Bombshell from London

by Eric S. Margolis

THE London-based International Institute for Strategic Studies (IISS), is the world’s leading think tank for military affairs. It represents the top echelon of defence experts, retired officers and senior military men, spanning the globe from the United States and Britain to China, Russia and India.

I’ve been an IISS member for over 20 years. IISS’s reports are always authoritative but usually cautious and diplomatic, sometimes dull. However, two weeks ago the IISS issued an explosive report on Afghanistan that is shaking Washington and its Nato allies.

The report, presided over by the former deputy director of Britain’s foreign intelligence agency, MI-6, says the threat from al-Qaeda and Taliban has been “exaggerated” by the western powers. The US-led mission in Afghanistan has “ballooned” out of all proportion from its original aim of disrupting and defeating al-Qaeda. The US-led war in Afghanistan, says IISS, using uncharacteristically blunt language, is “a long-drawn-out disaster”.

Just recently, CIA chief Leon Panetta admitted there were no more than 50 members of Al Qaeda in Afghanistan. Yet US President Barack Obama has tripled the number of US soldiers there to 120,000 to fight Al Qaeda.

The IISS report goes on to acknowledge the presence of western troops in Afghanistan is actually fuelling national resistance. I saw the same phenomena during the 1980’s Soviet occupation of Afghanistan.

Interestingly, the portion of the report overseen by the former MI-6 Secret Intelligence Service deputy chief, Nigel Inskster, finds little Al Qaeda threat elsewhere, notably in Somalia and Yemen. Yet Washington is beefing up its attacks on both turbulent nations.

Abandoning its usual discretion, IISS said it was issuing these warnings because the deepening war in Afghanistan was threatening the west’s security interests by distracting its leaders from the world financial crisis and Iran, and burning through scarce funds needed elsewhere.

The IISS’s findings are a direct challenge to Obama, Britain’s new prime minister, David Cameron, and other US allies with troops in Afghanistan. This report undermines their rational used to sustain the increasingly unpopular conflict. It will certainly convince sceptics that the real reason for occupation of Afghanistan has to do with oil, excluding China from the region, and keeping watch on nuclear-armed Pakistan.

The report also goes on to propose an exit strategy from the Afghan War. Western occupation troops, IISS proposes, should be sharply reduced and confined to Kabul and northern Afghanistan, which is mostly ethnic Tajik and Uzbek.

Southern Afghanistan – Taliban country – should be vacated by Western forces and left alone. Taliban would be allowed to govern its own half of the nation until some sort of loose, decentralised federal system can be implemented. This was, in fact, pretty much the way Afghanistan operated before the 1979 Soviet invasion.

Meanwhile, the war in Afghanistan is turning against the increasingly wobbly western occupation forces. The US-installed Afghan leader, Hamid Karzai, openly prepares for direct peace talks with Taliban and its allies – in spite of intense opposition from the US, Britain and Canada.

Pro-government Afghan forces are increasingly demoralised. Only the Tajik and Uzbek militias, and Afghan Communist Party, both supported by India, Russia and Iran, want to keep fighting the Pashtun Taliban.

Taliban leader Mullah Omar last week proclaimed the western occupiers were rapidly losing the war. He may well be correct. Nothing is going right for the US-backed Kabul regime or its western defenders. Even the much-ballyhooed US offensive at Marjah, designed to smash Taliban resistance, was an embarrassing fiasco. Civilian casualties from US bombing continue to mount.

Europeans are fed up with the Afghan war. Polls report 60% of Americans think the war not worth fighting.

The IISS bombshell comes on the heels of the most dramatic part of the British Chilcot Inquiry into the origins of the invasion of Iraq. Baroness Manningham-Buller the former head of Britain’s domestic security service, MI-5, testified that the Iraq War was generated by a farrago of lies and faked evidence from the Blair government. What we call “terrorism” is largely caused by the western invasions of Afghanistan and Iraq, she testified.

The truth about Iraq and Afghanistan is finally emerging.

Afghanistan may again prove to be “the graveyard of empires”.

Eric S. Margolis is a contributing editor to the Toronto Sun chain of newspapers, writing mainly about the Middle East and South Asia. Comments:letters@thesundaily.com

The Other Flood In Pakistan

The Flood

BY KREPON

The clearest thinking and writing I’ve ever done was under the influence of chemo drips. The prospect of death can be life affirming… or not.

The Soviet Union was on a chemo drip for the decade before it died, but few took serious notice. Sovietologists in the United States were too threat-oriented to recognize grave weaknesses. And those who benefitted so much from the perks of state in the USSR were, for the most part, disinterested or incapable of reversing negative trend lines. To be sure, the Nomenclatura knew that new energy was badly needed at the top, which accounted for the elevation of Mikhail Gorbachev. But the rot was so far advanced by that time that Gorbachev’s attempts at reform unhinged the state.

All of the nuclear weapons and fissile material accumulated by the Soviet security apparatus – stockpiles so large that no keeper of this treasure had an accurate count – helped not one bit to change this outcome. These surpluses were more than sufficient for deterrence, but worse than useless for what ailed the Soviet Union. Nuclear weapons could not reform a culture of corruption, political institutions or the agricultural sector.

Pakistan now faces an existential crisis that requires, for starters, clear thinking. A country in desperate need of water has been deluged by it. A political system that justifiably receives low marks for governance in the absence of crises could not cope with a natural disaster of this magnitude. President Asif Ali Zadari, now emblematic of what ails Pakistan, chose not to let the onset of flooding interfere with his travel plans to France, where he reportedly checked on his real estate portfolio, and Great Britain, where he planned to choreograph a public appearance by his son, recently graduated from Oxford, to help secure another family inheritance, one of Pakistan’s major political parties. This seminal event was shelved in lieu of a fund raiser for disaster relief. [Product endorsement: Readers can make earmarked charitable contributions to help Pakistan recover from this disaster via the Red Cross and Doctors without Borders.]

For Pakistan, as well as India, the future now holds a million mutinies. Indian security forces are used to managing mutinies; Pakistan’s security forces are not. With an economy in decline, croplands and power grids destroyed, and a ruling class that does not believe in load sharing, micro-level revolts over land and electricity are likely to pile on to the macro list of Pakistan’s woes. Sectarian violence has not taken a holiday during Ramazan and the flood; militant groups are threatening U.S. aid workers, and the hollowing out of Islamabad’s writ over the country is accelerating. As if this weren’t enough, the pride of Pakistan – members of the national cricket team – have been credibly accused of fixing matches.

Disease gets a blank check when existential threats do not prompt a re-thinking of root causes. Pakistan’s military leaders now face very hard questions, the result of poor decisions made at earlier, critical junctures. Pakistan’s Kashmir policy, which was once viewed as a low-cost way to keep India off-balance and foster national unity has done far more damage to Pakistan than to India. Military takeovers have stymied political development without promoting sound governance. The Army’s expansion into economic domains has restricted economic growth and entrepreneurship. [Ayesha Siddiqa, in Military Inc.: Inside Pakistan’s Military Economy (2007), estimates that Pakistan’s military accounts for 7% of the nation’s GDP; runs one-third of Pakistan’s heavy manufacturing; owns 59% of all rural, arable land and 65% of it in Punjab.] It is hard for Pakistan’s military to prepare to defend national territory when it is trying to run Pakistan’s government, agriculture and economy.

The cost of defending Pakistan would be significantly less if Pakistan pursued reconciliation and economic trade with India, but movement along these lines in the past has been stymied by assaults on iconic Indian targets by young men trained and equipped in Pakistan. New Delhi’s political leaders should have the wisdom to understand that seizing and holding Pakistani territory would be like trying to swallow a porcupine, but continued mass casualty attacks by militant, Islamic groups based in Pakistan beg the question of New Delhi’s continued forbearance. India’s armed forces have the responsibility of developing punitive plans and are acquiring the capabilities to execute them if given these orders.

Pakistan’s military is therefore caught between a rock and a hard place. The conventional balance is tipping more and more in India’s favor, which means relying increasingly on nuclear weapons that, if used, would be Pakistan’s ultimate disaster. (In the midst of current travails, Pakistan’s Ambassador to the Conference on Disarmament, Zamir Akram, reaffirmed his country’s veto on starting FMCT negotiations.) Militant groups remain a double-edged sword. The Army is taking on one group, the Tehrik-e-Taliban Pakistan that has blown up mosques, markets and military installations, at significant cost. Other outfits, such as the Lashkar-e-Taiba and its parent organization, are inconvenienced only after major explosions in India. They are poison to Pakistan’s political and economic development, posing a threat to the state that Muhammad Ali Jinnah envisioned — but they are also likely to become the Pakistan Army’s allies in the event of an Indian attack triggered by their actions. The longer this dilemma continues, the harder it becomes for the Pakistan Army to address. Taking over governing functions would only add to GHQ’s headaches, but it is once again evident that Pakistan’s political leaders have done well for themselves and poorly for their country.

So what, in current circumstances, does it mean to defend Pakistan

Afghanistan should restrict Taliban’s movement: Malik

[The movement of arms from Afghanistan to Pakistan is far more important than arms coming from Pakistan, simply because one is an open secret and the other will bring down the house of cards that American misleaders have constructed in Afghanistan.  If Malik follows his charges to their conclusion it will either reveal the Indian/American/Israeli/British/Russian arms smugglers, or lead to Pakistani troops crossing the border into Afghanistan to attack Indian assets.]

ISLAMABAD: Federal Interior Minister Rehman Malik has said that we won’t back away an inch and would sacrifice everything for the security and sovereignty of our country. The process of arms smuggling from the neighboring countries and Taliban movement should stop now.
In an interview with a private TV channel, Rehman Malik said that Pakistan has given enormous sacrifices in the war on terror. He said that our army gave a befitting response to terrorists operating in Swat and Malakand and we are continuing to give sacrifices more than any other country, but it is regrettable that still arms are being smuggled from the neighboring countries. He said that we have emphatically told Afghanistan that the process of arms smuggling should stop and it should play its role in stopping the movement of Taliban.
He said that US gave the most donations for flood affectees and we are grateful for their help. However, today Pakistan has its own policy and we are not dictated by anyone. He said that it is our policy that terrorism should be eradicated wherever it exits in the world. He said that terrorism has become a great threat to the mankind. He said that the terrorists have no country, nationality or religion. He said that we need a global policy on terrorism, which we lack. He said that Taliban irrespective of where they exists in Afghanistan or Pakistan are the enemies of the mankind and our common enemy.
He said that he never said that there would be an army operation in Balochistan on the lines of Swat and Malakand but anywhere the govt’s writ is challenged, we would take action.
He said that whatever he said about Balochistan was his personal opinion based on the intelligence reports.
However, after consultations, we have given control to the Frontier Corps and the CM has the authority to utilize them in any way and the FC would be led by a policeman.

Two Shots To the Head “Suicide” and Ukraine’s Orange Revolution

Ukraine police to question Kuchma

Ukraine’s ex-president Leonid Kuchma is expected to be questioned this week over the murder of an investigative reporter critical of his rule. Last

Ukraine’s ex-president Leonid Kuchma is expected to be questioned this week over the murder of an investigative reporter critical of his rule.The former president cut short a vacation in the Czech Republic to return to Kiev on Saturday, a day after his onetime interior minister Yury Kravchenko was found dead. Kravchenko was due to answer prosecutors’ questions over the 2000 killing of investigative reporter Georgy Gongadze on Friday. Gongadze, who had been critical of Kuchma in articles in his internet newspaper Ukrainska Pravda, disappeared in September 2000 and his headless body was found two months later. His gruesome death, which became a symbol of the corruption within Kuchma’s government, sparked widespread opposition that eventually led to its downfall late last year, and is now threatening some of its most senior members. Top priorities Although prosecutors have not yet said whether they will summon Kuchma, many observers expect the former leader – who was implicated in the killing in recordings that his former bodyguard smuggled out of the country – to eventually be questioned. “It’s very likely that Kuchma will be questioned,” Andriy Yermolayev, a political analyst, said. The murder triggered widespread anger at the government that culminated in last year’s “orange revolution” protests that brought to power opposition leader ViktorYushchenko . Yushchenko has made solving Gongadze’s murder one of the top priorities of his administration. Kuchma was implicated in the death after his former bodyguard Mykola Melnichenko released tapes that allegedly had recorded Kuchma, in between epithets, ordering Kravchenko to take care of the persistent investigative reporter. Kuchma has repeatedly denied any wrongdoing and has called the tapes a fabrication. On Friday, he said he was innocent “before God, before the people and before my conscience”. Political intrigues Meanwhile, speculation swirled in Ukraine over whether Kravchenko, who was found dead with two shots to his head at his elite country home on the morning he was due to appear at the prosecutor’s office, killed himself as police insist. Police said Kravchenko died after shooting himself twice – first in the chin and then in the temple - and left a note laying the blame for the Gongadze murder on Kuchma. “It’s very likely that Kuchma will be questioned” Andriy Yermolayev, political analyst “I am not guilty of anything,” police have quoted the note as saying. “I have become a victim of political intrigues of president Kuchma and his entourage. I am leaving you with a clear conscience.” But many observers have raised doubts over the official version. Either Kravchenko ordered Gongadze’s killing or “his death was in the interest of several people, particularly those who are really behind the killing who do not want to be held responsible for the crime,” the Komsomolskaya Pravda newspaper wrote. “Kravchenko was ready to carry out any order by Kuchma,” Yermolayev said. “Kravchenko’s death played towards the thesis that Kuchma commandeered and Kravchenko organized [the killing].”

Ex-minister ordered Ukraine journalist’s murder: prosecutors

Acting Russian President Vladimir Putin met with Minister of Internal Affairs of Russia and Ukraine, Vladimir Rushailo and Yuri Kravchenko.

Ex-minister ordered Ukraine journalist’s murder: prosecutors

A man wearing a T-shirt featuring opposition journalist Georgy Gongadze holds candles during a memorial ceremony in Kiev in 2006.

KIEV: Ukraine’s then interior minister ordered the 2000 murder of the outspoken journalist Georgy Gongadze, whose killing helped spark the Orange Revolution, prosecutors said on Tuesday.

Prosecutors released a statement saying “the late Yury Kravchenko instigated and ordered” Gongadze’s murder.

Kravchenko, the former interior minister, committed suicide in early 2005 under unclear circumstances.

Ukraine: Ex premier Yury Kravchenko has committed suicide

05.03.2005 | Source:

Pravda.Ru

Former Ukrainian Interior Minister Yury Kravchenko was found dead at his country home early Friday, hours before he is to testify in a murder case of an opposition journalist. A preliminary report suggested Kravchenko committed suicide in his house in the Koncha-Zaspe elite cottage village, Interfax-Ukraine news agency cited law enforcement sources as saying. Interior Ministry press secretary Inna Kisel also echoed the statement by saying later that Kravchenko is believed to have committed suicide. Kravchenko was expected to go to the Prosecutor General’s Office on Friday morning for questioning related to the investigation of the 2000 murder of journalist Georgy Gongadze. On a recording said to have been made by a former bodyguard of ex-president Leonid Kuchma, Kravchenko allegedly can be heard making comments on Gongadze’s disappearance in September 2000. Kravchenko served as interior minister at the time of Gongadze’s disappearance. Ukraine’s Segodnya newspaper earlier reported that Kravchenko had been under official surveillance since December 2004, being banned from leaving Ukraine, reports Xinhuanet. According to BBC News, President Viktor Yushchenko broke the news on Tuesday, saying Mr Gongadze’s murder had been solved. A day later, Prosecutor-General Svyatoslav Piskun’s statements at a news conference that Mr Gongadze was strangled to death by police and two suspects had been detained led the main evening news programmes. All channels covered the news conference and background to the story, with analysis and reaction. NR

Vashadze drew Tbilisi into an international scandal

2010-09-10 18:23

Georgian MFA has hardly stopped rejoicing at the resolution on refugees from Abkhazia and South Ossetia adopted by UN General Assembly when the joy started fading away: Sakartvelo diplomats again have to redden with shame for their leaders. The growing Armenian-Georgian scandal provoked by Grigol Vashadze’s statements regarding the military base in Gumri may completely “freeze” the relationship between Tbilisi and Yerevan.

Let us remind you that Vashadze took the fact of signing the agreement on extending the presence of the Russian military contingent at the Gumri base rather painfully. According to him, the extension of number of the Russian military bases in the South Caucasus means a real threat for Georgia, Azerbaijan and sovereignty of Armenia. “The military base gives no chances to ensure stability, safety and cooperation. At the same time, the base does not create any favorable conditions for settling the current South-Caucasian problems in a civilized and peaceful way. The only purpose of the Russian military base is to enhance the strain in the region. The extension of the term of presence for this military base in Armenia for another 24 years and the alteration of its functionality presents a real danger for the region”, – the head of the Georgian foreign policy administration expressed his apprehensions.

Those who have got the smallest idea of the South Caucasus’ political structure made it clear from Vashadze’s statement that it contained no concern about the regional safety. It is obvious that the only idea of the head of Foreign Ministry at the moment of verbiage was to have another dig at Russia. However, the minister’s personal views are hardly worth being mentioned here: just like any other representative of the official Tbilisi, he has lost the right to voice them a long time ago.

According to Chairman of the Multinational Georgia public movement Arnold Stepanyan, Vashadze would have hardly made a statement like that on his own. He said the agreement on prolonging the term of the Russian military base location in Armenia, especially the enhancement of its function causes great anxiety among the Georgian political elite. “Thus, Georgia’s general approach to the situation was voiced. In this connection, one can hardly assume that some representative of the top echelon of power will make an attempt to mitigate his statement”, – Stepanyan said in his interview toGeorgiaTimes correspondent.

In the opinion of the head of Multinational Georgia, the authorities of Armenia could have prevented Vashadze’s invective if an official report on complete security of the Gumri base for Tbilisi had been made by Yerevan right after the meeting of Medvedev and Sarkisyan. However, even if this report had been printed and stuck on the walls of the Georgian Foreign Ministry, it would hardly have prevented its leader’s hysteria. According to Stepanyan, the tendency of interference in other states’ affairs is the top priority in the foreign policy of Saakashvili’s regime. “Our authorities touch not only upon Armenia but even upon those states that have got no relation to Georgia and are located in another hemisphere”, – he underlined.

Of course, such impudence won’t go unnoticed. Editor-in-chief of the Russian Armenians’ newspaper Erkramas Tigran Tavadjan believes that relationship between Armenia and Georgia may be seriously aggravated: “I don’t think it will in anyway affect the official structures’ relationship. However, one should expect quite a tangible cooling in the dialogue between the states at the level of political forces and public organizations. However, it will be affected not only by Vashadze’s statement.

Let us take, for instance, the situation with the closing of Armenian schools which is going on by order of the Georgian Ministry of Education”.

However, as for Vashadze’s statement, Tbilisi is gradually realizing the entire nonsense of it, which is confirmed by the fact that Georgian authorities still haven’t officially responded to the situation that was especially heated after the talk of the head of Georgian MFA withhis Armenian colleague Edward Nalbandyan. This kind of silence does not at all resemble the traditional behaviour of this country’s politicians who generally produce a stormy reaction at every word of their patron and principle generator of ideas Mikheil Saakashvili. By all appearances, the talk between the Armenian and Georgian foreign ministers went on at a rather high pitch and now Sakartvelo diplomats are thoroughly discussing every letter in the application dedicated to him so as not to make any slips.

Let us also underline that the words about the regional security acquire rather a contradictory meaning in the mouth of a person whose boss unleashed bloody aggression against South Ossetia and is constantly rearming the army, while his country is on the verge of economic catastrophe and famine. However, the Georgian authorities are obviously concerned not about security but about reducing the “danger” of their own country. The base in Gumri together with Russian contingents in the territory of South Ossetia and Abkhazia is playing the role of a firm belt that might whip the naughty Georgian “tearaway” against his tender spot in case of another provocation.

Your Handy Guide to Russian Oligarchs

PHOTO ILLUSTRATION BY DOUGLAS B. JONES

By Yuriy Humber

Recent Moves by Eight Russian Tycoons

Russia’s tycoons lost billions in the global financial crisis. Their fortunes, though, have revived in the last year as the country’s RTS and Micex stock indexes have jumped 120%. That means Russian billionaires are again snapping up art, sports teams, and yachts. But as they settle into their 40s and 50s, they’re also making corporate acquisitions with an eye toward creating their legacies. Here are some recent maneuvers by leading Russian magnates, plus estimates of their net worth by Russia’s Finans business magazine.

PHOTO BY NIKISHIN/GETTY IMAGES

Mikhail Prokhorov

President, Onexim Group
Age: 44
Est. Net Worth: $17.9 billion
Businesses: Metals, gold, real estate
Latest Deal: New Jersey Nets

Prokhorov may become the first Russian owner of a U.S. basketball team. The 6-foot-7-inch magnate is awaiting NBA approval of his proposed $200 million purchase of 80% of the New Jersey Nets and 45% of the team’s planned arena in Brooklyn. (He would also assume 80% of the team’s estimated $207 million debt and fund up to $60 million in future Nets losses.) Prokhorov intends to do more acquisitions in the U.S., likely in energy and nanotechnology, and aims to build Russia’s first electric car. He fared better than most of his fellow oligarchs in the crisis after selling his 25% stake in Norilsk Nickel, the world’s No. 1 nickel miner, for $7 billion and a 14% stake in aluminum producer Rusal in 2008. The bachelor, who practices kickboxing, likes to party in Moscow nightclubs.

PHOTO BY POLARIS

Roman Abramovich

Top shareholder, Millhouse
Age: 43
Est. Net Worth: $17 billion
Businesses: Gold, steel, football
New Toy: The Eclipse yacht

After becoming a father for the sixth time last year, Abramovich and his partner, socialite Daria Zhukova, celebrated New Year’s Eve at his Caribbean estate on the island of St. Barts, hosting guests including actress Lindsay Lohan and economist Nouriel Roubini. Abramovich is awaiting delivery of his third yacht, the 557-foot, $400 million Eclipse, which will be the world’s biggest. (He denies rumors it has an antimissile system.) Abramovich recently swapped two gold deposits in the Arctic Chukotka region, where he was governor until 2008, for 1.5% of Canada’s Kinross Gold (KGC) and $165 million in cash. His investment group also holds 32% of Russia’s Highland Gold Mining and 36% of the country’s No. 2 steelmaker, Evraz Group (EVGPF). Abramovich is a regular at matches of England’s Chelsea football club, which he bought in 2003.

PHOTO BY SAVERKIN/ITAR-TASS

Mikhail Fridman

Chairman, Alfa Group
Age: 45
Est. Net Worth: $14.3 billion
Businesses: Banking, telecom, oil, retail
Free Time: Active in Russian Jewish Congress

He started with a window-washing business in the late 1980s and now leads one of Russia’s most powerful empires. Fridman was one of four shareholders who fought with BP (BP) over the management of oil venture TNK-BP last year. After a five-year conflict with Norway’s Telenor over mobile-phone assets, Fridman declared a truce in October and said the two companies would merge their mobile operations in Russia and Ukraine. Each will own just over 38% of the combined entity, which will be Eastern Europe’s No. 1 mobile provider. In his spare time, Fridman enjoys playing the piano for friends.

PHOTO BY ZEMLIANICHENKO/BLOOMBERG

Oleg Deripaska

CEO, Basic Element; CEO, Rusal
Age: 42
Est. Net Worth: $13.8 billion
Businesses: Metals, autos, oil, utilities, construction, insurance
Personal: Married to Boris Yeltsin’s granddaughter

Deripaska entered the crisis with more than $20 billion in debt, but he may yet pull off a turnaround. The yoga-practicing tycoon ceded stakes in German builder Hochtief and Canadian auto parts maker Magna International (MGA) to lenders. And he got a helping hand when state-owned VEB Bank awarded aluminum producer Rusal, which Deripaska controls and runs as CEO, with a $4.5 billion bailout loan. Last year, Deripaska hammered out an agreement with Rusal’s creditors to extend repayments on its $17 billion in debt. That allowed the company to raise $2.2 billion in an IPO in Hong Kong in January. (The shares are down 24%.) Now, Deripaska plans to expand in China. He’s not looking much to the U.S., where he has been questioned about alleged ties to the Russian mob, which Deripaska denies.

PHOTO BY HOSLET/EPA/CORBIS

Vagit Alekperov

President, Lukoil
Age: 59
Est. Net Worth: $10.7 billion
Businesses: Oil, refining, retail
Free Time: Fishing, tennis, travel

Alekperov scored a coup in January when Lukoil, Russia’s largest nonstate oil producer, signed a contract to develop an Iraqi oil field that could in time pump 1.8 million barrels per day—as much as the company’s Russian operations. Known for his rigid style (he has banned jeans from Lukoil’s glass skyscraper in Moscow), Alekperov was the Soviet Union’s first deputy oil minister when the country broke up in 1991. He soon left the government and set up Lukoil in 1993. Alekperov is the largest individual shareholder with about 20%; ConocoPhillips (COP) also owns 20%. He has said he hopes his son, Yusuf, now a student, will inherit the top job.

PHOTO BY SAVERKIN/ITAR-TASS

Vladimir Potanin

President, Interros Holding
Age: 49
Est. Net Worth: $10 billion
Businesses: Metals, banking
Sideline: TV personality

Potanin has played the Donald Trump role in a Russian version of The Apprentice, but his chief asset isn’t real estate. It’s Norilsk Nickel, which had an estimated $9.7 billion in revenues last year. The tycoon recently announced he will donate most of his fortune to charity within 10 years, following in the footsteps of Bill Gates. Potanin faces a tough battle to hold on to Norilsk as another shareholder, Rusal, clamors for a merger to create a Russian rival to mining giant BHP Billiton. The Kremlin would likely decide Potanin’s role in a new entity.

PHOTO BY SCHNEIDER/CORBIS

Viktor Vekselberg

Chairman, Renova Group
Age: 52
Est. Net Worth: $8.4 billion
Businesses: Aluminum, oil, natural gas, renewable energy
Free Time: Art collecting

Vekselberg is in a clash with Swiss authorities, who in January slapped him with a $38 million fine stemming from his purchase of shares of Swiss technology company Oerlikon in 2006. The charge, which he denies, is that he did not declare he was acting with others when buying the shares. Russian Finance Minister Alexei Kudrin called on the Swiss to review the fine or risk damaging the nations’ ties. Vekselberg has also invested in Switzerland’s Sulzer, an equipment maker, and in real estate developer Züblin Immobilien Holding. He plans to spend $1 billion on renewable energy projects in France, Italy, and Germany and to build a solar-panel plant in Russia. After making headlines by purchasing nine Fabergé eggs to bring back to Russia in 2004, he has spent $100 million in the past four years to expand his collection with Russian paintings, porcelain, and silver.

PHOTO BY GRIGORY/ITAR-TASS

Roustam Tariko

Founder, Russian Standard
Age: 47
Est. Net Worth: $1.6 billion
Businesses: Vodka, banking
Sideline: Miss Russia Pageant

Tariko started as a Moscow street sweeper and now heads a vodka and banking empire under the brand name Russian Standard. Tariko aims to overtake Pernod Ricard’s Absolut in three years and later outpour Diageo’s (DEO) Smirnoff. The chief sponsor of the Miss Russia Pageant, he features its winners in his company’s advertisements and at his lavish parties.

PUTIN ASKS CLINTON FOR US GOVERNMENT SUPPORT OF RUSSIAN OLIGARCHS

March 22nd, 2010

By John Helmer in Moscow

Prime Minister Vladimir Putin, who also chairs the Russian bailout bank Vnesheconombank (VEB), asked Friday for the US Government to signal its support for at least two oligarch-owned Russian companies in the US.

The remark, which has taken State Department officials by surprise, mentioned Norilsk Nickel and steelmaker Severstal, whose controlling shareholders are Vladimir Potanin and Alexei Mordashov, respectively. But Putin is believed to be thinking also of two other, heavily indebted oligarch groups with American interests and US bank obligations — steelmaker Evraz, controlled by Roman Abramovich (left image), and Oleg Deripaska (right image), owner of United Company Rusal and the Basic Element automobile group.

According to the prime ministry’s website transcript, Putin said publicly after meeting US Secretary of State Hillary Clinton, on March 19: “As to our economic cooperation, our large companies are, of course, interested and expect support from both parties. General Electric, Boeing, [and] the [US] oil companies have been working in Russia for a long time and have been doing that successfully. And, of course, they require support both from sides, the authorities of the United States of America, and from the Government of Russia, and the same is true for our companies. Our Norilsk Nickel, one of the world’s largest companies in this sphere, [and] our other large companies are already investing in the United States and working there. Severstal, for example. They certainly require support. They need signals showing them they are welcome both in the Russian and US economy.”

In 2003, Potanin was the first Russian oligarch to be allowed by Putin to export earnings from his shareholding in Norilsk Nickel, the world’s largest producer of nickel and Russia’s largest mining company, and invest them in a US corporation. After protracted review by the White House, and lobbying from the Kremlin, Norilsk Nickel bought a 55% control stake in the Montana-based palladium miner, Stillwater Mining. Since then, Stillwater has been a loss-maker in every year, except for 2004 and 2006.

Even counting the net losses over seven years of $438 million, Potanin spent just a fraction of the amounts Mordashov and Abramovich have paid out, and lost, for their US assets. According to the Norilsk Nickel records, the control stake of Stillwater cost a total of $133 million in cash, plus 877,000 ounces of palladium. The precious metal was assigned a value of $157 million in the transaction, but was at the time unsellable in the market.

By contrast, in 2008 alone – as the US and global steel markets headed for the crash — Mordashov paid out $2.2 billion for three US steelmills. They made Mordashov one of the largest steelmakers in the US – and also one of the most profligate. In 2007, Severstal North America reported losses (gross figure) of $43 million; $522 million in 2008; and $674 million in 2009. That grand total of $1.2 billion, added to his $2.2 billion buying spree in 2008, makes Mordashov the second biggest Russian loser in American history.

First prize in that class goes to Abramovich, along with his Evraz co-stakeholder, Alexander Abramov: they paid $5.1 billion to buy steel, pipemaking, and scrap assets in the US and Canada over 2007 and 2008. Evraz does not break down its profit and loss account to make its US mill performance visible. The group accounts also manipulate the revenue, earnings, and profit and loss figures, so that it is impossible to judge how much profit earned in Evraz’s Russian steel operations offset what sized losses in the US and elsewhere. Evraz is also slow to report the bad news.

The last financial report issued by Evraz is for the six months ending June 30, 2009. At that stage, Evraz was running a consolidated group loss (gross) of $1.3 billion. The total debt, accumulated in large measure to pay for the North American asset purchases, was $10 billion at the end of 2008; $8.5 billion at June 30, 2009.

Buying offshore haven assets at premium prices is a well-known tactic of the Russian oligarchs to protect their global fortunes and their Russian concessions from Kremlin penalties or reassignment. Russian steelworker unions have observed also that they have lost jobs and wage gains to the oligarchs, in order for the relative profitability of the Russian mills to subsidize the loss-making in the US haven operations. US steelworkers have charged that profits have been stripped from the North American mills to show higher losses on the US balance-sheets, where tax rates are higher.

Not a word of criticism of these business practices has escaped from the Russian government, the Russian parliament, or the state auditor, the Accounting Chamber. In last week’s recommendation to Secretary Clinton for “support signals” from the US Government, Putin appeared to asking for more than benevolent silence from Washington.

During a hostile takeover attempt in 2007 and 2008 by oligarchs Oleg Deripaska and Mikhail Prokhorov against Norilsk Nickel, Putin protected Potanin, and warded off Deripaska. When Deripaska’s Rusal then toppled into insolvency in November 2008, Putin arranged for VEB to protect Rusal’s 25% stake in Norilsk Nickel from forfeit to a consortium of banks, led by Bank of America Merrill Lynch; they had loaned $4.5 billion to Rusal for the purchase of Norilsk Nickel shares from Prokhorov, and Deripaska couldn’t pay the loan back.

Bank of America Merrill Lynch has gone on to become the biggest US financial institution promoting Deripaska, acting as lead bookrunner in Rusal’s Hong Kong Stock Exchange listing in January. No other US bank has done so much. Neither Morgan Stanley nor Goldman Sachs, which advised Rusal in its abortive London Stock Exchange listing in 2007, agreed to try again. JP Morgan sources say they want nothing to do with Rusal’s share promotion. A recent Merrill Lynch report on Rusal urged investors to buy Rusal shares because “Rusal presents good value vs aluminium peers”: and “is the “best of a ‘challenged’ bunch’.” In the small print, the report also warns that Merrill Lynch “may have a conflict of interest that could affect the objectivity of this report.”

With friends like Mother Merrill on the bandwagon, what more does Putin want from Washington? The Prime Minister’s press office was asked: “What support from the US Government was the Prime Minister referring to in his remark to Clinton? For example, does Mr Putin believe the US Government should bail out Severstal’s debts on loss-making steelmills Mr Mordashov purchased in the US — debts and losses which Severstal’s Russian steel operations currently subsidize? And does Mr Putin intend or imply that he believes the US Government should do more to support Oleg Deripaska in the US, including the lifting of his visa ban, and permission to buy into the US auto industry?” There has been no reply.

Norilsk Nickel and Severstal also declined to answer what support or signal they would like from the US Government. “We do not comment on actions or utterances by state officials,” said a Norilsk Nickel spokesman.

Last month, Admiral Dennis Blair, Director of National Intelligence in Washington, told the US Congress that “criminally linked oligarchs will enhance the ability of state or state-allied actors to undermine competition in gas, oil, aluminium and precious metal markets.” The list appears to refer, among others, to Deripaska’s Rusal, Prokhorov’s Polyus Gold, and Potanin’s Norilsk Nickel. Without naming Russian individuals or companies, Blair referred explicitly to the problem of “a growing nexus in Russian and Eurasian states among governments, organized crime, intelligence services, and big business figures.” Blair hinted that the US Government should intervene to deal with the Russian oligarch “nexus” and its threats of “bribery, fraud, violence, and corrupt alliances with state actors to gain the upper hand against legitimate businesses.” Did Blair mean to imply that the “nexus” threatened Stillwater Mining?

There has been speculation in Washington that US Government shareholding control of General Motors (GM) could, and should be applied to pressure the auto company into procuring Stillwater’s palladium. Stillwater reported last August that it was in discussions with GM to do just that, after the latter terminated its Stillwater palladium purchasing contract, ostensibly as part of GM’s July 2009 bankruptcy court procedures.

In a press release, Stillwater said that “the termination of the [GM-] Stillwater contract puts good paying American jobs at risk at the same time GM is receiving massive federal government funding of U.S. taxpayer dollars with which GM emerged from bankruptcy.” The outcome of the talks, added Chief Executive Frank McAllister, “did not yield any positive results for our Company, its employees and other stakeholders or the communities in which we operate. At issue is the termination of the Stillwater contract while at the same time GM continues to purchase palladium from foreign suppliers in Russia and South Africa, funded with U.S. tax payers’ dollars.”

Since then, Stillwater has had little to say about GM; and nothing about US Government aid.

The GM contract cancellation was offset, according to financial data released by Stillwater on February 25, by rising palladium prices and improved demand: “Palladium realizations, which benefit from floor price provisions in the Company’s automotive supply agreements, averaged $374 per ounce in the fourth quarter, up from $360 per ounce in the third quarter and — despite the loss of the General Motors agreement in early July — above the $364 per ounce realized in this year’s first and second quarters. In this environment, the Company has had no difficulty receiving full market prices for the metal displaced by the GM contract cancellation.”

Although CEO McAllister noted last month that the mining company’s contract with Ford runs out at the end of this year, he was generally upbeat on this year’s production, price, and profit prospects. “Mine production for 2010 is projected at 515,000 PGM ounces, as we disclosed previously. This guidance is actually a little lower than the 529,900 ounces that we produced in 2009. Our management focus in 2010, however, will continue to center on strengthening our cost performance and improving mining efficiency, rather than on seeking to maximize mine production.”

The US Embassy in Moscow was asked what it knows of the discussions between Putin, Clinton and other officials on US Government aid for Russian oligarchs. A spokesman said the Embassy has no comment on Putin’s public remark. And if he and Clinton discussed the subject privately, the Embassy added it could not comment at all.

Speculation that Clinton might do favours for friends and associates from her presidential campaign who have been engaged in a Washington lobbying campaign by Deripaska surfaced last year after the firm, Endeavor Group, filed the required foreign agent’s registration form on May 8, 2009. This revealed that Deripaska was paying $40,000 per month for the group to work on persuading US Government officials to lift the bar on his entry visa; and to support Deripaska’s bid to buy the Opel unit from GM: http://www.fara.gov/docs/5934-Exhibit-AB-20090508-1.pdf

Putin steps into Norilsk row

© RIA Novosti. Aleksey Nikolskyi

by Tom Washington at 01/09/2010 16:58

Squabbling in the world’s largest nickel company has attracted a stern rebuke from prime minister Vladimir Putin, as the saga of shares in the board of governors continues. He told them on Tuesday to get their house in order and stop bickering before they did further damage.

Putin’s intervention echoes his dressing down of Oleg Deripaska in Pikalyovo last year, and reflects the importance the government places on Russia’s industrial powerhouses and their role in sustaining the local economy of many cities.

It also highlights once again the extent to which the country’s wealthiest men are open to suggestion from the authorities.

Deripaska’s Rusal and Vladimir Potanin’s Interros have been embroiled in a bitter power struggle over Norilsk since June 28 when Rusal lost one seat on the board of directors to Interros, leaving Rusal with three seats to Interros’ four. Both companies own a 25 per cent stake in Norilsk.

Putin gave them a verbal rap on the knuckles last Friday, telling them that the government would “do something” if the shareholders fail to end the dispute, the BBC reported. “I do not care which of the shareholders has a controlling stake or in what proportion,” he told RIA Novosti.

Personal enmity

“This kind of [childish] behaviour is typical of oligarchs,” Uralsib metals and mining analyst Dmitry Smolin told The Moscow News. “As I see it this conflict began in 2007 and then we saw state intervention in 2008. The counter parties signed an agreement which was broken earlier this year.” His outlook for both men’s future together is bleak. “In my view there is no way back now and this conflict is unlikely to be resolved, probably one of the parties should exit.” They are currently fighting out the breach of contract in London’s International Arbitration Court.

The main problem, he said by telephone, is that they don’t like one another and so he doesn’t see the squabbling tycoons staying in the same company together. “Two options are possible. The first is that with state interference one oligarch may buy the other out, or alternatively the state itself could buyout a stake in the company.” He does not share Putin’s optimism that all will be resolved soon.

Meeting the issue

The prime minister flew to the northern city of Norilsk on Tuesday, where the firm’s major operations are based. He faced complications landing, as had Deripaska’s plane late on Monday when the oligarch was refused permission to land at the Norilsk Nickel controlled airport. “Thanks to a public campaign and interference from state agencies, Oleg Deripaska’s plane was [eventually] allowed to land in Norilsk,” his press service announced after the incident

Deripaska was also on one occasion refused entry by security guards to a meeting of the board of directors. Potanin, in his turn, was detained for half an hour in early August for questioning by security forces at Sochi airport, which is controlled by Deripaska’s Basic Element, Vedomosti reported.

They managed to put their differences aside when their headmaster came, who duly gave them a metaphorical pat on the head and said after a private meeting that, in general, both shareholders are good and not greedy or mean, Gazeta.ru reported. “There is some movement forward,” he said.

When pressed by journalists after the meeting Potanin, “went into denial,” Lifenews reported, and said that there was no conflict. He was all just a little childish fun and nonsense.

Hands off for now

The government does not usually intervene directly in corporate conflicts and Rusal and Interros were the only shareholders respresented at Tuesday’s meeting. There is unlikely to be anything more direct unless the bust-up starts to undermine social stability in Norilsk, Gazeta.ru reported.

There was one more stern word of warning from Putin. The Norilsk plant must modernize or face heavy fines.

The intriguing case of Talco Aluminium

Posted by Izabella Kaminska on Oct 28, 2008

The High Court this week began hearing the case of Tajik Aluminium Plant v Abdukadir Ganievich Ermatov. While it has failed to make many UK headlines (as yet), its tale of intrigue, corruption and even a potential murder is topping newspapers across most of central Asia.

Not only is it expected to price-in as one of the UK’s most expensive cases ever (some estimate at about £90m in legal fees), it could offer an intriguing insight into the affairs of some of the world’s most secretive business characters. For one, the case is linked to the familiar name (of late) of Oleg Deripaska via his control of Russian aluminium group Rusal.

At issue is control of the Talco aluminium smelter in Tajikistan, one of the smaller former soviet republics. The smelter itself, formerly known as TadAz, accounts for more than half of Tajikistan export revenues, making it one of the country’s prized assets.

According to the Times the case centres on allegations of bribery and corruption amounting to £500m against its former business partner Azar Nazarov, a Tajik businessman now based in the UK.

Talco claims Nazarov via his Guernsey holding company Ansol siphoned profits from the smelter between 1996 and 2004 using a corrupt relationship with the plant’s former manager Abdukadir Ermatov. The FT reports:

Talco claims that its supplier, a Guernsey-based company run by Avaz Nazarov,  a Tajik national, siphoned off as much as $485m (£245m) in profits through the  arrangement, assisted by an obscure UK consultancy known as Ashton Investments.

Mr Nazarov, Ashton and several other defendants deny wrongdoing and are pursuing  their own multi-million pound counterclaim.

As well as siphoning profits via a scheme in which the smelter sold aluminium far above market-prices to Ashton, Talco alleges lavish bribes were paid including the gift of a £300,000 flat  in Marylebone for use by the manager’s son. Meanwhile, in a separate action in the British Virgin Islands, Talco has accused Deripaska’s Rusal, Ansol’s former joint venture partner, of involvement in the fraud too.

On Monday, the Talco defence team openly accused Deripaska of knowingly participating in the “grubby” scheme. The FT adds that while neither Rusal nor Mr Derispaska are defendants in the high-profile  proceedings, the team characterised them as important players in the alleged conspiracy.

“Accomplices came and went,” Murray Rosen QC told the court. “They constitute a  colourful cast including some of the biggest and most ruthless operators in  Russia and central Asia. Foremost among them was Rusal, previously called Sibal,  owned by its chairman, Mr Oleg Deripaska.”

Metal Bulletin goes on to say the lawyers accused Nazarov and Ermatov of exploiting Talco as a “cash cow” via a series of “daisy chains” of companies associated with Ansol.

But what of the Tajik government’s role in the case? The FT article says many have expressed outrage that the Tajik government is spending millions on legal fees abroad while many of its citizens may face crippling shortages of food, heat and electricity this winter. Furthermore:

The case had been dogged by rumours an important witness — Hassan Saduloev,  brother-in-law of Tajik president Emomali Rakhmon, had been shot dead in a  family feud. Mr Rosen on Monday gestured toward Mr Saduloev in his opening  statement. “Reports of his death have been greatly exaggerated,” Mr Rosen told  the High Court.

On the cost front, legal experts currently project the case to rank as the third most-expensive lawsuit contested in English courts. Curiously, the judge hearing the case Mr. Justice Tomlinson also presided over the UK’s most expensive, which just happened to be the last time anyone ever tried to sue the Bank of England in BoE vs Liquidators of BCCI (Deloitte). The case lasted 13 years but failed to reach a verdict. In the end Deloitte was forced to pull out after a ruling said the case was no longer in the best interests of creditors. They were charged with over £110m in total legal fees, verus an initial claim of £1bn.

That time, according to the Guardian, Justice Tomlinson said some of the claims were “simply bizarre” with the structure they were based upon “built on occasion not even on sand, but rather air”.

It will be interesting to see what he makes of the Talco case. The case continues tomorrow…

Russian Financier Seeking US Help for Hostile Takeover of Norilsk Nickel

[Mr. Derispaska is looking to make Norilsk Nickel into another "cash cow," a counterpart to his Tajik Aluminum "cow," Talco aluminium, formerly known as "TadAz."  Deripaska is also the brains behind the controversial revival of the Soviet-era Rogun Dam hydroelectric project.  (Rogun is at the center of ongoing Uzbek/Tajik tensions over both water and existing electric transmission lines, which is inciting Uzbekistan to disrupt rail traffic going to Tajikistan and on to Afghanistan--the Northern Distribution Network.  By selling shares on the Hong Kong Stock Exchange, he hopes to get Chinese money to mix with US loans, to finance controversial development projects in the former Soviet Union.]

Deripaska on US mission

By John Helmer

MOSCOW – Oleg Deripaska, chief executive of Rusal, the Russian aluminum monopoly, is preparing a series of presentations to institutional investors next week in Boston and New York, chaperoned by one of his largest creditor banks, BNP Paribas.

Rarely has such an odd couple asked to be believed for the sincerity of their hand-holding.

The share-sale prospectus released by Rusal to the Hong KongStock Exchange on December 31 reveals that BNP Paribas’ affiliated banks are owed more than US$415 million by Rusal; no other international bank appears to be owed a larger sum by Rusal.

In addition, BNP claims more than $80 million from another of Deripaska’s companies, about which there has been a “dispute” and a “repayment shortfall” in connection with Deripaska’s abortive effort to take a stake in the North American auto parts firm, Magna.

BNP chairs and coordinates a syndicate of international lenders in connection with Rusal’s billion-dollar debts. BNP is listed as the bank in charge of enforcing the security of Rusal’s loan agreements with the syndicate. It is one of the principals in the “cornerstone placing agreements”, according to which the first listing of Rusal shares on January 27 was guaranteed.

The purpose of BNP’s exercise in the US is to convince US investment fund managers and analysts of institutions holding Norilsk Nickel shares that they should vote in favor of Deripaska’s hostile takeover attempt against Norilsk Nickel, Russia’s largest mining company and a world leader in nickel, copper, palladium and cobalt.

On October 21, at a planned extraordinary shareholder meeting called by Rusal, they are being asked to reverse their near-unanimous vote against this scheme when the annual general shareholders’ meeting of Norilsk Nickel was held on June 29.

Additional presentations for the same purpose are planned by Rusal, BNP and another of its creditor banks and promoters, Credit Suisse, in London. The proposition that the Norilsk Nickel minority shareholders should embrace Deripaska’s hostile takeover effort has already been rejected in the open marketplace, and by none other than Rusal shareholders, since the company first sold shares in Hong Kong seven months ago. The vote of no-confidence is reflected in the share price chart, which illustrates Rusal bouncing between 38% below the initial fix to 24% below at the moment.

What interviews with fund managers in London, Hong Kong and the US reveal is the churn rate, which isn’t disclosed in this highly volatile price line – that is, the amount of short-term share buying and selling that is driven by wagers on the movement of the price of commodity aluminum.

The unusually high churn rate for Rusal reported by these market experts suggests that few, if any, of the original January and February shareholders remain committed to the company and its chief executive, apart from those who have no choice – the Russian government bank VEB, which is securing the state monopoly of aluminum from bankruptcy; Nathaniel Rothschild and his father Jacob; and the other cornerstone investors – tycoons Robert Kuok and Li Ka-shing, hedge-fund boss John Paulson, and the Libyan Investment Authority.

Deripaska faces troubles in Russia, put on open display this week by the two most powerful decision-makers in Russia, Prime Minister Vladimir Putin and Deputy Prime Minister in charge of resource concessions, Igor Sechin. The occasion was their state visit to the plant, town, workers, and management of Norilsk Nickel.

When Deripaska’s aircraft had trouble getting airport clearance to land for this meeting, he decried his rival Norilsk Nickel shareholder, Vladimir Potanin, for a dirty trick. Land Deripaska eventually did – with this advance signal for all to see that it is the Kremlin that is running Norilsk Nickel, and that even local air-controllers aren’t afraid that Deripaska may become their boss.

For those fund managers who are about to receive visits from BNP and Rusal, it is no novelty to understand that in the management of Russia’s natural resource, mining and metal companies, the oligarchs with shareholding control are temporary concessionaires, with limited operating, earnings, tax and capital gains rights; and that it is the state which dictates terms and the sharing-out of rewards.

Exactly how the sharing of these concession rewards has been arranged, including the debt bailouts Rusal and Norilsk Nickel received during the 2008 crisis, is widely understood in oligarch circles but unprintable in a family newspaper. The operative rule, however, is that those officials who supervise the concessionaires swear to have no purpose but the welfare of the market, the workforce, and the Russian commonwealth – and no desire to intervene when the concessionaires fight each other. That is why Sechin, seated to Putin’s right during their meeting with shareholders and management, said: “The main shareholders will reconcile their positions. We don’t interfere in corporate processes. That’s the shareholders’ business.”

Understanding why the no-intervention disclaimers must be made, it follows that the methods of Kremlinology are required to decipher the real meaning of the intervention which Putin and Sechin have decided towards Deripaska and Potanin. Accordingly, Tuesday’s display indicates that timing and circumstance are not going as well for Deripaska as he will claim next week in North America.

At his session with Norilsk Nickel workers, Putin was peppered with concerns about the Pikalevo analogy. This refers to June last year when residents of the Leningrad region town of Pikalevo protested at the collapse of their livelihoods at the hands of the Deripaska group, which dominates the town’s alumina refinery. The trouble was settled by Putin appearing on national television to give Deripaska his marching orders. Since then, Deripaska has clawed back much larger financial favors from the prime ministry, and dismissed the affair as a show for television.

This time round, Putin has been at pains to distinguish Deripaska’s conduct and the problems at Pikalevo from the takeover conflict at Norilsk Nickel. But the insistence of the questioning on the Pikalevo point was a round-one win for the state official running Norilsk Nickel, Vladimir Strzhalkovsky, who for months has been publicly attacking Deripaska’s competence and ethics.

According to the transcript published by the prime ministry, the question for Putin was that since shareholders such as Deripaska (explicitly named) have as their main purpose “to fill their own pockets, many people in Norilsk are worried about the current conflict between the main shareholders of Norilsk Nickel. I would like to ask you: Do you think how our employees are protected from the possible adverse effects of this conflict? And I hope that it will not be a Pikalevo scenario – I hope, and am confident in this. But can we count on the support of the government of the country?”

Putin’s reply started with an explanation of how the conflict at Pikalevo was not comparable with the shareholder fight at Norilsk, then added, “With regard to the [shareholder] conflict – yes, we see that it’s there. I tell you frankly: today it has not even been discussed. And in accordance with the law, we would not be there to intervene. But I’m on to something that has drawn attention.”

At this point, Putin referred to the proportion of profit Norilsk Nickel and its international peers had distributed as dividends to shareholders. “Kazakhmys”, he said, “distributed 6.6%, Rio Tinto in my opinion, 18%; BHP, 38% plus something. The shareholders of Norilsk Nickel distributed as dividends 50% of the profits – the largest allocation [in the peer group]. I think that’s enough. You see, an order of magnitude greater than all the rest!”

Implicit in this remark was condemnation by the prime minister of the attempt by Deripaska to get Norilsk Nickel to pay out in dividends more than it had earned last year – a payout rate of about 115%. That had been blocked by the unanimous opposition of the minority shareholders, Potanin, the management, and the board elected in June.

In short, Putin told the workers he expected to see reinvestment of profits for social purposes and would not allow Rusal to extract cash from Norilsk Nickel if that would work to “the detriment of the company”. He also assured the workers that he had made his will plain to the shareholders. “Today we talked to them and about the resettlement program, and about environmental issues, and so on. I must give credit to shareholders; they are not greedy, not mean, not argumentative – all at once they agreed.”

Remarks by Putin during the management and shareholder session also suggested a win on points for Strzhalkovsky against Deripaska. Discussing the proposals from government ministries to raise more tax from Norilsk Nickel through a duty on nickel and copper exports, greater spending on environmental protection measures, and higher social benefits, Putin implied that the state wanted to curb its payouts to the oligarchs’ profit line, and to increase budget revenues at their expense.

Some Moscow brokerage analysts reacted that this might be negative for the share price. Others noted that the proposed tax would amount to less than 6% of prospective earnings – insignificant for the company’s financial performance.

But Putin’s emphasis on fiscal probity also implies his reluctance to endorse the large state bank loans Deripaska would require if he were to make good on his takeover bid for Norilsk Nickel; or the cash-stripping from Norilsk Nickel to pay down Rusal’s debts if Deripaska were to be allowed to take control. A Troika Dialog analyst, who has championed Rusal in recent reports, expressed his disappointment that “nothing groundbreaking was said during the meetings”; by that he meant “that UC RUSAL would lose more than others should the current status quo be maintained.”

The London news in the run-up to the October 21 shareholder vote at Norilsk Nickel isn’t going to Deripaska’s benefit either. The UK High Court will resume for the Michaelmas term on October 1, and a hearing has been scheduled a few days later to decide when Deripaska goes on trial to defend the shareholding that currently gives him control of Rusal.

The accumulation of new evidence files in court, and the judge’s ruling on the trial schedule, mark the progress Mikhail Chernoy (Michael Cherney), Deripaska’s former patron and shareholding partner, is making to adjudicate the suit for his share of Rusal, and of the dividends and profits Deripaska has taken for himself since the two men signed a trustee and shareholding agreement in March 2001. The sum of Chernoy’s claim is more than $4 billion. That’s more than half the value of Deripaska’s stake in the company.

John Helmer has been a Moscow-based correspondent since 1989, specializing in the coverage of Russian business.

Deripaska’s jet denied landing at Norilsk airport

Oleg Deripaska

00:07 31/08/2010

© RIA Novosti. Alexei Danichev

Related News

• Putin threatens to step in over Norilsk shareholder row
• Russian court to hear RusAl suit against Norilsk Nickel AGM votes on Sept 16
• Potanin borrows $3 bln for Norilsk Nickel war chest
• RusAl files arbitration appeal over Norilsk Nickel dispute in London court
• RusAl maintains pressure for replacement of Norilsk Nickel top management

• Oleg Deripaska to invest in China

Russian Oligarch Oleg Deripaska’s private jet was not allowed to land on Monday at an airport in the northern Russian city of Norilsk, where Russian Prime Minister Vladimir Putin is to hold a meeting on Tuesday.

Deripaska’s metals company, RusAl, owns a blocking stake in metals giant Norilsk Nickel, which in turn owns the airport.

Deripaska was due to take part in a meeting on the socio-economic development of Norilsk, to be led by Putin.

RusAl said that an hour before the departure, Deripaska’s Basic Element holding company received a letter signed by the director general of the airport, which reported that “landing [at the airport] was impossible.”

No reasons for the decision were given, RusAl said.

Norilsk airport said that one private aircraft had been denied landing space, but did not specify who it belonged to or the reasons for the decision.

RusAl and Interros holding company, controlled by tycoon Vladimir Potanin, have been embroiled in a bitter shareholder row over influence at Norilsk Nickel after RusAl lost one seat on Norilsk’s board at the June 28 annual shareholders meeting.

RusAl now has only three seats, whilst Interros has kept four seats. Both companies each own a 25 percent stake in Norilsk Nickel.

Last Friday, Putin said the shareholder’s row was damaging Norilsk Nickel, which is one of the world’s largest producers of nonferrous metals.

MOSCOW, August 31 (RIA Novosti)

The Sabra-Shatila Massacre: 28 years later does anyone remember?

Does anyone really care?

Franklin P. Lamb

This was originally posted on Counterpunch and also
on the news-fix list on September 14, 2007.
jh

A Letter to Janet

Franklin Lamb
Martyrs Square
Sabra-Shatilla Palestinian Refugee Camp
Beirut
September 12, 2007

Dearest  Janet,

It’s a very beautiful fall day here in Beirut today. Twenty-five years ago
this week since the September 15-18, 1982 Massacre at the Palestinian refugee
camps at Sabra-Shatila. Bright blue sky and a fall breeze. It actually rained
last night. Enough to clean out some of the humidity and dust. Fortunately
not enough to make the usual rain created swamp of sewage and filth
on Rue Sabra, or flood the grassless burial ground of the mass grave (the
camp residents named it Martyrs Square–one of several so named memorials
now in Lebanon)) where you once told me you that on Sunday September
19, 1982, you watched, sickened, as families and Red Crescent workers
created a subterranean mountain of butchered and bullet riddled victims
from those 48 hours of slaughter. Some of the bodies had limbs and
heads chopped off, some boys castrated, Christian crosses carved into some
of the bodies.

As you later wrote to me in your perfect cursive:

“I saw dead women in their houses with their skirts up to their waists and
their legs spread apart; dozens of young men shot after being lined up
against an ally wall; children with their throats slit, a pregnant woman
with her stomach chopped open, her eyes still wide open, her blackened face
silently screaming in horror; countless babies and toddlers who had been
stabbed or ripped apart and who had been thrown into garbage piles”.

Today Martyr’s Square is not much of a Memorial to the upwards of 1,700
mainly women and children, who were murdered between Sept. 15-18. You
would not be pleased. A couple of faded posters and a misspelled banner that
reads: “1982: Saba Massacer”, hang near the center of the 20 by 40 yard area
which for years following the mass burial was a garbage dump. Today,
roaming around the grassless plot of ground is a large old yellow dog that
ignores a couple of chicken hens and six peeps scratching and pecking
around.

Since you went away, the main facts of the Massacre remain the same as your
research uncovered in the months that followed. At that time your findings
were the most detailed and accurate as to what occurred and who was
responsible.

The old 7-storey Kuwaiti Embassy from where Sharon, Eytan, Yaron, Elie
Hobeika, Fradi Frem and others maintained radio contact and monitored the
48 hours of carnage with a clear view into the camps was torn down years
ago. A new one has been built and they are still constructing a Mosque on its
grounds.

I am sorry to report that today in Lebanon, the families of the victims of the
Massacre daily sink deeper into the abyss. No where on earth do the
Palestinians live in such filth and squalor. ‘Worse than Gaza!” a journalist
recently in Palestine exclaims.

A 2005 Lebanese law that was to open up access to some of the 77 professions
the Palestinians have been barred from in Lebanon had no affect. Their social,
economic, political, and legal status continues to worsen

“It’s a hopeless situation here now,” according to Jamile Ibrahim Shehade,
the head of one of 12 social centers in the camp. “There are 15,000 people
living in one square kilometer,” Jamile runs a center which provides
basic facilities such as a dental clinic and a nursery for children. It receives
assistance from Norwegian People’s Aid and the Lebanese NGO, PARD.
“This whole area was nothing before the camps were here and there has been
very little done in terms of building infrastructure,” Shehade explained.

Continued misery in the camps has taken a heavy psychological toll on
the residents of Sabra and Shatila, aid workers here say. Tempers run high as
a result of frustration from the daily grind in the decrepit housing complex.
In all 12 Palestinian camps in Lebanon, tensions and tempers rise with
increasing family, neighborhood, and sect conflicts. Salafist and other militant
groups are forming in and around Lebanon’s Palestinian camps but
not so much here in the Hezbollah controlled areas where security is better.

In Sabra-Shatilla schools will run double shifts when they open at the end of
this month and electricity and water are still a big problem.

According to a 1999 survey by the local NGO Najdeh (Help), 29 percent
of 550 women surveyed in seven of the 12 official refugee camps scattered
across Lebanon, have admitted being victims of physical violence. Cocaine
and Hashish use are becoming a concern to the community.

There is some new information about the Sabra-Shatilla Massacre that has
come to light over the years. Few Israelis, but many of the Christian Lebanese
Forces, following the national amnesty, wanted to make their peace and
have confessed to their role. I have spoken with a few of them.

Remember that fellow you once screamed at and called a butcher outside of
Phalange HQ in East Beirut, Joseph Haddad. At the time he denied
everything as he looked you straight in the eye and made the sign of the cross.
Well, he did finally confess 22 years later, around the time of his youngest
daughter’s Confirmation in his local Parish. Your suspicions were indeed
correct. His unit, the second to enter the camp, had been supplied with
cocaine, hashish and alcohol to increase their courage. He and others gave
their stories to Der Spiegel and various documentary film makers.

Many of the killers now freely admit that they conducted a three-day
orgy of rape and slaughter that left hundreds, as many as 3,500 they claim,
possibly more, of innocent civilians dead in what is considered the bloodiest
single incident of the Arab-Israeli conflict and a crime for which
Israel will be
condemned for eternity.

Your friend, Um Ahmad, still lives in the same house where she lost her
husband, four sons and a daughter when Joseph, a thick-set militiaman
carrying an assault rifle bundled everyone into one room of their hovel and
opened fire. She still explains like it was yesterday, how the condoned
slaughter unfolded, recalling each of her four sons by name, Nizar, Shadi,
Farid and Nidal. I asked Joseph if he wanted to sit with Um Ahmad and seek
forgiveness and possible redemption since he has now become a lay cleric in
his Parish. He declined but sent his condolences with flowers.

Do you remember Janet, how we used to walk down Rue Sabra from Gaza
Hospital to Akka Hospital during the 75-day Israeli siege in ‘82, as you
used to say “to see my people”? Gaza Hospital is gone now. Occupied and
stripped by the Syrian backed Amal militia during the Camp Wars of ‘85-87.
Its remaining rooms are now packed with refugees. One old lady who
ended up there recited how it’s her 4th home since being forced from
Palestine in 1948. She survived the Phalangist attack on and destruction of
Tel a Zaatar camp in 1976 fled from the Fatah al Islam Salafists in Nahr
al Bared Camp in May of this year and wore out her welcome at the teeming
and overwhelmed Bedawi camp near Tripoli last month.

Most of your friends who worked with the Palestine Red Crescent Society are
gone from Lebanon. Our cherished friend, Hadla Ayubi has semi-retired in
Amman, Um Walid, Director of Akkar Hosptial, finally did return to Palestine
following Oslo, still with the PRCS. And its President, Dr. Fathi Arafat,
your good friend, passed away in December of 2004 in Cairo less than a month
after his brother Abu Ammar died in Paris. They both loved you for all you
had done for their people.

That trash dump near the Sabra Mosque is now a mountain. Yesterday I
did a double take as I walked by because I saw three young girls-as sweet and
pretty as ever I have seen–maybe 7 to 9 years old in rags picking thru the
nasty garbage. Their arms were covered with white chemical paste.
Apparently whoever sent them to scavenge sought to protect them from
disease. As I climbed thru the filth to give them my last 6,000 LL ($4) they
managed a smile and giggle when I slipped on a broken thin plastic bag of
juicy cactus fruit skins and plunged to my knees.

In some areas of the camps there are mainly Syrians. Selling cheap ‘tax free’
goods. Still some Arafat loyalists. Mainly among the older generation.
Palpable stress among just about everyone it seems. One young Palestinian
explained to me his worry that with the upcoming Parliamentary election
to choose a new President scheduled for September 25, there may be fighting
and his October 6th SAT exams may be cancelled and he won’t be able to
continue his studies.

When you and I last spoke Janet, it was on April 16th of that year, and
I was en route to the Athens Airport to catch a flight to Beirut to be with you,
you told me you were working on evidence to convict Sharon and others
of war crimes.

Twenty years later, lawyers representing two dozen victims’ and other
relatives attempted to have Ariel Sharon tried for the massacre under Belgian
legislation, which grants its courts “universal jurisdiction” for war crimes.

There had been great expectations about the case among the Palestinians
and their friends, since as you remember, Sharon had already been found to
bear “personal responsibility” in the massacres by an Israeli commission of
inquiry which concluded he shouldn’t ever again hold public office. But
hopes were dashed when the Belgium Court, under US and Israeli pressure,
decided the case was inadmissible.

I regret to report that all those who perpetrated the Massacre at Sabra-Shatilla
escaped justice. None of the hundreds of Phalange and Haddad militia
who carried out the slaughter were ever punished. In fact they got a blanket
amnesty from the Lebanese government.

As for the main organizers and facilitators, their massacre at Sabra-Shatilla
turned out to be excellent career moves for virtually all of them.

ARIAL SHARON, found by the Israeli Kahan Commission Inquiry “to bear
personal responsibility” for allowing the Sabra-Shatilla massacre resigned as
Minister of Defense but retained his Cabinet position in Begin’s Government
and over the next 16 years held four more ministerial posts, including
that of Foreign Minister, before becoming Prime Minister in February, 2001.
Following the Jenin rampage US President Bush anointed him “a man
of peace.”

RAFEL EYTAN, Israeli Chief of Staff, who shared Sharon’s decision to send in
the Phalange killers and helped direct the operation was elected to the
Knesset as leader of the small ultra rightwing party, Tzomet. In 1984 he was
named Agriculture Minister and Deputy Prime Minister in 1996. He currently
serves as head of Tzomet and is jockeying for another Cabinet position in
the next government.

Major-General YEHOSHUA SAGUY, Army Chief of Intelligence: found by
the Kahan Commission to have made “extremely serious omissions”
in handling the Sabra-Shatilla affair later became a right-wing Member of the
Knesset and is now mayor of the ultra-rightist community of Bat-Yam,
a little town near Tel Aviv.

Major-General AMIR DRORI, Chief of Israel’s Northern Command: found
not to have done enough to stop the massacre, a “breach of duty”, recently
was named as head of the Israeli Antiquities Commission.

Brigadier-General AMOS YARON, the divisional commander whose troops
sealed the camps to prevent victims from escaping and helped direct
the operation along with Sharon and Eitan was found to have” committed
a breach of duty”. He was immediately promoted Major-General and made
head of Manpower in the army, served as Director-General of the Israeli
Defense Ministry and Military Attaches at the Israeli Embassy in Washington.
He is currently working for various Israeli lobby groups as a scholar in
‘tink thanks’.

ELIE HOBEIKA, the Chief of Lebanese Forces Intelligence, who along with
Sharon master-minded the actual massacre fell out with the Phalange in 1980s
under suspicion that he was involved in killing their leader, Bachir
Gemayal. He defected to the Syrians, acquired three Ministerial posts in
post-civil war Lebanon Governments, including Minister of the Displaced
(many thought he knew a lot about this subject) of Electricity and Water and
in 1996, Social Affairs.

On January 24, 2002, twenty years after his involvement at Sabra-Shatilla he
was blown up in a car bomb attack in East Beirut. Two of his associates who
were also rumored to be planning to “come clean” regarding Sharon’s role
were assassinated in separate incidents.

A few days before Hobeika’s death he stated that he might reveal more about
the massacre and those responsible and according to Beirut’s Daily Star
staff who interviewed him, Hebeika told them that his lawyers had copies of
his files implicating Sharon in much more than had become public. These
files are now is the possession of his son who following Sharon’s death may
release them to the public.

They still remember you in Burj al Buragne camp. A few weeks ago one
old man told me: “Janet Stevens? No, I didn’t know her”. He paused and then
said, “Oh!.. you mean Miss Janet! She spoke Arabic… I think she was
American. Of course I remember her! We called her the little drummer girl.
She had so much energy. She cared about the Palestinians. That was so long
ago. She stopped coming to visit us. I don’t know why. How is she?”

And so, Dearest Janet, I will be waiting for you at Sabra-Shatilla , at Martyrs
Square, on Saturday, September 15, 2007.

You will find me patting and mumbling to that old yellow dog. He and I have
become friends and we will pay our respects to the dead and I will reflect
on these past 25 years and we will watch for and wait for you. You will find
us behind the straggly rose bushes on the right as you enter.

Come to us, Janet. We need you. The camp residents need you, one of their
brightest lights, on this 25th anniversary of one of their darkest hours.
You were always their mediator and advocate… and until today you are their
majorette for Justice and Return to their sacred Palestine.

Forever,

Franklin

Note:
Janet Lee Stevens was born in 1951 and died on April 18, 1983, at the age of 32,
at the instant of the explosion which destroyed the American Embassy in
Beirut. Twenty minutes before the blast, Janet had arrived at the
Embassy to met with
U.S.A.I.D. official Bill McIntyre because she wanted to advocate for more aid to
the Shia of South Lebanon and for the Palestinians at Sabra, Shatilla,
and Burg al
Burajneh camps, stemming from Israel’s 1982 invasion and the September 15-18
massacre. As they sat at a table in the cafeteria, where she had
planned to ask why the
US government has never even lodged a protest following the Israeli invasion
or the Massacre, a van stolen from the Embassy the previous June
arrived and parked
just in front of the Embassy. Almost directly in front of the
cafeteria. It contained
2,000 pounds of explosives. It was detonated by remote control and
tons of concrete
pancaked on top of Janet and Bill, killing 63 and wounding 120. Remains of
Janet’s body were found two days later, unidentified in the basement
morgue of the
American University of Beirut Hospital by the author. She was pregnant with
our son, Clyde Chester Lamb III. Had he lived he would be 24 years
old. Hopefully
taking after his mother he would, no doubt, be a prince of a young man.

Franklin Lamb’s book on the Sabra-Shatilla Massacre, now out of print, was
published in 1983, following Janet’s death and was dedicated to Janet Lee
Stevens. He was a witness before the Israeli Kahan Commission Inquiry, held
at Hebrew University in Jerusalem in January of 1983.

Lamb, Franklin P.: International legal responsibility for the
Sabra-Shatila-massacre
Franklin P. Lamb – Montreuil: Imp. Tipe, 1983 – 157 S. Ill., Kt.

Franklin Lamb is Director, Americans Concerned for Middle East Peace,
Beirut-Washington DC, Board Member of The Sabra Shatila Foundation, and
a volunteer with the Palestine Civil Rights Campaign, Lebanon. He is the
author of The Price We Pay: A Quarter-Century of Israel’s Use of American
Weapons Against Civilians in Lebanon and is doing research in Lebanon for
his next book. He can be reached at fplamb@gmail.com

Exploding the Myth of Heroin Cadavers

Hulu – American Gangster: Above the Mafia, posted with vodpod

Sgt Smack and the heroin trade revealed

Sergeant Smack is the fitting title of a book that centres on Ike Atkinson, a successful US Army Master Sergeant who parlayed street smarts into a brief career as one of the world’s leading heroin peddlers, followed by a lifetime behind bars.

Atkinson was the brains and operator of the Thailand end of a heroin epidemic that swept across North America in the late 1960s and early 1970s, even infecting and crippling US troops in the Vietnam war.

More importantly, this book – breathlessly subtitled The Legendary Lives and Times of Ike Atkinson, Kingpin, and His Band of Brothers – is the gold standard describing this important niche of history of both the US and Thailand.

Seasoned crime reporter and author Ron Chepesiuk has done what no predecessor bothered.

He has put the solid facts of an important era down in black and white. He has wiped out a dozen myths, uncovered important information and made it impossible for future historians to gild the lily, and let a good story overwrite the facts.

Most spectacularly, Sergeant Smack lays to rest once and for all the insidious Rumour That Would Not Die about heroin trafficking at the time of the Vietnam conflict – the cadaver connection.

Chepesiuk eviscerates the ridiculous rumour of smuggling heroin inside the bodies of US servicemen killed in the Vietnam War. Over the years, but particularly in the very early 1970s, dozens of officials and newsmen spent thousands of hours trying to track down this sensational allegation. Sergeant Smack even details its origin, in a careless remark by a panicked assistant district attorney in Maryland.

The myth of the cadaver connection has survived, and is still seen. The 2007 movie American Gangster about the fictional life of the real criminal Frank Lucas revived it.

In the movie, Denzel Washington plays Lucas, who very fictionally flies to Thailand for a few days, travels to the heart of the Golden Triangle to arrange some heroin shipments in the bodies of dead GIs, and flies back home.

In real life, Lucas is now a legend in his own mind. His real part in the heroin epidemic was as a dealer in the US, supplied by the Ike Atkinson gang.

When Lucas dies, his epitaph should read: “He fooled the world into believing the cadaver connection.”

To a reader at this end of the heroin connection, Sergeant Smack’s most interesting sections deal with the opaque Thai involvement in the trade.

Much work remains, but Chepesiuk is the first important writer to reveal the main supplier to the US smuggling gang, Luchai “Chai” Ruviwat.

A Thai-Chinese businessman who invested with Atkinson in the GI hangout Jack’s American Star Bar, Luchai remains a shadowy figure. Lured to the US where he was arrested and imprisoned for years, Luchai is still something of a ghost, who no doubt could shed much light on the men in green and in high places who made the heroin trade possible between the Golden Triangle and Bangkok.

Corruption “was just a part of doing business”, reports this book, and foreign embassies routinely reported involvement in the heroin trade by senior military, police, government and “the most respected Thai families”.

Example: A prominent hotel in central Sukhumvit Road was built on piles of peddled heroin.

But the US military had no moral high ground. Atkinson’s team bought, sold and transported heroin from the green cocoon provided by the US military uniforms they wore. Ostensibly employed by the US government and taxpayers, Atkinson’s organised group included chiefs, workers, spotters and drug mules.

In fact, the best you could say is that the US military tried to police itself.

In June 1975, after years as a kingpin, Atkinson received his first sentence for drug smuggling – but continued to run his gang from inside prison.

Chepesiuk details the long, tortured task of law enforcement to bust the Atkinson ring. A key event came in mid-1975 when a hapless military customs agent in Bangkok accidentally discovered a huge heroin stash in a teak-furniture shipment by US Army Sgt Jasper Myrick – a front-page story in the Bangkok Post, but a milestone in busting the kingpin and his band of brothers.

Atkinson’s operation ended in a combination of arrests and the 1976 US troop withdrawal from Thailand, but the Thai connection merely evolved. The US busted and jailed the chief supplier to the military ring, Luchai. He was only a cog in the supply chain controlled by senior Thai officials – although described apocryphally by US anti-drug agents as Mr Big.

With this book, author Chepesiuk has turned the corner from crime writer to historian. Sergeant Smack is not a “good read” or “worth having in your reference library”. It is a vital and necessary source for anyone seeking to understand the intertwining of cross-border crime, recent Thai history, and the mixed emotions of the US military involvement in Thailand during the Vietnam War.

About the author

Writer: Alan Dawson