Security Watch: July 15, 2003

PUTIN URGES SECURITY CHIEFS TO 'DESTROY THE TERRORISTS.' Speaking during his weekly meeting with Prime Minister Mikhail Kasyanov, Foreign Minister Igor Ivanov, and the heads of Russia's security agencies on 7 July, President Vladimir Putin attributed the 5 July suicide bombing in Moscow to Chechen separatists and said that their main goal is disrupt "a political settlement in Chechnya," RTR reported. Putin called on the security forces to seek out the "terrorists" and destroy them. "The bandits operating in Chechnya are part of the international terrorist network," Putin said. "It is useless to try to work with them. They should be plucked out of the basements and caves where they are hiding and destroyed." Putin asked Ivanov and his colleagues in the security organs to boost efforts "through the partnership channels of the international terrorism coalition" to secure the extradition of people suspected of having committed crimes in Russia. Putin also urged the security chiefs "not to be provoked by terrorists." He said their actions should be selective and precise in order to avoid harming the civilian population and detracting support from the political processes that have begun.

...AS ANOTHER MOSCOW EXPLOSION KILLS FSB OFFICER... A Federal Security Service (FSB) major was killed on Moscow's main street, Tverskaya ulitsa, on 9 July as he tried to disarm an explosive device found in a woman's backpack, Russian media reported. Patrons reportedly called police after noticing the woman behaving suspiciously in a posh restaurant. According to an FSB spokesman, the woman, who was identified as 22-year-old Zarima Muzhikhoeva, a resident of Chechnya, was arrested and is being questioned. The spokesman added that the agency expects to charge the woman with terrorism. He also said that the explosive devise used in this incident was identical to those used during the 5 July rock-concert bombings. FSB agents also arrested a man, who was identified as 26-year-old Zurab Dadaev, a resident of Chechnya, whom they believe was the woman's accomplice.

...AND SUSPECT CHARGED WITH TERRORISM. The Prosecutor-General's Office has obtained a court order to charge Muzhikhoeva with terrorism for her alleged role in the 9 July suicide-bombing attempt at a downtown Moscow restaurant, RTR reported. Muzhikhoeva was arrested after she allegedly attempted to detonate a bomb hidden in her bag. FSB experts believe it is possible that a remote-controlled device was used to detonate the bomb. The FSB also denied that any individual other than Muzhikhoeva has been arrested in connection with the attempted bombing, as was reported earlier. Moscow Mayor Yurii Luzhkov announced after a meeting of city officials called on 10 July to discuss the security situation that they decided against declaring a state of emergency, opting instead to "reinforce vigilance" in the capital, RosBalt reported.

INTERIOR MINISTER SAYS SUICIDE-BOMBER NETWORK IS OPERATING IN RUSSIA... Interior Minister Boris Gryzlov told journalists on 10 July that there is a direct connection between the 5 July suicide bombings and the 9 July attempted bombing attempt of a central Moscow restaurant, RTR and other Russian media reported (see "RFE/RL Russian Foreign Policy and Security Watch," 8 July 2003). Gryzlov said the 5 July attack, in which two women believed to be Chechens reportedly killed themselves and 13 others when they detonated separate explosive devices at a rock concert, and the 9 July attempted bombing were carried out by a group of terrorists unified under a joint command structure that is sending suicide bombers to various Russian cities. He said the ministry has obtained information that will lead it to the group's command network.

...URGES TOUGHER MEASURES TO COMBAT TERRORISM, ORGANIZED CRIME. Speaking to a gathering of law enforcement officials from the Central Federal District on 10 July, Gryzlov proposed extending the length of time that people suspected of involvement in terrorism can be held without charge from two days to 30, RIA-Novosti reported. He said that the necessary amendments to the Criminal Procedural Code could be introduced in the Duma when the fall session opens in September. Gryzlov also sharply criticized his own ministry for failing to cope with organized crime. He said that it is a cliche within the ministry to say that "criminal organizations are under our control," but added that it is not enough to "control" such organizations. Instead, they must be broken up and destroyed, Gryzlov said, particularly because of the dangerous links between organized crime and terrorism. He proposed assigning senior Interior Ministry officials to be personally responsible for combating known organized-crime groups.

SECURITY OFFICIALS WARN OF MORE BOMBINGS IN MOSCOW AND REGIONAL CITIES. FSB investigators probing the 5 July suicide bombings at a rock concert in Moscow have warned that that attack is just the first in a series of actions planned by "Chechen terrorists" in a number of cities, including St. Petersburg, Saratov, Rostov-na-Donu, and Volgodonsk, vesti.ru and gazeta.ru reported on 9 July. The investigators said that, according to information they have uncovered, it is possible that female Chechen suicide bombers have already arrived in these cities. The FSB is reportedly taking all possible measures to forestall any bombings. Salambek Maigov, Chechen President Aslan Maskhadov's personal representative in Russia, told polit.ru on 9 July that Maskhadov is outraged by the 5 July bombing and has offered his condolences to the victims and their families. Maigov reiterated that Maskhadov has disavowed such tactics and has called on Chechen fighters to refrain from using them. He noted as well that rock musicians have generally always opposed the war in Chechnya, so bombing a rock concert makes no sense.

MOSCOW BOOSTS ANTITERRORISM MEASURES... For the second consecutive day, President Putin on 8 July met with his senior security officials in the Kremlin to discuss additional antiterrorism measures in the wake of the 5 July suicide bombing in Moscow that killed 16 and injured 59, Russian media reported. Putin, Interior Minister Gryzlov, FSB Chairman Nikolai Patrushev, and deputy administration head Dmitrii Kozak discussed various legislative changes that could enhance the government's ability to combat terrorism, RTR reported. The Moscow City Duma on 8 July began reviewing new municipal legislation that would create district-level public-security councils "to detect criminal elements," nns.ru reported, citing City Duma Security Committee Deputy Chairwoman Inna Svyatenko. The legislation would also boost the number of mounted-police patrols and the number of bomb-sniffing dogs. The Defense Ministry announced that it will deploy a dedicated battalion of airborne forces that could respond immediately to any acts of terrorism, strana.ru reported.

...AS DO OTHER REGIONS. Police in Vladivostok have introduced new security measures following the 5 June suicide bombing in Moscow, regions.ru reported on 8 June. The Highway Patrol Service will be checking cars on city streets for weapons and explosive devices. According to the Primorskii Krai administration's press service, police have been told to increase their readiness and to maintain special watch over places where large numbers of people gather, such as resorts, markets, and ports. Also on 8 July, police in Pskov Oblast moved to a heightened security regime in part to prevent similar terrorist acts during this summer's celebrations of the 1,100th anniversary of the city's founding, regions.ru reported.

RUSSIA, FRANCE CREATE JOINT ANTITERRORISM GROUP. Speaking after an 8 July meeting in Moscow of the joint Russia-France Security Council, Foreign Minister Igor Ivanov announced that the two countries have agreed to create a permanent joint group of diplomats and intelligence officials to combat international terrorism, Russian media reported. The Russia-France Security Council was established last year and is modeled on a similar U.S.-Russia group headed by Deputy Foreign Minister Vyacheslav Trubnikov and U.S. Deputy Secretary of State Richard Armitage. Also on 8 July, President Putin met in the Kremlin with French Foreign Minister Dominique de Villepin and French Defense Minister Michele Alliot-Marie and lauded bilateral political and security cooperation. "Russia is searching for a place in this changing world, and we need French support in this process," Putin said. He also noted that the first Russian-French naval exercises are currently under way in the Sea of Norway. "For our navy, this is the first experience of its kind, because so far we have not held any similar exercises with any NATO member states," Putin said, "especially with the participation of our submarine fleets."

U.S. AMBASSADOR SAYS RUSSIA MIGHT KNOW WHERE DEPOSED IRAQI PRESIDENT IS... Alexander Vershbow told Interfax on 11 July that Moscow could help the United States to combat attacks on coalition forces in Iraq by people loyal to deposed Iraqi President Saddam Hussein. He urged Moscow to share with U.S. intelligence any information that it has about pro-Hussein groups or about the whereabouts of Hussein and his sons. Vershbow added that the United States "categorically condemns the recent terrorist acts in Moscow" and will provide Moscow any information that can prevent such acts in the future. Vershbow also said that the United States does not consider the Russian Embassy in Baghdad a diplomatic mission. He said that it is unreasonable to send a diplomatic mission to a country that has no government with which it can deal.

...AS FOREIGN MINISTRY DEPLORES AMBASSADOR'S STATEMENTS. Foreign Ministry spokesman Aleksandr Yakovenko said on 13 July that Ambassador Vershbow's statement implying that Russia has information about the whereabouts of deposed Iraqi President Hussein or his sons is "incorrect," RIA-Novosti reported. He said that bilateral relations have reached such a level that there are constant, reliable channels for the exchange of such information, including confidential channels. Therefore, Yakovenko said, it is wrong to appeal for such information through the media. In a separate statement, the Foreign Ministry expressed concern about U.S. unwillingness to guarantee the diplomatic status of the Russian Embassy in Baghdad. The United States is an occupying power is obligated to do this under international law, the statement said.

FOREIGN MINISTER MEETS WITH PALESTINIAN LEADERS. Igor Ivanov on 12 July arrived in the West Bank city of Ramallah as part of his Middle East mission to jump-start the "road map" peace plan in the region, Russian and Western media reported. Ivanov met on 12 July with Palestinian Prime Minister Mahmoud Abbas and told him that Moscow fully supports the new Palestinian cabinet and Abbas personally. Ivanov and Abbas discussed the process of resuming negotiations between both Israel and Syria and Israel and Lebanon. Ivanov was also expected to meet with Palestinian Autonomy President Yasser Arafat. Israeli Deputy Prime Minister Natan Sharansky told Ekho Moskvy on 12 July that Israel does not condone Ivanov's intention to meet with Arafat. "Israel considers Arafat an obstacle on the way to peace and has decided to isolate him. Any attempts to return him to the political arena will only prolong terrorism in the Middle East," Sharansky said.

FSB CHIEF CALLS FOR GREATER ROLE FOR AGENCY IN PRIVATIZATION. Speaking at a conference of regional FSB officials in Ulyanovsk on 4 July, FSB Chairman Patrushev said that his agency should have control over the privatization of industrial enterprises, especially those within the defense sector, gzt.ru and newsru.com reported on 7 July. He said that he is "concerned" about some deals that have already been made in this sector. Presidential envoy to the Volga Federal District Sergei Kirienko supported Patrushev's initiative and said that information gathered by regional FSB officials has played an important role in combating economic crime and in detecting violations of the laws regulating privatization, gzt.ru reported. Property Relations Ministry spokesman Aleksandr Parshukov said that the ministry routinely uses FSB agents who are assigned to the ministry to monitor defense-sector privatization. "If they have concerns in this area, they should address them with their own people," Parshukov said, according to gzt.ru. The website commented that Patrushev's concern might have been piqued by the 6 June slaying of Igor Klimov, the acting general director of the leading defense contractor Almaz-Antei (see "RFE/RL Newsline," 9 June 2003).

SHAKE-UP AT MOSCOW CRIMINAL POLICE CONTINUES... All 780 officers of the elite Moscow Criminal Investigations Department (MUR) are being interrogated in connection with a major anticorruption probe (see "RFE/RL Russian Foreign Policy and Security Watch," 8 July 2003) and dozens have already been suspended after failing to respond adequately to questions, "Kommersant-Daily" reported on 8 July. As a result, many officers will be transferred to provincial cities or dismissed from the Interior Ministry, the daily reported. According to the report, officers from the Interior Ministry's Internal Affairs Department searched MUR offices and found unspecified amounts of foreign currency, stock shares, and jewelry. Some MUR officers claimed that such items were their personal property being kept at the office for security reasons, but investigators have discounted such explanations and have initiated disciplinary measures.

...AS LEFT-WING WEBSITE COMMENTS ON LATEST ANTICORRUPTION CAMPAIGN. Pravda.ru on 7 July editorialized that the recent arrests of allegedly corrupt senior law enforcement officials, the arrests of a group of border guards charged with smuggling wanted criminal suspects out of the country, and the arrest and interrogations of top Yukos managers seem at first glance to be an election-campaign tactic to boost the image of the pro-Kremlin Unified Russia party, which is headed by Interior Minister Gryzlov. However, a second glance reveals that one of those who has experienced problems because of the anticorruption effort is Emergency Situations Minister Sergei Shoigu, who is also a leader of Unified Russia. Instead, the website argues, what we are seeing is a struggle for control of the country's security and law enforcement community between the so-called St. Petersburg chekists and the Yeltsin-era Family. The former is headed by a former colleague of Putin's from the KGB, Lieutenant General Konstantin Romadanovskii, who now heads the Interior Ministry's Internal Affairs Department. Shoigu is the Family's senior official within the security community, the website wrote.

PUTIN ADDRESSES POLITICAL ELITE... President Putin met in the Kremlin on 11 July with representatives of the country's political elite, including Prime Minister Kasyanov, State Duma Speaker Gennadii Seleznev, Federation Council Chairman Sergei Mironov, the leaders of the main parliamentary factions, several prominent regional leaders, and the heads of several national nongovernmental organizations, Russian media reported. Putin called for the "consolidation of society" to meet the strategic goals that he set forth in his 16 May address to the Federal Assembly (see "RFE/RL Newsline," 16 May 2003). Those goals include doubling Russia's gross domestic product, combating poverty, and carrying out military reform. Putin noted that various political forces have different and sometimes opposing approaches to these questions, but said that on the most crucial issues it is necessary to form "a common position." He called for the creation of a joint working group headed by presidential aide Igor Shuvalov that will develop a consolidated approach and asked those in attendance to express their views on such a group.

...AS POLITICIANS RAISE BURNING QUESTION OF YUKOS... Most of the politicians who met with President Putin on 11 July avoided mentioning the legal investigations into oil giant Yukos and allegations that the Kremlin is putting pressure on oligarch and Yukos CEO Mikhail Khodorkovskii, but Union of Industrialists and Entrepreneurs (RSPP) President Arkadii Volskii handed Putin a letter from his organization urging the president not to do anything that would disturb the country's political stability, RTR and ORT reported on 12 and 13 July, respectively. Volskii said that in other countries crimes are investigated first and then arrests are made, but in Russia just the opposite is done.

...PARTY LEADERS HAVE THEIR SAY... Yabloko leader Grigorii Yavlinskii said that his party favors finding "non-repressive methods of emerging from the oligarchic system that developed in the 1990s with Volskii's support." Union of Rightist Forces (SPS) leader Boris Nemtsov said "the topic of reviewing privatization should be closed if we want economic growth." He said that if Russia begins anew the process of divvying up assets, then the poor will get nothing and the "hungry" oligarchs will merely seek the assets of the "sated" oligarchs, while the latter will simply take their capital abroad. Senior Communist Party member Valentin Kuptsov said his party favors reviewing the 1990s privatization process and continues to insist upon it. Liberal Democratic Party of Russia (LDPR) leader Vladimir Zhirinovskii said that, politically speaking, "a drive against the oligarchs is a magnificent thing that will be applauded by millions of voters."

...AND PUTIN SAYS HE WILL NOT INTERFERE WITH POLICE WORK. In response to Zhirinovskii's comment, President Putin said that "we cannot orient ourselves on applause," RTR reported on 11 July. "I am against arm twisting and [the use of prison] cells as far as economic crimes are concerned. They cannot solve this problem," Putin said. However, he added, the fight against such crimes must continue and be tough because such crimes infringe on the constitutional rights of Russian citizens. Putin also cited Duma Speaker Seleznev, who has said that the active lobbying by the oligarchs is hampering the Duma's ability to work. Commenting on Putin's reaction to the Yukos scandal, strana.ru wrote on 11 July that Putin made it clear that if law enforcement agencies have "substantiated questions" for commercial organizations or their leaders, then the Kremlin will do nothing to stop them from getting answers.

DEFENDANT'S LAWYERS BARRED FROM ATTENDING INTERROGATIONS... Prosecutors are not allowing the lawyers of Platon Lebedev, the billionaire chairman of the board of Yukos's financial arm Menatep, to be present during interrogations, "Kommersant-Daily" reported on 7 July. Lebedev was arrested on 3 July on suspicion of embezzling nearly $300 million from the state during a 1994 privatization deal (see "RFE/RL Russian Foreign Policy and Security Watch," 8 July 2003). In apparent violation of earlier promises that the inquiry into the case would be lawful and transparent, interrogators now say that the lawyers -- Yevgenii Baru and Anton Drel -- cannot enter Lefortovo prison for the interrogations because "there is not any free room in the building to conduct interrogations." Baru and Drel told journalists that they have appealed a Moscow district court decision upholding the prosecutor's arrest warrant for Lebedev and that they are demanding their client be released on bond. "Vremya novostei" on 7 July reported that state-owned petrochemical major Rosneft had complained to the Prosecutor-General's Office that Yukos had allegedly "stolen" a 19 percent stake in a company called Yeniseineftegas that Rosneft claims belongs to it. Rosneft alleged that Yukos illegally included the stake in the company's offshore assets, and has asked prosecutors to investigate.

...AS OLIGARCH AGAIN DECRIES CAMPAIGN AGAINST YUKOS... Mikhail Khodorkovskii, the CEO of oil giant Yukos and reportedly the richest person in Russia, said on 7 July that the recent actions of the authorities against Yukos officials are unlawful, Russian media reported. Although the actions are being carried out with the appearance of legality, Khodorkovskii said, they are essentially illegitimate. "We are witnessing the beginning of a power struggle between different camps in the entourage of President Putin," he said, adding that the struggle will be completed after the March 2004 presidential elections. He noted that it is Putin's political style not to intervene in such struggles. Gazeta.ru on 7 July wrote that the Kremlin believes that Khodorkovskii violated an unwritten agreement that was struck between Putin and the oligarchs when the president came to power in 2000. Under that agreement, the Kremlin would not look into the legitimacy of any capital accumulations if the oligarchs renounced any claim on political power. Instead, the website argued, Khodorkovskii began financing the Communist Party, Yabloko, and the Union of Rightist Forces (SPS), which could give him influence over up to one-half of the deputies in the new Duma. Naturally, the Kremlin cannot ignore this possibility, since it is trying to achieve the same goal, gazeta.ru concluded.

KREMLIN INSIDER SEES YUKOS AS A VICTIM OF INFIGHTING WITHIN THE PRESIDENTIAL APPARATUS... Foundation for Effective Politics head and Kremlin insider Gleb Pavlovskii said on 8 July that the recent criminal investigations into the activities of senior Yukos managers are a manifestation of a conflict within the presidential administration, as various elements seek to secure their positions in anticipation that President Putin will win a second term in the March 2004 presidential election, RIA-Novosti and other Russian media reported. "It is a signal from one group of functionaries to another and to big business that [that group] is stronger and it is a specific invitation for cooperation," Pavlovskii said, according to utro.ru. Pavlovskii added that President Putin himself has nothing to do with the Yukos affair, although he was certainly informed in advance that it was in preparation. He added that as a result of the alleged campaign, Yukos will likely stop being a major sponsor of political parties, but he does not foresee other significant problems for the oil giant. Yukos is legally well-protected, Pavlovskii said. He concluded that all political parties spend more on campaigns than is allowed by law, but they do not reveal their sponsors. But Yukos made its political activity public, and that is why it has become a victim of infighting within the Moscow bureaucracy.

...AS SELF-EXILED OLIGARCH PREDICTS YUKOS EXECUTIVES WILL SHARE HIS FATE. In a lengthy interview published in the weekly "Russkii fokus," No. 24, self-exiled former oligarch Boris Berezovskii said the Kremlin is using the same methods against the executives of oil giant Yukos that it used against him and former oligarch Vladimir Gusinskii. "They took [Gusinskii's chief financial manager] Anton Titov as a hostage against Gusinskii and against me, they took Nikolai Glushkov [Berezovskii's main financial partner]," Berezovskii said. "Now they have taken Leonid Nevzlin against [Yukos CEO] Mikhail Khodorkovskii." Berezovskii added that Chukotka Autonomous Okrug Governor and oligarch Roman Abramovich is "smarter," because he recently bought the British soccer club Chelsea as a "preemptive protection measure," rather than as a business or a hobby. In a 9 July interview with "Kommersant-Daily," which he owns, Berezovskii said the main goal of the alleged Kremlin campaign against Yukos is to prevent the consolidation of any political opposition with significant financial resources. Berezovskii noted that after he went into self-imposed exile as a result of Kremlin pressure on him, he predicted that other oligarchs would be subjected to similar measures. He now predicted that Nevzlin and, eventually, Khodorkovskii will also be forced to leave the country.

YUKOS CEO LEAVES THE COUNTRY... Mikhail Khodorkovskii and his family have departed for the United States, where the oligarch will participate in an international business conference in Sun Valley, Idaho, "Kommersant-Daily" reported on 12 July. Khodorkovskii attends the conference each year, and Yukos's management told the daily that he will return to Russia shortly. RSPP head Volskii told RTR on 12 July that he warned Khodorkovskii not to leave the country, since his departure would fuel false speculation and send the wrong signal. Volskii also said that at a recent RSPP meeting, Khodorkovskii asked him "not to expose his company to an attack." That is why the RSPP letter to President Putin merely called on the president to maintain political stability and did not mention Yukos by name, he added. Volskii said he is still concerned that the Yukos affair will undermine Russia's business environment and block Western investment. He said that Great Britain's ambassador to Russia has told him that British Petroleum might back away from a proposed $6.75 billion "strategic partnership" with Russia's Alfa Group and Access/Renova (see "RFE/RL Newsline," 12 February 2003) if the pressure against Yukos becomes serious.

...AS PRESIDENT OFFERS HIM SOME ADVICE. At the 11 July meeting with the representatives of the political elite, President Putin told RSPP head Volskii to tell Khodorkovskii not to use the Sun Valley conference as a platform for airing his grievances against the Kremlin, "Vremya-MN" reported on 12 July. The conference will be attended by the elite of the world's business community, including Microsoft CEO Bill Gates and New York City Mayor and billionaire Michael Bloomberg. Putin reportedly said that Khodorkovskii seems to have the mistaken idea that business circles play a decisive role in U.S. politics and that he would not like the authorities there any better. According to the daily, Putin said Gates nearly lost control of Microsoft following the 2000 U.S. presidential election because he allegedly supported Democratic Party candidate and Vice President Al Gore. In reality, however, Microsoft experienced severe legal difficulties under the administration of former U.S. President Bill Clinton, difficulties that were quickly resolved after U.S. President George W. Bush took office.

PROSECUTOR-GENERAL'S OFFICE BEGINS PROBE OF SIBNEFT... The Prosecutor-General's Office and the Tax Police have begun their probe into the business activities of the Russian oil major Sibneft, which is controlled by Abramovich and is in the process of merging with embattled oil giant Yukos, newsru.com and other Russian media reported on 10 July (see "RFE/RL Newsline," 23 April 2003). Sibneft has confirmed that Sibneft President Yevgenii Shvidler and Vice President for Finance Tatyana Breeva have been questioned by the Prosecutor-General's Office, but declined to provide further information regarding the investigation.

...AS OTHER INVESTIGATIONS CONTINUE... The Prosecutor-General's Office on 10 July ordered that Menatep-St. Petersburg's Moscow offices be sealed in connection with the investigation of the company's manager, Platon Lebedev, who was arrested last week on charges stemming from a 1994 privatization deal, strana.ru reported. Menatep-St. Petersburg is a subsidiary of Menatep, the financial arm of Yukos. "Komsomolskaya pravda" reported on 10 July that Audit Chamber Chairman Sergei Stepashin has informed the government that major energy companies underpaid their taxes by 100 billion rubles ($3.3 billion) combined over an unspecified amount of time. Stepashin also said the Audit Chamber is conducting planned probes of major oil companies, and that he expects the State Duma to discuss in its fall session ways of closing loopholes in the country's tax legislation.

...AND DUMA SPEAKER CALLS FOR WIDER INQUIRY INTO THE OLIGARCHS. Gennadii Seleznev said on 9 July that the Prosecutor-General's Office and the Duma's Audit Chamber should investigate how Russia's billionaires acquired their fortunes over the last eight or nine years, RBK and fcinfo.ru reported. Speaking to journalists in Rotterdam, where he is attending a session of the Organization for Security and Cooperation in Europe (OSCE) Parliamentary Assembly, Seleznev said that some European politicians have asked him why the Russian authorities have not paid attention to this question. "It seems that for Russian billionaires it is not enough to make enormous fortunes and buy luxury real estate abroad," Seleznev said. "They want something more." He charged that the oligarchs are seeking to play a role in politics and to place their own representatives in the organs of Russian government, and criticized oligarch and Chukotka Autonomous Okrug Governor Abramovich for his recent acquisition of Britain's Chelsea soccer club. He noted that some 39 million Russians currently live below the poverty line and said "this number should serve as a warning to the oligarchs."

AUDIT CHAMBER HEAD BLASTS OLIGARCH'S PURCHASE OF BRITISH SOCCER CLUB. Sergei Stepashin said in St. Petersburg on 7 July that Abramovich's recent purchase of a majority stake in the London-based Chelsea soccer club was "an arrogant and demonstrative challenge to Russia," RosBalt and other Russian media reported. Stepashin said that if Abramovich has extra money, then as a politician and a governor, he should invest it in his region rather than buying a British sports team. He added that the Audit Chamber has established that Sibneft, the oil giant that Abramovich controls, evaded paying 10 billion rubles ($300 million) in taxes in 2001. "The state will soon make its own conclusions about the deal with Chelsea," Stepashin said.

POPULAR NEWSPAPER DOCUMENTS ABRAMOVICH'S LAVISH LIFESTYLE. "Komsomolskaya pravda" on 10 July published a photograph of Abramovich's luxury yacht "Le Grand Bleu" moored in port in Vladivostok. The 100-meter, $90 million yacht was built for Abramovich in Germany and features an Australian crew, a helicopter, and two hovercraft launches. The yacht's christening in Rio de Janeiro was attended by many of Abramovich's jet-setting friends, according to the newspaper. The yacht's home port is reportedly Hamilton, Bermuda.