the 64th anniversary of the Day of Victory of the Soviet People in the Great Patriotic War of the Years 1941-1945. The parade will feature the premiere of trendy new Russian army uniforms - approved by Vladimir Putin himself. To make sure the whole event goes off without a hitch, an entire full-scale replica of Red Square has been erected on a military base outside town - by decision of Vladimir Putin himself. And in order for all the big military hardware to pass unhindered, all overhead electric wires will be dismantled in the center of Moscow, disrupting public transport and leaving downtown residents and businesses without electricity for several days. This sounds more like North Korea than a civilized European country!

Translated from RBC:

Electric power lines to be taken down in center of Moscow for 9 May parade

For the passing of the military hardware that will participate in the parade on 9 May on Red square, streetcar lines, trolleybus communications and lines of electric power transmission will be taken down in the center of Moscow.

As head of the Main administration for combat training of the Ministry of defence of Russia lieutenant-general Vladimir Shamanov reports, the corresponding understanding has already been attained with the government of Moscow.

Ed Lucas, who recently authored the book "The New Cold War" (see the review by Latvian blogger Peteris Cedrins), has a powerful new piece running in the Times of London calling upon Europe to get firm with Russia on critical issues. With regard to the recent case-related events, he writes "Politics in Russia is a matter of life and death. Mikhail Khodorkovsky, once Russia's richest man, is on prison hunger strike in protest against the ill-treatment of his aide Vasily Aleksanyan. Mr Aleksanyan is confined in a filthy mould-infested cell because he refuses to sign a bogus confession incriminating Mr Khodorkovsky. His judicial torture, including denial of medical care, which has blinded him, has been condemned by the European Court of Human Rights. It reads like something from Dostoyevsky, not a factual account of prison conditions in supposedly one of the world's top eight industrialised democracies."

More after the jump.

They say that for about a $100,000 donation to his foundation, you can get former U.S. President Bill Clinton to show up practically anywhere for a speaking engagement. And apparently for $31.3 million, you can even get him to hop on a plane with you to Kazakhstan, and offer the president-for-life Nursultan Nazarbayev political backing for the OSCE in exchange for a lucrative uranium mining deal.

I am pretty late in getting around to posting about this Clinton news, but thought I would do so for those who haven't had a chance to read it yet. This is one wild, wild story from the New York Times, and one that exhibits a lesson (or bad example, depending on your view) for foreign investors looking to land energy and mineral extraction deals in the region. You can't exactly blame the Kazakhs for bringing politics into the decision regarding Kazatomprom's new partner - after all it was a clever Canadian and a former president looking to raise funds that thought up this particular quid pro quo.

Communist Party leader Gennady Zyuganov was probably worried about losing his heavyweight title as champion of the soundbite in Russian politics. So this weekend he brought the thunder, and declared that the upcoming elections would be illegitimate because "thieves can't call fair elections" and said that Vladimir Putin and Dmitri Medvedev were "completely irresponsible people."

That seems less than tactful - makes me wonder why it is Mikhail Kasyanov who gets banned...

Zyuganov also provided a quick lesson in international finance and economic policy to reporters: "if dollars from the oil and gas bubble dry up or even shrink a little, then the Russian financial and economic system will collapse somewhat faster than some people can imagine."

What is the old joke from 1990s post-Soviet Russia? Something like "everything they told us about communism was a lie, but even worse, everything they told us about capitalism was true."

It's no secret that Russia has been agressively targeting Hungary and Bulgaria in its pipeline strategy - promising powerful roles as gas distribution hubs for the region (quite similarly to what Serbia was promised allegedly in exchange for allowing Gazprom's bid to pass through on NIS).

What is perhaps surprising is Hungary's nomination this week of the KGB-trained Sandor Laborc as head of intelligence services, making him chairman of NATO's intelligence community during the country's one year rotation. At the official level there is silence, but many diplomats have gone off the record to register their worries, remarking that members may be less inclined to share intelligence with someone from a KGB background.

We've recently blogged about the boost given to the Nabucco pipeline project from the enlistment of RWE, as well as the potential concerns over Turkmenistan's reliability as a supplier (the recent cut-off of supply to Iran caused a domino effect which reached all the way to Greece and the EU).

These concerns have not diminished over recent weeks, and it now appears that Europe has to seriously reckon with how to deal with an increasingly assertive government in Turkmenistan that is eager to play hardball in energy politics. However, this supply cut-off should not be compared with the Gazprom-Ukraine example for several reasons.

The share of the world's oil reserves controlled by big Western oil companies, such as BP, Shell and ExxonMobil, has fallen to less than 10%, compared with 70% in 1978; and world reserves are dominated increasingly by government-controlled national oil companies in big producer countries such as Saudi Arabia, Russia, Iran and Venezuela.

Gazprom will buy back 1.7 million of its MICEX-listed shares and distribute them to selected employees. “The Russian energy giant did not say how many company managers will be awarded shares.”

Kyrgyzstan’s newly appointed Prime Minister has announced that Kyrgyzgaz will be sold. “Although no tender has been held yet, it is clear that Russia’s Gazprom will take partial or full ownership of Kyrgyzgaz.”

Rising Russian prices caused by the oil boom is causing havoc for Russian firms. The head of Polyus Gold comments, “There's no infrastructure, no power, no roads. Electricity costs twice what they pay in Alaska and Canada. We face a Soviet bureaucracy passing decrees that make you weep." Inmarko, the leading ice cream company in central and eastern Russia with a turnover of approximately €115m in 2007, has been acquired by Unilever for an undisclosed sum. One paper suggests that money from Russia's newly-created sovereign wealth funds could be diverted to help local banks survive the global credit crunch. Russia's sovereign fund is examining the possibility of investing in Japanese stocks. Finance Minister Alexei Kudrin says there will be no major price hikes in Russia when some food prices are “unfrozen”. Carmaker AvtoVAZ may partner with Renault to assemble new car models in Russia, scrapping an agreement with Canadian auto parts maker Magna. For the first time in ten years, the Central Bank of Russia is raising the refinancing rate. “Investment backed by states such as China and Russia has entered an aggressive new phase.” Entertainment television company CTC Media has signed a deal to buy a 20% stake in Channel 31, Kazakhstan's fourth-largest television network.

TODAY: Medvedev begins official campaign, emphasizes continuity of power. Poland reaches missile agreement with United States; Russia may withdraw offer. Nashi denies imminent demise. More on the “new Cold War” - the West is already losing, apparently.

Russia's presidential election campaign has officially begun, with first deputy prime minister Dmitry Medvedev as “the clear favourite to win”. United Russia has revealed that it will give Medvedev its backing. Speaking publicly this weekend, Medvedev emphasized the continuity of power and promised to continue subsidies for farmers. Former Prime Minister Mikhail Kasyanov will appeal to the Supreme Court over his disqualification from running in the election.

Following news that Poland said it had reached an agreement “in principle” with the United States on plans to install a missile defense system on Polish territory, Russia has hinted that a proposed deal with the US over the use of Russian radar stations as an alternative to building part of the system in eastern Europe now may not be reached. In a new military cooperation pact “certain to irritate Russia”, the United States promised Kazakhstan to help it bring its armed forces up to NATO standards.

An image with an unpleasant odor

By Grigory Pasko, journalist

In European countries I’ve lived in many different hotels; eaten in many different restaurants and more modest eateries, but everywhere I saw one constant: outstanding croissants. In Moscow, by the way, they have appeared as well. But for some reason, nobody’s advertising them.

They’re just another kind of bun, crisp-crusted and tasty. What’s to advertise?

The reader can no doubt easily recall another dozen things that don’t need advertisement. For example, the tap water in European countries. Good things, as a rule, don’t have any need for advertisement.

But goods that are rotten, have an unpleasant odor, “sturgeon of second-rate freshness”, as we say… that’s something else entirely.

In the Guardian's Comment is Free, Mark McDonald writes "As a human rights lawyer, I was shocked to hear of the plight of Vasily Alexanyan. In 2006, just three days after he was appointed an executive vice president of the Russian oil giant, Yukos, he was arrested on charges of embezzlement and money laundering."

McDonald laments that we have arrived to a point where everyone's expectations of Russia's adherence to law has "dipped so low that the common response to this tale is, "well, that's Russia."

An important and timely article after the jump.

George Will at the Washington Post writes about how to handle the new challenge (and occasional hysteria) of sovereign wealth funds:

"Calmness, combined with vigilance, is sensible. Calmness, because the funds are a small fraction of the world's wealth and are performing necessary services. Vigilance, because they pose potential problems concerning transparency and possible political purposes. (...)

Various U.S. states and municipalities, too, are scrambling for higher returns through investments in equities because they have made $700 billion in unfunded pension promises to public employees. Stephen Schwarzman, chief executive of the Blackstone Group, a large private equity firm, says, "In our experience, there is virtually no difference between going to a sovereign fund [for investment capital] and going to a state pension fund in the U.S." Because U.S. policy endorses the free flow of capital around the world, inflows of foreign investments should be welcome -- if the motive of the nations operating sovereign wealth funds is profit-maximization rather than political power.

Chris Cox, chairman of the Securities and Exchange Commission, says the SEC's mission is to prevent fraud and unfair dealing, and sovereign wealth funds could complicate that mission if the governments operating them are both market players and referees. Or if the governments use their intelligence services' covert information-collecting to give their investors information advantages. Or if the funds' lack of transparency contributes to market volatility because of uncertainty about the funds' allocation of assets.

The blurring of the line between government and private economic activity is potentially troublesome. Still, the funds are not large relative to the world economy or even to the $14 trillion U.S. economy, which is larger than the next four largest economies combined -- Japan's, Germany's, China's and Britain's. Russia's economy is about the size of New York's and Arizona's combined; India's is about half the size of California's."

Yesterday the Wall Street Journal featured a column on the Kremlin's successful efforts to jam and distort free press both within and outside of Russia:

Kremlin More Subtly Jams Freedom's Beams

Michael McFaul and Kathryn Stoner-Weiss paint a demoralizing picture of Vladimir Putin's relentless attack on democracy and the toll it has taken on Russian society ("Notable & Quotable," Jan. 18). In the longer essay for Foreign Affairs from which the excerpt is taken ("The Myth of the Authoritarian Model," Jan./Feb. 2008), the writers also emphasize how, instead of building "an orderly and highly capable state," the Kremlin has focused on neutralizing independent media within -- and outside of -- Russia.

The Kremlin clearly has a comprehensive strategy to neutralize foreign broadcasters. Congressionally funded Radio Free Europe/Radio Liberty (RFE/RL) and BBC World's Russia service have seen a dramatic reduction in their broadcasting power. Though the trend has accelerated sharply in the past few years, the strategy to deploy these tactics was born as early as 2002 when Mr. Putin officially revoked the 1991 Yeltsin era decree that established RFE/RL's presence in Moscow.

It seems like the Nabucco pipeline project has seven lives - every time we think it's "dead" because of a competing Russia-backed project, it finds new life.

The latest surge of optimism comes from the German company RWE, which the Financial Times is reporting has become the sixth major company to sign on to the project, which aims to bring natural gas from the Caspian region along a route free of Gazprom's control to Europe. Now if only they could find more gas outside of Azerbaijan to fill it....

From FT:

German group to back Caspian gas pipeline

By Ed Crooks in London

RWE, one of Germany's biggest energy companies, is to become the sixth company backing the proposed Nabucco pipeline to bring gas from the Caspian region to Europe, bolstering hopes for the troubled plan.

RWE is expected to be formally announced as a member of the consortium at a ceremony in Vienna next week, joining the five member companies from Austria, Hungary, Romania, Bulgaria and Turkey.

RWE yesterday would not confirm the reports, saying only that it had expressed its interest in Nabucco and was "very happy about these positive signals".

The old Latin saying qui tacet, consentit (silence implies consent) was first brought back into the contemporary Russia debate by blogger Vilhelm Konnander following the assassination of journalist Anna Politkovskaya. However, today it is more resonant and telling than ever, as we watch country after country turn their backs in willful silence on the fate of the dying Russian prisoner Vasily Alexanyan (also spelled Alexanian, Aleksanyan, and Aleksanian). (Read my blog here, here, here, here, here, and here).

Why on earth won't anybody say anything about this poor, unfortunate victim of Kremlin injustice? This is the question often put to me in recent emails and comments. Of course I have my theories which I shall outline below, but I certainly do share their outrage and disbelief.

This clip comes via CBC:

Reading today's news of the continued cruelty against the imprisoned Yukos executive Vasily Alexanyan is like going back to the future - at least in this court, Stalinist times are back in full swing.

Russian prosecutors and judges involved in these Yukos cases appear to be engaged in conducting trials and judicial procedures at the behest of the most radical members of the siloviki to expand the circle of those responsible for committing crimes against international law and fundamental human rights.

Michael Weiss provides an interesting history of the British Council in Russia in the Weekly Standard: "One theory popular among Putin's domestic enemies is that the FSB is quite happy to level charges of espionage and "provocation" at so harmless an outfit as the British Council because its own agents desire to live in England. (Lavrov's daughter studied there, as have the children of so many other Kremlin officials.) After all, the greater the supposed threat posed by Her Majesty's Secret Service, the more spies from the other sides are required for surveillance and counterintelligence. Many a grizzled KGB agent has reminisced about his cushy Andropov-era posting near the Thames, and it should come as no surprise that, in a country ruled by ex-KGB agents, there is still the willingness to manipulate national security to obtain la dolce vita. Bottomless accusations against the British Council therefore play into a much larger scheme of what might be called siloviki self-gratification. And that's enough to make even a dispassionate observer sick without polonium."

"We are planning no radical steps to decrease taxation on the oil industry,” said a spokesman for the Finance Ministry. Russia may raise taxes on the gas industry but has no plans to cut them for the oil sector despite complaints from oil firms that they need more cash for investments. Kommersant reports, however, that the Finance Ministry has acknowledged that the current system of taxation of oil companies is unworkable in the long term, and may revive a seven-year-old bill on the taxation of supplemental income.

The International Energy Agency's deputy executive director has warned that the EU needs to examine closely Gazprom's strategies, saying the company was clearly focusing on acquisitions and not investing in upstream gas supply.

Could the sudden recent arrest of Semyon Mogilevich have anything to do with Gazprom's recent push to be listed on the New York Stock Exchange?