Daily Archives: June 9, 2008

June 9, 2008 — Contents


(1) EDITORIAL: The Collaborators Among Us

(2) Annals of Putin’s Stormtroopers

(3) Bovt on Medvedev

(4) Annals of Neo-Soviet Persecution of Journalists

(5) Russia, Carbon King

(6) Putin Lies and then he Lies Some More

(7) Isn’t she Lovely?

EDITORIAL: The Collaborators Among Us


The Collaborators Among Us

Below, we publish a column from last Friday’s edition of the Moscow Times by pundit Georgy Bovt, no stranger to regular readers of this blog. In it, Bovt highlights the total lack of morality that pervades Russian government today, and ridicules that Dimitri Medvedev is qualified, much less inclined, to do anything about it. As for Vladimir Putin, he’s a proud KGB spy.

The column was buried by the MT editors under its shockingly boring new format, and might easily have been missed by many readers. It stood in stark contrast to the column the MT editors chose to highlight, from one Bruce Bean (pictured, left), identified as a lawyer who lived in Moscow from 1995 to 2003 and now teaches at Michigan State University Law School.

It looks for all the world as if the Moscow Times is slowly selling out to Kremlin pressure. It didn’t report on Oleg Kozlovsky’s recent two-week stint in prison, a preemptive arrest that was manifestly illegal — nor did it republish Kozlovsky’s op-ed in the Washington Post which came out while he was in prison. Instead, it published a ridiculous screed from Kremlin apologist Edward Lozansky, who in turn was publishing a Kremlin propaganda festival he was hosting in Washington DC. It’s still publishing some Kremlin-critical coverage, but it’s staying away from the hot button issues and it’s trying to minimize the impact of what it does publish. And while we’ve written its editor three letters challenging these practiced, none of them has been published.

Professor Bean, yet one more person who’d like to get rich selling out Western values to the malignant little troll who prowls the Kremlin’s parapets, trots out the same ridiculous screed of lies and misdirections that we’ve seen emanating from the USSR and from neo-Soviet Russia for time out of mind, in the most predictable and embarrassingly lame manner possible. It really is as if the stooges in the Kremlin wrote this column themselves as part of a giant do-over of the USSR’s collapse, as if it was all due to nothing more than a freak incidence of bad luck. He mocks the idea that Putin’s KGB past (and present, he has filled the halls of government with spies) could be remotely relevant to understanding his governance.

In May, Russia experienced the worst uptick in consumer price inflation in more than five years. Prices skyrocketed from a 14.3% annualized rate in April to a shocking 15.1% in May, an increase of 5.6% in just one month. Food prices rose at an annualized 22.1% rate. Vladimir Putin’s only response to this nightmare (earning $4/hour on average, ordinary Russians can ill afford any inflation, much less this kind of apocalypse) has been a promise to raise wages — the same thing as throwing gasoline on a grease fire in your kitchen. What the country needs is more production, not more money, and even a kindergartener should be able to understand that. Russia’s KGB leadership, however, doesn’t.

All they understand is propaganda, just like their Soviet forbears. Sweep the problem under the carpet, and hope people don’t notice the mountain of debris already sitting there. This kind of “thinking” made the the USSR the laughing stock of the world and laid it low. Russia under Medvedev is following exactly the same course.

Bean writes that “after President Dmitry Medvedev’s inauguration on May 7, Russia has successfully concluded its first “normal” presidential succession cycle, in which a healthy outgoing president voluntarily turned over power to a new popularly elected one. ” He ignores the conclusive evidence that the election results were rigged. If Vladimir Putin were writing this propaganda tract, we dare you to explain how his remarks would have been any different.

Bean writes of Putin that “it was precisely this treacherous spook who abided by the 15-year Constitution and left office — something he promised to do for many years leading up to the election.” He claims that it simply means nothing that Putin sat in the presidential chair, one the nation has grown accustomed to associating with the seat of power, and asks us to ignore it because Russia isn’t the USSR and is no longer mysterious. Apparently, he’s saying that if Putin really were going to secretly retain the reins of power, he’d simply tell us openly. Only a true Kremlin stooge can make statements as outrageous as that.

And then top it. Bean writes: “Whether he deserved better or not, during his 100 months in office, Putin never had more than a few weeks of fair treatment from the international media. The reforms of the first years of Putin’s administration introduced a 13 percent personal income tax, low corporate taxes, new labor and land laws, and, most significant, major reforms of the judiciary. Boris Yeltsin was unable to persuade the State Duma to enact any of these.” Apparently, he’s suggesting that if only the “international media” had been fairer to Putin, he wouldn’t have wiped out the domestic media, local government and opposition political parties. The truth is that the international media weren’t nearly tough enough on Putin, allowing him to wipe out civil society and achieve a permanent dictatorship without raising a finger to stop it.

Bean writes: “Many complain about Russia’s corruption and lack of judicial independence. The progress the country’s judicial system has achieved under Putin is not familiar outside Russia, since it has been consistently ignored in favor of stories that are more sensational.” Then he doesn’t give one single example to back up this ludicrously false statement, and claims that since Medvedev is law professor like him, the rule of law is safe in Russia. He claims that because recently a corrupt judge was exposed and another complained about lobbying from the Kremlin, this proves Medvedev is committed to the rule of law. But Medvedev hasn’t said a single word about these events, much less did he instigate them, and they are meaningless drops in the bucket of corruption that has been documented repeatedly by international surveys. As the Moscow Times states in an editorial:

Prosecutors have shown no interest in looking into the allegations. Three weeks after [the judge’s] statements, there have been no reports of an investigation. In answer to written questions, the Investigative Committee under the Prosecutor General’s Office advised The Moscow Times to contact the Prosecutor General’s Office itself. Written questions to the Prosecutor General’s Office went unanswered. If the rule of law that Medvedev has been talking about is to have a chance at taking root, then allegations like those made in court against Boyev will have to be pursued to the end. As the prosecutor general reports directly to the president, Medvedev should be able to get the investigators moving.

Professor Bean simply chooses to ignore these facts (or else he doesn’t even read the paper he’s writing in), and doesn’t call upon Medvedev to take any specific action. Martin Luther King always said he had much more fear of pseudo-liberals than he did of the KKK. How right he was!

Let’s be clear: What Professor Bean is doing now is exactly what many did when Putin came to power, the exact opposite of what he claims occurred. When Yeltsin named Putin, instead of immediately opposing him the world listened to those like Professor Bean who said that Putin was a new kind of leader for Russia, that as soon as he got a grip on Russia’s economic problems he would move to protect civil society. Khodorkovsky’s arrest was justified on this basis, as were all of Putin’s toxic moves towards dictatorship. We were induced by traitors like Professor Bean (whether they are motivated by mere ignorance, cowardliness or complicity makes no difference) to drop our guard and let Putin consolidate his power — exactly what happened with Stalin and Hitler as well. And how they’re doing it all over again, this time in regard to Medvedev. They want us to wait until he’s firmly entrenched before we even consider recognizing the threat we face.

It means nothing to Professor Bean that Medvedev participated in an election where (a) all the viable opponents were liquidated and (b) the ballot box was horrifically stuffed, to the point where he won with over 90% of the vote in some regions. In exactly the same way, it meant nothing to the collaborators that Vladimir Putin was a proud KGB spy, and still doesn’t. As they would have it, once given power some magical transformation occurs and these individuals suddenly become stalwart defenders of the rule of law. That’s neo-Soviet propaganda, pure and simple. It’s what destroyed the USSR, preventing it from implementing real reform (or even calling for it) and it will do the same thing to Russia.

To say nothing of the contents of this blog, just read through out current issue today. If you can do that and then read Professor Bean’s revolting nonsense with losing your lunch, you may have what it takes to report for duty at Vladimir Putin’s Kremlin. It’s a well paying position, as long as you don’t count the collateral damage to your soul.

There is an easy way of testing whether a nasty little troll like Professor Bean is speaking in good faith or not. He says we needn’t fear Putin based on his current record. OK, fine. But what would Putin have to do to make Professor Bean believe that the time had come to fear him. If he tells us, he lays down a benchmark he can be held to later, and we should respect his opinion. If he doesn’t, the no matter what Putin ever does Professor Bean can always move the goalposts, just as Chamberlain did with Hitler.

Read his column for yourself, and see whether he offers any benchmarks of any kind. Then treat his views accordingly.

Annals of Putin’s Stormtroopers

As a tourist I would be scared to be in Moscow and have no desire to ever visit there. My colleagues passports were held for ransom by Russian police during sightseeing on Red Square. If you cant trust the police who can you trust in Moscow? Russian President needs to take quick and decisive action to rid itself of widespread corruption at its highest echelons in government especially in its law enforcement agencies to gain the West’s confidence that it is a Just and Social society mindful of it citizens and tourist welfare with a deep sense of Right & Wrong, otherwise it will be continued to be seen as a country reliving its violent and oppressive past.

— Comment on the following story by reader “John”

Business Week reports:

It seemed like any other workday at Togliatti Azot, a giant chemical factory in Russia’s Samara region, on the Volga River 600 miles east of Moscow. Engineers were on their morning rounds, and union representatives had just finished a talk about financial support for newlyweds. Then around 11 a.m., dozens of men dressed in camouflage and toting automatic weapons charged into the administration building. “We thought it was a terrorist attack,” Sergei Korushev, the plant’s deputy director, says of the September, 2005, raid.

In fact, the uninvited visitors were members of the local OMON, Russia’s crack paramilitary police, and detectives from Moscow. They seized thousands of financial documents—evidence, they said, of crimes by management. The police later brought charges of tax evasion and fraud against General Director Vladimir Makhlai and CEO Alexander Makarov, both of whom have since left the country. (Neither could be reached for comment.) While the company has been hit with $150 million in back tax claims, many at Togliatti Azot have their own explanation for the events. “Someone wanted to eat up a very good and very lucrative morsel for their selfish goals,” says Korushev. The plant’s current boss, Yuri Budanov, calls the police probes a “shakedown,” which a local politician links to a rival company.

Budanov and Korushev, like many Russians, believe the police and courts have become weapons in the capitalist arsenal. Some 8,000 companies a year are targets of lawsuits or investigations at the behest of rivals seeking to put them out of business or take them over, the Russian Chamber of Commerce & Industry says. Russians call this process reiderstvo, or raiding. In some of these cases, companies pay off police and courts with a goal of harassing competitors. Often raiders rely on corrupt courts to rule that they are legal owners of a company. In other cases, raiding companies or their agents use legal pressure as a tool to force controlling shareholders to sell their stakes. While targeted companies sometimes don’t know who is behind the legal attacks, the practice is common enough for the Russian press to name the prices corrupt officials allegedly charge for various “services”: Getting police to open a criminal investigation costs $20,000 to $50,000, an office raid is as much as $30,000, and a favorable court ruling runs anywhere from $10,000 to $200,000, according to press reports.

Rampant lawlessness is the No. 1 barrier to Russia’s economic development, says President Dmitry Medvedev. The former law professor, who promised to make law and order a top priority, has coined his first catchphrase, “legal nihilism,” to describe widespread disrespect for the law at all levels of society. Medvedev, who took over the Presidency from Vladimir Putin on May 7, has called for legislation to rein in reiderstvo, and Parliament is debating a 20-year jail sentence for raiders who illegally acquire companies.


Sometimes Russia’s legal shenanigans make global headlines. Oil giant Yukos was broken up and renationalized by the Russian government between 2003 and 2007. Police on Mar. 20 raided the Moscow offices of BP (BP) and its Russian joint venture, TNK-BP. And on Apr. 6, Hermitage Capital Management, a British investment fund, said Russian police, under cover of an investigation for alleged tax evasion, stole documents that were then used in an attempt to defraud the fund. (The police did not comment.)

While such cases capture worldwide attention, reiderstvo more typically targets small and midsize companies in places like Samara. Located on the historic trade route with Asia, Samara has long had a wild streak. In the 17th century, the city—the capital of Samara province—was the base for Russia’s most notorious outlaw, a Cossack named Stepan Razin who held up riverboats. In the 1990s criminality in the region centered on the giant AvtoVAZ car factory in Togliatti, Samara’s second city, where mobsters stole cars and gunned down managers.

These days life is calmer. While assassinations of businessmen and officials still happen, Samara has seen an economic revival in the Putin era. Crumbling 19th century buildings give the city an air of faded elegance, but the streets have been brightened by the arrival of big electronics chains, mobile-phone shops, and Western brands such as Citibank (C) and Adidas. Today, the region’s businesses worry less about mobsters and more about cops and their bureaucratic masters.

That’s certainly the case at Togliatti Azot. Surrounded by Russia’s ubiquitous birch forests, the factory is one of Russia’s most profitable petrochemical plants, producing ingredients for plastics and fertilizer. (Azot means “nitrogen.”) Built in the 1970s with technical assistance from U.S. billionaire Armand Hammer, the plant is relatively modern by Russian standards. The perestroika economic reforms of the ’80s hurt, but the company revived, helped by new partners and markets.

Many credit Togliatti Azot’s survival to fugitive General Director Makhlai. He ran the company during the Soviet era and stayed at the helm when it was privatized in the early 1990s, becoming its largest shareholder. The plant’s staffers are surprisingly loyal to their boss and have organized dozens of demonstrations. Their banners and placards—”Hands off Togliatti Azot!” and “We won’t let the dirty raiders pass!”—make clear what the workers think of the accusations. “If the workforce has come to the defense of the manager, it’s because he isn’t guilty,” fumes Olga Sevostyanova, head of the plant’s trade union.

The police’s case rests on the claim that between 2002 and 2004, the factory sold ammonia at artificially low prices to a trading company in Switzerland. The police maintain the Swiss outfit was a front for Makhlai, and that it resold the ammonia at market prices, pocketing the difference. The factory disputes this and has received backing from experts at the Justice Ministry who support Togliatti Azot’s claim that the police case rests on insufficient evidence. The Samara police declined to comment, as did the Internal Affairs Ministry in Moscow. But Alim Dzhiganshin, investigations editor of the official police newspaper, Shield and Sword, says: “The position of the investigators is close to the truth. [Makhlai] crudely stole from his company, and now he’s trying to blame raiders.”

To be sure, the case against Togliatti Azot is complex, resting on such arcane matters as the fair export price for ammonia. Commentators note that such cases are rarely black and white. “Opening a criminal case is of course a kind of corporate war,” says Boris Titov, head of Business Russia, a lobbying group. “You don’t know who’s attacking whom.”

Murky as it is, the conflict has led to local outrage. “It’s obvious that all signs point to a hostile takeover of the company—a so-called raider,” says Anatoly Ivanov, a deputy of the pro-government United Russia party who represents the city of Togliatti in Russia’s Parliament. He points a finger at Renova, a Moscow-based company owned by Victor Vekselberg, a tycoon with interests in the petrochemicals sector. Renova Group, a minority shareholder in Togliatti Azot, emphatically denies involvement in a corporate raid, while acknowledging past disagreements with the plant’s management over dividends and shareholder rights. “The Renova Group can’t have any connection with the investigation of Togliatti Azot by the law enforcement agencies, because it is a private Russian business group,” Renova told BusinessWeek.

The onslaught of criminal and tax investigations against Togliatti Azot coincided with civil suits affecting it. In 2006 managers were amazed to learn of a case lodged in Ivanovo, near Moscow. In it, one small company accused another of reneging on an agreement to sell 100% of Togliatti Azot’s shares. After the plaintiff presented the court with a share register that appeared to prove the defendant owned the stock, the judge halted trading in Togliatti Azot’s shares. But that was reversed after the company proved the document was forged. In another unsuccessful case, executives say, a plaintiff lodged a lawsuit against Togliatti Azot citing papers that had been taken in the 2005 police raid. “They had documents that this company should never have had access to,” says Oleg Klyukhov, Togliatti Azot’s legal director.

The region of Samara doesn’t lack for other examples of alleged reiderstvo. In the city of Samara, the Smarts cell-phone company could hardly be more different from Togliatti Azot. The plant was a product of the Soviet industrial complex, passing into private ownership as a result of Russia’s controversial privatization process. Smarts, by contrast, is a creature of Russia’s post-communist consumer boom. It has some 4 million subscribers in the Volga region and occupies a shiny office block in Samara. Unlike the gray-haired engineers who head up Togliatti Azot, Smarts’ general director, Andrei Girev, is young, trim, and sharply dressed. But Smarts has one thing in common with Togliatti Azot: For the past three years it has been hit by legal challenges and criminal probes, which Girev calls “a classic raiders’ attack.”

The problems began in 2005, when Smarts was planning an initial public offering. It hired a Russian consulting firm, Marshall Capital Partners, which was working with Sigma, a Moscow investment firm. Smarts alleges that Marshall failed to do what it promised, leading the phone company to terminate the contract. Then the legal troubles began. “It used to be gangsters who ran rackets, and now it’s consultants and lawyers wearing ties, who are civilized on the surface but carry out the same blackmail,” says Girev, who suspects Sigma is acting on behalf of a company that wants to buy Smarts.

A Marshall spokesman said: “For us the case finished a long time ago.” Sigma didn’t respond to requests for comment. But the group has told Russian newspapers it wasn’t involved in a raider attack on Smarts. Sigma says Smarts violated its contract and that Sigma had an option to buy 20% of the company’s shares. Sigma has brought several court cases against Smarts but lost appeals last year.

A regrettable, but not uncommon, commercial dispute. Yet what happened next wouldn’t be part of a routine commercial dustup. Smarts’ major shareholder, Gennady Kiryushin, is now under investigation for alleged criminal offenses, including fraud, illegal entrepreneurship, and money laundering. “There is no foundation for the criminal case,” says Kiryushin, who is under legal order to remain in Samara. Girev says the allegations followed threats from individuals who promised to land Kiryushin in jail unless he agreed to sell his shares.


The basis for the criminal claims? Smarts is accused of failing to obtain permits for its base stations, violating licensing rules. Girev admits the company has sometimes operated stations before the licensing process was completed, but only on frequencies already allocated to Smarts. Such technical violations are normally punishable by a fine of $400-$800. The police declined to comment.

Smarts has also been hit with dozens of civil lawsuits in regional courts. These suits, using virtually identical language, ask that trading in Smarts shares be halted on the grounds that a private individual hadn’t honored a contract to sell bonds issued by Smarts. “What does Smarts have to do with this?” Girev asks. In one town, police identified the plaintiff, who said she had been approached by a stranger in a park and offered 5,000 rubles ($200) to sign a form. In another, the plaintiff died three weeks before the case was filed. While a few judges initially ruled against it, Smarts has been able to reverse the decisions by arguing the cases were frivolous. “We win in the end. But then, in another part of Russia, exactly the same thing happens,” says Girev.

With thousands of such cases across Russia, executives and entrepreneurs are pressing for action. Yet it’s doubtful that new legislation alone will solve the problem. After all, some tools in the reiderstvo playbook—corruption of courts and prosecutors, forgery, and bribery—have always been illegal. What’s needed is a cleanup of the culture of lawlessness—and it’s not clear Russia’s new President has the clout to do that.

Bovt on Medvedev and Russia’s Future

Georgy Bovt, writing in the Moscow Times:

Two years ago, I met with a high-ranking Kremlin official who confidently asserted, “The next president will surely become more of a moralist than former President Vladimir Putin, who is not suited to that style of behavior.” Now, Dmitry Medvedev has become president, but he has yet to mention the issue of morals or ethics in society. In fact, it is hard to picture Medvedev speaking with enthusiasm on such topics, arguing over an ethical issue or driving home a convincing point on morality.

Furthermore, his professional record does little to support the claim that he will become a president committed to morality. A lawyer by profession, he is accustomed to responding to the letter of the law, and not the underlying moral framework. A career bureaucrat, his logic follows a dry pattern of reasoning divorced from emotion. His manner and style are more suited to conducting a routine meeting of bureaucrats than to addressing mass meetings and inspiring his listeners to uphold high standards of integrity and fairness.

Meanwhile, there is a widespread feeling that not all is well with the country — particularly as far as morality is concerned. A VTsIOM survey conducted last year revealed that a majority of Russians feel the moral and ethical climate in society has worsened over the last 10 to 15 years. Fifty-four percent of respondents agreed that Russians had become more cynical, while over 60 percent felt that they displayed less honesty, goodwill, sincerity, generosity and mutual trust than before.

As a result, the issue of morality is being addressed more frequently in public forums. This stems in part from the fact that there is little to discuss about the country’s political system because it is entirely predictable and held under tight Kremlin control. Also, people understand that Russia has lost its moral foundation. We see this not only in national survey results, but also in the enormous level of corruption permeating every level of society. We also see a decline in the educational system over the last 15 years and an increase in the level of rudeness we encounter from others in everyday life, in the beer cans and liquor bottles littering our parks and public squares, in the aggressive and rude driving habits of motorists, and in countless other ways.

Public initiatives to address the morality problem appear sporadically. For example, to combat the alarming rise in drug addiction, the Interior Ministry proposes testing students for drug use. The Public Chamber is discussing the possibility of chemically castrating pedophiles to address the 26-fold increase over the last five years in sex crimes committed against children across the country. In addition, Lyudmila Verbitskaya, president of St. Petersburg University and a friend of Vladimir Putin’s family, proposes creating a commission on morality.

But most of these initiatives — and especially those proposing controls over the media and the Internet — would place the burden of defending morality on the state. According to polls, over 70 percent of Russians believe that the state should play the leading role in maintaining morals and ethical standards. But what about churches? And the media? And what about the members of society itself, especially the active members of nongovernmental organizations who could apply their creative talents to make their country cleaner, kinder, more honest and generous?

Apparently, very few people believe that these organizations hold responsibility for society’s moral health. This means that the situation will only worsen in the near future, as neither Putin nor Medvedev put morality and ethics high on their political agendas.

Annals of Neo-Soviet Persecution

Epoch Times reports:

Lidiya Talaizadeh (Lidia Louk, pictured above), an Epoch Times reporter and NTDTV correspondent, who was returning to New York City from Moscow, was released by Russian authorities after she mysteriously vanished in late May of this year. Ms. Talaizadeh was pulled from her plane before its departure by Russian officials.

On May 21, Russian Epoch Times reporter Juliana Kim dropped her colleague, Ms. Talaizadeh, off at Sheremetyevo 2 Airport so that she could catch the 3:30 p.m. flight to JFK. Later, Kim received a SMS text message from Ms. Talaizadeh saying, “They took me off the flight.” Her friend tried to call her back, but the phone went straight to voicemail repeatedly, indicating that the phone had been turned off.

Customs and Security officials at the Moscow airport have a different story. They say they have no record of anyone being pulled off any flights or any flights being detained.

Aeroflot airlines would not confirm whether Ms. Talaizadeh had boarded the flight or not. They said they could not release that information to anyone but her husband, Mr. Amir Talaizadeh.

Mr. Talaizadeh in New York called Aeroflot twice to confirm that his wife had boarded the flight. The representatives at Aeroflot refused to release any information without a confirmation number, despite Mr. Talaizadeh reminding them of the legal requirement to release information to the immediate family.

Seeking help from the Russian Consulate in Manhattan, Mr. Talaizadeh was told the only thing he could do was to fill out a form stating what had transpired. The form would be responded to, at the earliest, in 10 days.

According to Mr. Talaizadeh, “It was clear to me that the Russian Government had detained her and was controlling, from behind the scenes, the information that Aeroflot released.”

Mr. Talaizadeh believes he knows the reasons for her disappearance. “My wife practices Falun Gong, he explained, “and that practice is being severely persecuted in China; she was being detained because the CCP has close ties to the Russian government and is trying to export the persecution to other countries such as Russia.

“Other Russian practitioners had been detained before and several Chinese practitioners who held UN refugee status were illegally deported back to China.”

Tailing and Intimidation

Mr. Talaizadeh explained that Ms. Talaizadeh had gone to Russia in order to act as the host of the Shen Yun Chinese Spectacular show in St. Petersburg, which was to be held the first week of April.

In late March, Ms. Talaizadeh and the contact people for the show in Russia were informed that they could not hold the show unless they removed the content about Falun Gong. Eventually, it was decided by NTD that they could not guarantee security for the dance company and NTD staff, and the show was cancelled. Ms. Talaizadeh was trying to resolve these issues.

She had also been working on an appeal process to Article 8. Article 8 is a treaty that was signed by then President Putin and then head of the Communist party Jiang Zemin. Within the treaty, there was language that specifically states that any organization banned in China would be banned in Russia.

“My wife had met with several attorneys, ” continued Mr. Talaizadeh, “and a number of government officials regarding Article 8 and the persecution of Falun Gong in China. As a result of this, and her initial work with the organization of the Shen Yun Show, she noticed she was being followed by Russian agents.

They were not being inconspicuous in any way and made their presence known to her by giving her eye contact when each began his shift, and subsequently followed her wherever she would go as an obvious ‘tail.’ It was an obvious that the Russian Government was trying to intimidate her while also observing what she was doing.”

The detention on May 21 was not the first for Ms. Talaizadeh in Russia. She was detained for holding a Falun Dafa Hao (Falun Dafa is Good) banner at the Olympic Torch Rally in St. Petersburg.

“No reason was given for the detention, says Mr. Talaizadeh. “Several other practitioners who were also at the event without any identifying Falun Gong dress were nonetheless identified and pulled out of lines at the event and also detained for several hours and released.

“Individuals within the Russian Government know that Falun Dafa practitioners are good people, yet the way the Russian Government reacts and follows orders from the CCP is wrong, illegal, and puts its future in jeopardy—after all the CCP itself is collapsing inside China,” Mr. Talaizadeh continued.

Mr. Talaizadeh is grateful for his wife’s imminent return, but wonders how Russia can successfully abide by a “crazy” law to appease the CCP regime, while still looking sane to the rest of the world

Russia: Carbon King

The Moscow News reports:

Selling mortgages to people who can’t pay them back turned out to be a bad way of doing business in the long run. But inflated credit rates are nothing compared to the droughts, plagues, floods, forest fires and general death and destruction which may be the long-term effects of companies churning out carbon emissions with no thought to their long-term impact on the environment. This lack of foresight could lead to the most wide-ranging market failure ever according to Lord Nicholas Stern, author of an influential economic report on global warming, who will be speaking at this year’s Forum. And while Russia’s emissions are lower than Kyoto treaty targets, Russia remains one of the least energy efficient economies in the world. Worse still there is evidence that Russia is bearing the brunt of global climate change.

Stern’s review provides an apocalyptic account of the dangers of global warming; asserting that governments and businesses must act now to combat climate change or face devastating economic consequences. The report predicts that a rise of five degrees Celsius in the average global temperature could result in a loss of up to 10 percent of global output while the extreme weather patterns associated with such a rise could cost up to 1 percent of GDP.

This rise could happen within the next few decades according to a recent assessment made by the Intergovernmental Panel on Climate Change which predicts a warming of about 0.2°C per decade for next two decades. Eleven of the last twelve years (1995-2006) rank among the twelve warmest years since records began in 1850.

There is evidence that Russia is already suffering from the changing global climate; the annual number of natural disasters, such as floods and forest fires, in the country has doubled since the mid 1990s leading to an annual loss of between 2 and 4 percent of GDP.

In 2004 the Russian government formally recognized the growing problem of climate change by signing up to the Kyoto treaty, which aims to reduce global greenhouse gas emissions from industrialized countries to 5.2 percent below what they were in 1990. Russia’s current emission levels are well below the quota set for the country under the treaty. However this apparent success disguises the fact that Russia remains the third biggest air in the world polluter after China and the U.S.

The main reason why Russia has been able to keep to emissions targets is because the collapse of the economy in the 1990s led to a massive decline in industry and therefore carbon emissions and the country is only beginning to catch up:

“Russia has 27 percent less emissions than it had in 1990s,” Vladimir Chuprov, head of the energy department of Greenpeace, told The Mos­cow News.

“But it is predicted to produce 2.4 billion tons of CO2 emissions by 2025 which means that Russia will not decrease its emissions but just use the quota it received after the collapse of the Soviet Union.”

Swamped with natural oil and gas resources, it is understandable why energy efficiency has not been high on the agenda for Russia. But as the country’s domestic fuel consumption steadily increases in step with the rise in GDP, action will need to be taken in the Russian energy sector in order to meet both its domestic needs and its export obligations.

Director Jeroen Ketting, director of Lighthouse Energy Investments, a group which carries out energy efficiency, heat and power generation projects in Russia, told The Moscow News:

“Russia uses three to four times more energy per produced dollar of GDP than other industrialized countries, and industrial production and thus energy consumption is increasing. But 50 percent of industrial equipment installed is old and inefficient and the energy infrastructure is deteriorating. Moreover, Russia has a lot of gas and oil reserves but its capacity to produce and to transport oil and gas are limited. With increasing domestic and international demand and with existing export commitments Russia’s energy household is stretched to its very limits.”

There is a worry that Russia will try to fill this energy shortfall in the same way that China has; by increasing the use of coal in the energy mix. This would come as a blow to environmentalists as burning coal seriously affects both the climate and human health. Just one 150-megawatt coal-fired power plant produces more than one million tons of greenhouse gas emissions per year; the amount that 300,000 cars would produce. The large quantities of sulfur dioxide, nitrogen oxides and particulate matter that these plants produce have also been shown to cause respiratory problems and even premature death.

Russia is currently planning to triple the share of coal in the energy mix so that the amount of coal burnt will grow to between 150 million and 290 million tons of coal per year by 2020. This switch to coal to meet domestic energy demands is expected to boost the Russian economy by 30 percent but could lead to serious problems for the Russian population:

“The new coal-fired power plants will be constructed near consumers, near big cities, and some scientists are forecasting a dramatic growth in extra mortality rates. There is currently no real strategy for avoiding the growth of sulfuric and nitrous pollutants that will be emitted from these plants,” said Chuprov.

However, as Europe has demonstrated, there is a way for economic growth to go hand in hand with a decline in greenhouse emissions if significant energy saving policies are introduced. CO2 emissions in Central Europe fell by over 43 percent in relation to GDP between 1990 and 2002 through implementing such measures, according to figures from the U.S. Energy Information Administration. The Russian government has calculated that the country could save up to 40 percent of its current annual energy consumption through improved efficiency.

Converting to energy efficient technology can be costly but fortunately Russia can receive financial help to cover these costs under the Kyoto agreement. This allows countries to lower the costs of meeting their own emissions targets by investing in greenhouse gas reductions in other countries where reductions are cheaper through Joint Implementation (J.I.) projects.

Russia has the largest potential for generating carbon credits through of all Kyoto signatories, according to IFC international, a company which provides energy consulting to governments.

“In principle the potential for J.I. projects in Russia is huge,” explained Morten Prehn, Director of Core Car­bon Group which currently leads the supply of Russian emission reductions to the international market.

“We support the type of investments that have good long-term benefits for Russia and we are also willing to take a risk in providing the capital for implementing some of these projects,” said Prehn.

Several J.I. projects are already successfully underway in Russia including a project supported by the Russian Carbon Fund (an investment company backed by Merrill Lynch & Co.) to cut greenhouse-gas emissions at a plant owned by Russia’s biggest producer of phosphate fertilizer. But according to the Stern report one percent of GDP needs to be invested annually in order to avoid the worst effects of climate change and so far Russia is still a long way from reaching this figure:

“Formally the government recognizes the need for enhancing energy efficiency but in practice very little effective action is undertaken,” Ketting said.

“Also among big business the need for energy efficiency is not sufficiently recognized. In a country where money is easily made selling off national assets on the cheap the understanding that a ruble saved is a ruble earned is still far away.”

Putin Lies, and then he Lies Some More

Reuters reports that a Kremlin official has admitted that Russia alters its economic data to suit the whims of the dictator who rules it:

A deputy chairman of the Russian central bank, Konstantin Korishchenko, said on Thursday its 10.5 percent inflation forecast for 2008 was “politicised”, but that the bank was unlikely to change its estimate.

Annualised inflation has already exceeded 15 percent in Russia, and the Organisation for Economic Co-operation and Development has predicted it will reach 13 percent in 2008 but officials stick to artificially low inflation forecasts. Korishchenko told the lower house of parliament the central bank’s CPI inflation estimates “are indeed politicised” but that he did not see the forecast being altered. His critical comments are rare for a Russian central bank official.

He said increased volatility among factors that influence inflation had caused the quality of forecasts to deteriorate. “Our forecasting is based on statistical models. When sharp fluctuations of mathematical models’ parameters are taking place, the forecasts’ quality is going down,” Korishchenko said. “The quality of any forecast in such an environment will be low.”

Opinion polls show growing concern about rising food prices but, with political life tightly controlled by the Kremlin, Russia is unlikely to face popular protests like those seen in other emerging countries.


Korishchenko said exchange rate policy, food price rises, and excessive budget spending were to blame for Russia missing its inflation target by a wide margin in 2007. The Russian central bank is by law independent of the state, with its main goal being to ensure exchange rate stability rather than to fight inflation. “Inflation rates are currently in contradiction with exchange rate policy goals … As they say, it is easier to enter the corridor than to exit it,” Korishchenko said, referring to the central bank’s managed float policy. The central bank keeps the rouble in a corridor against a dollar/euro currency basket. A freely floating currency would give the bank more leverage over the economy via interest rate changes but would increase exchange rate volatility.


The central bank has said it will widen the rouble corridor to allow more fluctuation. Since the currency is under appreciation pressure from energy export revenues and capital inflows, such a policy would effectively amount to revaluation. Many investors are betting on the central bank revaluing the currency in the near-term to fight inflation. Korishchenko said the widening of the corridor will be “gradual and slow”. Korishchenko said he did not rule out a further increase in mandatory reserve requirements, which define how much money commercial banks should set aside on their operations. “If capital inflows continue at the current rate, I do not rule out (that) reserve requirements will be raised again,” Korishchenko said, noting that such requirements were much lower in Russia than in China. The central bank, worried about galloping inflation and fast lending growth, said last month it will aggressively raise bank reserve requirements from July 1 in order to curb inflation. Korishchenko said state-controlled corporations increasing their foreign debt were the main source of capital inflows, and conceded that the central bank was powerless to act. “This is not our sphere of regulation,” he said.

Isn’t She Lovely?

To have watched the French Open ladies’ finals live in California, you’d have needed to wake up at 6 am.

To see it live, you’d have needed to pay more than $100 to sit in the uppermost tier of the stadium, where the players would barely be distinguishable. To see them up close, you’d need to pay well over $1,000.

Would it have been worth it?

Well, you wouldn’t even have seen a match between top-ten players, much less any of the three really compelling superstars of the game (Henin and the two Williams sisters). You’d have seen world #2 Ana Ivanovic go up against lowly world #14 Dinara Safina. You’d then have seen five breaks of serve in the opening set (which consisted of just ten games), with one-third of its points ending in unforced errors. You’d then have seen Safina go down in easy straight sets, just as the seeding would have predicted.

The last time a French Open women’s match went three sets was 2001, when an American and Belgian were playing. We dare you to name the last time two Russians delivered a world-class match late in a Grand Slam event.

At least when Sharapova loses, though, Russians get to talk about how pretty she is. With Safina . . . well, you be the judge.

Yum. Pretty in pink!

Isn’t she lovely?

Thank heavens, for little girls . . .

Imagine how many marriage proposals this goddess must get each week

You can tell all you need to about Safina’s style of play from her photographs. She stands there and bashes the ball in an apelike manner. Not exactly compelling for a spectator. And unfortunately not much of a “well, she’s a nice little piece of ass” fallback position, either. As we’ve said before, the Russian contingent is destroying the women’s game.

In Russia’s defense, though, it should be noted that few Russians would recognize a person with a name like “Safina” as actually being Russian (certainly not Slavic), and Safina spends most of her time in Spain, where she perfected her game. She lives in Monaco, preferring tax convenience to patriotism, it seems.

So by all means let’s not forget to discuss the Queen of Russian beauty, the mother of all tennis babes, Sharapova. Here she is in all her regal splendor discussing her humiliating loss to Safina (the only way one superhuman Russian can lose, of course, is by being beaten by another):

Is she actually sporting five o’clock shadow?
Soon it’ll be all the rage in Paris!

Well, she air-brushes really well, anyway.

Non-top-ten Safina also humiliated Russia’s #2 player, Svetlana Kuznetsova, who was able to win only four games in their semi-finals match. If you payed big bucks to watch that, you were also rather disappointed, to say the least (the other semi-finals match, between two Serbians, went three sets). Kuznetsova, of course, being another one of Russia’s “dominating” beauties:

Sharapova, meanwhile, lost her “#1” ranking for the second time almost as soon as she received it, being replaced by Ivanovic. Sharapova has never won a tournament while ranked #1 in the world — no Russian ever has.

Russians bootstrapping themselves deep into grand slam events by playing each other. If it’s the future of women’s tennis, time to see what’s on the golf channel.