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Newsline - July 12, 2005


INVESTIGATION OF FORMER PREMIER THREATENS TO ACQUIRE POLITICAL DIMENSION...
As the Russian media reported the investigation of former Prime Minister Mikhail Kasyanov's alleged illegal purchase of his dacha (see "RFE/RL Newsline," 11 July 2005), investigative journalist and Duma Deputy Aleksandr Khinshtein (Unified Russia), who initiated the Prosecutor-General's Office probe of Kasyanov, has not disguised the case's political coloring, newsinfo.ru reported on 11 July. Khinshtein said that the investigation is a "preemptive" measure to make clear to Kasyanov that the Prosecutor-General's Office can find much more serious charges if Kasyanov decides to run for president in 2008. Khinshtein published on 3 July in "Moskovskii komsomolets" an investigative article in which he accused Kasyanov not only of buying for $1 million a state dacha worth $28 million, but also of helping to make an equally illegal deal for AlfaGroup head Mikhail Fridman. The Prosecutor-General's Office confirmed on 11 July it has opened a criminal case against Kasyanov and announced it has also opened a case against the state official, Ramil Gaisin, who sold Kasyanov and Fridman their dachas, RIA-Novosti and "Rossiiskaya gazeta" reported. "In all my years in the civil service, I never founded any commercial organizations or owned shares or stakes in any firms," polit.ru quoted a statement released by Kasyanov's press secretary as saying. The secretary added that Kasyanov, who is now on vacation abroad, will not interrupt his holidays and will return home as planned on 25 July, and he noted that Kasyanov continues to view Russia's current political course as mistaken. VY

...AS MOST OBSERVERS SEE KREMLIN BEHIND PROBE
Union of Rightist Forces (SPS) activist Leonid Gozman said on 11 July that the investigation is "an attempt to intimidate" Kasyanov and that it can only result in increasing his political stature, polit.ru reported. Another SPS leader, Boris Nemtsov, said that the persecution of Kasyanov "will backfire on the Kremlin's bosses who organized it together with the special services," polit.ru reported. Communist Party leader Gennadii Zyuganov said he's not ready to give a legal evaluation of the case, but "as for settling political scores, this is widespread in our country, and in the last 10 years prosecutors and courts have many times used this as an axe or a hammer to bash all undesirables on the head," he said. Russian Union of Industrialists and Entrepreneurs (RSPP) President Arkadii Volskii said that Kasyanov should bear responsibility if he is found guilty, polit.ru reported. "I would ask the commentators to refrain from searching for background motivation in Kasyanov's case. It is and should remain in the legal sphere," he said. However, pro-Kremlin political analyst Sergei Markov said on 11 July that the criminal case "is a preemptive strike against oligarchs," polit.ru reported. "The case against Kasyanov is a strike on holdovers of [former President Boris] Yeltsin's 'Family' who are preparing a political crisis in the country," he commented. VY

ANALYST SHEDS LIGHT ON PERSONAL RELATIONS BETWEEN PUTIN, KASYANOV
Political analyst and National Strategy Institute founder Stanislav Belkovskii said on 11 July that President Vladimir Putin ordered law-enforcement agencies to go after Kasyanov two months ago, just after it became clear that the former prime minister who aspires to head the united anti-Putin opposition, apn.ru reported. However, Belkovskii added that the current attack on Kasyanov will bring no political benefit to the Kremlin, because since the case of former Yukos CEO Mikhail Khodorkovskii it has become obvious to the public that Putin uses the judiciary not in the interests of the country, but for settling accounts and reaching commercial goals. "Everybody understands that even if the dacha is taken away from Kasyanov, it will be done not to reverse the illegal privatization of the most valuable property in the Moscow area, but just to put there, say, [presidential adviser] Igor Sechin or Putin's Labrador, Connie," he said. In relations between Putin and Kasyanov there is room for personal emotions, he added. Kasyanov is offended that Putin ousted him before his term was finished on 30 June 2004, and Putin is suspicious of anyone who has reason to be offended by him, Belkovskii said. VY

PUTIN WARNS AGAINST INFLATIONARY BUDGET SPENDING
President Putin on 11 July intervened in the dispute between the government and Unified Russia leaders in the State Duma over the draft 2006 budget (see "RFE/RL Newsline," 8 July 2005). Speaking at his regular Monday meeting with cabinet ministers, to which he also invited Duma leaders, Putin said he is not against a "development budget" -- shorthand for one that increases spending on investment projects -- but cautioned that "it should not be a squandering budget," Russian news agencies reported. Putin reminded those present of the high inflation rates of the 1990s and warned the government not to deviate from the "line that was chosen five years ago," which gradually has brought inflation rates down. "Kommersant-Daily" on 12 July declared Finance Minister Aleksei Kudrin the winner from the meeting, arguing that Putin in effect "put down the budget putsch" launched by Unified Russia leaders. Immediately following the cabinet meeting, Kudrin and Economic Development and Trade Minister German Gref went to the Federation Council to present leaders of the upper chamber with the same draft 2006 budget parameters they presented to Duma members a few days earlier, "Kommersant-Daily" reported. LB

PENSIONS TO GO UP IN AUGUST
Prime Minister Mikhail Fradkov on 11 July signed a government directive increasing the base rate used to calculate wage pensions by 6 percent and the rate used to calculate the insurance portion of pensions by 10.8 percent, effective 1 August, RIA-Novosti reported. According to the government's press service, the average monthly wage pension will be 2,745 rubles ($95) after 1 August, up from 2,217 rubles at the end of 2004 and 2,521 rubles as of 1 March 2005. That increase is faster than the government's target rate of 10 percent inflation for 2005, but just barely keeps up with the rate of inflation for food products, which has been projected at 20 percent for the year (see "RFE/RL Newsline," 8 July 2005). Veterans of World War II and those wounded during their military service will receive larger pension hikes. Meanwhile, Health and Social Development Minister Mikhail Zurabov told journalists on 11 July that the average pension will rise to nearly 4,000 rubles by 2008, RIA-Novosti reported. The federal budget's Stabilization Fund, which receives excess revenues linked to high oil prices, will finance the pension increases, Deputy Prime Minister Aleksandr Zhukov told RTR on 10 July. LB

DEFENSE MINISTER SAYS NOT INTERESTED IN RUNNING FOR PRESIDENT...
Defense Minister Sergei Ivanov, in an interview with the Spanish daily "El Pais" on 10 July while on a three-day visit to Spain, said he is not thinking of running for president in 2008. "This topic does not concern me. I have pretty close and confidential relations with [President Putin], who gave me a deadline and asked me to solve the complicated problem of modernizing the armed forces," he said. "If I think about other things, I will not complete my main task," added Ivanov, whom many consider Putin's likely successor. Ivanov also said that as a KGB veteran he feels a special responsibility for the country and that his former colleagues have the same vision. "Serving in state security, you are used to giving realistic estimates, not wishful thinking. There is less self-delusion and a sharper feeling of danger." Talking about Chechnya, Ivanov called it "a result of the collapse of the Soviet Union, a shot in the head." "Nobody wants to revive the Soviet Union, but now there is the need to develop the economy with the understanding that stability and investments will come if security is guaranteed," he concluded. VY

...OUTLINES VIEWS ON POSTSOVIET SPACE...
In the same "El Pais" interview, Defense Minister Ivanov said that Russia will fortify its border with Georgia and deploy two brigades there because "Georgia is a weak, corrupt state." "In the mountains of Chechnya, dozens of foreign mercenaries have been exterminated while trying to cross or after crossing the border from Georgia," he said. He also described as "a lie" the claim that Uzbek troops fired on a peaceful demonstration in Andijon in May. "It was a planned, armed riot with foreigners involved," he said. VY

...AND SAYS RUSSIA HAS NO AREA FOR PRACTICAL COOPERATION WITH NATO
Defense Minister Ivanov also said in the "El Pais" interview on 10 July that he has not seen areas where the Russian military and NATO can cooperate. "It is out of the question in Iraq and for historical reasons in Afghanistan, although we provide assistance there," Ivanov said. He added, however, that the progress in relations between Russia and NATO " was unimaginable only five years ago, but the unification of our military potentials is unrealistic." While in Spain, Ivanov discussed with his Spanish counterpart Jose Martinez Bano joint military exercises in 2006 and military cooperation between the two armed forces. VY

MORE THAN 20 DEAD IN FIRE REPORTEDLY SET BY TEENAGERS
At least 25 people have been killed and dozens hospitalized, some in critical condition, after two teenagers on 11 July allegedly threw a Molotov cocktail inside a crowded shop in the city of Ukhta, Komi Republic, according to Emergency Situations Ministry spokesman Viktor Beltsev, kominform.ru and Russian media reported. Witnesses told Ekho Moskvy that most of the victims died from the fire following the explosion and that the number of victims would have been smaller if rescue teams had arrived on the scene in time. The local directorate of the Federal Security Service (FSB) is investigating the incident and searching for suspects. Federal and local law-enforcement agencies have categorically ruled out terrorism, Ekho Moskvy reported. VY

'MOSKOVSKIE NOVOSTI' APPOINTS NEW GENERAL DIRECTOR
Sergei Gryzunov has been named the new general director of the weekly "Moskovskie novosti," Russian news agencies reported on 11 July. Gryzunov chaired the State Press Committee in 1994 and for the first half of 1995, during which time he was highly regarded in Moscow's journalistic community. After working for the U.S.-based pharmaceutical company ICN for several years, Gryzunov served as vice president of the Moskovskie novosti publishing house from 2001 to 2003. Speaking to journalists on 11 July, Gryzunov said the executives running "Moskovskie novosti" are discussing candidates to replace Yevgenii Kiselev as editor in chief and hope to make an announcement by 18 July, Ekho Moskvy and lenizdat.ru reported. (Ukrainian media magnate Vadim Rabinovich, whose Media International Group purchased "Moskovskie novosti" earlier this month, had previously announced plans to appoint a new editor in chief on 11 July.) Gryzunov asserted that the newspaper cannot afford to make "another mistake" and explained that the previous "big mistake" he had in mind was the dismissal of Viktor Loshak as editor in chief in September 2003. Loshak is now editor in chief of the magazine "Ogonek." LB

CHANNEL ONE CANCELS POLITICAL PROGRAM
Russian Channel One has dropped Svetlana Sorokina's political talk show "Osnovsnoi instinkt" from its schedule for the coming season, "Izvestiya" media commentator Irina Petrovskaya announced during a 9 July interview on Ekho Moskvy. Petrovskaya asserted that network executives and Sorokina reached the decision mutually. Sorokina "was very dissatisfied" with the limits on her program, "especially lately, during the most recent season," Petrovskaya said, adding, "As I understand, the limits were fairly strict." Although Sorokina could influence the topics and people covered on her show, Petrovskaya noted, there are "big differences" between a person who is "free" and a person who is "not free." She expressed the hope that Sorokina will launch a new show, but "of course not a political one, because the possibilities in that direction are significantly restricted on state television channels." Sorokina became a star as a news anchor on state-run RTR during the early 1990s. She worked for many years at the private network NTV, then for less than a year at TV-6, then for less than a year at TVS before launching "Osnovnoi instinkt" on ORT in March 2003. LB

WEEKLY DETAILS ABRAMOVICH'S LEGAL WOES
Boris Berezovskii's lawsuit in a British court against his former business partner Roman Abramovich will seek billions of dollars in damages and could inspire other legal action that "ruins" Abramovich, "Novaya gazeta" reported in its 11 July issue. The lawsuit will charge that Abramovich communicated Kremlin threats to imprison Berezovskii's friend and partner Nikolai Glushkov, forcing Berezovskii to sell Abramovich a 49 percent stake in the ORT network for only $170 million. Similarly, Berezovskii claims that pressure forced him and Badri Patarkatsishvili to sell a 50 percent stake in the Sibneft oil company for $1.3 billion at a time when the company was worth $15 billion. Finally, Berezovskii claims the price Abramovich paid for his shares in the Rusal company was at least $600 million below their market value. In the same article, "Novaya gazeta" reported that Abramovich may face legal action from the European Bank for Reconstruction and Development in connection with an unpaid loan issued to the Swiss firm Runikom, of which Abramovich is a director. Abramovich owns a vast estate in West Sussex, England, and reportedly has transferred most of his wealth to the United Kingdom. LB

PROTESTERS STORM LOCAL GOVERNMENT OFFICE IN INGUSHETIA
An unspecified number of outraged local residents stormed the office of Karabulak Mayor Ibragim Arsamakov on 11 July after he refused to meet with them to discuss their complaints about the distribution of land plots and about corruption among local officials, ingushetiya.ru reported. The authorities responded by blocking all roads leading to the town; Prime Minister Ibragim Malsagov traveled to Karabulak to meet with the protesters, who dispersed following the announcement of Arsamakov's dismissal "due to his incorrect approach to resolving the population's problems." Opposition leader Bekbulat Gorchkhanov told ingushetiya.ru that people are so angered by high-level corruption and by President Putin's renomination last month of Murat Zyazikov to serve a second term as Ingushetian president that a revolution could erupt at any time. The Ingush opposition pledged after the republic's parliament confirmed Zyazikov's renomination that it will continue to observe the three-month moratorium on protest actions against Zyazikov that it announced in early June, ingushetiya.ru reported on 5 July. LF

SLAIN MILITANT'S GROUP NAMED RESPONSIBLE FOR HIGH-PROFILE KILLINGS IN DAGHESTAN
Daghestan's Interior Minister Adilgirey Magomedtagirov told journalists in Makhachkala on 11 July that the so-called Shariat Djamaat group of militants is responsible for the murders of Nationality Policy, Information, and External Ties Minister Zagir Arukhov in May and of political commentator Zagid Varisov on 5 July, and for the 1 July bomb attack in Makhachkala that killed 10 Russian servicemen, Interfax and lenta.ru reported (see "RFE/RL Newsline," 23 May and 7 July 2005). Shariat Djamaat was headed by Rasul Makarsharipov, who was killed in a shootout with police in Makhachkala last week (see "RFE/RL Newsline," 7 July 2005); the Chechen website chechenpress.com on 12 July confirmed his death. Also on 11 July, police in Daghestan apprehended another member of Shariat Djamaat, Russian media reported. LF

DEPUTY PROSECUTOR-GENERAL ADMITS MORTAR FIRED AT BESLAN SCHOOL
Deputy Prosecutor-General Nikolai Shepel has admitted that Russian troops opened fire from an antipersonnel Shmel mortar on the Beslan school where Chechen militants held some 1,000 pupils and teachers hostage last September, lenta.ru reported on 11 July. But at the same time Shepel insisted that such a weapon could not have caused the blaze that killed many of the victims. Shepel also denied that Russian forces during the siege used any weapons banned by international conventions. In an interview published on 28 June in "Vremya novostei," Stanislav Kesaev, who heads the North Ossetian parliamentary commission investigating the circumstances of the Beslan hostage taking, said that flamethrowers were fired at the besieged building. Kesaev added that he personally saw Federation Council member Oleg Panteleev find the discarded tubes from such weapons, which according to Kesaev disappeared after they were handed over to investigators. LF

ARMENIAN OPPOSITION BLOC REJECTS PROPOSED DRAFT CONSTITUTIONAL AMENDMENTS
Following a three-hour discussion on 11 July, representatives of the nine Armenian opposition parties aligned in the Artarutiun bloc said the most recent version of the proposed amendments to the constitution, which were submitted to the Council of Europe's Venice Commission last week (see "RFE/RL Newsline," 11 July 2005), do not fully meet the opposition's three key demands, RFE/RL's Armenian Service reported. Opposition representatives pointed out that under the revised amendments, the president cedes to the parliament the power to sack the prime minister, but remains empowered to dissolve the parliament if legislators twice reject his successive proposed candidate for prime minister. They also noted that the revised amendments provide for the mayor of Yerevan to be elected by the municipal council, whereas the opposition insists that the mayor should be elected by the city's population. LF

ARMENIA SAYS KARABAKH SETTLEMENT CLOSE...
Armenia and Azerbaijan have reached agreement on the key points of a formal peace accord ending the Karabakh conflict, and that agreement could be signed by the end of this year, RFE/RL's Armenian Service reported on 11 July, citing unnamed senior officials. Under that deal, Armenia would return to Azerbaijani control five of the seven districts adjacent to Karabakh currently controlled by Karabakh Armenian forces, not including the strategic Lachin corridor. A peacekeeping force composed of troops from countries that are not members of the Organization for Security and Cooperation in Europe (OSCE) Minsk Group would be deployed in the conflict zone. Then, after 10-15 years, the population of the unrecognized Nagorno-Karabakh Republic would be required to vote in a referendum on whether the region should become independent, become a part of Armenia, or revert to Azerbaijan. LF

...AS OSCE MINSK GROUP HOLDS TALKS IN AZERBAIJAN
The French, Russian, and U.S. co-chairmen of the OSCE Minsk Group met on 11 July in Baku with Azerbaijani President Ilham Aliyev and Foreign Minister Elmar Mammadyarov to discuss the ongoing search for a solution to the Karabakh conflict, Azerbaijani media reported. They also met with Nizami Bakhmanov, head of the Azerbaijani community that fled the then Nagorno-Karabakh Autonomous Oblast in 1988. Lider TV and Azad Azerbaycan TV both quoted the U.S. co-chairman, Steven Mann, as saying the group has "serious proposals" for resolving the conflict. Mann did not disclose details of those proposals. Mann also rejected as inappropriate comparisons between the Karabakh conflict and Kosova. LF

WILL FORMER RUSSIAN PREMIER BE NAMED AMBASSADOR TO AZERBAIJAN?
"Nezavisimaya gazeta," which predicted on 29 March the appointment of former Russian Deputy Prime Minister Ramzan Abdulatipov as Russian ambassador to Tajikistan (see "RFE/RL Newsline," 1 June 2005), reported on 12 July that former Russian Prime Minister Viktor Chernomyrdin will shortly be named Russia's ambassador to Baku. Chernomyrdin has served since May 2001 as Russian ambassador to Ukraine (see "RFE/RL Newsline," 11, 17, and 22 May 2001). LF

AZERBAIJANI POLICE FORCIBLY DISPERSE ANTICORRUPTION PROTESTERS
Police in Imishly Raion used force on 11 July to disperse a group of local entrepreneurs who planned to march to Baku to protest pressure from local police and government officials, Turan reported. Several of the businessmen were injured in the fracas. LF

CONFERENCE ENDORSES GEORGIA'S SOUTH OSSETIA PEACE INITIATIVE
Participants at a two-day international conference convened in Batumi by the Georgian government adopted a resolution on 11 July expressing support for the South Ossetian peace initiative outlined by President Mikheil Saakashvili at the UN General Assembly session in September 2004 and to the Parliamentary Assembly of the Council of Europe in January 2005, Caucasus Press reported (see "RFE/RL Newsline," 27 January 2005). The conference participants described the ongoing conflict as posing a threat to the security of the South Caucasus and hailed Tbilisi's stated readiness to form a joint commission to investigate military crimes committed in the course of the conflict. Georgian Prime Minister Zurab Noghaideli was quoted on 11 July by rustavi2.com as saying Tbilisi is now waiting for a response from South Ossetia and Russia to Saakashvili's offer to create a liberal economic zone in South Ossetia. But Yurii Dzisoyty, the deputy chairman of the parliament of the unrecognized Republic of South Ossetia, told Caucasus Press on 11 July that the republic is determined to campaign peacefully for international recognition of its unilaterally proclaimed independence and rejects all forms of common statehood with Georgia proposed by unnamed European experts. LF

KYRGYZ PRESIDENT-ELECT OUTLINES NEXT STEPS...
Kyrgyz President-elect Kurmanbek Bakiev told a news conference in Bishkek on 11 July that he will propose Ar-Namys Party head Feliks Kulov to parliament for the post of prime minister, RFE/RL's Kyrgyz Service reported. The move is in line with a pre-election pact between the two men (see "RFE/RL Newsline," 16 May 2005). Bakiev said that his new cabinet will retain virtually all members of his interim cabinet, although he added that he will take regional factors into consideration to ensure that not all ministers are from the same part of the country. Bakiev also said that he sees no need to dismiss parliament, stressing that economic issues such as increasing production are a first priority, akipress.org reported. Meanwhile, Central Election Commission (CEC) Chairman Tuigunaly Abdraimov said that Bakiev, who was elected on 10 July with roughly 90 percent of the vote amid 75-percent turnout according to official statistics from the CEC, could be sworn into office before 18 August, ITAR-TASS reported. DK

...AND SUGGESTS U.S. BASES MAY BE CLOSED...
Addressing a press conference on 11 July, Bakiev voiced his support for the Shanghai Cooperation Organization's recent call for a timeline for the withdrawal of U.S. forces from Central Asia (see "RFE/RL Newsline," 7 July 2005), Kabar reported. Bakiev noted that the U.S. bases in Kyrgyzstan and Uzbekistan were opened in 2001 to support military operations in Afghanistan. Addressing the issue of military operations, he said, "This is no longer the case. Parliamentary and presidential elections have taken place in Afghanistan. Now we can begin reviewing the issue of the advisability of the U.S. military presence. How and when this will be -- time and the appropriate procedures will show." DK

...AS DOES KYRGYZ ENVOY IN MOSCOW
Apas Jumagulov, Kyrgyzstan's ambassador to Russia, told a news conference in Moscow on 11 July that the closure of the U.S. air base at Manas, Kyrgyzstan is possible in the foreseeable future, agencies reported. Jumagulov said, "The [U.S.] base is changing its purpose in connection with the progress regarding the situation in Afghanistan. Its withdrawal has long been predicted," ITAR-TASS reported. He also noted, "The base will become unnecessary as tension eases in Afghanistan and the situation normalizes," Interfax-AVN reported. Stressing that Russia "was, is, and will be Kyrgyzstan's main strategic partner," Jumagulov said that the Russian base in Kant, Kyrgyzstan "is one of the key military points in the CIS and an alternative should not be sought," ITAR-TASS reported. DK

FORMER KYRGYZ PRESIDENT HINTS AT BETRAYAL BY AIDES, CONGRATULATES SUCCESSOR
In an interview with Russia's "Kommersant-Daily" on 11 July, former Kyrgyz President Askar Akaev suggested that his ouster on 24 March may have stemmed from collusion between his then ministers and the opposition. Akaev said, "Of course, I can't state this now -- I would need facts. But I think that [the leadership of police and security forces] was in collusion with the opposition, and especially with drug barons." Akaev added that the "West showed its active displeasure with my policy of strengthening cooperation with Russia." Nevertheless, Akaev said that he supports the tandem of President-elect Bakiev and presumptive Prime Minister Kulov. Maksim Maksimovich, a lawyer representing Akaev's interests, said that Akaev tried to call Bakiev after the election and left a message of congratulation with an aide, akipress.org reported. DK

UZBEK OFFICIAL RAISES OFFICIAL ANDIJON DEATH TOLL TO 187
Bahodir Dehqonov, the prosecutor of Uzbekistan's Andijon Province, told a press conference in Andijon on 11 July that the official death toll from violent unrest in the city on 13 May has risen from 176 to 187, RIA-Novosti and fergana.ru reported. Dehqonov said that 94 terrorists, 20 law-enforcement officials, 11 soldiers, 57 ordinary residents, and five unidentified individuals died. Dehqonov also played excerpts from a videotape that he said was seized from armed militants and showed them seizing hostages in Andijon on 13 May. Dehqonov blamed the violence on the Islamic Movement of Turkestan (another incarnation of the Islamic Movement of Uzbekistan), Hizb ut-Tahrir, and Akramiya, which he described as an offshoot of Hizb ut-Tahrir. DK

BELARUSIAN PRESIDENT REVEALS HE HAS NO FRIENDS...
President Alyaksandr Lukashenka said in an interview with Russia's TV-Tsentr on 11 July that he has no friends, Belapan reported. Responding to a remark by the interviewer that "the presidency is a colossal solitude," Lukashenka said this description touches a "sensitive spot" in him. "This is the hardest thing, and...it tends to grow," Lukashenka went on. "It is getting bigger and bigger over the years. Vladimir Vladimirovich [Putin], my good colleague and friend, has friends. I cannot boast the same thing." Lukashenka added that he has always envied Moscow Mayor Yurii Luzhkov, who has many friends. "He is a different character, not like me," the Belarusian president noted. JM

...AND DECLARES READINESS TO DEFEND HIS POWER ALONE, WITH ARMS
Answering a question about his dream in the same interview with TV-Tsentr on 11 July, President Lukashenka recalled former Chilean President Salvador Allende. "Salvador Allende was an example in history. I will defend my people, my state, and my power with arms in my hands, alone if necessary. No matter whether you like it or not," Lukashenka said. "Defending my power, I do not defend wealth that I have amassed, etc. I am a man of ideals, principles, and a very proud man in this respect. I will defend it without fear. I will not flee the country even if they shoot at me." Allende, the Socialist president who ruled Chile from 1970-73, died while defending the presidential palace from a military coup. JM

UKRAINIAN PREMIER DENIES PILFERING RUSSIAN GAS
Prime Minister Yuliya Tymoshenko told journalists in Kyiv on 11 July that Kyiv is not siphoning off Russian gas that flows in transit across Ukraine to Europe, Interfax-Ukraine reported. "I would not like to see Ukraine humiliated by statements that do not correspond to reality," Tymoshenko said. She was referring to Russian President Vladimir Putin's comment last week that Russia is ready to cooperate with Ukraine provided that Kyiv does not steal Russian gas (see "RFE/RL Newsline," 11 July 2005). She also stressed that Gazprom's accusations last month that 7.8 billion cubic meters of Russian gas disappeared from Ukraine are not true. According to Tymoshenko, this gas volume remains in Ukrainian storage facilities. JM

UKRAINIAN COURT FREEZES SHARES OF FERROALLOY GIANT
Following a request from the Prosecutor-General's Office, the Kyiv Appellate Court has frozen 50 percent-plus-one-share in the Nikopol Ferroalloy Plant that belong to the Interpipe consortium controlled by Ukrainian oligarch Viktor Pinchuk, Interfax-Ukraine reported on 11 July. The shares were sold at two auctions in 2003 for a total of 410 million hryvnyas ($82 million at the current exchange rate). The Nikopol Ferroalloy Plant reportedly accounts for 11.5 percent of the world market of ferroalloys. Earlier this year the government managed to annul the 2004 privatization of the Kryvorizhstal steel mill, which was partly owned by Pinchuk (see "RFE/RL Newsline," 22 June 2005). JM

BOSNIAN LEADER CRITICIZES UN ROLE AT SREBRENICA...
Sulejman Tihic, who is the Muslim member of the Bosnian Presidency, said at the 11 July gathering near Srebrenica to mark the 10th anniversary of the massacre there that "the United Nations failed to protect the inhabitants of its safe haven," which led to the killing of about 8,000 mainly Muslim males by Serbian forces, RFE/RL reported (see "RFE/RL Newsline," 11 July 2005). He argued that the Dutch UN peacekeepers "surrendered [the victims] to the Serbian military forces from both sides of the Drina River, who committed genocide." Tihic told the families of the victims that he has "no word of comfort for your pain and suffering. No one can bring back and replace your loved ones, either. The only thing we can do now is to do our best in finding the missing and killed ones -- to bury them with dignity -- and to punish those who are responsible for the crime. Particularly, the most wanted war criminals [former Bosnian Serb leader Radovan] Karadzic and [former Bosnian Serb commander General Ratko] Mladic." Former chief U.S. Balkans envoy Richard Holbrooke told the gathering that "Srebrenica was the failure of NATO, of the West, of peacekeeping, and of the United Nations. It was the tragedy that should never be allowed to happen again." U.S. President George W. Bush said in a written statement that "we...remain committed to ensuring that those responsible for these crimes face justice, most notably Radovan Karadzic and Ratko Mladic." PM

...AS CROATIA'S PRESIDENT EXPRESSES SURPRISE AT HIS SERBIAN COUNTERPART...
Croatian President Stipe Mesic told reporters after the 11 July commemorative gathering near Srebrenica that he was surprised that Serbian President Boris Tadic, who also attended the meeting, did not apologize for the role of Serbian forces in the 1995 massacre, RFE/RL's South Slavic and Albanian Languages Service reported (see "RFE/RL Balkan Report," 10 June and 1 July 2005). "I don't know why he did not do so," Mesic added. He said that it was good that Tadic attended the commemoration but argued that it would have been far more significant if Tadic had apologized for the Serbian role in the war crime. Before Tadic left Belgrade for Srebrenica, some nationalist politicians warned him not to apologize for anything in the name of other Serbs. Elsewhere in Srebrenica, Rasim Ljajic, who chairs Serbia and Montenegro's National Council for Cooperation with the Hague Tribunal, said that his country is ready to be a "stabilizing factor" during a time of change in the region. PM

...BOSNIANS EXCHANGE BARBS...
A representative of the mothers of the victims of the 1995 massacre included in her speech to the 11 July commemorative meeting near Srebrenica the words: "Long live Bosnia and Herzegovina, death to the perpetrators of genocide on this land," RFE/RL's South Slavic and Albanian Languages Service reported. In response, Republika Srpska President Dragan Cavic said that all people who committed war crimes must answer for what they did, adding that it is "tragic that some people have used the commemoration...to pronounce a death sentence on the Republika Srpska." PM

...AND SERBS LIGHT CANDLES
Several dozen people laid wreaths at a monument to innocent victims from all nations and faiths in the Serbian city of Cacak on 11 July to show respect for the Muslim victims of the 1995 Srebrenica massacre, RFE/RL's South Slavic and Albanian Languages Service reported. In Belgrade, the Serbian parliament observed a moment of silence for Serbian victims of the wars of the 1990s and also for those who lost their lives in Srebrenica in 1995 and in London during the recent terrorist attack. Members of the Serbian Radical Party (SRS) were not in the chamber at the time. Tomislav Nikolic, who heads the SRS parliamentary faction, charged that speaker Predrag Markovic called for the moment of silence without consulting the leaders of the various party factions in the legislature. PM

TRANSDNIESTER ASKS RUSSIA TO INCREASE MILITARY PRESENCE
The government of Moldova's breakaway region of Transdniester has asked Moscow to increase its military contingent in the region from the current 500 troops to 2,400 troops, including a helicopter squadron, Infotag and Flux reported. Tiraspol said that Russia is entitled to have such a military force in Transdniester under the 1992 agreement on the settlement of the Transdniester conflict. "The Moldovan leadership is preparing a forcible solution of the Transdniester conflict and is trying to ruin the [ongoing] peacekeeping operation," Transdniester State Security Minister Vladimir Antiufeev explained. "Moldova is implementing a plan prepared in the West to abolish the peacekeeping operation. In the event of the Transdniester army's adequate reaction to provocations by Moldovan power ministries, the West will declare the peacekeeping operation with Russia's participation a failure and will voice the need to replace the Russian peacekeeping contingent with NATO troops," Antiufeev added. JM

AN INSIDER LOOKS AT MOLDOVA'S PASAT CASE
On 27 June, the trial of former Moldovan Defense Minister Valeriu Pasat in connection with the sale by his government in 1997 of 21 MiG-29 jet fighters to the United States got under way. The ostensible offense for which Pasat, who served as defense minister from 1997-99, is in the dock is that he defrauded the Moldovan state of $54 million by selling the planes to Washington for a mere $40 million.

The arrest and trial are widely viewed as politically motivated, due to Pasat's association with a previous Moldovan administration and his current connection with Russia's Unified Energy Systems (EES), for which he works as a consultant. The image of a political trial is reinforced by the fact it is being held behind closed doors at the request of the prosecution, purportedly for national security reasons.

Whatever else Pasat may have on to account for, the MiG sale was a good financial deal for Moldova. I oversaw the purchase as Regional Director for Russia, Ukraine, and Eurasia in the office of the U.S. Defense Secretary. I conducted the initial negotiations with Pasat, although I left the Pentagon for a Congressional staff assignment a few weeks before the final purchase.

This acquisition involved confidential matters that I am not at liberty to discuss, but the intention of the U.S. government was to remove the planes from any potential illicit sales on the international arms market and to assist Moldova during a period of extreme economic hardship. The Pentagon saw the transaction as, in part, a type of assistance to Moldova. The amount the United States was willing to pay for the aircraft and associated equipment seemed generous to U.S. officials involved.

The Moldovan side, including Pasat, did not understand the concept of "fair market value," to put it mildly. Officials in Chisinau felt the planes must be worth at least what they had cost the Soviet Union to build, rather than what anyone with real money was currently willing to pay for them. They wanted much more that $40 million, and it took months for them to recognize the limitations of the market.

The aircraft in question had been left in Moldova by the Soviet collapse. Although local mechanics kept the planes in good repair, they were of no practical use to the Moldovan state, which could not even afford fuel for training. The planes had no viable military purpose, as Moldova barely has enough airspace for high-performance fighters to turn around in the sky.

There were no other legitimate buyers for the aircraft, my research at the time revealed. Several other governments operated MiG-29s, but none wanted to add to their inventories; indeed, most were shifting to NATO-standard aircraft. The Moldovan planes lacked a source of spare parts and support/repair systems, making them of little value for a new customer. Russia, the producer of the MiG-29, made clear to potential customers that it would supply parts only for planes purchased from it or with its concurrence. Russia would not encourage the competitive sale of MiGs from sources like Moldova, which might cut into its own export market.

The only other potential customers for the Moldovan planes were the so-called "rogue states." Washington felt it had legitimate concerns about the leakage of Soviet-made weaponry of all types from the arsenals of post-Soviet and former Warsaw Pact states to rogue governments. For Moldova, such an option would have been a disaster because the United States would have terminated its bilateral assistance programs if the MiGs fell into rogue-state hands as required by U.S. law. I have no doubt Washington would also have used its influence in international financial institutions to punish Moldova severely as an object lesson to other countries to discourage this kind of commerce.

The Moldovan government in 1997 was informed of these realities and came, although slowly, to understand the United States was its only serious potential customer, that the offer was a fair one, and that the United States would pay real money immediately in contrast to the vague promises so common in the global arms trade. After several months of negotiations and high-level interventions from the U.S. side, the deal was done. It was a good deal for Moldova.

The sale was a disappointment to many in Chisinau who imagined the aging aircraft to be a goldmine of astronomical worth. In fact, $40 million was more than many people in Washington wanted to pay. I remember having a hard time finding so much money for a country of less-than-primary importance to the United States. The Pentagon proceeded as part of its policy to develop cooperative defense relationships with all the former Warsaw Pact and Soviet states.

I do not know how the $40 million was used. The payment was a simple inter-state financial transfer with no cash or funny business involved. The money went to the Moldovan Finance Ministry.

Anyone with experience of Moldova knows how far short it falls in comparison to Western standards of business practices. Corruption and malfeasance have been rife there throughout its years of independence. However, the sale of 21 aircraft for $40 million was an entirely legitimate transaction. The thinly veiled accusation behind the Pasat trial that the United States in some way defrauded or swindled Moldova in this matter is false.

(E. Wayne Merry is a former U.S. State Department and Pentagon official and current senior associate at the American Foreign Policy Council in Washington.)

AFGHAN LEADER SAYS FOREIGN AGENTS ARE PRESENT IN GOVERNMENT...
In a televised speech before Afghanistan's provincial governors in Kabul on 9 July, President Hamid Karzai, among other issues, focused on the presence of foreign intelligence agents inside the Afghan government, the National Television of Afghanistan reported. Discussing the civil wars in Afghanistan in the 1990s, Karzai said that his country "fell into the hands of all foreign intelligence services, especially those of our neighbors." These services "almost fully occupied Afghanistan's state departments," Karzai stressed. It is a national duty of the Afghan government to "purge state departments of foreign intelligence agents," he told the governors. Karzai said that he has instructed the "relevant authorities" to remove government officials "suspected of having links with foreign intelligence. Even if they are senior government officials." The Afghan president warned that if foreign agents are not removed from government departments, the country "will lapse back into anarchy." Karzai did not name any specific foreign country's intelligence agency nor specify when individuals suspects of spying will be identified and removed. AT

...AND SAYS NARCOTICS ARE GREATER DANGER THAN TERRORISM
In his 9 July speech before the provincial governors, President Karzai said that opium poppy cultivation "is more dangerous than terrorism for Afghanistan," the National Television of Afghanistan reported. Saying that "terrorism has been wiped out" in Afghanistan, Karzai warned that poppy cultivation "can hamper the smooth implementation" of development projects in the country. The Afghan leader pointed out that his government has been successful in controlling the cultivation of opiates, but he urged the governors to take tough measures to stop the dependence of Afghan farmers on poppy cultivation. AT

FOUR ARAB PRISONERS ESCAPE FROM U.S. DETENTION FACILITY
Suspected terrorists linked to Al-Qaeda escaped on 11 July from the detention facility at the Bagram Air Base north of Kabul, Tolu Television reported. An unidentified spokesperson for the U.S. forces in Afghanistan said that the four individuals are considered dangerous terrorists who were captured in clashes with coalition forces. The four have been identified as Kuwaiti citizen Mohammad Ahmad, Libyan citizen Mohammad Hasan, Syrian citizen Abdullah, and Saudi Arabian citizen Al-Qatani. According to Tolu, the prisoners managed to flee from the highly secure facility after killing a U.S. prison staffer. AT

U.S. MILITARY SPOKESMAN SAYS MORE TROOPS TO AID AFGHAN ELECTIONS
At a conference on 11 July, Colonel James Yonts, a spokesman for the U.S.-led coalition forces in Afghanistan, said that a battalion of U.S. Army troops will arrive in Afghanistan shortly to help maintain security for the upcoming elections in Afghanistan, the official National Radio of Afghanistan reported. "We take the [September parliamentary] elections very, very seriously, and so do the Afghan government and the Afghan people," Yonts added. The force of about 700 troops from the 82nd Airborne Division will leave the United States for Afghanistan by the end of July, Bloomberg reported on 11 July. AT

NEO-TALIBAN BURNS VEHICLES USED TO SUPPLY U.S. FORCES AND KILLS TWO DRIVERS
Mofti Latifullah Hakimi, speaking for the neo-Taliban, said on 11 July that the militia has set on fire 15 vehicles traveling between southern Kandahar and Oruzgan provinces, Peshawar-based Afghan Islamic Press (AIP) reported. The neo-Taliban killed two drivers of the vehicles in the attack. The vehicles in question "were carrying equipment for American soldiers" based in Oruzgan, Hakimi told AIP. AT

ROCKETS HIT U.S. BASE IN SOUTHERN AFGHANISTAN
An official in Kandahar Province speaking on condition of anonymity said on 11 July that three rockets hit the U.S. air facility in Kandahar, AIP reported. The missiles reportedly hit the headquarters of the U.S. and Afghan military units based in the air base and injured three foreign nationals. No one has claimed responsibility for the attack; neo-Taliban spokesman Hakimi told AIP that he was not aware of such an attack. AT

JAILED IRANIAN JOURNALIST'S SUPPORTERS REACH OUT TO EUROPE...
Nobel Peace Prize winning attorney Shirin Ebadi and Masumeh Shafii, the wife of jailed journalist Akbar Ganji, have written a letter to the European Union's high representative for common foreign and security policy, Javier Solana, Radio Farda reported on 11 July. In the letter they ask that Solana prevent a repetition of the tragic death of Canadian photojournalist Zahra Kazemi, who was beaten to death at Evin prison, after being detained for photographing protestors outside the penitentiary. The two women note in their letter that Ganji, who has been on hunger strike for approximately one month, is suffering from asthma and other ailments. They say he needs specialized medical attention. Radio Farda also reported that there are calls for a pro-Ganji demonstration in front of Tehran University on 12 July. Signatories of the letter announcing the demonstration, which is available at http://releaseganji.net/CfD.php, include members of the Office for Strengthening Unity and another student organization, former legislators, university lecturers, and journalists. BS

...AS JOURNALIST DISCUSSES HIS HUNGER STRIKE
"I will continue my hunger strike until death," Ganji says in a letter smuggled out of prison and published in "Al-Sharq al-Awsat" on 11 July. Ganji goes on to say, "I want the world to know that I am not sick, have not started a hunger strike, and that my weight dropped from 77 to 58 kilograms as a result of the torture I underwent last month." Ganji wrote that even if he dies "the love for freedom and thirst for political justice will not die." BS

PRESS WATCHDOG CRITICIZES IRANIAN JUDICIARY
Reporters Without Borders (http://www.rsf.org) notes in a 9 July statement that Zahra Kazemi died two years ago and her family is still waiting for the exhumation of her remains and their return to Canada. The press watchdog called on the international community to support Canadian efforts that could make Iran fully accountable. Shirin Ebadi, who represents Kazemi's family, accused the Iranian government of organizing "explanation sessions" rather than justice, which would include the conviction of the responsible individuals in a real court. Among the "unanswered questions" listed by Reporters Without Borders are the names of Kazemi's interrogators. The press watchdog said the interrogation records were tampered with. BS

UKRAINIAN SECURITY OFFICIAL VISITS IRAN
Petro Poroshenko, secretary of Ukraine's National Security and Defense Council, arrived in Tehran on 11 July, Interfax-Ukraine news agency and the UNIAN agency reported. He met with Petroleum Minister Bijan Namdar-Zanganeh and discussed cooperation on energy issues. Poroshenko added that bilateral trade in 2005 is 50 percent higher than it was in 2004. Poroshenko met with Foreign Minister Kamal Kharrazi, IRNA reported, and volunteered his country as a gateway for the transit of Iranian gas to Europe. BS

IRANIAN PRESIDENT-ELECT DISCUSSES FOREIGN POLICY
President-elect Mahmud Ahmadinejad said on state television on 11 July that the recent presidential election is sufficiently significant that it will have an impact on domestic and foreign affairs. "We want fair relations with the whole world," Ahmadinejad added. "We want justice to prevail inside as well." BS

DISSIDENT IRANIAN CLERIC CONDEMNS LONDON BOMBINGS
Ayatollah Hussein Ali Montazeri-Najafabadi on 11 July condemned the terrorist attacks in London four days earlier, ILNA reported. He expressed regret that the attacks occurred in the name of Islam, and added: "Islam is 100 percent against such violence and killings and most of the Muslims in the world hate such crimes. Islam condemns terrorism." Montazeri also expressed concern that these incidents would be used as a pretext for revenge against Muslims. BS

NINE IRAQIS SUFFOCATE WHILE DETAINED IN POLICE VAN
At least nine Iraqis died from suffocation after being locked in a police van outside a Baghdad hospital for 14 hours, Al-Sharqiyah television reported on 11 July. The incident occurred after a shooting incident in which a construction worker was killed by U.S. forces; the men were detained for allegedly aiding terrorists. According to Al-Sharqiyah, the shooting occurred when U.S. forces responded to gunfire from unknown gunmen, and the worker was caught in the crossfire. Police arrested the men, who were colleagues of the dead construction worker, at the hospital for allegedly having links to the gunmen. The men were detained in a police van where nine died of suffocation. Two reportedly survived and were transported to a second hospital. The television channel said it was banned by the hospital from interviewing the men. The Muslim Scholars Association condemned the detention and deaths, saying it amounted to torture. All of the dead were Sunni men. KR

FOREIGN MINISTER BRIEFS PRESS ON DIPLOMATIC CORPS IN BAGHDAD...
Hoshyar al-Zebari told reporters in Baghdad on 11 July that the Foreign Ministry held a meeting that day with members of the diplomatic corps working in the capital to discuss security and the targeting of diplomats by terrorists in Iraq, RFE/RL's Radio Free Iraq reported. "In our message to the ambassadors and diplomats we said that the response to these attacks, threats, and operations of extortion and intimidation is to go ahead and send the diplomats and ambassadors to Baghdad and raise the level of diplomatic representation with the Iraqi government," al-Zebari said. He reminded the media that the government has launched a "large-scale diplomatic campaign" in recent weeks asking Arab and Islamic governments to send ambassadors to Baghdad. Jordan, Morocco, and Yemen subsequently named ambassadors to Iraq, while Syria expressed its readiness to do so, as has the Arab League, al-Zebari said. "The aim behind the attacks that targeted the late Egyptian ambassador, the Bahraini deputy chief of mission, and the Pakistani ambassador was to sever Iraq's contacts with the Arab and Islamic states. So [the terrorists] wanted to abort this success [of opening up diplomatic ties]," he added. KR

...AND PROMISES BETTER SECURITY FOR DIPLOMATS
Al-Zebari told the media that the Iraqi government vowed to provide better security for foreign diplomats during the 11 July meeting, RFI reported. "No doubt, we too have responsibilities. The Iraqi government has security responsibilities under international law...it must guarantee protection and security for the diplomats and the embassies and missions here in Baghdad," he said. Al-Zebari noted that diplomats were told in the meeting that the Iraqi government is capable of protecting all embassies, ambassadors, and diplomats in Baghdad "without depending on any other quarter." The foreign minister said there are currently 45 embassies and missions operating in Iraq. "Many of these embassies exist in the protected Green Zone. As for the ones outside the zone, we believe that the Interior Ministry and even the Foreign Ministry have the capabilities of guaranteeing the necessary protection," he said. It will be up to the foreign embassies and missions to inform the Iraqi government of their needs in terms of protection, al-Zebari added. In order to accommodate these embassies and missions, a new security plan has been drawn up that includes special hot lines that gives embassies and diplomats direct access to the Interior Ministry. KR

IRAQI DEFENSE MINISTER DETAILS AGREEMENT WITH IRAN
Sa'dun al-Dulaymi briefed reporters in Baghdad on 11 July on the memorandum of understanding signed between Iraq and Iran on security coordination, RFE/RL's Radio Free Iraq (RFI) reported the same day. Al-Dulaymi said that Iran will not train Iraqi troops under the agreement, contradicting Iranian media reports citing Defense Minister Admiral Ali Shamkhani. RFI obtained a copy of the five-point memorandum from the Defense Ministry. The memorandum calls for the establishment of a joint commission to guarantee border security through joint coordination to prevent terrorist infiltration across the Iraq-Iran border; cooperation in locating the remains of victims of the 1980-1988 Iraq-Iran war; and the establishment of a joint commission that will exchange maps and information on minefields existing on both sides of the border. Iran also expressed its readiness to follow through with previous donor commitments for the reconstruction of Iraq, and both sides agreed to support a conference for defense ministers of Iraq's neighboring states to address regional coordination. The memorandum, signed by al-Dulaymi and Shamkhani, is dated 7 July.

NGO SAYS HUNDREDS OF THOUSANDS OF IRAQIS LACK SHELTER
The Global IDP Project of the Norwegian Refugee Council said in a report released on 11 July that hundreds of thousands of internally displaced Iraqis lack adequate shelter, making them vulnerable amid the insecurity that prevails in large parts of the country (http://www.idpproject.org). The report said there are over 1 million internally displaced Iraqis, calling the country "home to one of the world's largest internal displacement crises." Many internally displaced people are living in squalid conditions in makeshift settlements on the outskirts of towns and cities, in overcrowded conditions marked by poor hygiene and lack of clean drinking water, the report said. "Many of those displaced under the previous regime have returned to their areas of origin but remain displaced because they do not have a home or land to go back to. Other displaced cannot return because their homes have been destroyed or occupied," the report said. The organization estimates that 2 million homes need to be built to alleviate the housing crisis, which also affects the nondisplaced. The report calls for an extension of a now-expired Property Claims Commission deadline for families to apply for compensation for land or homes confiscated by the Hussein regime. KR

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