Petrescu stays in Krasnodar till 2015

Russian Premier League side Kuban Krasnodar have extended their contract with Romanian head coach Dan Petrescu until June 2015.

The signing ceremony took place on Tuesday in the headquarters of the Krasnodar Region’s administration.

“Since the start of the season Kuban has shown self-sacrificing and passionate performance, and fully deserved to be in the top-eight zone,” stated head of the Krasnodar region Aleksandr Tkachev.

“And now playing against the best teams in Russia they look decent,” he added.

The reasons behind Kuban’s interest in Petrescu are obvious – the specialist led the team to the Russian top division last year, produced a shock securing a berth in the top eight, and won the Russian Premier League Manager of the Year award in 2011.

Petrescu himself says he is happy to stay with the team for the next few years.

“I’m happy in Krasnodar, I’m happy to lead the team, with which we have traveled a great way and continue to look forward. I’m thankful to the club’s president and investors, to players and fans, which were superb this year,” he said, adding: “My dream is to help Kuban play in Europe, and I will try my best to fulfill it.”

Moscow court awards ex-spy Anna Chapman $3k

A court partially satisfied a lawsuit filed by Russian sleeper agent Anna Chapman to prohibit Life News from using and distributing a video depicting Chapman and recovered 100,000 rubles ($3,190), Life News spokesperson Natalya Yanchuk told the Russian Legal Information Agency (RAPSI) on Thursday.

According to Chapman’s representative, the video shot at the Baltschug Kempinski Hotel on July 24, 2010, was filmed without Chapman’s permission. Chapman argues that the airing of the video infringed upon her honor and dignity and she incurred moral damage.

Vladimir Krasyukov, Chapman’s attorney, said she did not believe she would be filmed by the Lifenews Internet publication when Chapman arrived to the Baltschug Kempinski Hotel to meet actress Angelina Jolie.

Yanchuk said the video shooting was preliminarily agreed upon with Chapman personally and there is a record proving such an agreement was reached.

Chapman was arrested along with nine other Russian spies in the United States in June 2010. The agents were charged with collusion to spy for a foreign country. In early June, they were exchanged at a Vienna airport for four Russians convicted of spying against Russia.

Chapman sought 10 million rubles (approximately $318,620) in compensation for moral harm from Lifenews.

“Chapman’s lawsuit was upheld partially, but we do not agree with the decision and will dispute it,” Yanchuk said.

She added that the judge announced only the decision’s operative part. “We do not know the courts motives for this, and we cannot discuss them,” Yanchuk said.


Arshavin to return to Russia after Arsenal

Arsenal playmaker Andrey Arshavin says despite his liking for several European leagues, he only wants to play in Russia if he leaves the English Premier League.

­Arshavin was having a QA session with fans on his official website, and one of them wrote that he’d like to see the 30-year-old in the colors of Italian giants AC Milan.  

“When in Italy I’ve always rooted for Milan. I am interested in the club’s way of playing,”
the footballer replied. “But after the English league, I would not want to play anywhere else but in Russia.”

Arshavin’s contract with the Gunners expires in June 2013, and British media have already sent him back to Russia, where his former club Zenit Saint Petersburg and rich cats Anzhi Makhachkala are interested in his services.

The player himself doesn’t rule out the possibility of returning home, as he has spent too much time on the Arsenal bench this season.

Coach Arsene Wenger seems to prefer younger Theo Walcott and Gervinho to the Russian, who became the club’s biggest ever buy (£15 million) in February 2009.

Lukashenko says ‘Hush!’ to flash-mobs

Belarusian leader Aleksandr Lukashenko has ratified a new law targeting public gatherings, including flash-mobs organized through the Internet. The latest move is viewed by many as a hardening of the regime’s stance on freedom of assembly.

Under the new legislation, a protest or political rally can be held only with thepermission of the local authorities. It defines a rally as any “mass gathering of people in a fixed place at a fixed time.”

The law specifically targets flash-mobs organized via the Internet. It follows a wave of “silent protests” against the regime which had been taking place across the country since June in response to a brutal government crackdown on the opposition last year.

Moreover, there have been amendments to the existing legislation on political activity which introduce criminal charges for receiving funds from abroad. Public organizations are also banned from keeping money, or any assets, in banks located aboard.

Belarusian Interior Minister Anatoly Kuleshov described the new law as “the most democratic compared to similar laws in developed democratic states.” Anatoly Rubinov, a top lawmaker, added that the law was “well-timed.”

The world is swept by a wave of protests. Authorities in these countries are forced to use rubber bullets and deploy water cannons and batons. Why? Because they failed to establish order in the organization of mass gatherings,” he said.

Human right activists and international organizations such as the OSCE have expressed their discontent with the new legislation, saying it would “further limit fundamental rights of freedom of assembly and association” secured by the Belarusian constitution and international law.

Those unhappy with the current regime in the former Soviet republic are obliged to think carefully before taking to the streets as they run a constant risk of ending up behind bars.

In June, opposition forces organized the “Revolution through Social Networks” campaign. The rallies against Lukashenko, who has been dubbed “the last European dictator,” have been held every Wednesday in the capital, Minsk, for around two months. Protesters would gather in central squares across the city, standing silently or sometimes clapping their hands and stamping their feet.

Now, however, the new legislation has left the Belarusian opposition with few avenues to pursue in their efforts to get heard.

FBI Releases Videotape Showing Russian Spy Ring

FBI Releases Videotape Showing Russian Spy Ring

Published: November 2, 2011 (Issue # 1681)


Former real estate agent Anna Chapman attending Volvo Fashion Week in Moscow on Sunday.

WASHINGTON — FBI surveillance tapes, photos and documents released Monday show members of a ring of Russian sleeper spies secretly exchanging information and money during a counterintelligence probe that lasted about a decade and ended in the biggest spy swap since the Cold War.

The tapes show a January 2010 shopping trip to Macy’s in New York’s Herald Square by former New York real estate agent Anna Chapman, whose role in the spy saga turned her into an international celebrity. She bought leggings and tried on hats at the New York department store, investigators wrote in a document, and transmitted coded messages while sitting in a coffee shop.

On another occasion, Chapman is visible in a video setting up her laptop computer at a Barnes Noble bookstore. “Technical coverage indicated that a computer signal began broadcasting at the same time,” noted part of a heavily redacted FBI report on the incident, apparently showing an effort by Chapman to communicate with her handlers.

Other photos and video from the surveillance operation, which the FBI called “Ghost Stories,” show some of the 10 other conspirators burying money in a patch of weeds, handing off documents in what looks like a subway tunnel, meeting during a stroll around Columbus Circle or just taking their kids for a walk.

A photo of one spy, Donald Heathfield of Cambridge, Massachusetts, shows him at what appears to be a university graduation ceremony. Heathfield received a degree from Harvard’s John F. Kennedy School of Government in 2000. The school revoked the degree a month after the FBI rolled up the spy ring in June 2010.

Called illegals because they took civilian jobs instead of operating inside Russian embassies and military missions, the spies settled into quiet lives in middle-class neighborhoods. Their long-range assignment from Moscow: Burrow deep into U.S. society, and cultivate contacts with academics, entrepreneurs and government policymakers on subjects from defense to finance.

While the deep-cover agents didn’t steal any secrets, an FBI counterintelligence official said they were making progress. They “were getting very close to penetrating U.S. policymaking circles” through a friend of an unidentified member of President Barack Obama’s Cabinet, FBI assistant director for counterintelligence C. Frank Figliuzzi told The Associated Press. He did not give details, but Russian spy Cynthia Murphy of Montclair, New Jersey, provided financial planning for a venture capitalist with close ties to Bill and Hillary Clinton.

The investigation’s code name, “Ghost Stories,” was an apparent reference to the ring’s efforts to blend invisibly into the fabric of American society. An FBI spokesman said that releasing the material on Halloween was coincidental.

The linchpin in the case was Colonel Alexander Poteyev, a highly placed U.S. mole in the Foreign Intelligence Service, who betrayed the spy ring even as he ran it. He abruptly fled Moscow just days before the FBI rolled up the deep-cover operation on June 27, 2010. Poteyev’s role in exposing the illegals program only emerged last June when a Russian military court convicted him in absentia for high treason and desertion.

The United States swapped the 10 deep-cover agents arrested by federal agents for four Russians imprisoned for spying for the West at a remote corner of a Vienna airport on July 9, in a scene reminiscent of the carefully choreographed exchange of spies at Berlin’s Glienicke Bridge during the Cold War.

While freed Soviet spies typically kept a low profile after their return to Moscow, Chapman became a lingerie model, corporate spokeswoman and television personality. Heathfield, whose real name is Andrei Bezrukov, lists himself as an adviser to the president of Rosneft on his LinkedIn account.

President Dmitry Medvedev awarded the 10 freed spies Russia’s highest honors at a Kremlin ceremony.

The swap was Washington’s idea, raised when U.S. law enforcement officials told Obama that it was time to start planning the arrests.

The case was brought to a swift conclusion before it could complicate the president’s campaign to “reset” U.S. relations with Russia, strained by years of tensions over U.S. foreign policy and the 2008 Russia-Georgia war. All 10 of the captured spies were charged with failing to register as foreign agents.

An 11th suspect, Christopher Metsos, who claimed to be a Canadian citizen and delivered money and equipment to the sleeper agents, vanished after a court in Cyprus freed him on bail. The FBI released surveillance photos of Metsos on Monday.

Attorney General Eric Holder said officials decided to arrest the spies because one was preparing to leave the United States and there was concern that “we would not be able to get him back.”

Both Holder and Figliuzzi said the spies represented a real threat to U.S. security. “This was a massive investigation that spanned the entire field offices of the FBI,” Figliuzzi said Monday. “Resources were dedicated in multiple field offices, multiple counter-intelligence squads across the nation and certainly here in Washington at FBI headquarters.”

But former Soviet intelligence officials now living in the West scratched their heads over what Russia hoped to gain from its ring. “In my view this whole operation was a waste of human resources, money and just put Russia in a ridiculous situation,” said Oleg Kalugin, a former KGB major general who spied against the United States during the Soviet era, in an interview earlier this year. He now lives near Washington.

Alexander Vassiliev, a former KGB officer and journalist who has written extensively about Soviet spying in America, said the illegals were supposed to act as talent spotters and scouts, identifying Americans in positions of power who might be recruited to spill secrets for financial reasons or through blackmail.

Spies with the protection of diplomatic credentials would handle the more delicate task of recruiting and handling the agents. Moscow’s ultimate aim, Vassiliev said, was probably to cultivate a source who could provide day-by-day intelligence on what the president’s inner circle was thinking and planning in response to the latest international crisis. But he said there was no evidence the Kremlin made any progress toward that goal.

“How are you going to recruit someone like that, on what basis? That’s quite a successful person. Why should he spy for the Russians? I can’t see any reason.”

Vassiliev said Russia’s intelligence services seem unable to shake their Soviet-era habits. “The current practice of the Russian espionage agency is based on the practices which existed before 1945,” said Vassiliev, who now lives in London. “It’s so outdated.”

‘Eternal’ summer deprives Russians of extra sleep

For the first time in years, Russians will not be setting their clocks back on the last Sunday of October.

Russia is sticking with summer time after President Dmitry Medvedev scrapped daylight-saving time in June.

Following massive studies, the authorities decided that switching clocks twice a year is harmful to people’s health and triggers stress.

The report, published by the Russian Academy of Medical Sciences, revealed that when the clocks are changed, the number of heart attacks increases by 1.5 times, the rate of suicides grows by 66 per cent, and many more people call for an ambulance.

Moscow and St. Petersburg will stay at GMT+4 hours all year round, instead of reverting to GMT+3 for the winter period. Mid-winter sunrise in Moscow will occur at around 10 a.m., with an even later daybreak for the northern capital.

Ukraine was going to join Russia, but changed its mind 10 days ago. Now Russian Rail is hastily updating its schedule between the two countries. All ticket sales on routes going through Ukraine have been frozen until December 3.

The idea of daylight-savings time was first put forward in 1895 by New Zealand entomologist George Vernon Hudson. Today, 110 of the world’s 192 countries adjust their clocks twice a year. Iceland is the only exception in Europe. Russia started to use daylight-savings time in 1981.

Recession only worsened since officially ending

A new report reveals that not only have the after effects of the recession been more severe than thought, but offers perhaps the best revelation yet that the crisis has only continued even after we were told it was over.

Although the United States government has placed June 2009 as the official end of the last American recession, The New York Times reported over the weekend that in the two years since, the median household income — adjusted for inflation — has dropped by 6.7 percent. In comparison to how the “actual” recession affected Americans, the median household income between December 2007 and June 2009 saw a decline that stumbled downward at only half of the more recent rate. During when the government considered the recession, income dropped by only 3.2 percent.

The latest analysis from The Times comes courtesy of former Census Bureau officials who have mulled over the economic trends as of late. They suggest that as of June of this year, the median household income in the US is less than one hundred dollars shy of $50,000. That number is 9.8 percent lower than the real median annual household income at the start of the recession, which the study places at $55,309.

Additionally, unemployment figures from the beginning of the recession in early 2008 hovered near 5 percent before quickly surging to nearly double by the summer of the following year. Though the government officially called the recession quits shortly thereafter, the unemployment rate has remained above 9 percent for almost every month since, briefly skyrocketing to over 10 percent for the first time in an era.

Despite a highly touted stimulus package aimed at reviving the American economy, President Barack Obama has failed to get the nation out of its slump since he entered office mid-recession. This week Congress is expected to take a look at his American Jobs Act, which he predicts will bring the unemployment act back towards 8 percent within a year.

Meanwhile, thousands of Americans continue to rally against many of the factors they say are continuing to the economic downturn in the ongoing Occupy Wall Street movements spreading across the country. Outside of the parks being possessed by angst-filled Americans, economics are saying that their anger is all too warranted.

“The protesters are giving voice to a more broad-based frustration about how our financial system works,” President Barack Obama said last week. A week prior, Federal Reserve Chairman Ben Bernanke said that the American economy is “close to faltering” and acknowledged the growing demonstrations, saying he doesn’t blame people for taking to the streets. He has also called the economic problem a “national crisis” during a recent speaking engagement.

Last month both the International Monetary Fund and House Speaker John Boehner warned of an impending recession as well. In August, billionaire hedge fund magnate George Soros also said a double-dip recession was likely

Four Scenarios For Putin 2.0

So we know the who. But we still don’t know the what.

Vladimir Putin will return to the Kremlin for at least one, and most likely two, six-year terms starting in 2012. Dmitry Medvedev, it appears, is destined to become an interesting historical footnote — a curiosity who occupied the Kremlin in the short interlude between Putin and Putin: The Sequel. 

But what kind of policies will the next incarnation of Putin pursue?

Will he attempt a reform agenda that harkens back to the early years of his presidency when he simplified the tax code and initiated land reforms? Or will he revive “high Putinism,” the assertive and authoritarian centralization policies that marked much of his second term from 2004 to 2008?

And how will Russian society respond to whatever form Putin 2.0 takes?

Russia today is not the Russia of a decade ago or even five years ago, when people were prepared to sacrifice civil liberties and democratic niceties in exchange for rising living standards.

Lower oil prices, an economy in need of modernization and diversification, and creaking infrastructure in need of renovation have stalled the economic boom that marked the past decade. Fueled by a social media revolution, civil society is becoming increasingly active and assertive.

So what can we expect? Below are four possible scenarios for how Putin’s second stint in the Kremlin might play out (in no particular order of likelihood).

Top-Down Reform: The Stolypin Scenario

Pyotr Stolypin, Russian Prime Minister from 1906 to 1911
When Putin returns to the Kremlin as president on May 7, 2012, Russia will be a dramatically different country from when he relinquished formal power to Dmitry Medvedev four years earlier.

Gone will be the swagger of the “energy superpower” touting its superiority over the West. Much of the Russian elite understands all too well that some kind of reform is necessary — especially regarding the economy.

The country has lost $50 billion in capital flight this year alone; the ruble is languishing at a two-year low; the stock market is tanking; and oil prices are below the $116 a barrel necessary to keep the budget balanced — and are expected to fall further still amid a looming global recession.

Moreover, in the four-year interlude since Putin last occupied the Kremlin, Russian civil society has awakened to a degree not seen in years and — assisted by the Internet and social media — is becoming increasingly assertive and creative in making its voices heard.

“The rigid system is teetering, and its key components are breaking down,” Julia Ioffe wrote in “Foreign Policy” on September 27.

Even Putin appears to recognize that something needs to be done.

“Responsible authorities should always not only listen to the heartbeat but if they see and understand it, then they should prescribe drugs if there is any sort of problem,” he told party members on the eve of the United Russia congress.

“The authorities should explain to people in a clear and understandable way — not with truncheons and teargas, of course — but with discussion and dialogue.”

But despite this, nobody is holding their breath waiting for the second coming of Perestroika.

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Having experienced the late 1980s as a KGB agent in East Germany, Putin is haunted by the specter of reforms intended to preserve the system spinning out of control and bringing down the whole house of cards.

Any reforms he launches are going to be tightly controlled and designed to assure the current ruling elite’s continued hold on power.

So, if Mikhail Gorbachev isn’t the model, then who is?

Back in July, Putin gave a hint when he evoked the Tsarist-era prime minister Pyotr Stolypin, who served from 1906 until his death in 1911.

Chairing a commission tasked with erecting a monument to Stolypin to mark the 150th anniversary of his birth in 2012, Putin called him a “true patriot and a wise politician” who “served his country…at a very difficult and truly dramatic period in Russia’s history.” He also praised his “iron will” and “personal courage.”

Stolypin is actually the perfect model for a top-down reform wave a la Putin. Serving as premier in the tumultuous period following the Russo-Japanese War, He initiated historic land reforms, expanded the trans-Siberian railroad, and facilitated the development of Siberia.

But his zeal for reform only went so far. Stolypin was appointed by Tsar Nicholas II in the politically charged atmosphere following the revolution of 1905 and was obsessed with preventing further political upheaval. He was so ruthless in dealing with real and potential revolutionaries that the hangman’s noose became known as a “Stolypin necktie.”

Could Putin pull off a top-down economic reform while keeping a tight rein on the political system? This would likely depend on whether the reforms resulted in real improvements in people’s material wellbeing, which could dampen political dissent.

The problem is that, at least in the early phase, any reforms are going to result not in better living standards, but in increased economic hardship. Most notably, these will include painful overhauls of the country’s pension system and creaking social services infrastructure.

But given how invested Putin and his inner circle are in the commanding heights of the Russian economy, any reform effort can only go so far.

“In a way Putin is a prisoner of the system he created… which means that he can’t really change it ” says longtime Russia-watcher Edward Lucas, International Editor of the British weekly “The Economist” and author of “The New Cold War: Putin’s Russia and the Threat to the West.”

“If he tried to do something about corruption it would immediately raise questions about where the oil money goes, where the gas money goes. These are uncomfortable questions which would be particularly uncomfortable for him if they were answered.”

And as for Stolypin, that didn’t exactly end well either the first time around. He was assassinated in the Kyiv Opera House in September 1911, just six years before Russia descended into revolution and civil war.

Authoritarian Modernization: The Andropov Scenario

Former KGB chief Yury Andropov led the Soviet Union for 15 months in the early 1980s.
Stolypin is not the only role model Putin has plugged from Russian history.

Back in June 1999, Putin laid a bouquet of flowers on Yury Andropov’s grave to mark the 85th anniversary of the late Soviet leader and longtime KGB chief’s birth.

Shortly after he became president in 2000, Putin saw to it that a plaque honoring Andropov was placed on the Moscow building where he once lived. To mark the 90th anniversary of Andropov’s birth in June 2004, Putin arranged for a 10-foot statue of him to be erected in the suburb of Petrozavodsk, north of St. Petersburg.

And on June 15, 2009, the 95th anniversary of Andropov’s birth, Russia’s Channel One aired a nostalgic laudatory film titled “Yury Andropov: 15 Months Of Hope.”

Members of Vladimir Putin’s inner circle have long viewed Andropov’s brief 15-month rule as the path not taken, the great “what if,” the missed opportunity.

Putin has made no secret of his admiration for Andropov, who served as KGB head when he and many of his siloviki allies were fresh-faced rookie spies in the 1970s. Andropov’s model of governance somewhat resembles Stolypin’s top-down economic reform model, but envisions keeping more of the economy under the control of the state.

When he became Soviet leader after the death of Leonid Brezhnev, Andropov sought to introduce limited market mechanisms to make the stagnant Soviet economy more competitive with the West. But his plans for an authoritarian modernization left little room for any inkling of democracy or pluralism. Instead, the political system would remain tightly controlled and the economy tightly wedded to the state — with the KGB taking a leading role.

Members of Vladimir Putin’s inner circle have long viewed Andropov’s brief 15-month rule as the path not taken, the great “what if,” the missed opportunity.

If Andropov had lived, the argument goes, Moscow would have pursued a program of authoritarian modernization, introducing market reforms similar to those in China while preserving one-party rule. He would have reformed the economy, kept the Soviet Union together, and avoided the chaos and deprivation of the Perestroika period and the 1990s.

“Andropov thought that the Communist Party had to keep power in its hands and to conduct an economic liberalization. This was the path China followed,” Olga Kryshtanovskaya, head of the Russian Academy of Sciences Institute for Elite Studies, told me in a 2007 interview. “For people in the security services, China is the ideal model. They see this as the correct course. They think that [former Russian President Boris] Yeltsin went along the wrong path, as did Gorbachev.”

Kryshtanovskaya added that Putin and his protégés thought Andropov “was simply a genius, that he was a very strong person who, if he had lived, would have made the correct reforms.”

With the preeminence of the ruling United Russia party, the dominance of the security services, and the tight links between business and the state, many analysts believed Putin’s first stint in the Kremlin from 2000-08 was an attempt to revive Andropovism.

But the global financial crisis exposed the weaknesses in Russia’s top-heavy and energy-dependent economy. During Medvedev’s presidency, the focus shifted to opening up the economy and — to a degree — reforming the political system.

So with Putin returning to the Kremlin, will Andropovism also make a comeback?

The elite appears divided between the siloviki faction led by Deputy Prime Minister Igor Sechin, whciht favors the authoritarian state capitalist model, and a more technocratic group, including former finance minister Aleksei Kudrin, who favor seeing the economy liberalized and the political system opened up.

Kudrin’s recent resignation and the collapse of Right Cause, a Kremlin-sponsored project to get a regime-friendly party into the next State Duma suggests the liberalizing faction is losing, at least for now.

But with oil prices expected to fall, a global recession potentially looming, and Russia facing a budget crunch due to falling revenues, most observers agree that Moscow now needs to focus on diversifying its economy and selling off state assets.

Moreover, Russian civil society has become increasingly assertive since Putin left the Kremlin. Citizen groups and bloggers, powered by social media in a country where Internet penetration has reached 40 percent, are becoming more willing to challenge the authorities.

2012, it turns out, is not 1983 — or even 2007.

Survival and Stagnation: The Brezhnev Scenario

Soviet leader Leonid Brezhnev (centre) at the opening of the Moscow Olympic Games in 1980
One problem that Putin’s decision to return to the presidency unequivocally solves is Russia’s perennial succession dilemma and the uncertainty and instability that comes with it. The ruling elite now knows, with virtual certainty, who will be in charge until 2024 — Vladimir Putin (provided, of course, that he wins two six-year terms).

There should, then, be no repeats of the succession crises that marred Russian politics in 1999 or 2008.

But that stability comes with a price, the risk of stagnation and the ossification of an elite secure in its power and privilege.

If Putin remains president until 2024, he will have served as president for a total of 20 years and as Russia’s de facto ruler for 24 — just shy of the three decades Josef Stalin occupied the Kremlin and longer than Leonid Brezhnev’s 18-year reign.

And for this reason, the comparisons with Brezhnev were rife when the news broke on September 24 that Putin would return to the presidency.

“I think the Brezhnev analogy is quite a serious one,” Lucas told me.

“Obviously he [Putin] is not Brezhnev in that he is physically fitter and that [Russia] is not a police state or planned economy. But that feeling of corruption and incompetence will be very strong.”

The early Brezhnev’s political product mix included stability, sensible governance, and  growth in the people’s well-being…

But what many forget is that Brezhnev wasn’t always the bumbling, stumbling, and clownish figure who became the subject of so many jokes told over kitchen tables in the late Soviet period. In the early part of his rule, which ran from 1964 to 1982, he actually cut quite a young and energetic figure.

“What was the real Brezhnev like, not the Brezhnev of the jokes?  He was a person not without charm, he liked to joke, to shoot, to race cars, to chat with the people,” political analyst Sergey Shelin wrote in a commentary in late last year.

“The early Brezhnev’s political product mix included stability, sensible governance, a growth in the people’s well-being, and other nice things. It would be stupid to deny today that people liked this, and if the science of opinion polling in those days had known how to measure ratings, they would have been excellent.”

Sound familiar? The same could have been written to describe Putin’s first stint in the Kremlin.

Putin has been in power in one form or another for roughly 12 years now (if you include Medvedev’s four-year interlude as a placeholder). On the Brezhnev timeline, that places us roughly in 1976 — just before things started to go south. It was also in that year when Brezhnev, who was then 70 years old, reportedly considered resigning.

Instead he stuck around, collected his third Hero of the Soviet Union medal, took the military rank of marshal, and passed a new constitution. Meanwhile, as living standards sank and the general social malaise increased, he gave a lot of long and meandering speeches.

Is Putin aware of these similarities? I suspect he is. According to the Moscow rumor mill, Putin didn’t really want to return to the presidency, instead preferring to lord over the system as Russia’s national leader free from the daily dirty grind of politics.

So why did he come back. According to some Kremlin-watchers, he didn’t have a choice.

“Putin designed a system of managed conflict,” Nikolai Petrov, a political analyst with the Moscow Carnegie Center told me recently.

“He created different clans and groups who are fighting against each other. This is the way he keeps control over the system.  He is a judge and arbiter who is keeping the balance among them. It is impossible for him to leave. It is impossible to imagine this system without him because all of the agreements are guaranteed by him. Without him, all of these clans would fight each other, like after Stalin’s death.”

Crisis and Revolt: The Colored Revolution Scenario

Protesters demonstrating on Kyiv’s Independence Square during the Orange Revolution of November 2004
Ever since the Rose and Orange revolutions in Georgia and Ukraine the Russian authorities have been haunted by the specter of being overthrown by a popular rebellion. Those fears only increased after this year’s Arab Spring uprisings.

The elite has tried various methods of preempting such an ignoble end to their rule. They have demonized the colored revolutions as foreign-backed plots on state television, restricted the activities of NGOs, attempted to exert control over the Internet, and cracked down brutally on public demonstrations.

And now they have an added concern. With the frightening storm clouds now gathering over the global economy, some believe Russia could soon be ripe for revolt.

Opposition politician Boris Nemtsov, for one, thinks it is a very real possibility.

Putin’s return would lead to “very serious social and economic shocks” as well as “massive capital flight, a new wave of emigration, and further degradation of the state,” the opposition politician told RFE/RL’s Russian Service.

“Putin is turning into [Belarus Preident Alyaksandr] Lukashenka, and he could transform into [deposed Egyptian President Hosni] Mubarak or [deposed Libyan leader Muammar] Qaddafi.”

For the time being, though, there doesn’t appear to be any risk of a mass public uprising. The Russian economy has problems and badly needs to be diversified away from its dependence on energy, but does not look to be on the brink of collapse.

And while people have become more assertive in voicing their grievances, Putin remains very popular.

But that, of course, can change very quickly. After the elections, it is widely understood that the government will need to initiate very painful — and very unpopular — reforms to the pension and social services systems. Oil revenues are already below the level needed to balance the budget and are expected to fall further.

“Next year, the government will need to enact some very unpopular laws,” the Carnegie Center’s Petrov recently told RFE/RL’s Russian Service.

“The role of the first prime minister under President Vladimir Putin in 2012 will in some ways resemble that of a kamikaze pilot.”

And if things do go south, if Russia’s economy tanks, causing real economic pain and discrediting Putin, Putinism and the entire ruling elite, then they will face a difficult choice.

“If you got unrest or a deterioration of the external environment, which way would they go?” “The Economist’s” Lukas asked.  “Would they be forced into a kind of new era of Glasnost, Perestroika, and reform as in the Soviet Union in the 1980s? Or would they go down an Andropov line toward more repression.”

That question, of course, is impossible to answer at this point. But it easy to see how things could quickly spin out of the authorities’ control as they did in Tunisia, Egypt, and Libya.

But if they do, there is a chance that it won’t be the pro-Western liberals who will come out on top.
Russia’s nationalists have become increasingly organized and assertive in recent years and a deep economic crisis could end up igniting society’s most xenophobic elements.

If there is a colored revolution in Russia, it may not be orange, rose, or tulip — but one dominated by brownshirts.

Russian activist’s case in Moldova deliberately stalled

The investigation into the case of a Russian activist, detained in Moldova on charges of instigating riots, is being deliberately stalled, Russia’s ambassador to Chisinau said.

Eduard Bagirov was detained on June 16 on suspicion of organizing mass riots in Moldova in spring 2009. A court ruled that Bagirov must remain in custody pending trial.

“Moldovan investigation authorities have failed to provide any evidence of Bagirov’s involvement so far. Numerous visit requests by our consul were either turned down or answered too late, let alone our requests to release him” ambassador Valery Kuzmin said.

“This causes perplexity and make us think that Bagirov’s case is being deliberately stalled, and he is a hostage to Moldova’s internal political struggle,” the Russian diplomat added.

On April 7, 2009, a crowd of protesters forced their way into the parliament building and the presidential administration. Some analysts say the events in Moldova were a “Twitter revolution,” or a spontaneous uprising against the Communist regime, while others maintain it was a thoroughly planned coup.

The ambassador said that “the long-term detention of Bagirov, who even wasn’t in Chisinau during the riots, looks absurd anyway.”

“It looks even more absurd when we learn that the real participants of the events, who appear on the footage from the parliament square, have not even been summoned to testify in the case,” Kuzmin said.

He said the Moldovan authorities should release Bagirov under a written pledge not to leave and stop “creating an unnecessary irritant in bilateral relations.”

Bagirov wrote in his blog that during nearly four months of his detention he was interrogated only once for some 20 minutes.

The Russian Public Chamber said in late June the blogger is being held in a Chisinau pretrial detention facility in conditions that do not comply with international standards. Later, Bagirov was transferred to Chisinau’s Prison 13.

Budget Airline Avianova Files for Bankruptcy

Budget Airline Avianova Files for Bankruptcy

Published: October 5, 2011 (Issue # 1677)


Popular with students and budget travelers, Avianova carried 866,000 passengers between January and August of this year.

MOSCOW — Budget airline Avianova, which has been embroiled in a bitter shareholder dispute between its U.S. and Russian partners, issued a statement late Sunday saying that it would cancel all flights from Monday and file for bankruptcy. The airline went on to say it could not pay airports or meet licensing fees for its aircraft after minority American shareholder Indigo Partners cut off funding.

Confusion surrounded the fate of the airline on Monday as flights continued to take off and land at Sheremetyevo Airport, the budget airline’s hub, despite Sunday night’s statement.

The airline’s web site had ceased accepting bookings late Sunday, but about 67,800 tickets have been sold for flights scheduled between Oct. 3 and 29, according to news agencies citing sources at the company.

An operator reached via the airline’s hotline said passengers would be informed of their flight status by e-mail, and refused to give further information without a booking reference.

Avianova had not responded to e-mailed enquiries by Monday evening.

Avianova and its shareholders ought to meet obligations to passengers “at their own expense,” Federal Air Transportation Agency chief Alexander Neradko said Monday after a meeting with the airline’s management.

But Neradko said the airline’s bosses had been unable to tell him whether they would continue flying or not until they “consulted with their shareholders.”

Avianova was founded in 2007 as a joint venture between Arizona-based investment firm Indigo Partners, which holds a 49 percent stake, and A1, part of Mikhail Fridman’s Alfa Group, with the remaining 51 percent.

Based at Sheremetyevo Airport, the airline proved a hit with students and other budget travelers. It grew to serve destinations from Arkhangelsk in the north to Sochi in the south, and from Surgut in the east to Kaliningrad in the west.

It carried 866,000 passengers between January and August this year alone, according to the Federal Air Transportation Agency. But the partners fell out dramatically in June, with A1 effectively accusing Indigo of appointing the expat managers without their consent, and with the intention of running the airline without A1’s oversight.

In scenes that were likened to the corporate raids of the 1990s, several expat managers and Russian employees, including Pyne, Hayden and chief operating officer Guy Maclean, were evicted from the airline’s Moscow headquarters by security guards when they showed up for work on June 24.

At the time, new managers — Konstanin Teterin and Vladimir Gorbunov — accused Pyne of whimsical cancellation of flights, embezzlement and general mismanagement that they said cost the airline millions of dollars.

The evicted managers denied the charges and accused A1 of attempting a “coup” at the airline.

Both shareholders remained tightlipped about the round of negotiations that followed, though it now seems clear that they failed — and both sides have made it clear that it was the other’s fault.

Avianova’s management accused Indigo of lying about its reasons for opening the airline and accused the U.S. shareholders of sabotaging expansion plans that would have led to competition with Central Europe-based budget airline Wizz Air.

“This conflict of interest led the Indigo Partners’ leadership to repeatedly block expansion of the Avianova fleet and the launching of new destinations in Eastern Europe, while increasing the Wizz Air fleet of 35 new Airbus aircraft,” the Avianova statement said.

“This has caused irreparable harm to the development and economic results of the company and the development of the Russian aviation industry as a whole,” it said.

The St. Petersburg Times was unable to confirm Indigo’s relation to Wizz Air on Monday.

The statement repeated the accusation that Pyne, Hayden and Maclean were installed as “unqualified but loyal” placemen to secure control of the airline’s cash flow for Indigo.

Among other things, they accused the three of “practically forcing” the airline to lease two Airbus A320s from International Lease Finance Corp.

Last week, ILFC asked a Moscow arbitration court to seize the two aircraft as security for the $320 million it is owed by the airline. Indigo Partners in response blamed the bankruptcy on “reasons outside Indigo Partners’ control,” adding that their “oversight and control” of the airline had been cut off since the expulsion of the expat managers in June.

“Since that time, Indigo’s efforts to regain its influence and save the airline have been to no avail,” the company said in an e-mailed statement.

The counterclaims continued to swirl Monday. Hayden and Pyne said in an e-mailed statement that A1 had “declined to engage seriously with prospective investors who were willing to recapitalize the airline and support its continued operations.”

Elaborating, Hayden said A1 decided to accept an offer from a third party backed by Indigo that it had at first rejected about two weeks ago, but that it was “already too late” for Indigo, and the American firm decided to cut its losses and file for bankruptcy. Indigo was unable to make an offer directly because it would breach ownership laws.

But A1 flatly denied any such negotiations, saying by e-mail that it had “not received any official offers from any authorized structures” to buy its 51 percent share in the airline.

The expat managers at the heart of the storm say they intend to stay in Russia and have had “several job offers” from Moscow-based aviation firms.

“Personally I like Moscow — I want to stay,” Hayden said. “Hopefully I’ll be able to go on leading a normal life, even if it is with a few more gray hairs.”

Avianova’s management has suggested Hayden may face criminal investigation for deliberately deleting information from the airline’s booking system, costing the airline $20 million.

In the newest development, accounting firm KPMG has been drawn into the controversy after Pyne and Hayden accused the accountants of “gross distortion” in a report of the airline’s finances.

The pair have initiated legal action against KPMG for “libelous” statements in a report that the firm drew up on their time management of the airline.

The managers began the legal process “about two weeks ago,” Hayden said by telephone Monday. He did not say how much compensation they were seeking.

KPMG declined to respond to the accusations, saying by e-mail that the company does not comment on client matters.

Russia considers measures to improve regional air safety

The government is examining ways to boost air safety in the regions, Russia’s deputy transport minister said on Tuesday.

Four plane crashes since June mean Russia has the highest number of air-related fatalities in the world for 2011.

Ageing aircraft and poor maintenance, as well as a lack of properly-trained crews have been blamed for the crashes.

Deputy Minister Valery Okulov said that state guarantees for loans to buy new aircraft were among the options being considered to improve the situation.

He said the issue would be discussed with the Finance Ministry.

Russian air transport regulator Rosaviatsiya suggested on Tuesday banning aircraft that lack modern flight simulators.

Russia’s most recent air crash wiped out virtually the entire Lokomotiv Yaroslavl ice-hockey team and occurred when the side’s chartered Yak-42 plane went down near the Volga city of Yaroslavl shortly after takeoff on September 7.

In June, a RusAir Tupolev Tu-134 plane crashed in northwest Russia’s Karelia region, killing 47 people.

Fatal cocktail

Pilot error and bad weather conditions are being blamed as the main causes of June’s air crash in north-western Russia. The investigation report revealed one of the crew members was slightly intoxicated.

­The Interstate Aviation Committee concluded that the crew failed to go around and attempt a second landing.

They had descended below a minimum safe altitude without visual contact with airport approach lights and landmarks, which led to the aircraft colliding with trees. 

It also pointed out that the navigator was slightly drunk.  During the flight the captain “almost gave over the flight control to the navigator who was excessively active and lightly drunk and the co-pilot had been removed from controlling the aircraft during its final descent.”

The crew was also given incorrect information about low cloud, fog and visibility –  and the report says the pilots ignored onboard data designed to assist a safe landing.

The RusAir Tupolev Tu-134 passenger plane crashed near Petrozavodsk, the capital of the Republic of Karelia, in June. The aircraft came down on a highway some two kilometers from its destination airport killing 47 of the 52 people on board.

Russia plane crash navigator was ‘lightly intoxicated’

The navigator of a Russian airliner that crashed in June killing 47 people was “in a light level of alcoholic intoxication”, an official report said on Monday.

A Tu-134 jet belonging to the airline RusAir hit a road a mile short of the runway at Petrozavodsk airport in north-west Russia on 20 June. Five people survived.

Russia’s interstate aviation committee, which oversees civil aviation in the country and several other former Soviet republics, said the “use during the flight of a navigator in a light level of alcoholic intoxication” was one of a number of factors that had contributed to the crash.

Other factors were heavy fog and poor co-operation among the crew during the landing attempt. The investigation showed that the crew could not see the runway’s ground lights, but did not decide to turn away and make another attempt at landing.

The report said that the pilot had subordinated himself to the navigator with the co-pilot effectively excluded from decisions.

On Sunday, the state television channel Rossiya said experts believe the navigator, who was among those killed in the crash, had consumed about a glass of vodka shortly before the flight took off from Moscow.

Russia and other former Soviet republics have had poor air safety records in recent years. Industry experts say the air disasters are rooted not simply in flying older aircraft, but in poor crew training, crumbling airports, lax government controls and widespread neglect of safety in the pursuit of profits.

The death of 37 players, coaches and officials of a top Russian ice hockey team last week in a crash near Yaroslavl drew fresh attention to Russia’s poor air safety.

The Russian president, Dmitry Medvedev, responded to the crash by ordering officials to shut most of the country’s 130 carriers, saying small airlines tend to cut corners on safety. He also said the government may end attempts to bail out struggling national aircraft-makers and buy more foreign-built planes.

“The value of human life must prevail over all other considerations, such as support for local producers,” Medvedev said.

Official: Navigator In Petrozavodsk Plane Crash Was Drunk

A spokesman for Russia’s top investigative body says the navigator of a passenger plane that crashed into a highway in June, killing 47 people, was drunk.

The Tu-134 crashed just minutes before it was to land at the airport in Petrozavodsk, in the northwest of the country, on June 20.

Five people survived with serious injuries.

While commenting on Russian state television on September 18, Vladimir Markin, a spokesman for Russia’s Investigative Committee, said that “the navigator of the airliner was in a state of alcoholic intoxication.”

The navigator was killed in the crash.

compiled from agency reports

Russia to press for release of activist held in Moldova

Moscow will continue to press for the release of Eduard Bagirov, a Russian activist, blogger and writer detained in Moldova in June on charges of instigating riots, a foreign ministry spokesman said on Thursday.

“The Russian side is seriously concerned by the Moldovan judicial authorities’ decision to extend Bagirov’s custody for another 30 days,” Russian Foreign Ministry spokesman Alexander Lukashevich said.

Eduard Bagirov was detained on June 16 on suspicion of organizing mass riots in Moldova on April 7, 2009, when a crowd of protesters forced their way into the parliament building and the presidential administration. A court ruled that Bagirov must remain in custody pending trial.

Bagirov wrote in his blog that during his 90-day detention he was interrogated only once for some 20 minutes.

On Tuesday he said that he would go on hunger strike starting from Wednesday to protest his detention.

The Russian Public Chamber said in late June the blogger is being held in a Chisinau pretrial detention facility in conditions that do not comply with international standards. Later, Bagirov was transferred to Chisinau’s Prison 13.

Prokhorov backers say Right Cause congress overtaken

Representatives of tycoon Mikhail Prokhorov, head of the Right Cause party, said on Wednesday that outsiders had been registered for the party congress to vote to expel the party leader.

Congress participants, however, said this information was unsubstantiated and expressed surprise that Prokhorov, who has been leading the party since June, had not turned up at the party meeting ahead of the December elections to parliament.

The Right Cause opened its meeting on Wednesday behind closed doors. Rumors said that the party might consider changing its leader, though the issue is not on the agenda.

Prokhorov’s spokesman said the congress participants had obtained the majority of mandates in the absence of the party leader to vote against him on Thursday. He added that Prokhorov supporters were certain that their opponents in the party had only one-third of votes until today when it all changed.

“They have registered people who had nothing to do with the Right Cause until today, given them voting mandates and set up a mandate commission,” the spokesman said.

Boris Nadezhdin of the party’s federal political council said no irrelevant people had been registered for the congress.

The spokesman said Prokhorov was not within reach to comment. He will give a briefing later on Wednesday.

The party congress participants were surprised at the comments of Prokhorov’s spokesman.

“I am in my right mind, I personally know all the delegates,” Nadezhdin said, adding that there were no outsiders at the meeting. “But what is really surprising is that the party leader is not present.”

Prokhorov, 46, ranked by Forbes as Russia’s third richest man with a fortune of $18 billion, formally quit business in June to head the Right Cause party. He has said he will stand for president next spring if the party does well in December’s parliamentary polls. His proposals on the modernization of Russia have been publically supported by President Dmitry Medvedev.

Prokhorov says not quitting as Right Cause leader

Russian billionaire Mikhail Prokhorov said on Wednesday he would not quit as the leader of the Right Cause party despite speculation.

Prokhorov’s spokesman accused other party members earlier in the day of registering irrelevant people for mandates to vote against Prokhorov’s leadership on Thursday. Congress participants dismissed the allegations.

In an interview with the Ekho Moskvy radio station, Prokhorov also denied media reports that he would announce his resignation from the post at a briefing scheduled for 5:00 p.m. Moscow time.

Prokhorov failed to attend the first day of the party’s three-day congress ahead of the December parliamentary elections. His absence surprised party members who elected the mandate and accounting commissions without him.

Prior to the congress, media circulated reports that the party might consider ousting Prokhorov who assumed leadership in the party in June.

A source inside the party said some influential people wanted the billionaire to be replaced. Andrei Dunayev, head of the party’s executive committee, said that no such discussion was on the agenda of the congress.

Under the party regulations, such issues are decided by the party congress.

Prokhorov, 46, ranked by Forbes as Russia’s third richest man with a fortune of $18 billion, formally quit business in June to head the Right Cause party. He has said he will stand for president next spring if the party does well in December’s parliamentary polls. His proposals on the modernization of Russia have been publically supported by President Dmitry Medvedev.