POTANIN VERSUS THE ONE-MAN STATE

MOSCOW – Vladimir Potanin has a plan to cash out somewhere between $3 and $5 billion worth of his fortune in Norilsk Nickel by converting it into a controlling shareholding of the South African mining company, Gold Fields. If he succeeds, he will have achieved a bigger transfer of Russian wealth offshore – beyond the reach of the Russian prosecutor, courts, tax authority, or Kremlin – than Mikhail Khodorkovsky, Roman Abramovich, Boris Berezovsky, Vladimir Gusinsky, or any other Russian oligarch has been able to get away with, so far.

Part of the cost of Potanin’s plan has already been borrowed from the coffers of Norilsk Nickel itself; part from Citibank, the US bank which is so nervous about the plan it dare not explain the terms on which, last month, it loaned Potanin the money in the first place, and why it’s now desperate to recruit other banks to lend the money in its stead. That first transaction, the purchase by Norilsk Nickel of a 20 percent shareholding in Gold Fields for $1.16 billion, was the single largest corporate purchase offshore in the history of post-Soviet Russia.

The second part of the plan was signaled by Potanin’s dealmaker, Leonid Rozhetskin, in London a few days ago. He said Norilsk Nickel intended to buy more Gold Fields shares. What he meant was that Potanin intends to take another 30 percent shareholding, and thus control of Gold Fields. Constructing this deal is Rozhetskin’s job for the next several months. He doesn’t exactly want to pay cash – at least another $2 billion in real money-because he is not at all sure that the banks, which are wrestling uncomfortably with refinancing of Citibank’s $800 million loan, will be agreeable to an even larger credit. And so, the trick Rozhetskin must pull off is to give the Gold Fields shareholders something just as valuable. This is likely to be the collection of Russian goldmine assets which Norilsk Nickel has been buying up for the past two years. They include Polyus, Russia’s leading gold producer from Krasnoyarsk, and other deposits and mining companies whose productivity is much less, and capital requirements much more.

Indeed, this is such a mixed bag that what Rozhetskin really needs to make his Gold Fields takeover deal effective is that President Vladimir Putin will agree to award Norilsk Nickel the Sukhoi Log deposit, Russia’s largest unmined goldfield. This lies in remote territory northeast of Lake Baikal, in the Irkutsk region. A decade ago, it belonged to a partnership between Lenzoloto, a local mining association, Star an Australian miner, and JCI. But Lenzoloto cheated its partners, and has now been swallowed up by Potanin.

Sukhoi Log is listed as having 33 million ounces of gold; if every ounce could be mined, they would fetch more than $13 billion at the current gold price. Rozhetskin’s plan is that if Norilsk Nickel wins the government tender for the new mining licence for Sukhoi Log, he will be able to create a separate Norilsk Nickel company concentrating this and the other gold assets, and then merge the lot into Gold Fields. For an oligarch like Potanin, Gold Fields shares are as good a refuge, if not better than Chelsea is for Abramovich.

The Russian government acknowledges that it has begun investigating the deal. The South African government is slower to follow suit, but it will. The last takeover bid for Gold Fields, from the US miner Franco-Nevada, was disallowed.

In the meantime, it is possible to ask a range of Russian policymakers, including party leaders, parliamentary deputies, and advisors to the President what they think of this huge cashout attempt by Potanin. It is possible to ask, I say, but the answers reveal a surprising detail about the post-election landscape in Russia. This is a pervasive fear of having, let alone expressing an opinion, that may offend either an oligarch like Potanin, or the President.

In December, Victor Gerashchenko, the veteran Soviet state banker and former chairman of the Russian Central Bank, was elected by the voters to a seat in the Duma representing the new Rodina bloc, headed by Dmitri Rogozin. The party positioned itself during the election campaign as a sharp critic of the oligarchs, with a national-interest line of policy. Gerashchenko’s election four months ago, which did not exactly align him with his party’s public platform on any point, was something of an irony. During two terms at the Central Bank in the 1990s, he defied repeated efforts by the Duma to make his administration of Bank affairs legally accountable. Gerashchenko’s high opinion of himself has been not negotiable with any of the democratic laws or organs of the state, save the President. It is thus the President who is likely to have approved the recent nomination of Gerashchenko to the board of directors of Yukos. With sensitivity to the proprieties, Gerashchenko has announced that if elected, he will resign is seat in the Duma. Before long, Gerashchenko may be chairman of the Yukos board, supervising whatever new shareholding and management arrangements the Kremlin has in mind for replacing Mikhail Khodorkovsky’s group, as well as the American management led by Semyon Kukes. Until then, Gerashchenko is still a representative of the people.

What view does he therefore take of the legality and benefit to the Russian commonwealth of Potanin’s moves offshore? As the guardian of the Central Bank’s capital transfer regulations, there is no doubt that Gerashchenko knows the rules which Potanin has been carefully skirting. Gerashchenko has had a great deal of documented experience doing the same himself. But Gerashchenko has no opinion he dares to express on Potanin, Through assistants, spokesmen and secretaries, none of whom will identify himself by name, Gerashchenko has replied that he is not refusing to express a view on Potanin’s transactions, but neither is he going to reply. He is simply “busy right now”, according to a spokesman.

Vladislav Reznik is chairman of the Duma committee that has legal and legislative jurisdiction over what Potanin is doing. This is the committee on credit organizations and financial markets. Reznik was elected to the Duma to represent the United Russia faction. Before becoming a parliamentarian, Reznik was well-known as the manager who tried to privatize the state insurance company Rosgosstrakh for his own benefit. His expertise in evaluating Potanin’s financial operations should be considerable. But asked to do so, Reznik replied: “I can’t comment on government questions. Better ask that question to the Central Bank itself.”

Mikhail Zadornov is another Duma deputy, former chairman of the Duma Budget Committee, and once the successor to Anatoly Chubais as Minister of Finance. A member of the unsuccessful Yabloko faction, Zadornov has fallen slowly, but far from the power he once enjoyed. Asked to say if Potanin’s Gold Fields transaction accords with his view of Russian public policy, Zadornov employed a lady of such rudeness, his reluctance to talk became an attack on the presumption of anyone for daring to ask. Her courage failed when asked to give her name. “Mikhail Mikhailovich,” she said, referring to the freshly reelected tribune of the people, is “very busy.” Zadornov was even busier to respond to the question of whether he had ever received election support from Norilsk Nickel, or from Potanin’s holding company Interros.

During the Duma election campaign, the Rodina faction led on the hustings as the most critical of the concentrations of wealth amassed by the oligarchs under former President Boris Yeltsin. But when Dmitri Rogozin, the Rodina leader, was asked to say what he thought of Potanin’s latest moves, his spokesman responded that his answers “are not ready yet.” This was repeated at regular intervals over several weeks.

Mikhail Delyagin, an economist who heads the Institute for Globalization Problems in Moscow, has recently been engaged by Rogozin and his colleagues to add economic policymaking muscle to the faction. Delyagin is a keen practitioner of the media sound-byte on almost anything his questioners put to him – except Potanin. “We are not refusing to answer,” said Delyagin’s spokesman, who gave her first name as Maria. “We are delaying just a little bit.’ Delyagin himself remains stonily silent.

If the Rodina faction is afraid to have a policy view of capital flight, cashout schemes by oligarchs, or the distribution of wealth in Russia’s mining sector, then surely the Communist Party could be counted on to restate the eternal Marxist-Leninist verities, and place its opposition to Potanin on the record. True, the party led by Gennady Zyuganov had a soft spot for Yukos, and took money from that direction to finance its election campaigns for the Duma and the presidency. That it failed dismally in both has now led to serious internal trouble over doctrine and leadership. Nikolai Sapozhnikov is the designated Communist spokesman in the Duma on economic policy issues. He has refused to take calls to answer questions about Potanin.

Zyuganov remains the party leader, and however embattled he may be, he knows better than to duck a question delivered face to face. And so, after listening to a recital of Potanin’s plan for Gold Fields, and after being asked whether he judges it in Russia’s national interest, Zyuganov began: “The past ten years we haven’t had business in Russia. It was robbery.” Zyuganov took another breath, and was about to deliver a second sentence, when ail of a sudden, an elderly assistant tugged at his sleeve, and whispered, not altogether successfully: “That’s enough”. With that, Zyuganov closed his mouth, and made for the door, Potanin’s future at the hands of the Communist Party left in the air, uncertain but not at risk.

Across the political spectrum of Russia, therefore, there is no one who dares to express a view on the single largest transfer of the country’s wealth abroad. No one yet, it should be qualified, because the reaction of Russian party and political leaders to the attempted sale of Yukos to an American oil company drew the same timidity when each was interviewed last autumn, before Putin had Khodorkovsky arrested. Then those running in opposition to the government found their voices, and dared to oppose the oligarchs.

But as Reznik the parliamentarian succinctly summed it up, matters of such high policy are for the government to decide, not the Duma. If he had been honest, he would not have said government either. He meant Putin alone. And that’s exactly where Potanin and the other oligarchs now stand. Reviled in public opinion, and the cause of a massive shift of votes towards the erstwhile opposition of Rodina, they are no longer capable of buying the silence or the complicity of the parliament. It is Putin, not the oligarchs, that Gerashchenko, Reznik, Zadornov, Delyagin, Sapozhnikov, and Zyuganov now fear, now wait for. By their action and inaction, they have created a one-man state. But if that is all that stands for Russia between Potanin and his ill-gotten gains, then is there anyone who will gainsay that, for the national interest at least, better Putin than no one at all?

DERIPASKA PLAYS CARDS WITH THE KREMLIN

Oleg Deripaska is probably too young, and certainly too self-confident, to contemplate those who marked the loss of their power, or their end, with famous last words. Farouk, the last king of Egypt, lived thirteen years after he was deposed, but nothing before, or afterwards, was as memorable as his words on losing his throne. “There will soon be only five kings left,” he said in 1952: “the Kings of England, Diamonds, Hearts, Spades, and Clubs.”

For the Russian oligarchs created by ex-President Boris Yeltsin, this is the time of testing how far their fortunes will go like a deck of cards. Mikhail Khodorkovsky will go to trial in June, or thereabouts. Roman Abramovich is to be tested by the Accounting Chamber on May 15, when an audit of his conduct of the affairs of Chukotka, under his governorship, will be tabled. Vladimir Potanin’s attempt to cash part of his Norilsk Nickel fortune into a multi-billion dollar takeover of South African miner, Gold Fields, is already into the second month of the Kremlin’s investigation. And Deripaska, who controls most of the Russian aluminium sector, is waging a fight for cheap electricity with the federal government and Anatoly Chubais that he has already begun to lose.

A few days ago, the Minister of Economic Development and Trade, German Gref, intervened to block an attempt by Russian Aluminium (Rusal), Deripaska’s most important property, to lock in a low-cost power supply from the 2,000-megawatt Boguchansk hydroelectric power station in Krasnoyarsk region. Government and industry sources confirm that a federal government appointed commission is to meet soon to decide the future of the Boguchansk plant. Gref will supervise the commssion, as he told Alexander Khloponin, the regional governor of Krasnoyarsk, at a recent meeting.

Government and industry sources say this formula has been adopted to neutralize the bid by Deripaska and Rusal’s allies in the Krasnoyarsk region to buy control of the 24-year old, but unfinished plant for a pittance — just $46 million — and a promise to arrange the investment required for its completion.The sources expect the government to favour preserving state control of the plant; but they can do that by protracting the negotiations for completing the low-priority plant for years.

Notwithstanding his setback in Moscow, Deripaska announced at a press conference on April 16 that he and Governor Khloponin, the former chief executive of Norilsk Nickel, had agreed on terms for Deripaska to acquire control of the Boguchansk plant in return for a promise to finish the power station at a cost of up to $1.2 billion, and to construct a new aluminium smelter nearby with annual output capacity of between 300,000 and 600,000 metric tons. Krasnoyarsk sources confirmed that an agreement had been reached but declined to say what Deripaska has promised to pay. Khloponin sang Deripaska’s tune, as if he had never heard from Gref.

Andrei Yegorov, spokesman for United Energy Systems (UES), the national electricity utility, which owns the controlling 64% stake in Boguchansk, says that UES is skeptical of both of Deripaska’s promises, and believes he has no intention of meeting either of them. “It’s important to understand what Deripaska really wants,” Yegorov said. “If it is a wish to finish the electric power station, then we do not see the investment plan, and it was not announced. We think that the main Deripaska priority here is to dilute the [state’s] blocking shareholding and take full control over Krasnoyarsk GES. Boguchansk GES is only of secondary interest and maybe there is no interest at all.”

The Krasnoyarsk power plant is the principal power supplier to Rusal’s smelter at Krasnoyarsk. However, UES has launched court proceedings against Rusal to recover what it claims are non¬payments or artificially low payments over several recent years.

UES chief executive Anatoly Chubais, whose nose is exceptionally sensitive to the way the wind is blowing, has been categorical in saying he opposes Deripaska’s plan for Krasnoyarsk: “We are against the deal and will not allow it to take place.” Chubais, who was speaking at the Russian Economic Forum in London, added: “We have doubts about the transparency of such a deal. We do not support non-transparent deals.”

This was as close as Chubais could come to pleading mea culpa for his past attempts at favouring Deripaska. It was also a signal from Chubais that a higher power in the land than himself won’t tolerate another Chubais giveaway. In July 2002, for example, Deripaska tried to acquire Boguchansk, and he and Chubais signed an agreement for Rusal to lend UES $10 million. In return, Rusal was to receive an equity stake in the plant as collateral for the loan. That plan anticipated that Rusal would gain full control of the plant as it raised more loan funds to finance the construction, and received more equity. But the Putin government intervened. Chubais, under criticism from minority investors in UES and the Russian press, for arranging a sweetheart privatization in Deripaska’s favour, was obliged to abandon the deal. At the time, UES told me, it was spending Rb400 million ($13.2 million) in maintenance alone to preserve the plant. UES had also invested, it said, about $45 million in 2001 and 2002 for first-stage generating capacity of 185 mw.

Today the UES plan, said spokesmanYegorov, is to combine several regional generating companies, but not to unite hydroelectric units with thermal power stations “because hydro power is much cheaper, and everybody will want to use it.” The plan for Boguchansk, Yegorov told me, is to generate “superprofits” from □ two new hydroelectric companies, and use these to fund the Boguchansk capital requirement, without diluting state control. Deripaska, who has borrowing problems of his own recently, will be unnecessary to finance completion of Boguchansk. “Our specialists calculate that superprofit from [two] hydro generating companies will be enough to finish the first part of Boguchansk by 2009,” Yegorov said. There are several different capacity targets for Boguchansk from 2,000 to 9,000 mw, and the investment requirement goes up according to which is selected.

Hartmut Jacob, energy analyst at Moscow’s Renaissance Capital investment bank, reports that “we believe that although this UES financing scheme appears sound, implementation will depend on the willingness [of the federal government] to accept lower taxes from the hydro plants’ production (which could be directed towards social purposes) for the sake of retaining control over the plant.” Jacob also says he expects “the negotiations, from my point of view, will take a long time. The government will try to select a compromise variant.”

Maxim Bistrov, a Ministry of Economic Development and Trade official, reveals that the commission mandate had been agreed by Gref and Khloponin before Deripaska went public with his declaration of himself as virtual winner of the Boguchansk power grab. According to Bistrov, Deripaska’s bid is only one of several competing options, from which the ministry will recommend to the goverfnment and Kremlin its choice. “The commission will evaluate and decide on three general variants, and several additional ones,” he says. The current variants are (1) offering several additional issues of shares of the power plant to an investor; (2) lease of the plant by the investor with the subsequent right to convert spending on built capacity into the share capital of the plant; and (3) merger of the plant with Krasnoyarsk GES hydro plant, which is already controlled by Basic Element the Deripaska holding company.” Implying that other metals producers, including Deripaska’s rival Siberian Ural Aluminum (SUAL), have an interest in the outcome, Bistrov said that “other variants, such as combining the capital of several investors, will be closely evaluated, too,” He said it is too early to say what the schedule of the commission will be.

Yegorov of UES also casts doubt on Deripaska’s promise to build a new smelter in the region. “There is a space for an aluminium smelter near Boguchansk, and it was planned to build a smelter there. But the problem is that currently Rusal doesn’t have an investment plan. There is no project for the smelter too. they have been promising to do it for four years, but even the feasibility study was not done yet. “There is no railroad there, and RZD [national railroad company] doesn’t have plans to move the railroad there in nearest future. A smelter without a railroad is useless.”

Rusal has made other promises to build smelters in exchange for regional approval of shareholding deals in Deripaska’s favour. One of these, a year-2000 undertaking to build a smelter in the Kharkiv region of the Ukraine in return for privatization of state shares in the Nikolaev alumina refinery, is currently in the Ukraine courts, where the State Property agency has filed suit against Deripaska’s Ukrainian subsidiary for failure to honour his promise.

In the Irkutsk region, Deripaska and Rusal have also promised to build a new smelter at Taishet after winning regional support to take control of the smelter from Alucom-Taishet, another developer led by former Bratsk chief executive Boris Gromov. Victor Tifikov, who heads industrial development for the Irkutsk region, told me “there is no Rusal activity around Alucom-Taishet.”

The clash over the Boguchansk power project is the first test of Deripaska’s political influence with the federal government since President Vladimir Putin’s relection in March. If Deripaska loses, several other projects, which Rusal is already proposing to its bankers and contractors, may prove to be as rich as Farouk’s royal flush.

RUSSIA REVELS IN US’S WOES

MOSCOW – Nuri Said was the puppet prime minister of Iraq during the 1950s, when the British pulled all the strings in Baghdad. When he was toppled by revolutionary Iraqi officers in 1958, Said’s mangled corpse was dragged through the streets. His end more or less confirmed what he used to say: “You can always rent an Arab, but you can never buy him.” The Bush administration is filled with men with short memories who won’t have heard of Nuri Pasha, and aren’t in the frame of mind to listen to his advice.

Asia Times Online told this story in September of 2002 (Russia rooting for a quick hit on Saddam), and 18 months later it deserves to be repeated, especially after Said’s gruesome fate recently befell four American security men at the hands of an Iraqi mob in the town of Fallujah. Since their intensely televised death and dismemberment, the American occupation forces have faced surging rebellions by the two major communities of Iraq, the Sunnis and the Shi’ites. Their attacks have also targeted foreign civilians, pseudo-civilians, and soldiers of fortune in Iraq, forcing widespread evacuations.

For the first time, the US military leadership in Washington, fearing the political consequences of adding fresh, inexperienced US forces to Iraq, has cancelled the one-year rotation agreement it had with its troops, extending their service in the war zone for another three months. Rotation was a scheme devised by the White House to limit the extent to which unpopular and unwinnable wars might provoke mutiny in the ranks, and votes against the president at home. The one-year rotation failed to staunch the crack-up of the US Army in Vietnam, but neither presidents Lyndon Johnson nor Richard Nixon dared to cancel the rotation promise.

The political calculation by President George W Bush is that, even if the disgruntled families of the 20,000 troops affected immediately -one in every seven in Iraq – vote against him later this year in the presidential elections, that will still add up to fewer votes against him than if he adds 20,000 new troops who begin to suffer casualties.

The military calculation is that it will not be possible to preserve the US position in Iraq by paying local Iraqis to replace departing US forces. They must stay to fight; or they must retreat. The recent fighting has demonstrated for all to see that Said’s warning has returned to haunt those who ignored it. The Iraqis whom Washington has rented will never risk Said’s fate. And so, win or lose against Democratic Party candidate John Kerry, Bush has started down the slope that once defeated Johnson and Nixon, and put a brief stop to Washington’s imperial ambitions.

That’s a slope which Russian policy has no interest in either precipitating or accelerating – so long as it has the same outcome for US expansionism.

At the time of Nuri Said’s downfall, and again during the Vietnam War, the American leadership attributed its troubles to the cleverness of the Soviet Union, mostly because it was the Cold War, and Washington had no other way of explaining, let alone accepting, outbreaks of nationalism, localism and the like.

President Vladimir Putin, his Defense Minister Sergei Ivanov and new Foreign Minister Sergei Lavrov understand how easy it would be for Bush and his circle to revive similar charges, and put the blame for their own mistakes and battlefield losses on the Kremlin. They understand, too, how different the war in Iraq is from the war in Vietnam. They realize that the American people have even less commitment to the imperial fight this time than they had before. The Russian policymakers understand that it is Israel, and its men in Washington, who are mostly calling the shots for the president. The Russian assessment, and American public opinion, are therefore likely to converge, as the Arabs begin to exact the same toll on Americans in Iraq, as the Palestinians have been doing to the Israelis in that occupied territory.

Israel is trying to shoot its way out of a casualty ratio of one of their own to three Palestinians. For the time being, the US is trying to cope with a ratio of one to 50. Israel’s effective capture of the White House has taken a half-century to pull off, and for those, like Deputy Defense Secretary Paul Wolfowitz and Pentagon advisor Richard Perle, who now command the heights of US power, this is a do-or-die campaign. Only it will be patriotic Americans who will be doing the dying. And they are not as malleable as their president.

Russian policy is therefore founded on letting the battlefield serve as a reminder of Nuri Said’s warning. Officially, Moscow would like to effect a substitution of US troops for a combination of Iraqi sovereignty and United Nations support. But sovereignty cannot be rigged by Wolfowitz and Perle, nor paid for by the US Congress and Halliburton Corporation. Nor can Bush’s puppets in England, Australia, Italy, Poland, Ukraine and Japan pretend to UN legitimacy. The Iraqi resistance is making sure that point is already clear (ask Spain). Sooner or later, the allied occupation forces will have to be replaced. But creating a new Iraqi political consensus will take much longer than Bush has realized.

Until that happens, Russian policy is to try to neutralize the damage that the Israeli faction in Washington can do, and try to advance a strategic relationship with the Americans who may be able to wrest power over Bush from the grip of the Israelis. Two remarks by Ivanov on his recent visit to Washington indicate this direction. The Kremlin, said Ivanov, “considered joint Russian-US efforts within the framework of the counterterrorism coalition to be much more important than our differences about the war in Iraq …” The US alliance, he added, regarding the Balkan conflict in Kosovo, but a general principle nonetheless, “must finally understand that one cannot flirt with political extremists”.

For Russia, it is crucial to prevent the deteriorating US position in Iraq from becoming the policy of perpetual war and territorial aggrandizement, which has characterized the Israeli policy for decades. To this end, having such a person as Bush in the White House may be preferable, if the extremists around Bush can be defeated by the simple facts on the battlefield.

Ivanov and other Russian officials have acknowledged recently that if the Americans were to decide to abandon their redoubts in Iraq, as they did in Vietnam, the communal instability inside the country would pose severe risks of spreading. And that isn’t in the Russian interest, so long as Islamic fundamentalism already threatens across several Russian frontiers, and inside the Russian Caucasus. Ivanov made clear also that, beyond the Chechen conflict, Russia is especially concerned to protect the movement of its exports, especially energy, to market through waterways and pipelines that are vulnerable to attack.

Ivanov told his Washington audience that he expects that the most likely conflicts between the Great Powers that may “flare up in the foreseeable future will certainly be related to the economic domain, to the needs to secure by the individual, national states of their national interests, especially in the sphere of economy”. Teaching Washington to accept that Russian economic interests are not antithetical to American ones may take time. But as long as the US keeps making costly mistakes in Iraq, time is on Russia’s side. And so is the price of crude oil.

THE FATE OF KUKOS — WHICH K WILL HAVE YUKOS?

MOSCOW — There are so many different battles now going on for the assets of Yukos, inside the company, between the management and the shareholders, between different shareholders, between Yukos and Sibneft, and between the company and the state authorities, it is easy to mistake the plot.

Last week, Yukos CEO Simon Kukes took out a fulf-page advertisement in the Financial Times of London. When it was the alter ego of Mikhail Khodorkovsky, Yukos never had any trouble getting its message across through the news and feature columns of the FT’s ever-obliging editors and reporters.

That Kukes had to pay for space in the conventional way signals just how much has changed in the dynamics of spoon¬feeding by the Yukos PR machine and its rival, the Abramovich PR machine.

For months after Lebedev’s arrest last July, the Yukos headquarters near Paveletskaya train station in Moscow was the general head quarters for a Yukos-bankrolled war against President Vladimir Putin. But after it became clear that Khodorkovsky was going to lose his political battle with the Kremlin, the senior executives of the company panicked. They told associates they would leave the company by January. Months later they are still there, explaining that out of foyalty to their imprisoned ex-chairman they are duty-bound to stay and try to keep the company together. But this isn’t the same company, as the one Khodorkovsky, Lebedev and their partners Leonid Nevzlin and Mikhail Brudno believe they still own.

Legal experts, who have taken time to assess the cases built against Khodorkovsky, his partners and the company itself, have become increasingly certain that prosecutors will get convictions on many, if not all the grounds of their indictments. The initial thrust of the Yukos fighting machine was a political battle against the Kremlin, hoping that U.S. pressure and Western bad press would cower the presidential administration into abandoning its strong hand. But it has totally misfired, and Khodorkovsky is reduced to hapless begging for amnesty in exchange for a promise of good behavior.

Out of the legal crisis that has faced the Yukos shareholders, an opportunity was spotted, not just by Roman Abramovich and his Sibneft group, but also by the management headed by Kukes and his allies, Bruce K, Misamore, the chief financial officer and Steven M. Theede, chief operating officer, and president of YUKOS-Moscow

Abramovich ambushed Yukos intending to ingratiate himself with the Kremlin to protect his own assets, and not only those of Sibneft locked up in the Yukos-Sibneft merger. Whether or not Abramovich hoped there might be an opportunity to reverse the Yukos-Sibneft merger, and to win Kremlin permission for him to capture Yukos, he had a more urgent priority late last year. That was to protect himself from Khodorkovsky’s fate. By proposing to be subservient and even useful to Putin in private, Abramovich accomplished quickly what Khodorkovsky waited too long to attempt. After Putin had won both the Duma and presidential elections so handily, he didn’t need either of them.

Now that Putin is fully in command, there are three scenarios for Yukos. AH of them are what we call the Kukos scenarios. In the first one, Khodorkovsky is released from prison on parole, retakes the reins of his company, and everything ends almost as it had started —Yukos remains Khodorkovsky’s Kukos. This is unlikely.

In the second scenario, the Kremlin dismembers Yukos by subjecting it to tax claims it cannot pay, and accepts shareholdings to clear the debt and penalties. That would create the Kremlin’s own Kukos, possibly for resale later. This option has met with resistance from some of the economic advisors in the Putin administration who have been arguing that the costs to be inflicted on the domestic investment market would far outweigh the benefits to the state. They have also argued that Putin would potentially compromise himself if the outcome of the case against Yukos were to be a form of ^nationalization. Besides, Putin’s policy, according to the argument, has clearly advocated reducing the extent of the state’s stakes in the energy sector if control can be achieved by other means.

The third scenario now emerging is a Kukos with Kukes and his team in charge, in cahoots with the Kremlin.

Some time ago Yukos executives suggested that Yukos’ troubles were a hostile takeover scheme arranged between Abramovich and the Kremlin. But the Kukes group don’t apparently believe that any more. They have begun to attack Abramovich, but they have stopped insinuating that Putin was in on that plot.

In effect, there is increasing evidence that Kukes, Misamore,Theede and other senior executives are hoping to arrange a cheap-price management buyout of Yukos. Accordingly, they have been negotiating with the government and Kremlin, first to deter their support for a takeover by Abramovich and his Sibneft gang; and secondly, to lower the price at which the Kremlin will agree to divest the old shareholders and replace them with new ones. In pursuing this strategy, the three U.S. citizens must also do their best to disavow their nationality, and promise not to trade the company away to ExxonMobil or ChevronTexaco — at least not now.

The appearance of a page-long advertisement by Kukes in the Financial Times is a signal that this Kukos strategy is making
headway.

If Khodorkovsky is having the nervous breakdown that some journalists are reporting and that his mistimed, misjudged letters and notes are intimating, it is little wonder. He has begun to realize that his enemies may include his employees. He may think he can secrete a sizeable pile of cash away from the Kremlin’s retribution, although foreign litigation and court-ordered freezes may limit his ability to spend it for a while. He may think of negotiating a compromise with the Kremlin that would include sizeable penalties and the loss of some of his shares. But if the third Kukos strategy turned out to be effective, whatever plea bargain Khodorkovsky might secure from the Kremlin, he would be left without any significant economic base from which to operate, either commercially or politically, after his release. Without cash, ail Khodorkovsky’s talk of liberalism will prove to be tepid air.

ALUMINIUM OLIGARCHS AT WAR AGAIN

MOSCOW (Mineweb.com) – The Faberge Easter eggs, which Viktor Vekselberg has bought from Forbes in New York and has brought back to Russia as his peace offering to the Kremlin, may also come in useful as pacifiers, now that Vekselberg has gone to war again with fellow aluminium oligarch, Oleg Deripaska.

After appearing to agree to a no-raiding pledge a year ago, Siberian Ural Aluminum (SUAL), owned by Vekselberg, and Russian Aluminum (Rusal), owned by Deripaska, have clashed anew. This time the fight – similar to the last one in late 2002 – is over shareholding control of the aluminium sector’s tidbits, the Volkhov aluminium smelter and the Pikalevo alumina refinery.

Maxim Titov, spokesman for SUAL, said that recently Rusal had outbid SUAL for a 14% state owned shareholding in OAO Metallurg, a Russian company which owns Volkhov and Pikalevo. Titov acknowledged there is a conflict between SUAL and Rusal over the 14% share sale, but he declined to say at what price Deripaska had bested Vekselberg for the shares.

The unexpected share raid is embarrassing for Vekselberg because, without the shares, he cannot claim that SUAL has bankable ownership of its assets, and without that credibility, he cannot go to the international markets with his plea to investors to cash him out of SUAL. Who would give Vekselberg a billion dollars for assets he doesn’t control tightly enough to prevent his most deadly rival from capturing?

The answer to this question has been so troublesome that Chris Norvaf. head of Vekselfoerg’s foreign flotation venture SUAL International, has made himself unavailable to answer questions for a year now. Behind the scenes, he has commissioned South African mining consultants. SRK, to do a new inventory of SUAL assets, as if to freshen them up, after financial advisor Fleming Family & Partners, has spent an unsuccessful year trying to market them.

Titov has also confirmed that a recent shareholder meeting called in St. Petersburg, failed to proceed, because of the conflict between the two groups. Rusal is seeking a seat on the board of Metallurg. SUAL blocked the shareholders from meeting on a technicality.

The Volkhov smelter, in the Leningrad region, is the oldest, and smallest, of Russia’s primary aluminium producers, it was first constructed in 1932, but it has been upgraded as recently as 1999, and has annual output capacity of 50,000 tons per annum. Production in 2003 was 22,600 tons. That figure is just 3% of SUAL’s metal production for the year. It is even more minuscule compared to Rusal’s production numbers – just 0.9%.

The Pikalevo refinery, also in the Leningrad region, was started at the same time. But operations were postponed because of the German invasion until 1959. It is the smallest of Russia’s refineries, and last year turned out 249,130 tons of alumina, the vital raw material for producing aluminium metal. Pikalevo alumina comprised 12% of SUAL’s output. To Rusal, however, which is starved for alumina produced in Russia, Pikalevo represents almost one-quarter of what Rusaf is able to produce tor itsetf.

With local partners, SUAL owns about 80% of the shares in the two production units. It has been aiming to consolidate full control of the units, and make them wholly-owned subsidiaries of the SUAL group. The Rusal acquisition badly frustrates that plan. It also puts potential pressure on SUAL to make its alumina available to Rusal at prices that are more attractive than the imports Rusal is also obfiged to depend on,

Deripaska has made raids against Vekselberg before, less for raw material gains, and more to sabotage SUAL’s corporate consolidation plans, and greenmail Vekselberg into paying a high price to be left alone.

In January 2003 SUAL declared victory over Rusal, following a three-month long contest over a 32% shareholding in the Nadvortsk smelter. Alexei Goncharov told me at the time that SUAL had reached an agreement to buy the shareholding, which Rusaf had acquired from two Nadvortsk directors in October of 2002. He confirmed that the fight over Nadvoitsk had been a bitter one,

In November of 2002, Gulzhan Moldazhanova claimed Rusal wanted to buy into Nadvoitsk in order to have a source of aluminium dose to consumers in the remote northwestern wastes of Karelia. Moldazhanova was at the time Rusal’s director for corporate development Nowadays she manages Rusal’s cashflow and corporate lending programme from a seat at Basic Element, Derlpaska’s holding company. In the weeks that followed her remarks, Rusal spokesman Yevgeny Ivanov attacked SUAL in the press for withholding aluminium claimed by Rusal as shareholder; SUAL denied the charge, and criticized Rusal’s media tactics,

Nadvoitsk produces just 76,000 tons of aluminum,

SUAL hinted at the time that Deripaska’s raid was a violation of a gentleman’s agreement between Vekselberg and Deripaska that neither man would attack each other’s aluminium business. Deripaska, the Vekselberg group suggested, was no gentleman. But neither group has ever admitted how much the raid cost Deripaska, nor how much Vekselberg paid to make it go away.

Asked if SUAL plans to buy out the Rusal stake in Volkhov and Pikalevo, Titov gays he cannot “comment on how this situation will be solved.” Rusal’s Moscow office refused to say anything.

JUDAS ISCARIOT WRITES AN EDITORIAL

MOSCOW – The Moscow Times published an editorial Friday, which could only have been written by Judas Iscariot. The editorial is a wholesale denunciation of Mikhail Khodorkovsky, demonizing the man as he faces a likely prison sentence if the charges brought against him by Russian prosecutors are proven to be true. Talk about hitting a man when he is down.

The editorial comes in the wake of a decade-long relationship between Khodorkovsky’s Menatep and Yukos companies and Moscow Times.

Moscow Times is published by a former Dutch communist Derk Sauer who came to Russia as a reporter back in early 1990s. The early origins of financing for Moscow Times are still shrouded in a mystery buried deep in the files of a well-known organization in McLean, Virginia. But the newspaper found its niche promoting the privatization programs of President Boris Yeltsin, his favorite Anatoly Chubais, and his favorite in the U.S. Treasury, Lawrence Summers. Naturally, it became the favorite of the beneficiaries of that privatization. The editorials back then literally thanked God for people like Chubais and other prime beneficiaries of Russian privatization that saw mass looting of the country. At the peak of this sell off, the Moscow Times publisher applied for and landed himself a new patron – Khodorkovsky. Sauer needed his money to publish Playboy and Cosmopolitan. The methods, terms and scale of that cash injection into Sauer’s business remain almost secret to date. One of Khodorkovsky’s investment advisorsat the time has said that Sauer wanted to sell 20 percent of his publishing group; Khodorkovsky, acting through an outfit called Menatep Lausanne, agreed to just half, 10 percent. It is not known if the money Khodorkovsky paid Sauer is among the funds, which Khodorkovsky is now accused of laundering abroad. What is known, however, is that Sauer’s closest associates and partners have admitted selling their shares to Menatep for political protection in Russia. They never mentioned, however, how much money they got for that transaction. Nor did they ever announce the subsequent largesse the company kept on receiving for the following decade. Yukos was one of the first sponsors of the new newspaper by Sauer, Vedomosti.

His renamed banks and oil companies remained generous advertisers and sponsors. Moscow Times returned the favors by never asking any difficult questions about Menatep or Khodorkovsky, who attacked the Times of London group for daring to report that he was connected to Menatep Bank at the time of its default and collapse in 1998. That suit was settled by the Times of London with a confidential agreement that has deterred it from ever investigating Khodorkovsky again. The Moscow Times was already on retainer, and didn’t need a lawyers’ warning. Never once did Moscow Times notice wrongdoing at Menatep and Yukos; never once did the newspaper ask a difficult question; instead, it dispatched its reporters to brave sub-zero Siberian temperatures to do warm-up articles on how Yukos was changing Russia and Russian oil.

All that changed a few weeks after the July 2003 arrest of Platon Lebedev. Within days of the arrest, Moscow Times ran a front-page story accusing Lebedev of systematically intimidating reporters and curbing free speech. The reporters’ names were never mentioned. What Moscow Times did not reveal was that in a highly secretive deal, Sauer and his ironically named Independent Media had bought back the shares from Menatep and sold them, plus the stake held by VNU of the Netherlands, to Vladimir Potanin. The deal was arranged by Leonid Rozhetskin, a founding shareholder of Moscow investment bank Renaissance Capital and dealmaker

On contract to Potanin through Norilsk Nickel, where Rozhetskin is In November 2003, Potanin was the first big businessman to abandon Khodorkovsky, and to save himself offer tokens of his obedience to the Kremlin. The Moscow Times suddenly discovered the evil in Yukos and Khodorkovsky. Leading Moscow expatriates have told The Russia Journal how dismayed they were at the about turn by Moscow Times. “The newspaper never had any credibility, but the manner in which they turned on Khodorkovsky is just shameful,” said a leading American business leader in Moscow.

Few noticed that Moscow Times had begun to provide the same services to Potanin and his Norilsk Nickel and Interros holdings it had been giving to Yukos. No difficult questions about Potanin’s over-hyped investment deal with Hank Greenberg of AIG; no investigative stories of Potanin’s lobbying for favour from Finance Minister Alexei Kudrin; no truthful reports of the Norilsk Nickel miners’ strike against Potanin and his co-shareholder, Mikhail Prokhorov; no record of Potanin’s defeat in manipulating the Norilsk mayoral election won by a mine union leader.

Moscow Times and its parent company are hugely in debt to Potanin. At least, about 45 percent of their shares are owned by Potanin, and because of inherited debts, the Potanin interests have effective control.

The latest editorial by Moscow Times, biting the Khodorkovsky hand that once fed it while concealing Potanin’s hand, is a first, even for the newspaper known for its lack of openness and professional standards.

Judas would be ashamed. He was paid to betray his master, it is well known. Judas took sides, but then in remorse took his life. Sauer isn’t in that class.

AND THEN THERE WERE NONE

By John Helmer, Moscow
  @bears_with

Agatha Christie’s whodunit entitled And Then There Were None – the concluding words of the children’s counting rhyme — is reputed to be the world’s best-selling mystery story.    

There’s no mystery now about the war of Europe and North America against Russia; it is the continuation of Germany’s war of 1939-45 and the war aims of the General Staff in Washington since 1943. Defense Minister Sergei Shoigu (left) and President Vladimir Putin (right) both said it plainly enough this week.

There is also no mystery in the decision-making in Moscow of the President and the Defense Minister, the General Staff, and the others; it is the continuation of the Stavka of 1941-45.  

Just because there is no mystery about this, it doesn’t follow that it should be reported publicly, debated in the State Duma, speculated and advertised by bloggers, podcasters, and twitterers.  In war what should not be said cannot be said. When the war ends, then there will be none.  

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RUSSIANS RAISE THEIR GLASSES – THE TOAST IS TO BEATING THE BLOCKADE OF MOSCOW



By John Helmer, Moscow
  @bears_with

Alas and alack for the Berlin Blockade of 1948-49 (Berliner Luftbrücke): those were the days when the Germans waved their salutes against the unification of Germany demilitarised and denazified; and cheered instead for their alliance with the US and British armies to fight another seventy years of war in order to achieve what they and Adolf Hitler hadn’t managed, but which they now hope to achieve under  Olaf Scholtz — the defeat of the Russian Army and the destruction of Russia.

How little the Germans have changed.

But alas and alack — the Blockade now is the one they and the NATO armies aim to enforce against Russia. “We are drawing up a new National Security Strategy,” according to Foreign Minister Annalena Baerbock. “We are taking even the most severe scenarios seriously.”  By severe Baerbock means nuclear. The new German generation — she has also declared “now these grandparents, mothers, fathers and their children sit at the kitchen table and discuss rearmament.”  

So, for Russia to survive the continuation of this war, the Germans and their army must be fought and defeated again. That’s the toast of Russian people as they salute the intrepid flyers who are beating the Moscow Blockade.  

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THE INTERNATIONAL ATOMIC ENERGY AGENCY GOES TO WAR — GORILLA RADIO GOES NUCLEAR

By John Helmer, Moscow
  @bears_with

Last week the International Atomic Energy Agency’s (IAEA) board of governors voted to go to war with Russia by a vote of 26 member countries against 9.

China, Vietnam, India, Pakistan, Egypt, Senegal and South Africa voted against war with Russia.  

The IAEA Secretary-General Rafael Grossi (lead image, left) has refused to tell the press whether a simple majority of votes (18) or a super-majority of two-thirds (23) was required by the agency charter for the vote; he also wouldn’t say which countries voted for or against. The United Nations Secretary-General Antonio Guterres then covered up for what had happened by telling the press: “I believe that [IAEA’s] independence that exists and must be preserved is essential. The IAEA cannot be the instrument of parties against other parties.” The IAEA vote for war made a liar of Guterres.

In the IAEA’s 65-year history, Resolution Number 58, the war vote of September 15, 2022,  is the first time the agency has taken one side in a war between member countries when nuclear reactors have either been attacked or threatened with attack. It is also the first time the IAEA has attacked one of its member states, Russia, when its military were attempting to protect and secure a nuclear reactor from attack by another member state, the Ukraine, and its war allies, the US, NATO and the European Union states. The vote followed the first-ever IAEA inspection of a nuclear reactor while it was under active artillery fire and troop assault.

There is a first time for everything but this is the end of the IAEA. On to the scrap heap of good intentions and international treaties, the IAEA is following the Organisation for the Prohibition of Chemical Weapons (OPCW), and the UN Secretary-General himself.  Listen to this discussion of the past history when the IAEA responded quite differently following the Iranian and Israeli air-bombing attacks on the Iraqi nuclear reactor known as Osirak, and later, the attacks on Pakistan’s nuclear weapons sites.

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INTERNATIONAL ATOMIC ENERGY AGENCY TAKES UKRAINE SIDE IN WAR IN SEPTEMBER 15 VOTE, MAKING UN SECRETARY-GENERAL GUTERRES EITHER A LIAR OR A FOOL

By John Helmer, Moscow
  @bears_with

The International Atomic Energy Agency (IAEA) decided this week to take the side of Ukraine in the current war; blame Russia for the shelling of the Zaporozhye Nuclear Power Plant (ZNPP); and issue a demand for Russia to surrender the plant to the Kiev regime “to regain full control over all nuclear facilities within Ukraine’s internationally recognized borders, including the Zaporizhzhya Nuclear Power Plant.”      

This is the most dramatic shift by the United Nations (UN) nuclear power regulator in the 65-year history of the organisation based in Vienna.

The terms of the IAEA Resolution Number 58, which were proposed early this week by the Polish and Canadian governors on the agency board, were known in advance by UN Secretary-General Antonio Guterres when he spoke by telephone with President Vladimir Putin in the late afternoon of September 14, before the vote was taken. Guterres did not reveal what he already knew would be the IAEA action the next day.  

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THE RUSSIAN SITUATION COMEDY IS NO LYING MATTER – THE JOKE IS ON THE OFFICE OF FOREIGN ASSETS CONTROL

By John Helmer, Moscow
  @bears_with

Never mind that King Solomon said proverbially three thousand years ago, “a merry heart doeth good like a medicine.”  

With seven hundred wives and three hundred concubines, Solomon realized he was the inventor of the situation comedy. If not for the sitcom as his medicine, the bodily and psychological stress Old Solly had to endure in the bedroom would have killed him long before he made it to his death bed at eighty years of age,  after ruling his kingdom for forty of them.

After the British sitcom died in the 1990s, the subsequent stress has not only killed very large numbers of ordinary people. It has culminated today in a system of rule according to which a comic king in Buckingham Palace must now manage the first prime minister in Westminster  history to be her own joke.

Even the Norwegians, the unfunniest people in Europe, have acknowledged that the only way to attract the British as tourists, was to pay John Cleese of Monty Python and Fawlty Towers to make them laugh at Norway itself.   This has been a bigger success for the locals than for the visitors, boosting the fjord boatman’s life expectancy several years ahead of the British tourist’s.  

In fact, Norwegian scientists studying a sample of 54,000 of their countrymen have proved that spending the state budget on public health and social welfare will only work effectively if the population is laughing all the way to the grave. “The cognitive component of the sense of humour is positively associated with survival from mortality related to CVD [cardio-vascular disease] and infections in women and with infection-related mortality in men” – Norwegian doctors reported in 2016. Never mind the Viking English:  the Norwegian point is the same as Solomon’s that “a sense of humour is a health-protecting cognitive coping resource” – especially if you’ve got cancer.  

The Russians understand this better than the Norwegians or the British.  Laughter is an antidote to the war propaganda coming from abroad, as Lexus and Vovan have been demonstrating.   The Russian sitcom is also surviving in its classic form to match the best of the British sitcoms, all now dead – Fawlty Towers (d. 1975), Black Adder (d. 1989), You Rang M’Lord? (d. 1988), Jeeves and Wooster (d. 1990), Oh Dr Beeching! (d.1995), and Thin Blue Line (d. 1996).

The Russian situation comedies, alive and well on TV screens and internet streaming devices across the country, are also increasingly profitable business for their production and broadcast companies – not despite the war but because of it. This has transformed the Russian media industry’s calculation of profitability by removing US and European-made films and television series, as well as advertising revenues from Nestlé, PepsiCo, Mars, and Bayer. In their place powerful  Russian video-on-demand (VOD) streaming platform companies like Yandex (KinoPoisk), MTS (Kion),  Mail.ru (VK), and Ivi (Leonid Boguslavsky, ProfMedia, Baring Vostok)  are now intensifying the competition for audience with traditional television channels and film studios for domestic audiences.  The revenue base of the VOD platforms is less vulnerable to advertisers, more dependent on telecommunications subscriptions.

Russian script writers, cameramen, actors, designers, and directors are now in shorter supply than ever before, and earning more money.  “It’s the Russian New Wave,” claims Olga Filipuk, head of media content for Yandex, the powerful leader of the new film production platforms; its  controlling shareholder and chief executive were sanctioned last year.  

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RUSSIAN AVIATION INDUSTRY CORRECTS YELTSIN YAW – BOEING, AIRBUS DITCHED



By Olga Samofalova, translated and introduced by John Helmer, Moscow
  @bears_with

It was the American humourist Mark Twain who didn’t die in 1897 when it was reported that he had. Twain had thirteen more lively years to go.

The death of the Russian aerospace and aviation industry in the present war is proving to be an even greater exaggeration – and the life to come will be much longer. From the Russian point of view, the death which the sanctions have inflicted is that of the US, European and British offensive against the Soviet-era industry which President Boris Yeltsin (lead image, left) and his advisers encouraged from 1991.

Since 2014, when the sanctions war began, the question of what Moscow would do when the supply of original aircraft components was first threatened, then prohibited, has been answered. The answer began at the Federal Aviation Administration (FAA) in 1947 when the first  Supplemental Type Certificate (STC) or Parts Manufacturing Approval (PMA) was issued by Washington officials for aircraft parts or components meeting the airworthiness standards but manufactured by sources which were not the original suppliers.   

China has been quicker to implement this practice; Chinese state and commercial enterprises have been producing PMA components for Boeing and Airbus aircraft in the Chinese airline fleets for many years.  The Russian Transport Ministry has followed suit; in its certification process and airworthiness regulations it has used the abbreviation RMA, Cyrillic for PMA. This process has been accelerating as the sanctions war has escalated.

So has the Russian process of replacing foreign imports entirely.

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FOR WANT OF A NAIL THE KINGDOM WAS LOST – ENGLISH PATHOLOGIST GUY RUTTY FACES CHALLENGE TO THE RELIABILITY OF HIS NOVICHOK EVIDENCE



By John Helmer, Moscow
  @bears_with

The weakest link in the British government’s four-year long story of Russian Novichok assassination operations in the UK – prelude to the current war – is an English medical expert by the name of Guy Rutty (lead image, standing).

A government-appointed pathologist advising the Home Office, police, and county coroners, Rutty is the head of the East Midlands Forensic Pathology Unit in Leicester,  he is the author of a post-mortem report, dated November 29, 2018,  claiming that the only fatality in the history of the Novichok nerve agent (lead image, document), Dawn Sturgess, had died of Novichok poisoning on July 8, 2018. Rutty’s finding was added four months after initial post-mortem results and a coroner’s cremation certificate stopped short of confirming that Novichok had been the cause of her death.

Rutty’s Novichok finding was a state secret for more than two years. It was revealed publicly   by the second government coroner to investigate Sturgess’s death, Dame Heather Hallett, at a public hearing in London on March 30, 2021. In written evidence it was reported that “on 17th July 2018, Professor Guy Rutty MBE, a Home Office Registered Forensic Pathologist conducted an independent post-mortem examination. He was accompanied by Dr Phillip Lumb, also an independent Home Office Registered Forensic Pathologist. Professor Rutty’s Post-Mortem Report of 29th November 2018 records the cause of death as Ia Post cardiac arrest hypoxic brain injury and intracerebral haemorrhage; Ib Novichok toxicity.”  

Hallett, Rutty, Lumb, and others engaged by the government to work on the Novichok case have refused to answer questions about the post-mortem investigations which followed immediately after Sturgess’s death was reported at Salisbury District Hospital; and a cause of death report signed by the Wiltshire Country coroner David Ridley, when Sturgess’s body was released to her family for funeral and cremation on July 30, 2018.  

After another three years, Ridley was replaced as coroner in the case by Hallett in March 2021. Hallett was replaced by Lord Anthony Hughes (lead image, sitting) in March 2022.

The cause-of-death documents remain state secrets. “As you have no formal role in the inquest proceedings,” Hallett’s and Rutty’s spokesman Martin Smith said on May 17, 2021, “it would not be appropriate to provide you with the information that you have requested.” 

Since then official leaks have revealed that Rutty had been despatched by the Home Office in London to take charge of the Sturgess post-mortem, and Lumb ordered not to undertake an autopsy or draw conclusions on the cause of Sturgess’s death until Rutty arrived. Why? The sources are not saying whether the two forensic professors differed in their interpretation of the evidence; and if so, whether the published excerpt of Rutty’s report of Novichok poisoning is the full story.   

New developments in the official investigation of Sturgess’s death, now directed by Hughes, have removed the state secrecy cover for Rutty, Lumb, and other medical specialists who attended the post-mortem on July 17, 2018. The appointment by Hughes of a London lawyer, Adam Chapman, to represent Sergei and Yulia Skripal, opens these post-mortem documents to the Skripals, along with the cremation certificate, and related hospital, ambulance and laboratory records. Chapman’s role is “appropriate” – Smith’s term – for the Skripals to cross-examine Rutty and Lumb and add independent expert evidence.

Hughes’s appointment of another lawyer, Emilie Pottle (lead image, top left), to act on behalf of the three Russian military officers accused of the Novichok attack exposes this evidence to testing at the same forensic standard. According to Hughes,  it is Pottle’s “responsibility for ensuring that the inquiry takes all reasonable steps to test the  evidence connecting those Russian nationals to Ms Sturgess’s death.” Pottle’s responsibility is to  cross-examine Rutty and Lumb.

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KILLING IS CHEAPER — THE US ARMY SPECIAL OPERATIONS COMMAND WEAPONIZES TWITTER, FACEBOOK, INSTAGRAM, WHATSAPP, TELEGRAM

By John Helmer, Moscow
  @bears_with

The US Army’s Special Operations Command (SOCOM) has been firing several hundred million dollars’ worth of cyber warheads at Russian targets from its headquarters at MacDill Airforce Base in Florida. They have all been duds.

The weapons, the source, and their failure to strike effectively have been exposed in a new report, published on August 24, by the Cyber Policy Center of the Stanford Internet Observatory.  The title of the 54-page study is “Unheard Voice: Evaluating Five Years of Pro-Western Covert Influence Operations”.

“We believe”, the report concludes, “this activity represents the most extensive case of covert pro-Western IO [influence operations] on social media to be reviewed and analyzed by open-source researchers to date… the data also shows the limitations of using inauthentic tactics to generate engagement and build influence online. The vast majority of posts and tweets we reviewed received no more than a handful of likes or retweets, and only 19% of the covert assets we identified had more than 1,000 followers. The average tweet received 0.49 likes and 0.02 retweets.”

“Tellingly,” according to the Stanford report, “the two most followed assets in the data provided by Twitter were overt accounts that publicly declared a connection to the U.S. military.”

The report comes from a branch of Stanford University, and is funded by the Stanford Law School and the Spogli Institute for Institutional Studies, headed by Michael McFaul (lead image).   McFaul, once a US ambassador to Moscow, has been a career advocate of war against Russia. The new report exposes many of McFaul’s allegations to be crude fabrications and propaganda which the Special Operations Command (SOCOM) has been paying contractors to fire at Russia for a decade.

Strangely, there is no mention in the report of the US Army, Pentagon, the Special Operations Command, or its principal cyberwar contractor, the Rendon Group.

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MARIA YUDINA OUT OF THE DARK – THE RUSSIAN CLASSICAL PIANIST PLAYS AGAIN

By John Helmer, Moscow
  @bears_with

Maria Yudina (lead image) is one of the great Russian pianists. She was not, however, one who appealed to all tastes in her lifetime, 1899 to 1970.

In a new biography of her by Elizabeth Wilson, Yudina’s belief that music represents Orthodox Christian faith is made out to be so heroic, the art of the piano is diminished — and Yudina’s reputation consigned again to minority and obscurity. Russian classical music and its performers, who have not recovered from the Yeltsin period and now from the renewal of the German-American war, deserve better than Wilson’s propaganda tune.

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