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By John Helmer in Moscow

Oleg Deripaska is under unexpected personal pressure, at home and abroad, just when his plan to take control of one of the largest bauxite and aluminium producers in the world is close to final government approval. And that is exactly why the trouble for Deripaska is growing now.

Russian government authorization this month of the creation of a monopoly aluminium concern, integrating domestic and foreign bauxite, alumina, and aluminium production assets, has followed a no-objection ruling from the European Commission (EC) in Brussels. The unconditional ruling was issued by the EC on February 1.

The published text indicates that EC anti-trust regulators found no evidence that the new United Company Rusal will control a significant volume of the alumina and aluminium traded in the European Economic Area. The Commission concluded, says the release, ” that the operation would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.”
(more…)

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By John Helmer in Moscow

The decision of the Estonian government to remove the city’s Soviet war
memorial and the graves of Red Army soldiers who fell in the last war
against Germany has been an on/off thing for months.

Now that it’s on, clashes between protesters and supporters, have already
cost one life (Russian); inflicted grievous bodily injury; damaged property;
affronted the amour-propre of Estonian diplomats in Moscow; and generated
reams of anti-Russian media copy across Europe and the United States.

Even President George Bush has weighed in — on the side of the Estonian
victims of an alleged Kremlin oil cutoff. Only there’s no evidence of this.
An unusually warm burst of spring and early summer weather across Europe is
the real culprit, cutting demand for both gas and heavy oil for heating.

Gazprom, Russia’s dominant gas exporter, has also been feeling the pinch
from the weather, reporting this week that its exports to Europe fell in the
January-March period by 24%, compared to the same time in 2006. But if
Mother Nature — that Madame Butterfly ever faithful to the seasons — can
be pressed into campaigning against the Kremlin on behalf of the Bush
Administration, why blame Reuters for failing to check the temperature, and
for putting the blame on President Vladimir Putin instead? (more…)

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By John Helmer in Moscow

Never complain, never explain — that was the advice of the worst loser in
modern American politics, Richard Nixon.

Norilsk Nickel, the lead mining company of Russia and biggest nickel
producer in the world, appears not to understand how to lose, now that its
bid for LionOre has been topped by Xstrata, and the LionOre board has agreed
on terms that appear to lock in acceptance of the Swiss bid.

A statement issued by the newly named chief executive at NorNick, Denis
Morozov, commits both of the Nixon faults — first complaining at Xstrata’s
tactics, and then explaining why NorNick’s losing bid might be better — if
the world were different, and shareholdings didn’t cost money that
shareholders want.

(more…)

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By John Helmer in Moscow

It’s a pity Vladimir Lenin was tone deaf, and dismissed music (along with chess) as an entertainment for the ruling class. Had he an ear and taste for classical music (like Karl Marx, who was keen on Beethoven, and Leon Trotsky, who loved Verdi), he might have devised a revolutionary doctrine for the performing arts. This could have protected Russia from the likes of Mstislav Rostropovich the cellist, Nikita Mikhalkov the filmmaker, Valery Gergiev the conductor, and X the theatre director.

I regret I am obliged to avoid using X’s, or his Moscow theatre’s real name, because he and his colleagues are so thin-skinned, so despotic, and so vengeful, they brook no criticism, and would react by attacking the livelihood of a member of my family.

And this is the point: the erstwhile freedom which the presidency of Boris Yeltsin introduced, after toppling Mikhail Gorbachev in 1990, was not a freedom for artistic expression in Russia at all. It was the start of a new dictatorship, much worse for Russian culture, its producers and consumers, than anything that had gone before.

The eulogies over the death of Rostropovich — which followed Yeltsin’s in Moscow by five days in April — miss the point of the human rights which Rostropovich made a reputation pursuing, aggressively, during the Yeltsin period – Rostropovich’s interest was limited to advancing his own right to make as much money out of Russia as possible. Even an oligarch as wealthy as Oleg Deripaska, owner of Russian Aluminium, expressed his shock at the size of the performance fee Rostropovich once demanded for a charity concert in the Samara region, sponsored by Deripaska’s company.

Just as Yeltsin privatized Russia’s natural resources for the benefit of a handful of his supporters, who banked the cash value abroad; so Yeltsin’s privatization of Russia’s cultural resources made a handful of performing artists very rich. The cultural privatization also started a reign of new terror, in which this handful of men took control of the performing arts in Moscow – the concert halls, theatre stages, film studios, airwaves – and systematically destroyed all rivals for a dwindling state culture budget, corruptly garnering the public resources which had supported Soviet arts education, copyrights, and broadcasting, for their private gain. Unreformed, they still rule today. The destruction they wreaked was far greater, countrywide, and longer lasting than the policies of the cultural commissars of Stalin’s time. (more…)

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By John Helmer in Moscow

There have been two deconstructionists and reconstructivists of the music of J.S. Bach in our time. Both are dead now — Glenn Gould, aged 50, died in 1982; and Mstislav Rostropovich, aged 80, died this week. The music of one of them will live forever.

It was forty-four years ago, I remember, on a dry, wintry Saturday afternoon in January of 1963, when Rostropovich played Bach’s six unaccompanied cello suites in Tokyo. The concert was in the then brand-new, ultra-modern concert hall in Ueno Park, which was sold out for the solo recital. To get in for a back seat, I spent all of my scarce student’s money, and had to do without dinner that evening to hear the music. After watching the ungainly bulk of the man, alone on the vast stage, wrestle his instrument into life, and release the music like a slow detonation from one end of the music-hall to the other, I felt a charge; as you can see, I remember it to this day. For years afterwards, there was no other performer for me of the Bach cello suites – not Casals, nor Fournier, nor Piatigorsky, nor Rose, nor the next generation of Du Pre and Ma. To a young man’s ear, Rostropovich’s interpretation replaced the romantic, rhapsodic lilt, exposing the revolutionary structures of sound that had been missed in Bach’s own time. For all I knew then, Rostropovich’s performance was the first not to miss it.
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By John Helmer in Moscow

If life were a circus, then the only reason a contemplative man would walk behind an elephant in a ring, wielding bucket and shovel, would be for the money, not for the laughs.

John Lloyd, a onetime Moscow correspondent of the Financial Times, has made many of his colleagues and readers laugh at him. But it was his eulogy upon the death of ex-President Boris Yeltsin, just published by the Financial Times, that has been convincing. Lloyd hasn’t been clowning all this time for laughs. He’s been putting shit in a bucket for the money.

And good money it was, certainly when his then wife headed the Moscow office of a well-known English law firm, and Lloyd filled his Moscow despatches with tales of the good fortune falling from the parapets of the Kremlin for her clientele. There was the odd and embarrassing pratfall; the time, for example, when Lloyd reported, and the FT printed, that Yegor Gaidar had been voted in as prime minister, when that favourite of Lloyd, his wife’s law firm, and the FT had in fact been trounced by Victor Chernomyrdin. Thus did Gaidar’s high political career end – in retrospect, we can now say, for good – while Lloyd was telling the FT audience the reverse.
(more…)

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By John Helmer in Washington

When Hank Greenberg owned and ran AIG as his personal fiefdom, he was credited in the industry with originating the policy of never paying out claims unless the claimants threatened costly recovery litigation. When Greenberg tried the non-payment ploy himself recently, his reputation has come back to haunt him in a Boston courthouse.

A secret exercise in public relations spending and planting of newspaper articles to burnish Greenberg, and smear his prosecutor, then New York state attorney-general Eliot Spitzer, has been exposed in a detailed court claim, charging Greenberg with stiffing his PR agents, and refusing to pay more than $2 million in unpaid invoices for the services he had procured. One of the services Green paid for was to hire a prominent US business academic to “blunt” the impact of the prosecution against Greenberg for AIG’s business practices.
(more…)

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By John Helmer in Moscow

The worst-ever coal mine disaster in Russia, with a death-toll of at least 102 miners, and not less than another 8 still missing, hit the Ulyanovsk mine in Siberia on Monday afternoon.

Owned by Yuzhkuzbassugol (“South Kuzbass Coal”), one of the largest coal and coking coal producers in Russia, the mine was opened in 2002; it was reportedly equipped with the most modern equipment.

Failure to prevent a sudden increase in methane was initially blamed for the explosion that triggered the shaft collapse, trapping and killing miners. However, a statement from the General Prosecutor’s Office in Moscow, broadcast on national television Tuesday afternoon, said the explosion was triggered when mine managers were demonstrating equipment below surface to a visiting British auditor, Ian Robertson. All were killed. The name of the audit company has not been released yet. The audit was being conducted for the benefit of the initial share offering, planned by Yuzhkuzbassugol over the past six months.
(more…)

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By John Helmer in Moscow

RUSSIAN President Vladimir Putin’s visit to Athens this week – his second in six months, a Russian presidential record – is so unusual, its meaning may not be fully understood. Moreover, few Russians accompanying Putin are able to put into clear perspective the relationship which the president himself is trying to create.

For one thing, by choosing to meet his Greek and Bulgarian counterparts for a second signing ceremony that he could have delegated to a lower level, Putin is putting an end to false hopes that have bedevilled the Burgas-Alexandroupolis pipeline project for the decade that preceded Putin’s direct intervention last year.

The new pipeline is being built because the project supports strategic interests of the Russian state in seeing one of its natural resources safely to market, across friendly territory.

Commercial payoffs there will be. But these are the crumbs that will be divided after the majority shareholders of the project – Russia’s state pipeline company Transneft, and the state oil and gas companies, Rosneft and Gazprom – fix the lion’s share.
(more…)

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It was the 19th century English poet William Wordsworth who once warned that “in modern business it is not the crook who is to be feared most; it is the honest man who doesn’t know what he is doing.”

Since self-proclaimed presidential candidate Sergei Glazyev isn’t a crook, and he sues television broadcasters for moral damage for so much as suggesting that not all his qualifying signatures are valid, let us hasten to our conclusion by declaring that he is, or at least was, an honest man, who doesn’t know what he is doing. According to those who have known him since he was a precocious university student, it has always been so. Glazyev’s problem is that he doesn’t know what he doesn’t know about himself. That can be a fatal, if not quite tragic flaw, in politics. It is not something that anyone else in Russian politics need be afraid of.

When it comes to fatal flaws, Dmitri Rogozin, Glazyev’s erstwhile partner these days, has seen them before. In 1995, for example, when Rogozin was manager and strategist for a political movement called the Congress of Russian Communities (KRO), Rogozin was the brains behind the political rise of General Alexander Lebed. Like Glazyev, Lebed was an honest man, who didn’t know what he was doing. Like Glazyev too, he had an ambition for power; an intolerance of fools; and a vanity that couldn’t abide an insult, but was easy prey to flattery.

Lebed was Rogozin’s candidate to fire up Russian voters during the 1995 Duma election campaign as an alternative to Yeltsin, whom Rogozin detested, but found useful; and to the Communist party, whom Rogozin judged to have no usefulness, nor any future for himself.

Rogozin explained Lebed’s positioning to me in June of 1996. That was six months after Lebed had helped push KRO over the 5-percent barrier, and into the new Duma – only to see Yeltsin use fraud to lower the official vote tally, and keep him out. Yeltsin’s aides then approached Rogozin and Lebed with a fresh offer. They would help Lebed to double his vote in the first round of the presidential election, in order to draw votes away from the Communist Party candidate, Gennady Zyuganov, then well in front of Yeltsin among the majority of voters. If Lebed could neutralize Zyuganov’s lead, Yeltsin’s men promised a fresh deal. Lebed could have his choice of a senior post in the new Yeltsin administration, they said, in exchange for directing his voters towards Yeltsin in the second round against Zyuganov. Lebed asked for a revival of the vice-presidency. It was agreed, Rogozin said, that he would get a post with “broad authority to control the force structures and the right to confirm candidates for all major ministries.” When Lebed won just over 14% in the June 16 ballot, he had demonstrated his part of the bargain. Yeltsin had barely managed to stay ahead of Zyuganov, 34% to 31%. All that remained was for Yeltsin to promote Lebed to the Kremlin, and for Lebed to endorse Yeltsin in the second round. Within twenty-four hours of the poll, Lebed took the post of head of the Security Council. The power in the portfolio was kept secret, however.

As Rogozin explained what happened next, Anatoly Chubais, the presidential campaign chief, intervened. Just three days after Lebed’s appointment, Chubais forced Yeltsin to fire the two crucial advisors, Alexander Korzhakov and Mikhail Barsukov, who had been behind the Lebed deal. For seventy-two hours, Lebed thought he had been in charge of the government, when Chubais made his move. Once Korzhakov and Barsukhov were out, Lebed found himself isolated, and compared to Chubais with Yeltsin, impotent. It was a position that Rogozin had warned Lebed to avoid, but the general wouldn’t listen. It was also the end of Lebed’s power, before he had even begun to exercise it. It was the end of Rogozin’s support for Lebed.

It’s a charming coincidence that, after Yeltsin won the presidency over Zyuganov, and Chubais had reinforced himself, Lebed engaged Glazyev to serve as his deputy in charge of economic security. It’s a post that didn’t last long. Glazyev doesn’t like to talk about it nowadays, especially not when it is recalled that he and Lebed went on the attack against oligarchs like Vladimir Potanin. For a time, Glazyev even attempted to reverse Potanin’s illegal grab of Norilsk Nickel. But with Glazyev under Lebed’s boot, and Lebed under Chubais’s thumb, Potanin won out easily. Glazyev is so uncomfortable about what happened then, that when asked several times last year, during his campaign for the Duma, whether he backed the Norilsk Nickel workers in their campaign against Potanin, he refused to answer. Even during Potanin’s fraudulent, if feeble campaign to prevent the election of union leader Valery Melnikov to become Mayor of Norilsk city, Glazyev kept his mouth shut.

There are very few new tricks in politics, and so it isn’t exactly another coincidence that when Glazyev and Rogozin led their Rodina (“Motherland”) bloc in the December parliamentary election, they aimed their fire at a target they defined so vaguely that it wouldn’t embarrass Glazyev to name names. In 1996 Rogozin and Lebed made a deal with Yeltsin that they would campaign aggressively, but never attack Yeltsin personally. Only the voters were fooled. In 2003 Glazyev never attacked President Vladimir Putin, nor did he attack any of the oligarchs by name. In January, after Glazyev announced his run for the president, a Moscow newspaper asked him what he had to say about the incumbent. He replied, without using Putin’s name: “The Kremlin’s pursuing a policy of passively following price fluctuations in the global fuel market. This policy deprives us of economic growth because it encourages the brain drain and capital flight.” If this is an honest man saying what he really thinks of a politician he’s trying to beat, it’s plain he doesn’t know what he is doing.

During the Duma campaign, I asked Glazyev to say what he thought of the sale of Yukos to a foreign oil company. He refused to reply. When Vedomosti recently asked him to speak directly on the arrest and jailing of Mikhail Khodorkovsky, Glazyev responded:

“Business and government should be separated, since the government promotes national interests while business promotes its own interests.” I have tried to get him to be specific. Does he believe Putin is backing the oligarchs in general? Roman Abramovich in particular? What does he advocate for government policy towards Norilsk Nickel’s shareholding control by Potanin? Does he favour restructuring the Deripaska aluminium empire in any way? Glazyev evades the questions by instructing his spokesmen to say he’s too busy. The refusal to answer is obvious, nonetheless.

It is also obvious that the break Rogozin once came to with Lebed has occurred again with Glazyev, and with about the same speed as before. The only difference is that in 1996 Lebed failed to anticipate the double-cross which Yeltsin pulled on him, after Lebed had surrendered. Maybe this time Glazyev has pulled the double-cross first, deciding to run against Putin, after doing what the Kremlin wanted him to do during the Duma campaign. However, if Glazyev is honest about running against the president, he doesn’t seem capable of moving his mouth in that direction.

Over his years in politics Glazyev has come to regard himself as an ace. But the facts speak louder than he does. He is more the joker in the pack – the card that game-players can use to serve any value or function at all.