Monthly Archives: May 2007

07MOSCOW2553, BOEING RUSSIA: CHILLING THE BUBBLY FOR THE “BIG”

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Reference ID Created Released Classification Origin
07MOSCOW2553 2007-05-31 12:23 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0000
OO RUEHWEB

DE RUEHMO #2553 1511223
ZNY CCCCC ZZH
O 311223Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0748
RUCPDOC/USDOC WASHDC IMMEDIATE
RULSDMK/DEPT OF TRANSPORTATION WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE

C O N F I D E N T I A L MOSCOW 002553 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EEB BYERLY AND COLEMAN 
EUR/RUS FOR WARLICK AND HOLMAN 
USDOT FOR STREET AND HATLEY 
USDOC FOR 4321/ITA/MAC/EUR/RISA BROUGHER AND BEADLE 
USDOC FOR 3004/CS/ADVOCACY/BLOOM 
 
E.O. 12958: DECL: 05/31/2017 
TAGS: EAIR ECON PREL RS
SUBJECT: BOEING RUSSIA: CHILLING THE BUBBLY FOR THE "BIG" 
DEAL? 
 
 
Classified By: Econ MC Quanrud for reasons 1.4 B and D. 
 
1. (C) Boeing Russia and Economics Minister Gref confirmed to 
us that preparations are underway for three contracts to be 
signed on June 9 on the margins of the St. Petersburg 
Economic Forum.  The contracts include the $4 billion sale of 
22 787 Dreamliners to Aeroflot, an "enhanced role" for Boeing 
in the development and after-sales support of the Sukhoi 
SuperJet100, and a general partnership agreement between 
Boeing and the United Aircraft Corporation (UAC).  While we 
hope this is as solid as it appears, we also know the 
contracts have not be finalized.  If the Aeroflot deal goes 
through, Russia will be the single largest destination for 
the new 787 Dreamliner with a total of 37 sold (including 15 
sold to S7 Airlines May 29). 
 
2. (C) The Dreamliner sale to Aeroflot has been dubbed "the 
longest sale in Boeing history."  The process began in August 
2005, when Aeroflot announced its intention to modernize its 
wide-body fleet with either 22 787s or 22 Airbus A350s. 
While the obvious commercial choice has always been the 787 
for its earlier delivery dates and better fuel economy, the 
decision has been a pawn in a larger chess game of Russia-EU 
and Russia-U.S. relations.  A year into the process, the 
Kremlin tied the sale to proposed cooperation with Russia's 
aircraft-manufacturing conglomerate UAC.  Over the last six 
months, UAC has slowly been moving towards the view that both 
aircraft giants could bring different strengths to the table. 
 This appears to be triggering a GOR decision to purchase 22 
aircraft from each company.  Minister Gref told Ambassador 
and visiting CODEL Lott May 30 that the St. Petersburg 
Economic Forum would feature a Boeing signing ceremony.  He 
added that Boeing had played its cards right and that he 
appreciated Boeing's commitment and positive attitude towards 
Russia, even in the midst of GOR "emotional outbursts" 
against foreign aircraft companies.  Gref said Boeing's 
presence in Russia was "more robust" than that of Airbus and 
that ongoing cooperation with UAC on the SuperJet100 and the 
SuperSonic Business Jet was welcome. 
 
3. (C) Comment: This has been a good week for Boeing in 
Russia.  The news of the Aeroflot deal comes on the heels of 
a  May 29th announcement of the sale of 15 Dreamliners (worth 
approximately $2.4 billion) with an option to purchase 10 
more to S7 Airlines (formerly known as Sibir).  If the 
Aeroflot deal goes through, Russia will be the single largest 
destination for the new 787 Dreamliner, with 37 sold to date. 
 (Even U.S. carriers have yet to purchase that quantity.) 
Should it come to fruition in ten days, the back-story is 
extra sweet since the Dreamliner and Russia are a nice fit. 
Much of the plane's advanced features were designed at 
Boeing's Moscow Design Center and most of the cutting-edge 
titanium components will be machined by VSMPO-Avisma.  End 
comment. 
BURNS

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07MOSCOW2533, RUSSIA BANS EXPORTS OF HUMAN BIOLOGICAL SPECIMENS

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Reference ID Created Released Classification Origin
07MOSCOW2533 2007-05-30 15:46 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO0219
OO RUEHHM RUEHPB
DE RUEHMO #2533/01 1501546
ZNY CCCCC ZZH
O 301546Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0719
INFO RUEHZN/EST COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHPH/CDC ATLANTA GA PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAEPA/HQ EPA WASHDC PRIORITY
RUEAUSA/DEPT OF HHS WASHDC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUEHC/DEPT OF AGRICULTURE WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 002533 
 
SIPDIS 
 
SIPDIS 
 
 
DEPARTMENT FOR EUR/RUS, S/GAC, OES/OA AND OES/IHA 
STATE PASS USTR FOR MOLNAR AND KLEIN 
COMMERCE FOR ITA/PERELLI AND EDWARDS 
USAID FOR GH, E&E 
HHS FOR OGHA 
BERLIN ALSO FOR LABOR COUNSELOR HAGEN 
DOD/CTR FOR AWEBER 
EPA FOR BILL FREEMAN 
USDA FOR OSEC/DAN CAINE; FAS FOR OSTA/MACKE, WRIGHT, LEIER, 
ROSENBAUM; OCRA/THOMAS, FLEMINGS; OA/PATRICK CLERKIN 
 
E.O. 12958: DECL: 05/29/2017 
TAGS: TBIO SOCI ETRD RS
SUBJECT: RUSSIA BANS EXPORTS OF HUMAN BIOLOGICAL SPECIMENS 
 
REF: A. MOSCOW 976 
     B. 06 MOSCOW 13072 
     C. 05 MOSCOW 13418 
 
Classified By: EST Counselor Daniel J. O'Grady. Reason: 1.4(b,d) 
 
1. (C) SUMMARY:  The Federal Customs Service has temporarily 
banned all exports of human biological specimens from Russia, 
including hair, tissue, urine, and blood samples.  According 
to press reports, the ban was imposed after an intelligence 
report to the Kremlin alleged that Western researchers who 
receive Russian samples are engaged in a program to develop 
"genetic biological weapons."  The government's decision to 
impose an export ban appears to have been taken in haste, and 
without fully thinking through the impact on international 
scientific collaboration, on the tens of thousands of 
Russians in clinical trials for new medicines, or those 
needing life-saving organ or tissue transplants from abroad. 
END SUMMARY. 
 
Customs Service Bans Exports of Human Bio-Materials 
--------------------------------------------- ------ 
 
2. (SBU) Russia's Federal Customs Service has banned the 
export of human biological specimens from Russia.  According 
to press reports, the move came after a government 
intelligence report alleged that Western organizations who 
receive such samples are allegedly engaged in a program to 
develop "genetic biological weapons" that could harm the 
Russian population.  One press report specifically mentioned 
certain U.S. and European organizations that were involved in 
such research, including the Harvard School of Public Health, 
the U.S. Environmental Protection Agency, the American 
International Health Alliance (AIHA, a health NGO in Russia 
that receives Global Fund and USG funding), the Karolinian 
Institute in Sweden, the Swedish Agency for International 
Development, and the Indian Genome Institute. 
 
3. (SBU) AIHA quickly denied that it is involved in any such 
research or in taking specimens out of Russia.  The ban was 
also swiftly condemned by Academy of Medical Sciences 
President Davydov, who noted the devastating impact the ban 
would have on Russia's on-going scientific collaboration with 
many Western researchers, including in the United States. 
Chief Medical Officer Onishchenko was more muted and simply 
observed that "any civilized country" needs to regulate the 
import and export of biological specimens for security 
reasons.  Onishchenko's comment, however, failed to explain 
how an outright ban, rather than regulation, was justified. 
 
4. (SBU) Most immediately, the ban will affect basic clinical 
trials of new drugs run by multinational pharmaceutical 
companies.  There are over 28,000 Russians currently 
receiving new medicines through clinical trials, and experts 
value the Russian market for clinical trials at $100-150 
million.  During these trials, blood, urine or other 
biological samples from patients are routinely sent abroad 
for testing at a single specialized international laboratory, 
in order to maintain the consistency of data.  Glaxo Smith 
Kline's Moscow office issued a statement saying the ban was a 
serious blow to domestic health care and would hinder 
clinical trials in Russia. 
 
5. (SBU) Beyond the effect on clinical trials, Russians 
suffering from leukemia or other blood cancers frequently 
need bone marrow or other transplants, and blood samples are 
regularly sent abroad to type the specimen and find a donor 
match.  The ban would also affect more unique programs, like 
the CDC's Tuberculosis Program and the Arctic Investigations 
Program, which collaborate with Russian researchers on 
tracking the drug-resistance of tuberculosis in Russia and 
the health of Russia's indigenous communities in the Far 
North. 
 
 
MOSCOW 00002533  002 OF 003 
 
 
6. (SBU) The ban also seems inconsistent with Russia's 
long-term goals to establish itself as an international 
health player.  The focus on infectious diseases during 
Russia's 2006 G8 Presidency included establishing the Vector 
State Research Center of Virology and Biotechnology as a 
regional center for influenza and ultimately as a WHO 
collaborating center for avian influenza.  A complex of 
Russian institutes are also supposed to be established as a 
regional center for HIV vaccine development.  Neither of 
these international research efforts will be feasible if 
Russia is not willing to share specimens with the rest of the 
world.

 
Pharmaceutical Companies Left Wondering What to Do 
--------------------------------------------- ----- 
 
7. (C) A contact at Merck's Moscow office confirmed the 
export ban has been in place since May 28, and has left the 
company perplexed about how to continue its 21 separate 
clinical trials of new drugs involving 1,500 patients in 
Russia.  The International Association of Pharmaceutical 
Manufacturers (AIPM) sent a letter to the Russian Federal 
Surveillance Service for Health and Social Development 
(Roszdravnadzor) on May 29 asking for clarification on the 
export ban.  Roszdravnadzor is responsible for approving 
clinical trials in Russia and also is involved in issuing 
export and import permits for biological specimens, but the 
health agency has reportedly not yet even seen the text of 
the export ban issued by the Federal Customs Service. 
 
8. (C) The Merck official told us that the conditions for 
clinical trials have been extremely favorable over the last 
two years.  While Ramil Khabriyev was the head of 
Roszdravnadzor, the agency was quick to approve such trials, 
and apparently recognized they benefited not only Russian 
patients, but also helped stimulate domestic pharmaceutical 
and medical research.  With Khabriyev's firing earlier this 
year over the financing and supply problems with the 
government's drug benefits program (Ref A), the 
representative did not rule out the possibility that domestic 
drug makers might be trying to make business more difficult 
for their international competitors. 
 
9. (C) The Health and Social Development Ministry's chief 
infectious disease specialist told us that the ban would 
clearly damage international medical collaboration and 
scientific exchanges.  While he felt greater regulation of 
cross-border transfers of human biological specimens could be 
justified, he said he believes an outright ban made no sense. 
 
Comment: Not Seeing the Forest for the Trees 
-------------------------------------------- 
 
10. (C) The apparently knee-jerk decision to impose an export 
ban on human biological specimens suggests lingering paranoia 
among Russian leaders regarding Western organizations' 
motives in engaging in international research in Russia. 
Paranoia that the West is somehow engaged in biological 
meddling in Russia has also occasionally surfaced during 
avian influenza outbreaks, when some political figures have 
made irresponsible statements to the media about the causes 
of outbreaks (Ref C).  An outright export ban is too broad 
and ultimately unworkable, because it would harm too many 
infirm Russians, who receive new medicines in clinical trials 
funded by foreign pharmaceutical companies, or who are 
seeking life-saving tissue and organ transplants from abroad. 
 
 
11. (C) We suspect the government will have to scale back the 
ban and instead adopt some form of stricter regulation of the 
export and import of such specimens.  There is recent 
precedent that cooler heads will prevail and quickly reverse 
this hasty decision.  For instance, a botched drug tender 
issued by the Health and Social Development Ministry for 
 
MOSCOW 00002533  003 OF 003 
 
 
expensive AIDS drugs in December 2006 was reversed a month 
later at a meeting of Russia's National HIV/AIDS Committee 
following complaints by AIDS activists and the international 
community (Ref B). 
BURNS

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07MOSCOW2527, RUSSIA: REYMAN’S RIO-CENTER LOOKS FOR ALTERNATIVE

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Reference ID Created Released Classification Origin
07MOSCOW2527 2007-05-30 13:21 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO9987
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #2527/01 1501321
ZNY CCCCC ZZH
P 301321Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 0708
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 002527 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/RUS; EUR/ERA; EEB/IFD 
STATE PLS PASS USTR FOR DONNELLY, MOLNAR 
DOE FOR HARBERT/EKIMOFF 
NSC FOR KLECHESKI AND MCKIBBEN 
DOC FOR 4231/IEP/EUR/JBROUGHER 
 
E.O. 12958: DECL: 05/30/2017 
TAGS: ECON EINV EIND PGOV PREL RS
SUBJECT: RUSSIA: REYMAN'S RIO-CENTER LOOKS FOR ALTERNATIVE 
ECONOMIC COURSE 
 
Classified By: Econ M/C Pamela Quanrud.  Reasons 1.4 (b/d). 
 
1. (C) Summary.  Six months before the Duma elections and 
nine months before the Presidential contest, several economic 
think-tankers are laying out strategies for the post-Putin 
period.  Most of these plans are descriptive, not 
prescriptive: they are critical of the government's record on 
modernizing and diversifying the economy, but lack specifics 
on how to right the course.  Surprisingly, most think-tankers 
do not shy away from using the word liberal to describe their 
orientation - though their liberalism is qualified as 
"pragmatic," in contrast to the "ideological liberals" in the 
government today and many actually envision an even stronger 
role for the state in the economy.  The think tanks hope to 
mirror the experience of German Gref's Center for Strategic 
Research (CSR) and shape economic policy in the next 
presidential administration.  End summary. 
. 
2. (SBU) We recently met with three of these informal policy 
advisors, Leonid Grigoriev, President of the Institute of 
Energy and Finance, Iosef Diskin, head of the Council of 
National Strategy, and Ruslan Grinberg, head of the Russian 
Academy of Science Institute of Economics.  These three were 
keynote presenters at a recent conference sponsored by the 
Center for the Development of an Information Society, or the 
RIO center, which has ties to Communications Minister Leonid 
Reyman.  Over the upcoming months, we will meet with other 
leading economic think tanks to help identify the economic 
policy direction of the next administration and possible 
candidates for Ministers Gref and Kudrin's positions. 
. 
THE THINK TANKS 
--------------- 
. 
3. (SBU) When Putin became Prime Minister in 1999, he 
established the CSR, with German Gref as its head, to develop 
an economic reform program and put the Russian economy onto a 
market path.  Over the past eight years, the Center has been 
the center of economic legislation drafting or has 
contributed to drafts of Putin's key reforms, including the 
flat tax, land privatization, pension reform, health care, 
benefits monetization, and the public private partnership 
initiative.  However, when the reform momentum slowed, the 
CSR's role in economic policy-making also diminished. 
. 
4. (SBU) The first think tank in our study is the RIO center, 
a think tank with ties to Communications Minister Leonid 
Reyman and headed by Igor Yurgens, also the Vice President of 
the Russian Union of Industrialists and Entrepreneurs and a 
Vice President at Renaissance Capital. The center was 
established in 2003 with Reyman as its head.  According to 
its website, it's mission is to promote the development of an 
information society in Russia.  However, the center's 
activities have been broadened and last year, under Yurgen's 
leadership, the center launched a program to map out a 
modernization strategy for the country. On May 16, the RIO 
center organized a conference on "Alternative Modernization 
Strategies for the Russian Economy" and commissioned three 
reports from Grigoriev, Diskin, and Grinberg.  According to 
the RIO center website and our contacts, the two 
front-runners for the 2008 presidential elections, Dmitriy 
Medvedev and Sergey Ivanov, were to attend the May 16 
conference, but were no shows. 
. 
5. (SBU) Opening the conference, Yurgens characterized the 
three reports as liberal (Grigoriev), moderate (Diskin) and 
conservative (Grinberg).  The conference was well attended by 
well-known economic researchers, and present and former 
government officials, including: Yevgeniy Yasin (the Higher 
School of Economics and former Economics Minister), Yevgeniy 
Gontmakher (former Deputy Social Development Minister), 
Andrey Klepach (Ministry of Economic Development and Trade), 
Elvira Nabiullina (head of Dep. Premier Medvedev's Expert 
Council on Realization of National Priority Projects and 
former head of CSR). 
. 
THREE ALTERNATIVE MODELS 
------------------------ 
. 
6. (C) Iosef Diskin heads the Council of National Strategy. 
 
MOSCOW 00002527  002 OF 003 
 
 
This group gained notoriety during the Yukos Affair when they 
published a report on the growing influence of oligarchs in 
the economy that played out like a Kremlin manual to deal 
with oligarchs with political aspirations.  In his 
presentation, which also mirrored his discussion with us, 
Diskin lays out a modernization strategy that provides 
political prerequisites rather than concrete policies for 
economic development. He t
old us that his main criticism of 
the current economic course was the disconnect between the 
government's reforms and the population's real needs, and 
cited the housing reform passed last year -- which did not 
address, in his opinion, the acute lack of affordable housing 
-- as an example.  He advocated building a national coalition 
-- including government, business, and society -- as the 
first step to modernization.  Diskin was also the least 
concerned out of the three authors about the economy's 
dependence on energy and even called for strengthening 
Russia's position as an energy superpower. Diskin also 
favored using the Stabilization Fund for investments into 
energy infrastructure projects, such as oil and gas 
pipelines, power stations, and electrical grids. 
. 
7. (SBU) Ruslan Grinberg also criticized current economic 
policies as liberal dogmatism with Putin's economic ministers 
too reliant on market mechanisms and low inflation, instead 
of advancing a comprehensive state industrial policy, to 
drive Russia's modernization forward.  He said economic 
policies from the 1990s to Putin's Administration have 
resulted in the "primitivization" of the economy and 
advocated a more interventionist state, employing 
preferential taxes and import tariffs to protect and nurture 
strategic industries.  He saw Russia's comparative advantage 
in the following sectors: ballistic/space, aviation, nuclear, 
armaments, power machines, shipbuilding, transportation 
machinery, nanotechnology, and bio- and genetic engineering. 
The two priorities of building an innovation/hi-tech economy 
and reviving the old industrial economy also needed to be 
coordinated. 
. 
8. (SBU) Leonid Grigoriev presented a more balanced 
assessment of current economic policies and credited the 
macroeconomic stability of recent years and improvements in 
the business climate to prudent economic policies.  However, 
he painted a dire picture for Russia's economic future if 
these immediate challenges were not addressed: creating 
sustainable sources of growth, increasing the value-added 
component to production, stimulating innovation, leveling out 
the regional disparities in development, and reducing the 
energy-intensiveness of production.  After laying out four 
different scenarios for Russia's future development, using 
his terms -- Energy Rents, Mobilization, Inertia, and 
Modernization -- he concluded that the most difficult, but 
promising course is the Modernization scenario.  Under this 
framework, the three main actors -- the State, civil society, 
and business -- will compromise and exercise self-restraint 
to balance their parochial interests and achieve 
modernization of the country.  Grigoriev was not optimistic 
that this scenario will win out, and gave it only a five 
percent chance.  He viewed the Inertia scenario -- the 
current course -- as the most likely in the next eight years. 
. 
9. (SBU) All three authors concluded that modernization 
cannot occur without a broad base coalition.  This reflects 
the authors' main criticism of the current economic course: 
the lack of an overall strategy and the growing alienation of 
the population from government policies.  All three pointed 
to the perception of a growing income disparity between the 
rich and the poor as a troubling development that required a 
change in policies.  Another common factor in all three 
reports was their use of polling data to support their 
arguments. 
. 
COMMENT 
------- 
. 
10. (C) The three think-tankers were quite adamant in their 
conversation with us that their policy prescriptions were 
liberal in nature.  This appears to reflect their conviction 
that markets will have to play a role in Russia's 
modernization.  However, all three authors also advocate a 
 
MOSCOW 00002527  003 OF 003 
 
 
larger role for the state.  For Grigoriev, the role appears 
limited to coordinating coalition building, whereas Grinberg 
supports state policies that pick winners and losers.  As 
Troika Dialog chief economist Gavrilenkov puts it, the next 
administration will have to exercise greater professionalism 
and discipline, having less room to maneuver with declining 
budget surpluses, growing energy constraints, and neglected 
reforms in the social services sector.  The next economic 
team will face the unfinished business of the Putin years, 
including, revamping the pension, health, housing, and 
education system, with less resources to solve them.  With 
these challenges, it's not surprising that Grigoriev gives 
the modernization scenario only an outside chance of success. 
 End comment. 
BURNS

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07MOSCOW2472, CODEL NELSON/LOTT: SCENESETTER

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Reference ID Created Released Classification Origin
07MOSCOW2472 2007-05-25 17:19 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO7155
PP RUEHDBU RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #2472/01 1451719
ZNR UUUUU ZZH
P 251719Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 0642
INFO RUEHIT/AMCONSUL ISTANBUL PRIORITY 0681
RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHLN/AMCONSUL ST PETERSBURG 4140
RUEHVK/AMCONSUL VLADIVOSTOK 2141
RUEHYG/AMCONSUL YEKATERINBURG 2456

UNCLAS SECTION 01 OF 04 MOSCOW 002472 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON PARM ENRG RS
SUBJECT: CODEL NELSON/LOTT: SCENESETTER 
 
MOSCOW 00002472  001.2 OF 004 
 
 
1.  (SBU) Your visit comes at a vital juncture in 
Russian-American relations.  As Russia moves closer to 
succession in March 2008, the more complicated this 
relationship will be to manage.  There is a lot at stake: 
deepening cooperation in reversing North Korea's nuclear 
status and preventing the emergence of Iran as a nuclear 
power; building US-Russian leadership in the promotion of 
civilian nuclear energy and non-proliferation and energy 
security for producer and consumers alike; fighting 
terrorists and the ideology that motivates them; reinforcing 
promising trends like the growth of a middle class; and 
encouraging the development of civil society and democratic 
institutions, despite worrisome trends.  While differences 
over missile defense, Kosovo and Russia's treatment of its 
neighbors are real, high-level engagement is essential to 
advance our interests in areas of strategic importance. 
 
2. (SBU) Your visit follows on the recent consultations by 
Secretary Gates and Secretary Rice and will be followed by a 
 
SIPDIS 
meeting of Presidents Bush and Putin on the margins of the 
June 6 G8 summit in Potsdam.  Contacts between 
parliamentarians constitute an important channel of bilateral 
communication.  Congressman Lantos was here in February and 
is scheduled to hold a bilateral session with counterparts 
from the Duma in Washington in June.  Senator Lugar and 
former Senator Nunn are expected to travel to Russia in late 
August to commemorate the 15th anniversary of the Nunn-Lugar 
program.  Your interparliamentary dialogue with the 
Federation Council and your meetings with Russian leaders 
will serve to underline that commitment to engagement. 
 
Russia is Back 
-------------- 
 
3.  (SBU)  Buoyed by high energy prices and eight years of 
economic growth, the Russian elite sees a self-assured and 
economically dynamic Russia reassuming its place on the world 
stage.  The Russians view the world as full of possibilities 
-- the U.S. is focused on Iraq and Afghanistan; Europe is 
consumed with leadership transitions; and the Middle East 
offers opportunities to renew old ties while building new 
ties to countries like Saudi Arabia.  From the Kremlin's 
perspective, Russia's own neighborhood looks a lot better 
than it did a year ago, with NATO expansion less imminent and 
Ukraine's orange revolution fading.  Georgia's interest in 
NATO and insistence on restoring sovereignty over Abkhazia 
and South Ossetia, however, remain an issue for the Russians. 
 
Political Landscape 
------------------- 
 
4.  (SBU) Despite Russia's resurgence, the elite here 
maintains its peculiar mix of insecurity and cockiness.  Duma 
elections in December and the presidential succession are 
less than one year away.  While Putin's popularity hovers 
near 80%, authorities have hindered demonstrations by the 
opposition organization "Other Russia" in cities throughout 
Russia.  A series of election-related legislation has 
eliminated independent candidates and raised the bar to Duma 
representation from five to seven percent of the popular 
vote.  Still, it appears that at least four, and possibly 
five, parties will be represented in the next Duma.  A 
recently-created party, "For A Just Russia," although 
initially a brainchild of the Kremlin, shows signs of 
becoming a genuine political force. 
 
5.  (SBU) Looming larger than the Duma election contest is 
the 2008 presidential succession.  First Deputy Prime 
Ministers Sergey Ivanov and Dmitriy Medvedev are the front 
runners, but Putin has yet to indicate a preference and, in 
the interest of avoiding lame duck status, may not do so 
until after the December Duma elections. 
 
 
Economic Prospects 
------------------ 
 
6.  (U) The Russian economy has been growing steadily since 
the 1998 financial crisis, with annual GDP growth averaging 
7%.  Russia has an impressive fiscal surplus that reached 
7.4% of GDP in 2006, bolstered by high global prices for its 
oil, natural gas, and metals exports.  To help protect 
against a sharp drop in energy prices, Russia has accumulated 
a $113 billion Stabilization Fund.  Russia's foreign debt is 
5.1% of GDP, down from 75.7% of GDP in 1999.  Reserves have 
topped $380 billion. 
 
MOSCOW 00002472  002.2 OF 004 
 
 
 
7.  (SBU) The EU represents Russia's largest trading partner, 
driven largely by Europe's dependence on Russian oil and 
natural gas, but also by Russia's booming demand for European 
machinery and consumer goods.  Russia also maintains 
significant trade with China.  Although still a relatively 
small percentage of Russia's total, trade with the U.S. grew 
by 20 percent last year, and investment
 was up more than 50 
percent.  Some notable recent successes include Amway, whose 
sales reached $250 million after only two years here; Alcoa, 
with over $300 million invested in two aluminum fabricating 
facilities; International Paper, which is investing an 
additional $400 million here in a 50/50 joint venture with 
Ilim Pulp; and Ford, with over $500 million already in its 
St. Petersburg auto plant.  U.S. finance and service 
companies are also investing here, including Citibank, the 
largest foreign bank in Russia, with 38 branches servicing 
over 400,000 clients. 
 
8.  (SBU) World Trade Organization.   There are few events 
more likely to help our exporters than getting Russia into 
the WTO on terms we can live with.  The Russian Government is 
pushing hard to complete its decade-long WTO accession 
process, but significant issues remain.  Russia must complete 
multilateral negotiations, and fulfill its bilateral 
obligations to the U.S., spelled out in our November, 2006, 
market access agreement, including better IPR protection and 
market access for U.S. agricultural products.  You will meet 
with Economic Development and Trade Minister Gref, a strong 
proponent of free trade, who shares Putin's resolve to decide 
the issue during his tenure.  Gref will likely raise the 
constraints of the Jackson-Vanik Amendment. 
 
9.  (SBU) Trade and Investment Challenges.  Investors in 
Russia have long requested clear guidelines on the sectors in 
which they can invest.  A draft Law on Foreign Investment in 
Strategic Sectors is now moving through the legislative 
process, and should help improve the situation.   The same is 
true for long-awaited amendments to Russia's Subsoil Law, 
which will clarify which energy deposits foreigners may own. 
The subsoil restrictions would align legislation with the 
current practice of prohibiting foreign firms from holding 
majority stakes in projects with fields over 510 million 
barrels of oil or 50 billion cubic meters of gas. 
 
10.  (SBU) Promising Sectors.  Despite increased Russian 
Government control over the energy sector, Chevron and 
Gazprom Neft have formed a joint venture to work in West 
Siberia; Lukoil and ConocoPhillips continue to expand their 
partnership; and energy service companies are doing very 
well.  Gazprom CEO Alexey Miller, whom you will meet, is a 
longtime confidante of President Putin, having worked for him 
in St. Petersburg.  In the aircraft manufacturing and sales 
sector, Russia is working to revive its own manufacturing 
capabilities, but is also looking to update its aging fleets. 
 Boeing has been working hard over the past two years to win 
a share of that market. 
 
Emerging Middle Class 
--------------------- 
 
11.  (SBU) The emerging middle class is becoming one of the 
most important trends in Russia today.  Real incomes have 
gone up 70 percent in seven years.  The average Russian earns 
an annual salary of an estimated $4570, with Moscow's 15 
million inhabitants earning roughly twice that figure.  And 
at least another third of wages are "grey" - unreported and 
untaxed.  Most experts place the upper class at one percent 
of the population, the middle class - 20 percent, the 
lower-middle class - 65-70 percent, and 10-15 percent live in 
poverty.  The emerging middle class eventually will likely 
want a voice and vote in how their country is governed and 
how their tax dollars are spent. 
 
Energy Security 
--------------- 
 
12.  (SBU) Russia faces two broad challenges: getting its 
hydrocarbons out of the ground, and delivering them to the 
market.  For this, the Russian energy sector will need 
billions of dollars in investment.  Russia has capital and 
know-how, but will need additional foreign capital and 
specialized know-how.  The ability of Russia to attract and 
hold investors will depend greatly on the GOR's steps toward 
rule of law, transparency and good corporate governance. 
 
 
MOSCOW 00002472  003.2 OF 004 
 
 
13.  (SBU) We are involved in discussions with Russia on 
energy security issues both bilaterally through an energy 
dialogue and through the G-8.  Our messages are that Russia, 
the world's largest producer of hydrocarbons, has an 
obligation to provide reasonable leadership on key components 
of global energy security, including predictable, pro-market 
regulatory and tax regimes and diversification of sources and 
transit routes.  Key energy security issues such as these 
were agreed by Russia and other G-8 leaders in last year's 
St. Petersburg Plan of Action. 
 
Nuclear Cooperation 
------------------- 
 
14. (SBU) You will have a meeting with Rosatom Director 
Sergey Kiriyenko.  Much progress has been made on 
U.S.-Russian nuclear energy cooperation over the past year. 
The U.S. and Russia have formed a Civil Nuclear Energy 
Working Group to help align our respective nuclear energy 
proposals.  Negotiations on a 123 Agreement are ongoing and, 
to date, have been fruitful and the U.S. Russia Global 
Initiative to Combat Nuclear Terrorism, launched at the G8 in 
2006, has grown to 30 countries. 
 
15.  (SBU) U.S.-Russian cooperation on nuclear 
nonproliferation remains robust, with work proceeding well to 
meet the aggressive schedules for completing nuclear security 
work outlined in the Bratislava Presidential initiative.  The 
Nunn-Lugar program will celebrate its 15th anniversary this 
year.  Under the Elimination of Weapons Grade Plutonium 
Production program, DOE and Rosatom are moving closer to the 
goal of shutting down two plutonium production reactors in 
2008.  With respect to the Plutonium Disposition program, 
Russia has recently expressed a plan that it feels is 
financially and technically credible and discussions with 
Washington are ongoing.  On the heels of the 2006 signing of 
the protocol on liability and the reaffirmation of commitment 
to the program by Director Kiriyenko, there is reason for 
cautious optimism for a mutually acceptable program. 
 
Security and Nonproliferation Issues 
------------------------------------ 
 
16.  (SBU) Missile Defense.  Russia's opposition to the 
planned deployment of U.S. missile defense assets in the 
Czech Republic and Poland has been intense - and highly 
public.  The Russians reject our analysis of the future 
Iranian threat, believing the placement of interceptors and 
radars in Poland and the Czech Republic is provocative, and 
distrust our long-term intentions.  Secretary Gates has 
proposed cooperation, there will be an experts meeting in 
June, and Secretaries Gates and Rice will meet their 
counterparts in the fall to continue high level discussions. 
 
17. (SBU) Conventional Forces in Europe (CFE) Treaty.  In his 
April 26 State of the Federation address, Putin declared that 
a "moratorium" on
 Russian compliance with CFE would be 
necessary until NATO countries ratify the adapted treaty. 
Russia rejects NATO members' insistence that Russia first 
complete its Istanbul Commitments of removing remaining 
troops from Georgian and Moldovan territory before NATO 
members ratify the Adapted CFE Treaty.  Foreign Minister 
Lavrov, terming the status quo "absurd," called on May 23 for 
an extraordinary CFE Conference. 
 
18.  (SBU) NATO.  Russia's neuralgia about the prospect of 
Ukrainian entry into NATO has eased somewhat as Ukraine 
struggles with its internal political situation.  Russia 
strongly opposed the establishment of Intensified Dialogue 
for Georgia.  Your visit coincides with the Federation 
Council's passage of the NATO/PFP-Russia Status of Forces 
Agreement (SOFA) on May 24, following the Duma approval on 
May 23.  Passage sends a positive message on the 5th 
Anniversary of the NATO-Russia Council.  A SOFA will remove 
the stumbling block to joint exercises that precipitated the 
fall 2006 cancellation of the bilateral Torgau military 
exercise. 
 
19.  (SBU) Sanctions.  The U.S., in July 2006 and again in 
December, imposed INPA (Iran Nonproliferation Act, now known 
as the Iran, North Korea, and Syria Nonproliferation Act) 
sanctions against Rosoboronexport, the Russian 
government-supported arms agency that oversees all arms 
exports.  The GOR regards the sanctions as an attempt to 
undercut the Russian arms industry and deprive it of what 
Russian leaders see as legitimate markets.  Your 
 
MOSCOW 00002472  004.2 OF 004 
 
 
interlocutors will argue that this is an extraterritorial 
application of U.S. law and their sales do not violate 
international law or UN sanctions. 
BURNS

Wikileaks

07MOSCOW2471, FOR A JUST RUSSIA: KREMLIN BACKPEDALS ON SUPPORT

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Reference ID Created Released Classification Origin
07MOSCOW2471 2007-05-25 14:46 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO6936
PP RUEHDBU RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #2471/01 1451446
ZNR UUUUU ZZH
P 251446Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 0640
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUEHLN/AMCONSUL ST PETERSBURG PRIORITY 4138
RUEHVK/AMCONSUL VLADIVOSTOK PRIORITY 2139
RUEHYG/AMCONSUL YEKATERINBURG PRIORITY 2454

UNCLAS SECTION 01 OF 02 MOSCOW 002471 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KDEM PGOV PINR SOCI RS
SUBJECT: FOR A JUST RUSSIA: KREMLIN BACKPEDALS ON SUPPORT 
 
REF: A. MOSCOW 01007 
 
     B. MOSCOW 1023 
     C. MOSCOW 01067 
     D. ST. PETERSBURG 57 
     E. YEKAT 00023 
     F. VLAD 00026 
 
MOSCOW 00002471  001.2 OF 002 
 
 
1. (SBU) Summary:  Since "For A Just Russia's" (SR) more or 
less successful debut in the March 11 regional elections 
(reftels), the Kremlin appears to have reconsidered its 
options and backed away from providing the administrative 
resources including access to national TV airtime that SR 
members expected to receive.  SR critics and supporters alike 
recommend against pigeonholing SR as the "second" Kremlin 
party.  SR's struggle with United Russia (YR) allows it to 
cast itself as an opposition party and possibly improve its 
election results.  SR is focusing on building a larger party 
base, improving its image, developing its platform, and 
consolidating regional leadership.  End summary. 
 
------------------------------- 
Russia's Political Map Redrawn 
------------------------------- 
 
2. (SBU) As noted (ref b), "For A Just Russia's" solid 
performance in the March 11 regional elections, a mere four 
months after it was created, put it on Russia's political 
map.  SR finished first in Stavropol, second in four other 
regions and third in yet seven others.  Analysts credited 
SR's good fortune to a general drift to the left and 
President Putin's public support of the party. 
 
------------------------------- 
No Longer Second Kremlin Party 
------------------------------- 
 
3. (SBU) Although the Kremlin gave SR the push it needed to 
get started, analysts and SR party members cautioned against 
labeling it the "second" Kremlin party.  What might have 
started as a Kremlin effort to introduce managed competition 
has evolved considerably since.  Yuriy Korgunyuk of the INDEM 
think tank told us that while it is true that SR is a "Putin 
party," SR is not and has never enjoyed full Kremlin support. 
 Korgunyuk guessed that a strong SR coupled with a 
stronger-than-expected performance by the KPRF would threaten 
YR's majority, which in turn would upset the Kremlin's 
carefully constructed monopoly of power.  Korgunyuk was 
convinced that Putin, Presidential Administration Deputy 
Vladislav Surkov, and others would not allow an SR victory to 
disrupt that fragile balance.  Ekho Moskvy Editor Venediktov 
agrees that the Kremlin is unnerved by the fact that SR is 
developing as an opposition force, attracting disaffected 
elite in the regions.  The Kremlin, he maintained, was 
focused on a smooth transition and the competition between 
the parties now threatened to complicate that process. 
 
----------------------------- 
Party Expansion and Makeover 
----------------------------- 
 
4.  (SBU) SR International Affairs Director Mikhail Demurin 
told us that in the lead up to the December Duma elections SR 
would focus on grassroots efforts, including door-to-door 
campaigning, to build a larger party base and to improve the 
party's image.  The party seems off to a good start.  Shortly 
after the March regional elections, SR Party Chairman Sergey 
Mironov claimed that SR was registering 40,000 new members a 
month.  In April, Duma Deputy and head of SR's Duma faction 
Aleksandr Babakov described those new members as 45 years or 
older, former KPRF members or individuals who have never 
voted before. SR Duma Deputy Oksana Dmitrieva told us that 
SR's party membership comprised dissidents, small 
businessmen, and regional politicians unhappy with YR's 
monopoly of power.  As predicted by Mironov and others, 
several smaller parties have announced their intent to merge 
with SR, including Duma Deputy Gennadiy Gudkov's People Party 
and Duma Deputy Vasiliy Shestakov's United Socialist Party. 
(Shestakov is Putin's former judo instructor.) 
 
5. (SBU) Demurin, Dmitrieva, and others in SR expressed 
concern about the party's lack of access to the national 
media.  Dmitrieva worried that without access to 
administrative resources and the national media SR would 
conduct an "average campaign with average results." 
Dmitrieva's husband, a former Duma Deputy member, predicted 
that national airtime could cost at least one million rubles 
per minute in the lead up to the December Duma elections; to 
expensive for even a party with deeper pockets, like SR. 
 
MOSCOW 00002471  002.2 OF 002 
 
 
 
----------------------- 
21st Century Socialism 
----------------------- 
 
6. (SBU) Demurin told us that the portrayal of SR by media 
and others as "socialist" was inaccurate and that 
"progressive left" was a better fit.  Mironov repeatedly 
refers to himself as
 a "social democrat" and the bulk of the 
amendments proposed by the party to date seem social 
democratic to socialist in tenor.  In aligning itself on the 
left, SR is not alone.  All parties with a chance to enter 
the Duma portray themselves as parties that will guarantee 
social justice for the Russian people on a range of issues 
from health care to education to housing and pensions.  KPRF 
even appears to believe that SR's success has boosted KPRF's 
popularity.  Oleg Kulikov, Secretary of KPRF's Central 
Committee has said, "'For A Just Russia' has been 
rehabilitating Soviet-type socialism." 
 
------------------------------ 
Seeking Popular Personalities 
------------------------------ 
 
7. (SBU) The March 11 results demonstrated that SR can 
organize support, raise funds and create a viable political 
structure and party platform to contest YR's monopoly of 
power but (reftels e and f) the party continues to struggle 
with consolidation of its regional branches.  One of the 
biggest challenges facing SR now, according to Dmitrieva, is 
recruiting "big" names to draw voters on election day. 
Babakov echoed her assessment, telling us that SR needed more 
well-known personalities and activists as candidates for 
mayors and governors in order to succeed.  The party's 
growing pains in solidifying its power base and party 
leadership may not be limited to regional branches.  During a 
recent meeting, Babakov took several swipes at SR Chairman 
Mironov suggesting that all is not well within the party, 
either. 
 
------------------------------------ 
Opposition Strengthens SR's Chances 
------------------------------------ 
 
8. (SBU)  Dmitrieva predicted that SR would come in second in 
the Duma elections, winning 15 percent of the vote.  United 
Russia would win the largest number of seats, followed by SR, 
with KPRF a close third, followed by Zhirinovskiy's LDPR. 
SPS, Dmitrieva said, would not cross the seven percent 
barrier to Duma representation.  (Note:  Russia's three most 
well-known public opinion firms show support for SR hovering 
at 5-6 percent, more or less equal to LDPR's rating but not 
enough at this point to make it into the Duma.) 
 
-------- 
Comment 
-------- 
 
9.  (SBU) At his annual meeting with the press, President 
Putin welcomed competition between YR and SR, but the 
intensity of the jousting may be tempering enthusiasm.  It 
remains to be seen if SR can maximize its opportunity and 
become a viable opposition party.  With limited access to 
administrative resources and TV airtime, without the overt 
support of Putin, and with some Kremlin minions reportedly 
working to sabotage the party's chances, SR will not only 
have to devise a clever, comprehensive strategy for 
differentiating itself from YR, it will also have to 
discipline its regional factions.  Conflicts between YR and 
SR may intensify as the regional elites jockey for position 
on the party lists.  Those struggles could increase interest 
in this overdetermined election process. 
BURNS

Wikileaks

07MOSCOW2469, MEDIA FREEDOM IN THE ELECTION YEAR

WikiLeaks Link

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Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07MOSCOW2469.
Reference ID Created Released Classification Origin
07MOSCOW2469 2007-05-25 14:18 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO6893
RR RUEHDBU
DE RUEHMO #2469/01 1451418
ZNY CCCCC ZZH
R 251418Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 0633
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 04 MOSCOW 002469 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 05/24/2017 
TAGS: KDEM PHUM PGOV SOCI RS
SUBJECT: MEDIA FREEDOM IN THE ELECTION YEAR 
 
REF: 06 MOSCOW 2117 
 
Classified By: Pol M/C Alice G. Wells.  Reason:  1.4 (d). 
 
------- 
Summary 
------- 
 
1. (C) The Kremlin or its well-wishers have been making 
erratic attempts to fine tune the press in an effort to 
ensure that the looming Duma and presidential elections go 
according to script.  Ownership of key media by the 
government or by those friendly to it has been consolidated, 
a code of behavior has been introduced at one national wire 
service, and law enforcement has been used in an attempt to 
enforce a boycott on some opposition politicians or to close 
NGOs that work with the press.  Meanwhile, internet 
newspapers continue to offer unvarnished versions of the 
news, some of the national printed press remains fairly 
free-wheeling, and the regional media is in places as vital 
as ever, while the more traditional source of information for 
a majority of the population --television-- generally offers 
Kremlin-friendly views of events.  Uncertainty surrounding 
the looming succession will likely lead to increasingly 
concentrated attempts to exert further control as the year 
progresses.  End summary. 
 
-------------------------- 
Changes in Media Landscape 
-------------------------- 
 
2. (C) The preceding months have seen a series of unconnected 
actions by the GOR "wellwishers" that have in some cases 
arguably altered the media landscape for the worse and in 
others increased anxiety among those in the mass media.  Some 
of the developments: 
 
-- In May, many members of the staff of the Russian News 
Service (RNS) quit in protest at what they describe as 
requirements to force them to concentrate their attention on 
the pro-Kremlin United Russia party, members of the 
officialy-sanctioned Public Chamber, official human rights 
activists Ombudsman Vladimir Lukin and Chairwoman of the 
Presidential Council for Human Rights Ella Pamfilova, while 
ignoring "Other Russia" opposition figures Mikhail Kasyanov, 
Eduard Limonov, Garry Kasparov, and "unofficial" human rights 
activists.  According to the daily Kommersant, the Service's 
editorial staff has allegedly been told that its motto is 
"America is Our Enemy."  According to Gallup, as many as 
eight million Russian-speakers comprise RNS's audience. 
 
-- On April 18, representatives of the Department of Economic 
Security confiscated the financial documents and computer 
servers of the Educated Media Foundation, the successor to 
Internews Russia, allegedly as part of an investigation 
sparked by a failure by EMF's President and one other 
employee to properly declare currency they were bringing into 
Russia in January. The confiscations effectively ended the 
work of EMF, an NGO that since 1992 has trained more than 15 
thousand media professionals and provided invaluable 
assistance to the estimated 1,500 companies that broadcast to 
local audiences across Russia's eleven time zones. 
 
-- The Prosecutor General's (PG) office has on three 
occasions required that Gazprom-owned radio station Ekho 
Moskvy provide transcripts of comments that it thought may 
have contravened the law on extremism.  Transcripts of Ekho 
interviews with Garry Kasparov and Eduard Limonov, both 
members of the anti-Kremlin umbrella group "Other Russia," 
have been requisitioned.  More worryingly, the PG's office 
has also demanded a transcript of comments made by Ekho 
journalist Yuliya Latynina.  A finding that Latynina had 
violated the law on extremism would at a minimum have a 
chilling effect on the station and could, if repeated, have 
implications for its broadcasting license. 
 
-- In August 2006, Gazprom subsidiary director Alisher 
Usmanov bought national daily of record Kommersant (reftels). 
There was no immediate, discernible change in the newspaper's 
content until January 2007, when Kommersant's editorial page 
disappeared, allegedly to allow the paper to parry pressure 
by the Kremlin to place opinion pieces espousing official 
positions. Subsequent months have seen the newspaper's 
coverage become at times more tendentious, for example with a 
front-page article attacking the USG's Supporting Human 
Rights and Democracy report. Still, Kommersant continues to 
provide largely unvarnished coverage of, for example, the 
activities of the anti-Kremlin "Other Russia" organization 
and Viktor Gerashchenko's dead in the water presidential 
campaign. 
 
--  In April, the investment company Abros, a subsidiary of 
 
MOSCOW 00002469  002 OF 004 
 
 
the Petersburg-based bank Rossiya, which is controlled by 
President Putin's Petersburg confederate Yuriy Kovalchuk, 
acquired controlling interest of the national network REN-TV. 
 REN-TV's not very adventurous news broadcasts have not been 
affected by the takeover to date, but the ownership 
re-shuffle sparked rumors that REN-TV was to be brought to 
heel. 
 
-- In March, Radio Russia fired journalist Irina Vorobyova 
after she discussed the Other Russia-sponsored "March of 
Dissent" on an Ekho Moskvy program that featured as well 
United Civil Front Chairman Garry Kasparov.  Vorobyova was 
reportedly told by Radio Russia management t
hat she was being 
fired because of her "lack of loyalty to the station." 
 
-- An amended law on extremism has made media, particularly 
in the regions, much more careful in their coverage of 
election campaigns. 
 
-- The Kremlin has parlayed financial problems at the 
independent weekly magazine Profil into a change in the 
magazine's editorial staff.  Pro-American Editor Georgiy Bovt 
has been replaced with his polar opposite, Mikhail Leontiev, 
of Channel One's "However" program.  Bovt told us that he 
expects most of his staff to either be sacked or depart 
voluntarily when Leontiev takes over at the beginning of 
June.  Kremlin unhappiness with Profil had been expressed 
more frequently and pointedly since the beginning of the 
year, Bovt said. 
 
-- On the week of May 14, the national television network NTV 
continued its drift away from providing news, a process begun 
three years ago when Vladimir Kulistikov became General 
Director.  The 2200 news program is now shown at 2245, and 
the day's events are reviewed only very briefly and at great 
speed.  NTV's well-regarded Thursday program "To The 
Barrier," which features debates on topical issues between 
generally well-known public figures has been shortened by 
twenty minutes.  Andrey Malkov's higher-rated weekly program, 
"Extraordinary Events," has recently featured tendentious 
documentary films on the anti-Kremlin umbrella group "Other 
Russia," Mikhail Khodorkovskiy ("The Man From Yukos"), and 
alleged connections between exiled oligarch Boris Berezovskiy 
and Ukrainian President Viktor Yushchenko. 
 
--------------------------- 
Observers Present Different 
National Pictures 
--------------------------- 
 
3. (C) Conversations with journalists, media observers, and 
other contacts over the last few weeks suggest that the media 
are falling under ever closer scrutiny as the succession year 
progresses.  While some, like owner and editor of the 
independent daily Nezavisimaya Gazeta Konstantin Remchukov, 
maintain that they are free to publish whatever they like, 
and have no contact with the Kremlin.  Others, like outgoing 
Profil Editor Bovt, tell us that their publication has been 
under a microscope since at least January. 
 
4. (C) Bovt reported he had been regularly counselled by 
Presidential Administration Deputy Vladislav Surkov or others 
in Surkov's office on his magazine's content.  Surkov had 
asked Bovt why Profil had not joined the Russian national 
media attack on the Department's Supporting Human Rights and 
Democracy Report or criticism of the Estonian government in 
the wake of its decision to relocate its Soviet World War II 
liberation monument.  A Profil article suggesting in the wake 
of the suppressed Other Russia meetings that demonstrators 
should be allowed to demonstrate caused much unhappiness in 
the Kremlin, said Bovt, as did a longer article on Other 
Russia's "March of Dissent."  Remchukov, on the other hand, 
noted that his newspaper publishes pieces critical of the 
Kremlin and, as in a recent article on the legal problems of 
the appointed governor of Amur Region, of Putin himself. 
 
5. (C) Bovt alleged to us that all media are being watched 
carefully by a nervous Kremlin as the succession year 
progresses.  The scrutiny, Bovt said, extends to close 
textual analysis.  A colleague at the large-circulation 
national daily Rossiiskaya Gazeta had told him recently of an 
angry telephone call from Surkov complaining of a phrase in 
an article that had Prime Minister Fradkov "ordering" First 
Deputy Prime Minister Dmitriy Medvedev to do something. 
"Fradkov," Surkov allegedly instructed, "cannot 'order' 
Medvedev." 
 
6. (C) Ekho Moskvy Editor Aleskey Venediktov told us the 
media environment has worsened measurably over the last year, 
and that his station no longer enjoys its previous 
"privileged status" as the channel of dissent.  It is more 
difficult to secure government guests.  Anonymous threats 
 
MOSCOW 00002469  003 OF 004 
 
 
directed at Venediktov have increased, and the internal power 
struggle in the Kremlin translates into minute scrutiny of 
progamming details.  When "Just Russia" party leader Sergey 
Mironov was interviewed in connection with NATO developments, 
the Kremlin called, asking "Why not United Russia leader 
Gryzlov?" 
 
--------------------------- 
The Kremlin's Sliding Scale 
--------------------------- 
 
7. (C) Daily reading of the national newspapers Kommersant, 
Nezavisimaya Gazeta, Izvestiya, Vedomosti, Novaya Gazeta, 
Moskovskiy Komsomolets, and Rossiiskaya Gazeta and scans of 
the weekly magazines Kommersant Vlast, The New Times, Profil, 
Itogi, and Russian Newsweek over the past several months 
suggest that the Kremlin's calculus, if there is one, may be 
selective and situational.  Circulation, readership, subject 
matter, and personality seem to be to varying degrees 
important, as is the way that any purported criticism is 
handled.  Novaya Gazeta (NG) and The New Times feature the 
most searing criticism of the GOR.  NG's adroit, connected 
half-owner (Duma Deputy and businessman Aleksandr Lebedev), 
its relatively small circulation, and modest (twice-weekly) 
publication schedule may explain its survival. The weekly New 
Times is small in circulation as well and was launched only 
in January.  Venediktov told us that its scorching criticism 
of the GOR has made it a "must read" in the Kremlin and that 
the Presidential Administration directed that Business Russia 
hire Olga Romanova as Editor, rather than let her join New 
Times' coterie of reporters. 
 
8. (C) Although it is true, as Remchukov maintains, that 
pointed articles appear in Nezavisimaya Gazeta; Nezavisimaya, 
Izvestiya and Vedomosti often confine their criticism to 
longer pieces that avoid the names of prominent government 
personalities.  The articles generally focus instead on 
"Russia's" problems, as in a recent, full-page Izvestiya 
piece by Merkator President Dmitriy Oreshkin that compared 
Russia's recent economic and social development unfavorably 
to that of Estonia and Germany.  The newspapers manage to 
make the point that Russia's over-reliance on raw materials, 
staggering levels of corruption, and troubled demographic 
picture are the product of government policies without 
criticizing the principle government actors by name. 
 
9. (C) The national daily Moskovskiy Komsomolets (MK) 
produces good, critical journalism for the masses (its daily 
circulation is two and one-half million).  Possibly providing 
protective coloration are Editor Pavel Gusev, who has a slot 
on the establishment Public Chamber, and one of MK's key 
journalists, Aleksandr Khinshteyn, who is a Duma deputy with 
a background in the intelligence services.  The paper leavens 
its pointed criticism of the GOR with Russian patriotism and 
cloaks the results in a nearly-impenetrable format. 
 
 
--------------------- 
Observers
 Worry About 
the Internet 
--------------------- 
 
10. (C) Liliya Shibanova, Director of the NGO Golos, tended 
in a recent conversation to see the authorities' 
interventions as selective and the result imperfect if 
compared to the sweeping censorship that existed during the 
Soviet period.  Driving the Kremlin, she thought, was an 
calculation that involved achieving the desired outcome with 
a minimum of outrage, although she acknowledged that the 
looming succession could make the authorities willing to 
sacrifice outrage to outcome.  With central television news, 
the chief source of information for most Russians, firmly 
under control, Shibanova thought it made little sense to 
focus on the printed media.  Shibanova guessed, however, that 
the same impulse that caused the crackdown on the handful of 
Other Russia demonstrators was behind the urge to control the 
less influential media, as well.  The approach of the 
presidential succession would only exacerbate this tendency, 
she thought. 
 
11. (C) Director of the Center for Journalism in Extreme 
Situations Oleg Panfilov tended to be, if anything, more 
pessimistic than Shibanova. Panfilov claimed that key 
internet news sites were already under pressure.  He noted 
that Gazprom and Kommersant's Alisher Usmanov had purchased 
gazeta.ru, and claimed to have detected a resultant change in 
the tenor of its coverage.  Oleg Buklemishev of ex-Prime 
Minister Mikhail Kasyanov's Popular Democratic Union agreed 
that gazeta.ru had become less bold.  He pointed to its 
treatment of the latest twist in the Litvinenko assassination 
scandal as evidence. 
 
 
MOSCOW 00002469  004 OF 004 
 
 
------- 
Comment 
------- 
 
12. (C) The inroads on the media, although significant, have 
been uneven and largely situational. The authorities' 
sensitivity to any attempt to distract them as they manage 
the --for them-- perilous succession process will likely 
usher in an even more overdetermined media landscape by the 
time the official presidential campaign begins in January. 
BURNS

Wikileaks

07MOSCOW2463, VOLGOGRAD MAYORAL ELECTION: JUST RUSSIA BOUNCED,

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Reference ID Created Released Classification Origin
07MOSCOW2463 2007-05-25 13:28 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO6811
RR RUEHDBU RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #2463/01 1451328
ZNR UUUUU ZZH
R 251328Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 0618
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHLN/AMCONSUL ST PETERSBURG 4136
RUEHYG/AMCONSUL YEKATERINBURG 2452
RUEHVK/AMCONSUL VLADIVOSTOK 2137

UNCLAS SECTION 01 OF 02 MOSCOW 002463 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV KDEM PINR SOCI RS
SUBJECT: VOLGOGRAD MAYORAL ELECTION: JUST RUSSIA BOUNCED, 
KPRF BEATS UNITED RUSSIA 
 
MOSCOW 00002463  001.2 OF 002 
 
 
1. (SBU)  Summary:  In what was portrayed as an electoral 
upset by the national media, Communist Party (KPRF) candidate 
Roman Grebennikov won the May 20 Volgograd mayoral election, 
with United Russia State Duma Deputy Vasiliy Galushkin coming 
in a distant third.  "For A Just Russia's" (SR) candidate was 
struck from the ballot days before the election in a campaign 
marred by dirty tricks and counterattacks.  While local 
results generally have little predictive value for the 
December Duma elections, some commentators have claimed that 
they point to voter disillusionment with United Russia and 
note that SR's Kremlin support may be withering.  A closer 
reading of the results shows that this was a victory of a 
well-known local candidate, whom United Russia is moving 
quickly to co-opt.  End summary. 
 
------------------------------------- 
United Russia Fumbles, KPRF Takes All 
------------------------------------- 
 
2. (U)  On May 20, 31-year-old KPRF candidate Roman 
Grebennikov won 32.74 percent of the vote in the Volgograd 
mayoral election.  Voter turnout was 38 percent. 
Unaffiliated acting mayor Roland Kheryanov took 23.85 percent 
and the candidate of the pro-Kremlin United Russia party, 
Duma Deputy Vasiliy Galushkin, ran an erratic campaign and 
garnered only 20.35 percent.  SR nominated construction 
company general director Oleg Mikheyev less than a month 
before election day and he was struck from the ballot three 
days before the election. 
 
--------------------- 
Litigious Campaigning 
--------------------- 
 
3. (U)  The election campaign was rife with attempts to 
de-register candidates.  Mikheyev was de-registered on April 
28 for bribing voters, supposedly as a result of a deal 
between United Russia and KPRF Volgograd Governor Nikolay 
Maksyuta.  Mikheyev continued campaigning until the appeal 
was upheld on May 17, at which point, according to Indem 
analyst Yuriy Korgunyuk, he called on his supporters to vote 
for Grebennikov.  Grebennikov survived two de-registration 
attempts.  Both Kheryanov and Galushkin withstood charges of 
illegal use of administrative resources.  In the week before 
the election, a tape surfaced of Galushkin's campaign workers 
using threats to extract contributions from factory workers. 
Days before the election, Galushkin attempted to drop out of 
the race because of unnamed "pressure," which was rumored to 
have been from United Russia's national leadership.  His 
subsequent decision to stay in the race may not have been 
sanctioned by United Russia's leadership. 
 
------------------------- 
Defeat for United Russia? 
------------------------- 
 
4. (SBU)  Some commentators have billed United Russia's 
defeat in Volgograd as the product of growing disillusionment 
with the Kremlin party in the Volga region.  (NOTE:  SR's 
Viktor Tarkhov won Samara's mayoral election in October 2006 
and A Just Russia won the party vote in Stavropol's March 
2007 regional election.)  Grebennikov is a well-known and 
popular local politician, a lawyer who has been a regional 
duma deputy since 1998, and was speaker from 2001-2005. 
Indem's Korgunyuk told us that the result was unsurprising 
given Grebennikov's prominence in Volgograd.  He thought 
Grebennikov's success had nothing to do with his party 
affiliation.  Further, Korgunyuk noted that in the 
traditionally Communist "red belt," KPRF membership did not 
hurt. 
 
5. (SBU) United Russia may not have been wholeheartedly 
behind its candidate either.  In an apparent effort to 
distance the party from Galushkin's faltering campaign, 
Volgograd United Russia representative Yuriy Oleynikov 
highlighted before the election that the platforms of all the 
favorite candidates matched United Russia's.  United Russia 
Duma Deputy and First Deputy Chairman Vyacheslav Volodin 
stated that the party had supported multiple candidates, one 
of whom was Grebennikov.  According to United Russia's 
website, Duma speaker Boris Gryzlov had meetings in which 
Grebennikov had called himself an independent candidate who 
would work with all parties.  And indeed, Grebennikov's 
ballot entry also listed him as an independent.  The KPRF's 
Ivan Melnikov dismissed such talk as United Russia's attempt 
to deflect attention from the "obvious" defeat of its brand. 
 
 
MOSCOW 00002463  002.2 OF 002 
 
 
6. (SBU)  Nonetheless, Grebennikov has promised to work with 
United Russia, which has majorities in the city, regional, 
and State dumas.  Governor Maksyuta, who refused to ally 
himself with any of the mayoral candidates, attended a United 
Russia party meeting endorsing Galushkin ten days before the 
election. 
 
---------------------------- 
Just Russia Too Threatening? 
---------------------------- 
 
7. (SBU)  A Just Russia Duma Deputy Oksana Dmitrieva told us 
on May 21 that she considered the Volgograd result to be 
further evidence of A Just Russia's waning popularity with 
the Kremlin.  She argued that the KPRF is now being 
positioned as the "opposition" party.  VTsIOM analyst Leontiy 
Byzov concurred.  Byzov noted to us that while provincial 
results do not predict what will happen nationally, the KPRF 
appears to be increasingly popular.  He argued that KPRF's 
popularity is now in the Kremlin's interest because SR is not 
siphoning off KPRF votes, as was intended, instead it has 
become apparent that SR is taking United Russia votes. 
 
------- 
Comment 
------- 
 
8. (SBU)  As closer examination usually reveals, all politics 
are local and the image of a United Russia dominated Russia 
is often challenged by local election outcomes.  In this 
case, United Russia could not keep a good man down -- even if 
he is a Communist -- and has moved quickly to co-opt him. 
BURNS

Wikileaks

07MOSCOW2462, RUSSIA BILATERAL CIVAIR NEGOTIATIONS: FRUITFUL

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Reference ID Created Released Classification Origin
07MOSCOW2462 2007-05-25 13:14 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0000
OO RUEHWEB

DE RUEHMO #2462/01 1451314
ZNY CCCCC ZZH
O 251314Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0614
RULSDMK/DEPT OF TRANSPORTATION WASHDC IMMEDIATE
INFO RUCPDOC/USDOC WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 002462 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EEB BYERLY AND COLEMAN 
EUR/RUS FOR WARLICK AND HOLMAN 
USDOT FOR STREET AND HATLEY 
USDOC FOR 4321/ITA/MAC/EUR/RISA BROUGHER AND BEADLE 
USDOC FOR 3004/CS/ADVOCACY/BLOOM 
 
E.O. 12958: DECL: 05/21/2017 
TAGS: EAIR ECON PREL RS
SUBJECT: RUSSIA BILATERAL CIVAIR NEGOTIATIONS: FRUITFUL 
TALKS BUT NO DEAL YET 
 
REF: MOSCOW 02189 
 
Classified By: Econ M/C Quanrud for reasons 1.4 B and D. 
 
1. (C) The U.S. and Russian civil aviation delegations had 
productive discussions May 16-17 on updates to the Annexes of 
our 1994 Bilateral Air Transport Agreement, but no deal was 
reached.  On overflights, the GOR continues to bar any use of 
the Trans-Siberian routes without a commercial agreement with 
Aeroflot but offered to increase crosspolar, Indian 
subcontinent, and Trans-East frequencies.  On codesharing, 
the GOR was not ready to allow third-country codesharing from 
Europe, particularly with German-owned carriers, but said it 
would study the issue.  On rights for Russian carriers, the 
GOR asked for limited Seventh Freedom cargo rights for routes 
between Asia, the United States, and points beyond.  The U.S. 
lead negotiator, Bureau of Economic, Energy, and Business 
Affairs Deputy Assistant Secretary John Byerly, and the 
Russian lead negotiator, Director General Gennady V. 
Loshchenov of the Ministry of Transport,s Department of 
State Policy in Civil Aviation, agreed to meet again 
September 4-6 in Washington. 
 
------------------------------- 
OVERFLIGHTS: NO TRANS-SIBERIAN, 
BUT INCREASES ON CROSS-POLAR, 
INDIAN, AND TRANS-EAST ROUTES 
------------------------------- 
 
2. (C) On Trans-Siberian routes, Byerly requested traffic and 
tech stops in Novosibirsk and Krasnoyarsk and also raised the 
issue of the Chinese requirement for planes using route 
"L888" to exit Chinese airspace at navigation point "Revki." 
Loshchenov was absolutely clear that he was not in a position 
to negotiate on any Trans-Siberian routes -- including use of 
the Revki crossing point -- without a corresponding 
commercial agreement between the airline concerned and 
Aeroflot for use of the route.  A final deal between the GOR 
and Europe to phase out the payments to Aeroflot required by 
such agreements had not been vetted through the Russian 
inter-agency process in time for the Russian-EU Summit in 
Samara May 17-18.  The deal, however, is expected to involve 
a phasing out of such payments for existing flights by 2014, 
coupled with an understanding that there would be no charges 
for new flights.  (Comment: Loshchenov clearly did not want 
to appear to be offering a free-ride to the Americans when 
the Europeans negotiated hard for a seven-year phase out.  He 
said, "I'd have every European carrier crying foul at my 
door."  End comment.) 
 
3. (C) The GOR would not allow any stop in Krasnoyarsk 
(principal hub of AirBridgeCargo, formerly Volga-Dnepr), but 
Loshchenov said it would consider a technical stop in 
Novosibirsk, provided the U.S. carrier entered into a 
commercial agreement with Aeroflot.  Likewise, all traffic 
including flight navigation point "Revki" and points farther 
north would require a commercial deal.  Loshchenov hinted 
that the amounts that U.S. carriers would be required to pay 
would be modest.  The U.S. delegation responded that 
mandatory commercial agreements were a "bad policy" that the 
United States and its carriers had consistently opposed.  To 
Loshchenov,s apparent surprise, the U.S. indicated its 
intention to drop the issue of Trans-Siberian routes, pending 
the outcome of the EU-Russia deal, rather than consider any 
form of pay-off to Aeroflot. 
 
4. (C) On other overflights, Loshchenov offered increases as 
part of an overall package with some room for bargaining. 
First, he offered 83 East-bound, 83 West-bound cross-polar 
frequencies; the USG requested 84-84 now, 119-119 in March 
2008, and 126-126 in Winter 2008.  Next, Loshchenov called 
service to India "sensitive" to Russian companies because of 
the connections they offer to India, through Moscow, for 
North American passengers and therefore offered 41-41; U.S. 
carriers are effectively using that now, and the U.S. side 
thus requested an increase to 52-52 in March 2008.  Finally, 
Loshchenov offered 300-500 for the Trans-East route as part 
of a larger package, which was acceptable to the USG. 
 
--------------------------------------------- 
RUSSIA NOT READY FOR THIRD-COUNTRY CODESHARES 
--------------------------------------------- 
 
5. (SBU) Though the GOR would like to see Aeroflot's 
applications for bilateral codesharing with Northwest, 
 
Continental, and Delta approved, it was still reluctant to 
offer third-country codesharing (even on a limited basis) to 
U.S. carriers wanting to serve Russia in cooperation with a 
European partner.  Loshchenov said that the whole Russian 
industry came to a consensus that third-country codesharing 
would eat too much into their European market share now. 
Loshchenov specifically said he was barred by bilateral 
protocol from allowing any third-country codesharing with a 
German-owned carrier.  (Comment:  This obviously includes 
United's bid to codeshare with Lufthansa but could als
o bar 
any cooperative marketing arrangements with Swiss Air, as it 
is now Lufthansa-owned.  End comment.)  Loshchenov did say, 
however, that he would study the protocol with Germany, 
consult with Russian industry, and consider, before the next 
round, the possibility of limited third-country codesharing 
(perhaps one flight to Moscow per day for each of the six 
principal U.S. carriers). 
 
--------------------------------------------- ---- 
SEVENTH FREEDOM CARGO RIGHTS FOR RUSSIAN CARRIERS 
--------------------------------------------- ---- 
 
6. (C) Besides approval of the Aeroflot codeshare 
applications, the GOR had only one major request.  It wanted 
limited Seventh Freedom cargo rights for routes between Asia 
and Alaska, continuing on to Chicago (and perhaps another 
point in the lower-48 states), and beyond, without servicing 
Russia.  Andrey Shumilin, the representative from 
AirBridgeCargo (formerly Volga-Dnepr), told us privately that 
his company is interested in carrying cargo between Asia and 
the United States.  With substantial loads, such flights 
would refuel in Krasnoyarsk.  He said, however, that 
AirBridgeCargo would like the option to forgo the stop in 
Krasnoyarsk during the low season (when it has very low 
payloads) because the extra landing fees in Krasnoyarsk would 
not make the trip profitable.  Shumilin stressed that this 
right would be for occasional use only, perhaps for 10 
percent of a total of no more than 300 flights per year 
(i.e., perhaps 30 flights would forgo the stop in Krasnoyarsk 
and operate on a Seventh Freedom basis).  Byerly replied to 
both Loshchenov and Shumilin that the U.S. has never granted 
Seventh Freedom all-cargo rights outside of an Open Skies 
agreement, but that the U.S. delegation would nevertheless 
study the matter before the September round. 
 
-------------------------------------- 
OTHER RUSSIAN PROPOSALS TO THE ANNEXES 
-------------------------------------- 
 
7. (SBU) During the opening session of the negotiations, the 
GOR proposed modifications to the Annexes, particularly Annex 
I, Section 6 and Annex II, Sections 1-3, tabling specific 
texts.  (Comment: Interestingly enough, the GOR never raised 
the drafts again in either the plenary sessions or the 
chairmen's meetings.  It is therefore not entirely clear how 
important these changes were to the Russian side.  End 
Comment.) 
 
8. (U) The proposed changes to Annex I, Section 6 address 
intermodal cargo and, according to Loshchenov, were requested 
by Russian Customs.  The changes to Annex II, Section 1 would 
remove the requirement that charter carriers be designated by 
diplomatic note.  In Section 2, Paragraph C, the Russians 
requested we strike the three listed reasons for a denial of 
an application: reciprocity, safety, and national security. 
Finally, the GOR proposed deleting Annex II, Section 3 
entirely, which would mean that humanitarian charters would 
count against the numerical limitation on charter flights. 
 
-------------------------- 
OTHER DOING BUSINESS ITEMS 
-------------------------- 
 
AIR NAVIGATION SERVICE FEES AND STATE FLIGHTS: 
 
9. (C) The Federal Air Navigation Service presented a chart 
to Byerly of all the U.S. carriers (and other entities) that 
allegedly owe money for air navigation services.  Natalia 
Kirillova explained that much of the money owed comes from a 
recent change of their operational dollar-ruble exchange 
rate.  Kirillova also stated that the U.S. Embassy owed for 
state flights to and over Russia but acknowledged that this 
topic would be discussed in Washington during upcoming state 
flights negotiations.  (Comment: Kirillova, her boss Mikhail 
Parnev, Alexander Zakharov from the Ministry of Foreign 
 
 
Affairs, and Elena Mikhayeva from the Ministry of Transport 
all raised the issue of state flights on the margins of the 
talks.  End comment.) 
 
FAA ISSUES: 
 
10. (SBU) The Federal Air Navigation Authority (FANA) also 
brought up concerns it had about air traffic control 
procedures on crosspolar routes and possible alternate 
landing destinations in the United States for Russian 
aircraft flying to Canada.  The U.S. Federal Aviation 
Administration (FAA) is aware of these issues and is working 
to get an answer for FANA. 
 
------- 
COMMENT 
------- 
 
11. (C) Perhaps Loshchenov said it best in his closing 
remarks, "There is no need to panic.  Even though we don't 
agree, we still have very good relations."  Though we didn't 
come to a solution this round, talks were open, honest, and 
friendly.  Both Byerly and Loshchenov acknowledged the need 
to consult in their capitals with the goal of finding a 
solution in the September talks. 
 
------------------------- 
LIST OF U.S. PARTICIPANTS 
------------------------- 
 
- John Byerly, Head of Delegation - Deputy Assistant 
Secretary for Transportation Affairs, Bureau of Economic, 
 
SIPDIS 
Energy, and Business Affairs, U.S. Department of State 
 
- Mary Street - Assistant Director for Negotiations, Office 
of International Affairs, U.S. Department of Transportation 
 
- Kathleen Milton - Attorney-Advisor, Office of the Legal 
Adviser for Economic and Business Affairs, U.S. Department of 
State 
 
- Steven Hatley - Senior Negotiator, Office of International 
Aviation, U.S. Department of Transportation 
 
- Laura Trejo - Senior Attorney, Office of International Law, 
U.S. Department of Transportation 
 
- Brian Staurseth - FAA Representative, U.S. Embassy Moscow 
 
- Kristen Grauer - Civil Aviation Officer, U.S. Embassy Moscow 
 
- Sametta Barnett, Director of Government Affairs, Delta 
Airlines 
 
- Cecilia Bethke - Managing Director of International 
Affairs, Air Transport Association 
 
- Kai Uwe Detering - Public Affairs Manager, United Parcel 
Service Germany 
 
- Oracio Marquez - Manager of Alliances, International, and 
Regulatory Affairs, United Airlines 
 
- Kevin Montgomery - Washington Representative of Polar Air 
Cargo 
 
- Jeffery Walker Morgan - Director of International and 
Regulatory Affairs, Northwest Airlines 
 
- Richard Page - SOAR International Ministries 
 
- David Short - Senior Counsel, Regulatory and Industry 
Affairs, FedEx Express 
 
- Daniel Weiss - Director, International Policy and 
Regulatory Affairs, Continental Airlines 
 
- Robert Wirick - Director, Regulatory Affairs, American 
Airlines 
 
---------------------------- 
LIST OF RUSSIAN PARTICIPANTS 
---------------------------- 
 
- Gennady V. Loshchenov, Head of Delegation - Director 
 
 
General, Department of State Policy in Civil Aviation, 
Ministry of Transport 
 
- Irina G. Fedechinka - Head of Air Services Division, 
Department of State Policy in Civil Aviation, Ministry of 
Transport 
 
- Elena A. Mikh
eeva - Deputy Head of Air Services Division, 
Department of State Policy in Civil Aviation, Ministry of 
Transport 
 
- Yulia V. Volodina - Senior Expert of the International 
Agreements Division Legal Department, Ministry of Transport 
 
- Yuri Romanenko - Civil Aviation Officer, Department of 
International Relations, Ministry of Transport 
 
- Alexander Delezha - Acting Director of the Air Transport 
Department, Russian Federal Air Transport Agency 
 
- Natalia Kirilova - Department of International Relations, 
Russian Federal Air Navigation Authority 
 
- Alexander Zakharov - Head of the Bilateral Relations, North 
America Desk, Ministry of Foreign Affairs 
 
- Igor Regush ) Aeroflot 
 
- Kamil Feizafmanov - Aeroflot Cargo 
 
- Martya Goryashko - Aeroflot Cargo 
 
- Andrey A. Shumilin - AirBridgeCargo 
 
- Yuri A. Malishev - AirBridgeCargo 
 
- Dennis Ilyin - AirBridgeCargo 
 
- Aleksei Leonov - AirBridgeCargo 
 
- Natalia V. Nazarova - AirBridge Cargo 
 
- Natalia Pechinkina - Transaero 
 
- Denis Savchenko - Transaero 
 
- Glenn Wicks - The Wicks Group 
 
- Katya Grimes - The Wicks Group 
 
- Sergey Teselkin - Polet 
 
- Denis Zuzanov - Polet 
 
- Yuri Lavrentiev - TESIS 
 
 
 
 
 
BURNS

Wikileaks

07MOSCOW2452, RUSSIA: BANK OF NEW YORK OFFICIALS ON NEW LAWSUIT

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07MOSCOW2452.
Reference ID Created Released Classification Origin
07MOSCOW2452 2007-05-25 09:49 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0007
PP RUEHWEB

DE RUEHMO #2452/01 1450949
ZNY CCCCC ZZH
P 250949Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 0598
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHMFISS/DEPT OF JUSTICE WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHMFISS/FBI WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 002452 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/RUS, EB/CBA 
TREASURY FOR MEYER 
NSC FOR KLECHESKI 
USDOC FOR 4231/IEP/EUR/JBROUGHER 
 
E.O. 12958: DECL: 05/25/2017 
TAGS: ECON EINV EFIN RS
SUBJECT: RUSSIA: BANK OF NEW YORK OFFICIALS ON NEW LAWSUIT 
 
Classified By: ECMIN Quanrud for reasons 1.5 b and d. 
 
1. (C) Bank of New York (BONY) officials confirmed in a 
meeting with the Embassy on May 24 their understanding that 
the Moscow Arbitration Court has accepted a case against the 
company, reportedly filed by the Russian Customs Service.  On 
May 16, A U.S.-based lawyer claiming to act on behalf of the 
Russia's Customs Service announced that he a filed suit 
asking for USD 22.5 billion in damages in connection with 
money laundering charges brought against BONY in the late 
1990s.  BONY has not yet received a copy of the case, and 
will await receipt of the complaint to determine next course 
of action. The company is not seeking USG assistance at this 
time.  BONY officials speculate that the suit appears linked 
to the proposed merger between BONY and Mellon Bank, and may 
be part of a subterfuge to hide insider trading and attempts 
at market manipulation.  End Summary. 
 
The Case 
-------- 
 
2. (SBU) The complaint is based, per press reports, on a 
criminal investigation in the United States that dates back 
to the 1990s.  BONY officials were found to have laundered 
money, allegedly coming from Russian importers attempting to 
avoid taxes and customs duties.  BONY fired three branch 
managers, and paid out an estimated USD 26 million to the 
U.S. government in fines and damages, and another USD 12 
million to banks that lost money because of the transactions. 
 The settlements were paid out in November 2005. 
 
3. (SBU) BONY officials told us May 24 that they had received 
confirmation that Moscow Arbitration Court has accepted the 
complaint.  The Bank has not yet seen the complaint, but is 
making arrangements to obtain a copy from the court. 
(Comment: It is common for the charges to be sent by post, 
which can take several weeks.  End Comment.) 
 
An Odd Approach by a Miami Firm 
------------------------------- 
 
4. (C) According to BONY, about a year ago lawyers from the 
Miami-based law firm of Podhurst Oreck, which claimed to be 
representing the Russian customs service, approached the bank 
and said it planned to file suit for a claim of USD 7 billion 
related to the 1999 money-laundering case.  However, if BONY 
would pay USD 600,000, the case would be settled without 
going to the court - and that such a payment would keep "BONY 
from having regulatory trouble."  BONY refused to pay, 
perceiving this as a case of extortion.  To Bank officials, 
the timing of this approach did not seem coincidental since 
it was at the moment when BONY engaged in merger talks.  The 
company did not hear any more until press reports of the case 
filed on May 16. 
 
Market tampering? 
----------------- 
 
5. (C) BONY officials are suspicious about the timing of the 
lawsuit's announcement -- on the eve of BONY shareholder 
discussions about the proposed BONY-Mellon Bank merger, and 
speculate it was timed to affect market shares.  BONY 
officials said there were serious stock market fluctuations 
for both banks when the suit was announced; the two banks' 
trading spreads, which had been in sync since December, 
split, and trading volumes were up by four times average, 
activity that is sure to have caught the eye of the SEC and 
NYSE.  BONY is also curious why, if the Customs Service was 
so intent with its lawsuit, no representative from the 
Customs Committee attended the press conference announcing 
the lawsuit (and they were no-shows given that nameplates of 
Customs officials had been placed on the dais) and why 
Customs has been mute on the suit.  Moreover, the Customs 
Service, according to BONY, does not have the authority to 
bring such a suit under Russian law -- that right rests with 
the Finance Ministry, as a revenue flow is involved. 
 
Bank's Market Presence 
---------------------- 
 
6. (SBU) BONY has only a representative office in Russia, 
with no full-time American staff.  Despite its low-profile 
(understandable in the wake of the scandal and trial in the 
U.S.), it is still the depository agent for Gazprom, VTB and 
many other prominent Russian companies.  This fact, plus 
private assurances from the Finance Ministry (the nominal 
Ministry that would bring such a suit) that it had no hand in 
this, have led BONY to the conclusion at this point that this 
may be a renegade operation by an opportunistic trial lawyer. 
 
Next Steps 
---------- 
 
7. (C) The company is in the process of hiring local legal 
counsel, and will await a copy of the charges to determine 
appropriate next steps.  It has no plans to make further 
public statements and is not seeking USG assistance at this 
time. 
 
BURNS

Wikileaks

07MOSCOW2438, APEC: INVITATION TO APEC FOOD DEFENSE WORKSHOP

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Reference ID Created Released Classification Origin
07MOSCOW2438 2007-05-24 14:07 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXRO5603
PP RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB
DE RUEHMO #2438 1441407
ZNR UUUUU ZZH
P 241407Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 0575
INFO RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION PRIORITY

UNCLAS MOSCOW 002438 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PTER TBIO EAGR APEC RS
SUBJECT: APEC:  INVITATION TO APEC FOOD DEFENSE WORKSHOP 
 
REF: STATE 61613 
 
We shared the invitation letter to the Food Defense workshop, 
the workshop agenda and registration form with Valeriy 
Sorokin, Chief of the MFA's APEC Section.  We also passed it 
to interested technical experts in the GOR Ministry of 
Agriculture.  Sorokin had no comment about the workshop.  If 
the Agriculture Ministry officials are able to attend, they 
will respond directly to the contact persons identified in 
reftel. 
BURNS

Wikileaks