Category Archives: CONFIDENTIAL//NOFORN

08MOSCOW1478, RUSSIA’S ROLE IN THE IRAN-SYRIA-LEBANON TRIANGLE

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Reference ID Created Released Classification Origin
08MOSCOW1478 2008-05-23 14:37 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Moscow

VZCZCXRO2106
PP RUEHBC RUEHBW RUEHDE RUEHDIR RUEHKUK RUEHROV
DE RUEHMO #1478/01 1441437
ZNY CCCCC ZZH
P 231437Z MAY 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 8242
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RUCNIRA/IRAN COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 001478 
 
SIPDIS 
 
E.O. 12958: DECL: 05/23/2018 
TAGS: PGOV PREL IR LE SY RS
SUBJECT: RUSSIA'S ROLE IN THE IRAN-SYRIA-LEBANON TRIANGLE 
 
REF: MOSCOW 1340 
 
Classified By: Political M/C/ Alice G. Wells for reasons 1.4 (b/d). 
 
1. (C) Summary:  Russia welcomed the May 21 Doha agreement as 
an opportunity to put Lebanon on the path toward national 
reconciliation, but understood that this was a temporary 
measure to overcome the country's latest political crisis. 
MFA officials believe the Lebanese factions' decision to 
avoid the issue of disarming Hizbollah was wise, but 
acknowledge a seemingly intractable issue remains to be dealt 
with in the future and warn of increased militarization of 
Lebanese society.  Moscow will continue calling upon Syria 
and Iran to allow a long-term political settlement in 
Lebanon, while recognizing that its influence is limited. 
The GOR will not condition its arms sales to Syria, 
maintaining that it takes a pragmatic approach that keeps 
political and economic issues separate.  Most analysts and 
diplomats see Russia attempting to play a helpful role in 
Lebanon, but doubt Moscow will push Damascus too hard for 
fear of losing its key Middle East ally.  Russia's ability to 
influence events in the region or rein in Hizbollah are 
further limited by the complicated nature of 
Russian-Syrian-Iranian relations.  End summary. 
 
Doha Agreement a Positive Step, But Problems Remain 
--------------------------------------------- ------ 
 
2. (C) MFA Counselor for Lebanon Oleg Levine told us on May 
23 that Russia welcomed the May 21 Doha agreement that set 
the stage for a full-fledged agreement that would allow 
Lebanon to choose a President and form a new government. 
Ironically, he argued, Hizbollah's show of force over control 
of the Beirut airport appeared to have been the necessary 
spark that pushed the Lebanese political blocs toward 
compromise, ending a months long stalemate.  Levine assessed 
Hizbollah's muscle-flexing as having strengthened its image 
among Lebanese by demonstrating that it remained the 
country's only real military force.  He thought the Doha 
agreement aided Hizbollah politically by giving the 
opposition enough parliamentary seats to block government 
initiatives aimed at weakening or disarming the organization. 
 Unfortunately, the recent crisis could have the affect of 
leading other factions to strengthen their militias.  Levine 
thought that Lebanon could now experience "parallel 
processes" with movement to a political settlement at the 
same time the militarization of the country increased. 
 
3. (C) Despite the continued instability caused by armed 
militias, Levine said it a "wise decision" to leave the issue 
of Hizbollah's weapons out of the final Doha agreement.  Had 
the parliamentary majority pushed for this it would have 
scuttled the talks.  Despite GOR support for the Doha 
agreement, Levine admitted that leaving the issue of weapons 
for another day made the agreement a stopgap measure that 
simply helped Lebanon overcome its current crises and did not 
necessarily move it toward a long-term political settlement. 
 
Russian Influence Limited 
------------------------- 
 
4. (C) Levine told us that Moscow would continue to call upon 
Damascus and Tehran to allow a political settlement in 
Lebanon, just as the GOR had asked Syria and Iran to help end 
the recent violence.  (Note: The May 16 MFA report of DFM 
Saltanov's meeting the Iranian Ambassador Ansari underscored 
a franker than usual GOR message to Iran and Syria.  End 
note.)  Russia could, however, only "send a message" as its 
influence was limited.  Levine explained that it would be 
difficult for Russia to convince either Syria or Iran to 
lessen support for Hizbollah, both of which depended upon the 
organization to confront Israel.  He did not think that the 
current Syrian-Israeli negotiations would lead Syria to 
lessen its support for Hizbollah in the near term, explaining 
that the negotiations were likely to be drawn out and in 
danger of disruption if Israel pressed too hard on Hizbollah. 
 Levine said Iran's interests in Hizbollah were to form an 
"umbrella" to protect Lebanon's Shia and demonstrate Iranian 
influence in the Middle East. 
 
5. (C) In response to our strong concerns over arms transfers 
to Damascus, Levine emphasized that Russia would not use its 
military sales to Syria as a means to increase its leverage 
over Asad in order to persuade him to play a more positive 
role in the region.  Levine reiterated that Syria was 
Russia's "traditional partner" in the Middle East, with which 
it had close political and economic relations.  Military 
sales, as well as energy cooperation, fell under the later 
category and were kept separate from political 
considerations.  Levine thought it not incompatible for 
Russia to sell weapons to Syria while it improved relations 
 
MOSCOW 00001478  002 OF 003 
 
 
with Israel.  If it was, Israel would not be so anxious to 
improve relations with Russia. 
 
ME Diplomats Split on Russian Role in Lebanon 
-----------------
---------------------------- 
 
6. (C) Middle Eastern diplomats in Moscow are divided over 
Russian intentions in Lebanon.  Lebanese Emboffs have 
consistently complained about the lack of results from 
Russian attempts to get Syria to end its meddling in their 
country, and see this as indicative of both the limits of 
Moscow's influence with Damascus, as well as the GOR's 
unwillingness to push Asad too hard for fear of weakening its 
only regional ally.  Lebanese First Secretary Nagi Khali told 
us that the GOR was so anxious to protect Asad that it asked 
Lebanon to reconsider the formation of the international 
tribunal investigating the Hariri assassination, which, 
Moscow knew, would lead back to Asad. 
 
7. (C) Jordanian and Egyptian diplomats believe Russia 
genuinely is trying to play a constructive role in Lebanon. 
Egyptian Emboff Wael Badawi said that FM Aboul Gheit called 
FM Lavrov May 13 and asked the GOR to press Syria to end the 
recent turmoil in Lebanon because Cairo thought Moscow would 
respond positively (reftel).  Egypt understood, however, that 
Moscow's influence with Syria had limits.  Badawi added that 
to really change the situation in Lebanon it would be 
necessary to press Iran - the real power behind Hizbollah - 
but Moscow's influence with Tehran was even more limited than 
with Damascus.  By way of example of the distance with which 
Iran kept Russia when it came to Hizbollah, Badawi explained 
that Lavrov sent Iranian FM Mottaki a personal letter in 
April asking Iran to help end the political stalemate over 
selecting a new Lebanese President, but only received a 
response a month later. 
 
Moscow Sticks With Asad 
----------------------- 
 
8. (C) Russian analysts have consistently assessed Moscow's 
relations with Syria as a balance between encouraging 
Damascus to play a more helpful role in the region while not 
pressing Asad too hard for fear of losing Russia's one real 
ally in the region.  Institute of Middle Eastern Studies 
President Yevgeniy Satanovskiy argued that the GOR wanted to 
keep Asad in power as a means to maintain Syria's internal 
stability; without a strongman Russia was unsure of the 
direction Syria would take.  Georgiy Mirskiy of the Institute 
of Higher Economics noted that with Saddam's Iraq gone, Syria 
was the only Arab ally Russia had left.  He doubted, however, 
just how good an ally Syria was considering that Asad "flatly 
denied" to Russian officials a role in the Hariri 
assassination and consistently failed to modify Syrian 
interference in Lebanese affairs.  Had Asad done so, he could 
have helped Russia "save face" by giving Moscow something to 
show for its efforts in the region.  Aleksandr Shumilin, 
Director of the Center for the Analysis of Middle East 
Conflicts, discounted the impact of Russian pressure on 
Syria, which was minute compared to the pressure from Arab 
states to take a more moderate course and move away from 
Iran.  If Asad could withstand his Arab neighbors, Moscow was 
easy to handle. 
 
"Complicated" Russia-Iran-Syria Triangle 
---------------------------------------- 
 
9. (C) Iran specialist Vladimir Sazhin of the Oriental 
Studies Institute described for us a "complicated" trilateral 
Russia-Iran-Syria relationship that was formed by a limited 
number of common interests and typically faced turbulence 
caused by diverging interests.  The Syria-Iran link was 
particularly complicated by basic differences between 
religious, Persian Iran and secular, Arab Syria.  These 
countries found themselves together more because of their 
traditional anti-Americanism and pariah status then common 
goals.  The inequality of their relationship further 
complicated a situation in which resource-rich Iran had 
become an independent regional actor and the real power 
behind Hizbollah.  Syria, meanwhile, often found itself 
isolated within the region and saw its influence with 
Hizbollah diminished as it became simply a conduit for 
Iranian supplies to the organization.  This situation created 
difficulty for Moscow, which was closer to Syria than Iran. 
It was through Syria that the GOR hoped to play a positive 
role in the region by helping end Lebanon's political 
troubles and prodding Asad toward a Syria-Israel peace 
agreement 
 
10. (C) Sazhin doubted Russia's ability to influence Iran, 
and argued that countries with strong economic ties with 
Iran, including China, France, and Germany, had more concrete 
 
MOSCOW 00001478  003 OF 003 
 
 
methods at their disposal to change Tehran's behavior. 
Sazhin pointed to FM Mottaki's public rebuke of Lavrov's May 
15 statement encouraging the P5 1 to offer security 
guarantees to Iran as a confidence building measure.  When 
Mottaki said within a day that Iran did not require security 
guarantees from any country, Sazhin thought this demonstrated 
the actual political distance between Tehran and Moscow. 
 
Russian Press Skeptical of Moscow's Influence 
--------------------------------------------- 
 
11. (U) The press has displayed considerable skepticism of 
Russia's ability to influence events in Lebanon vis-a-vis 
Syria or Iran.  RIA Novesti commentator Andrei Murtazin asked 
if Russia could help "save" Lebanon when Moscow's relations 
with Damascus and Tehran were "far from perfect."  He 
concluded that Lebanon's western oriented government 
continued to turn to Russia out of desperation to utilize 
Moscow's few remaining "levers" of influence.  In the case of 
Syria, Russia agreed to write off 70 percent of its 
Soviet-era debt and remained Syria's largest supplier of 
arms.  With Iran, however, Moscow had little upon which to 
base its influence except that it maintained the strongest 
political relations with Tehran of the P5 1 nations.  RIA 
Novesti's Marianna Belenkaya was more circumspect about a 
Russian role, commenting instead on the reactions of the 
U.S., France, Israel and Saudi Arabia to Hizbollah's 
increasing influence in Lebanon.  She doubted Russia could 
play much of a role to settle the problem in Lebanon or help 
deliver peace with Israel, which was being handled by Turkey. 
 Ilya Kononov noted in Nezavisimaya Gazeta that the current 
Lebanese crisis broke out as Turkey helped get the 
Syria-Israel negotiating track moving, while Russia, which 
trumpeted its relations with Syria as its greatest possible 
contribution to the MEPP, had no part in this initiative and 
had to look to the Arab League to help solve the current 
crisis in Lebanon. 
RUSSELL

Wikileaks

08MOSCOW1238, A BRIBE TOO FAR? THE SACKING OF CVO NEPOKLONOV

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Reference ID Created Released Classification Origin
08MOSCOW1238 2008-05-02 12:04 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Moscow

VZCZCXRO3947
RR RUEHBW
DE RUEHMO #1238/01 1231204
ZNY CCCCC ZZH
R 021204Z MAY 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 7899
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 001238 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
SECSTATE PASS AGRICULTURE ELECTRONICALLY 
USDA FOR FFAS/TERPSTRA, FAS FOR OCRA/FLEMINGS, KUYPERS; 
- OSTA/MACKE, HAMILTON; OTP/FOSTER, OGA/CHAUDHRY 
FAS PASS APHIS FOR JOHN CLIFFORD, JAY MITCHELL 
FAS PASS FSIS FOR RICK HARRIES, RALPH DUTROW 
STATE FOR EUR/RUS, EB/ATP/SINGER 
STATE PASS USTR FOR ROHDE, KLEIN, PORTER 
POSTS FOR AGRICULTURE 
BRUSSELS PASS APHIS/FERNANDEZ 
VIENNA PASS APHIS/TANAKA 
 
E.O. 12958: DECL: 05/02/2028 
TAGS: EAGR PGOV PREL SOCI RS
SUBJECT: A BRIBE TOO FAR? THE SACKING OF CVO NEPOKLONOV 
 
REF: A. MOSCOW 36 
     B. MOSCOW 558 
 
Classified By: Allan Mustard, AgMinCouns, for reasons 1.4(b) and (d) 
 
1. (C) SUMMARY: Moscow's agricultural rumor mill buzzed this 
winter and spring with word that MinAg's notoriously corrupt 
Chief Veterinary Officer, Yevgeniy Nepoklonov, was variously 
in hiding, suffering from gunshot wounds, or under 
indictment.  Nepoklonov eventually resurfaced in Moscow, but 
only after having been quietly fired as CVO.  The informal 
word on the street is that Nepoklonov was scapegoated for 
having gone too far in his corrupt activities -- but even so, 
he not only won't do jail time, he won't even be indicted, 
and may end up with a cushy sinecure.  END SUMMARY. 
 
2. (C) In late January 2008, Russian Chief Veterinary Office 
(CVO) Yevgeniy Nepoklonov abruptly disappeared "on vacation 
for health reasons".  Embassy learned of this when AgMinCouns 
called the Veterinary and Phytosanitary Surveillance Service 
to follow up on Nepoklonov's request, made in mid-January, 
that AgMinCouns come see him as soon as possible (AgMinCouns 
at that time was departing Moscow imminently, so the meeting 
had to be postponed.)  Nepoklonov remained "on vacation in 
Europe" throughout February, then in March reappeared in 
Moscow though still "on vacation," with other veterinary 
officials signing letters in his stead.  As weeks went by, it 
became clear that Nepoklonov would not return as CVO, and 
that appointment of Nikolay Vlasov as Russia's new CVO was in 
the works.  The tale of Nepoklonov's firing, as best we can 
piece it together, is one of corruption having gone just a 
bit too far. 
 
3. (C) Embassy has reported on the November 2007 arrest of 
the chief veterinary officer of Moscow Oblast, Aleksey 
Volkov, and the linkage of his corrupt activities to Russia's 
then-CVO Nepoklonov (REF A).  While certainly a blow to 
Nepoklonov and his overseers (Veterinary and Phytosanitary 
Surveillance Service Head Sergey Dankvert and Agriculture 
Minister Aleksey Gordeyev, among others), sources tell us the 
Volkov case was not quite enough to have led to Nepoklonov's 
ouster -- but it provided Gordeyev with the excuse he needed 
to can Nepoklonov for some of his other transgressions. 
 
-------------------- 
CONFLICT OF INTEREST 
-------------------- 
 
4. (C//NF) The straw that broke the steer's back was 
apparently Nepoklonov's refusal to issue permits for imported 
veterinary pharmaceuticals that compete with products of his 
multiple personal pharmaceutical companies.  Nepoklonov's 
firms' inferior medications were a major factor in the 
shockingly high mortality rate of very expensive foreign 
livestock imported under the National Priority Project for 
Agriculture (REF B).  Lorin Grams (strictly protect), a U.S. 
citizen managing a dairy farm in Rozhdestvo village, Vladimir 
Oblast, told us the head of the All-Russian Institute for 
Livestock in Vladimir confessed that in the aggregate, 
imported cattle had suffered a 48 PCT death rate over two 
years, due to a combination of incompetent herd management, 
inadequate nutrition and bad veterinary care.  In particular, 
Grams said, use of Nepoklonov's firms' pharmaceuticals 
increased animal mortality -- herds receiving Nepoklonov's 
firms' vaccines had higher death rates than herds that were 
not vaccinated at all.  Andrey Zhuravlev, head of the Russian 
Interregional Beef Foundation (and himself an importer of 
live cattle for breeding) confirmed Grams's information and 
added that AgMin Gordeyev had personally reacted angrily to 
reports that Nepoklonov was single-handedly undermining one 
of his pet projects. 
 
5. (C//NF) Aleksandr Rasskazov (strictly protect), MinAg's 
deputy director for rural development, explained to us that 
this combination of factors led to Nepoklonov's dismissal. 
In effect, his corrupt conflict of interest in reserving the 
veterinary pharmaceutical market solely for himself was not 
enough to force Gordeyev to act, Rasskazov said, even though 
it was undermining the national project, but when the Volkov 
case broke, it gave Gordeyev an excuse to act.  In late 
January Nepoklonov was shown a dossier the procuracy had 
 
MOSCOW 00001238  002 OF 002 
 
 
collected on his corrupt activities and given the choice of 
resigning or being indicted.  He chose to resign, and before 
the resignation took effect, took his family to an 
unspecified location in western Europe for roughly a 
one-month getaway. 
 
-------------------- 
THERE AND BACK AGAIN 
-------------------- 
 
6. (C) Nepoklonov's disappear
ance sparked rumors, some 
verging on the bizarre: that he had hired bodybuards to 
protect himself from angry competitors, that he had been shot 
and was in hospital in Europe, that his bodyguards had been 
assassinated, that he had moved to western Europe and would 
never return for fear of being indicted.  Nepoklonov 
resurfaced in March, when German Agricultural Counselor 
Judith Kons bumped into a healthy-looking Nepoklonov on the 
steps of the Duma.  In March, Stavropol Agrarian University 
Rector Vladimir Trukhachev (protect), himself a veterinarian, 
told us Nepoklonov had resigned to avoid being indicted but 
had now weathered the worst of the storm and was bucking for 
appointment as rector of the Moscow Veterinary Academy (the 
position opens in May 2008).  Trukhachev expressed doubts 
that Nepoklonov would get such a plum job after being fired 
as CVO, saying, "he doesn't have a lot of friends," but 
others have told us Nepoklonov may well land a job as 
director of one of Russia's numerous veterinary institutes. 
 
7. (C) Most MinAg contacts have been silent on Nepoklonov's 
abrupt departure.  For example, when we asked Ivan 
Rozhdestvenskiy, Director of the Department of Veterinary 
Medicine in MinAg, why Nepoklonov left, he shrugged that he 
does not know and didn't want to speculate (COMMENT: 
Rozhdestvenskiy is extremely well plugged in, is close to 
Gordeyev and Dankvert, and certainly is in the loop.  END 
COMMENT).  Veterinary officials have as a rule been very 
circumspect with us as well, though they were willing to 
confirm that Nepoklonov had been "removed" (as opposed to the 
official line that he resigned voluntarily "for personal 
reasons") and to keep us posted about progress in getting 
Vlasov appointed as Nepoklonov's successor. 
 
------- 
COMMENT 
------- 
 
8. (C) In Russia, once you are a member of the club -- what 
in communist times was the nomenklatura -- you rarely have to 
worry about being sent to jail for serious violations of law. 
 Rather, the punishment is to be privately disgraced and, in 
extreme cases, stripped of assets you acquired through your 
corrupt activities.  The heavy betting is that Nepoklonov, as 
a scapegoat for Dankvert, Gordeyev, and their Kremlin masters 
in the Volkov case, will not be stripped of his ill-gotten 
wealth.  Volkov, however, almost certainly will be relieved 
of his assets in a process known by the Russian verb "obut'" 
(literally, to shoe).  After that, Volkov will likely receive 
a suspended sentence for his crimes and be released back to 
society, presumably to prosper in the private sector. 
Nepoklonov, on the other hand, will most likely not even get 
that much of a slap on the wrist. Rumor has it Nepoklonov 
paid USD 250,000 in bribes for the CVO position five years 
ago.  From a financial angle, we suspect it was a sound 
investment. 
BURNS

Wikileaks

08MOSCOW558, MEDVEDEV AND RUSSIA’S NATIONAL PRIORITY PROJECTS

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Reference ID Created Released Classification Origin
08MOSCOW558 2008-02-28 15:53 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Moscow

VZCZCXYZ0002
RR RUEHWEB

DE RUEHMO #0558/01 0591553
ZNY CCCCC ZZH
R 281553Z FEB 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 6863
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC

C O N F I D E N T I A L MOSCOW 000558 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
PASS TO EUR/RUS 
 
E.O. 12958: DECL: 02/08/2018 
TAGS: ECON PGOV RS SOCI
SUBJECT: MEDVEDEV AND RUSSIA'S NATIONAL PRIORITY PROJECTS 
-- ALL HAT, NO CATTLE? 
 
REF: A. MOSCOW 431 
     B. MOSCOW 5924 
 
Classified By: ECMIN Eric T. Schultz for reasons 1.4 (b) and (d). 
 
------- 
SUMMARY 
------- 
 
1. (C) President Putin's choice of Dmitry Medvedev as his 
successor has been cause for optimism among much of Russia's 
business elite, who point to Medvedev's calls for more 
economic freedom.  However, Medvedev's public record provides 
little substance to support this rhetoric.  In addition to 
his problematic chairmanship of Gazprom, Medvedev's other 
high profile responsibility has been running Russia's 
National Priority Projects (NPPs) in healthcare, education, 
housing, and agriculture since 2006.  Under Medvedev, the 
NPPs have accomplished relatively little, providing grist for 
cynics who see the NPPs as window dressing and leading to 
public disillusionment. 
 
-------------------------- 
Medvedev as Closet Liberal 
-------------------------- 
 
2. (C) Echoing the prevailing business sentiment in Russia, 
Renaissance Capital's Senior Russian partner, Igor Yurgens, 
told us that President Putin had chosen the successor with 
the "higher ceiling."  He said Dmitry Medvedev was more 
likely to allow greater economic and political freedom and to 
bring Russia closer to Europe and to the West than the other 
alternatives.  This sense of optimism in Russia's business 
community has been further reinforced by Medevdev's campaign 
for the presidency and in particular his speech February 15 
at the Krasnoyarsk Economic Forum, when he called for reduced 
corruption and greater economic freedom (Ref a).  A European 
diplomatic colleague present at the speech said it received a 
strongly favorable response from the audience, which had been 
composed largely of Russian businessmen. 
 
3. (SBU) The international business community has also 
reacted positively to Medvedev's rhetoric.  They have 
interpreted the Krasnoyarsk and other comments by Medvedev 
and his surrogates as a signal that Medvedev's presidency 
will pursue more market-oriented economic policies.  In a 
recent internal meeting, the Director of the American Chamber 
of Commerce highlighted Medvedev's four "I"s: investment, 
innovation, institutions and infrastructure, which he said 
would mean a much improved business climate for investors, 
foreign and domestic. 
 
---------------------- 
Record versus Rhetoric 
---------------------- 
 
4. (C) Medvedev's liberal economic rhetoric is not matched by 
a record of accomplishments.  Critics of Medvedev, such as 
former Deputy Energy Minister Vladimir Milov, have pointed to 
his record as Chairman of Gazprom, when the company used 
Russia's energy wealth to pursue political objectives, as 
evidence that Medvedev is unlikely to back up his words with 
deeds.  Lending further fuel to critics has been Medvedev's 
other high profile responsibility of the past few years -- 
his chairmanship of Russia's National Priority Projects 
(NPPs).  The NPPs were started in 2005.  President Putin gave 
Medvedev responsibility for them the following year, 
reportedly to help develop a positive public image for his 
protege. 
 
5. (C) From the beginning, critics of the projects contended 
that the NPP were "window dressing" intended to provide cover 
for the government's broader economic policies.  Lending fuel 
to this criticism has been the performance of the NPPs, 
including under Medvedev.  The projects were intended to 
address key social deficiencies and help nurture a Russian 
middle class.  The first three sectors identified were 
education, health and housing.  Agriculture, which still 
employs a large percentage of Russian workers, was later 
added as a fourth priority.  However, nearly three years 
after their launch, and despite Medevdev's personal 
involvement, most experts agree that the projects have been 
too small in scope and have failed to reform social systems 
in need of deep structural changes. 
 
--------------------------- 
Performance of the Projects 
 
--------------------------- 
 
6. (SBU) To assess whether the criticism is deserved we 
decided to take a closer look at each of the four projects. 
What we found is a mixed record.  Some of the projects have 
been more successful than others but even the more successful 
projects have been fairly modest in their scope and in none 
of them did the reality match the GOR's lofty rhetoric of 
fundamental reform. 
 
Education: the Most Successful Project 
---------------------------------------- 
 
7. (SBU) The modernization of the education system has been 
the most successful of the four projects.  In 2007, USD 1.85 
billion (50 billion rubles) funded 1400 new buses, internet 
connectivity in every school, teacher salary increases 
averaging 25-30 percent, and awards for innovative teachers 
and schools.  Marina Kiseleva, Deputy Head of Coordination of 
the Education National Project at the Minis
try of Education, 
told us that one of the project's main accomplishments was 
the new flexibility of schools to decide the best way to 
educate their students. 
 
8. (SBU) However, the project has not achieved many of its 
short-terms goals.  Kiseleva said that schools had a 
difficult time accepting the new responsibility for 
modernizing their institutions, especially determining how to 
make most efficient use of the money.  Kiseleva also admitted 
that there was a huge regional disparity in the quality of 
education and teacher qualifications and acknowledged that 
there were no concrete proposals for future programs or for 
spending this year's budget of USD 1.7 billion. 
 
Healthcare: Improved Technology but Costs, Access Problems 
--------------------------------------------- ------------- 
 
9. (SBU) Olga Kochetkova, Acting Head of the Department for 
Monitoring the National Priority Projects, told us that the 
health care NPP was improving the state of healthcare in 
Russia "little by little."  In 2007, the GOR claimed the 
healthcare NPP had been responsible for providing 42,487 new 
units of diagnostics equipment, higher-quality medication, 
and 13,244 new ambulances and that this in turn had led to 
lower mortality rates and increased birth rates and life 
expectancy. 
 
10. (SBU) However, most experts in the sector, such as Ksenia 
Yudayeva, Director of Research at the Center for Strategic 
Research, argued that rising incomes, not the NPP, had led to 
such improvements.  Moreover, even Kochetkova acknowledged 
that the greatest weakness of the project was its failure to 
improve affordability of and access to quality healthcare. 
She added that future plans were unclear due to rumors of a 
reorganization of the Ministry of Health and Social 
Development, but that any new initiatives would likely be 
implemented at the regional, rather than federal level. 
 
Affordable Housing -- Little Progress 
------------------------------------- 
 
11. (SBU) According to the GOR, the affordable housing 
project's 2007 budget of USD 2.3 billion led to the 
construction of 66 million square meters of new housing 
(714,000 new apartments), 30 percent more than in 2006. 
However, experts note that there is still a large imbalance 
between housing demand and supply, which has effectively 
maintained high housing prices.  The GOR estimates that only 
20 percent of Russians were able to afford a new home in 
2007, compared with 60 percent of Russians who were in need 
of new or renovated housing. 
 
12. (SBU) More important in the long run, is continued 
weakness in mortgage lending.  Alfa Bank told us that the 
mortgage market in Russia amounts to only 1.8 percent of GDP 
compared with 15-20 percent in Eastern European countries and 
80 percent in the U.S.  Moreover, Andrei Shirokov, Head of 
the Department of Real Estate and Urban Infrastructure 
Management at the Moscow Institute of State and Corporate 
Governance, noted that up to two-thirds of Russia's housing, 
or 3.8 billion square meters, needs repair and estimated that 
the repairs would require USD $200-400 billion. 
 
Agriculture NPP -- a Failure 
---------------------------- 
 
13. (SBU) In December 2007, Russian Minister of Agriculture 
 
Aleksey Gordeyev declared 
"victory" in implementation of the National Priority Project 
for Development of the Agroindustrial Complex and announced 
that it would be replaced by a five-year "Program of 
Agricultural Development and Market Regulation" (much of 
which is yet to be funded).  Gordeyev pointed to increases in 
meat and dairy production, increased loans to smallholders 
and cooperatives, and the Russian Agricultural Bank 
(Rosselkhozbank), responsible for nearly two thirds of 
agricultural loans issued under the NPP, quadrupling its 
branch network.  In addition, he claimed that the NPP had 
created 3,700 rural cooperatives. 
 
14. (SBU) In reality, however, the NPP has largely been a 
failure.  Ministry officials admitted publicly that roughly 
half of the new rural cooperatives exist only on paper. 
Other officials acknowledged that the reported increases in 
meat and milk production were unsupported, and increases in 
meat production were either unrelated to the project 
(poultry) or have led to financial hardship (pork).  Finally, 
the rapid expansion of credit cooperatives and 
Rosselkhozbank's branch network, coupled with the political 
imperative to push money out to rural areas in advance of the 
December 2007 Duma elections, resulted in many suspect loans 
that will likely lead to a ballooning default rate in 2008. 
 
---------------------- 
A Disillusioned Public 
---------------------- 
 
15. (SBU) The flawed implementation of the NPPs appears to 
have disillusioned the Russian public.  More than half (53 
percent) of respondents to a Levada Center poll said the NPPs 
had not affected them at all.  The public was also skeptical 
about continuing the NPPs, as nearly half (49 percent) of 
respondents did not believe the projects would improve the 
country's social woes.  Much of the public's cynicism appears 
to have its roots in the fact that more than half (52 
percent) of respondents thought the funding would be 
inefficiently spent.  Moreover, more respondents believed the 
money would be stolen than spent efficiently (22 and 15 
percent, respectively).  In addition, based on anecdotal 
information, between 10 and 30 percent of NPP funds was 
diverted to kickbacks in return for program award, and thus 
not spent as intended. 
 
------- 
Comment 
------- 
 
16. (C) With respect to the NPPs, Medvedev has failed to 
match a record of accomplishment with his strong rhetoric in 
favor of improved social services.  Last month he announced 
that the GOR was drafting a new long-term program for social 
and economic development through 2020.  However, most of the 
experts with whom we talked predicted that this too would 
accomplish little.  Under a Medvedev presidency, the most 
likely scenario is a continuation of the current approach of 
small scale projects and that he would avoid any large 
controversial reforms.  That said, Medvedev may come under 
pressure early in his presidency to make good on his promises 
and accelerate social spending.  How he responds to that 
pressure could be an early indicator of the direction 
economic policy will take in his presidency.  End comment. 
BURNS

Wikileaks

07MOSCOW5703, KUDRIN’S PLEA UNSUCCESSFUL; STORCHAK STILL DETAINED

WikiLeaks Link

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Reference ID Created Released Classification Origin
07MOSCOW5703 2007-12-04 15:41 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Moscow

VZCZCXYZ0002
PP RUEHWEB

DE RUEHMO #5703 3381541
ZNY CCCCC ZZH
P 041541Z DEC 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5675
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 005703 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/RUS, EEB/IFD 
TREASURY FOR MEYER, TORGERSON 
NSC FOR WARLICK 
 
E.O. 12958: DECL: 12/04/2017 
TAGS: EFIN ECON RS
SUBJECT: KUDRIN'S PLEA UNSUCCESSFUL; STORCHAK STILL DETAINED 
 
REF: A. MOSCOW 5525 
 
     B. MOSCOW 5459 
 
Classified By: Ambassador William J. Burns, Reasons 1.4 (b/d). 
 
------- 
Summary 
------- 
 
1.  (C) Deputy Finance Minister Sergey Storchak remains 
incarcerated after a Moscow City Court denied a defense 
appeal to have his November 15 arrest overturned.  Neither 
Deputy Prime Minister Aleksey Kudrin's petition requesting 
Storchak's release from custody (Ref A) nor the defense 
team's plea for his release on medical grounds proved 
successful.  Following these proceedings, an Investigations 
Committee representative announced that a new charge of 
exceeding authority, under Article  286 of the Criminal Code, 
would be brought against Storchak in connection with the 
latter's involvement in Soviet-era debt relief negotiations 
with Kuwait.  Finance Minister Kudrin signed this debt relief 
deal in May 2005.  End Summary. 
 
------------- 
Appeal Denied 
------------- 
 
2.  (U) Deputy Finance Minister Sergey Storchak's defense 
team appealed to a Moscow City Court to overturn the Moscow 
Basmanny Court's sanction of Storchak's November 15 arrest 
(Ref B).  According to accounts of the hearing, the defense 
team focused on the importance of Storchak's achievements on 
behalf of the broader GOR, namely in paying down much of 
Russia's foreign debt early and saving billions in interest 
payments.  The defense also argued that Storchak suffered 
from a longstanding heart condition that his current 
detention facility would not be able to treat. 
 
3.  (U) Prosecutors observed that the defense did not argue 
the legal merits of the Basmanny Court's decision and that 
Storchak should, therefore, remain in custody.  Prosecutors 
used the same line of reasoning regarding Deputy Prime 
Minister Kudrin's late-November petition requesting 
Storchak's release.  Kudrin's letter guaranteeing Storchak's 
cooperation with the investigation was reported to have 
emphasized "the significance of Storchak's work in the 
development of Russia's economy."  The three-judge panel 
ruled in the prosecution's favor, dismissing the medical 
grounds and Kudrin's personal plea for Storchak's release 
from custody.  The defense team announced its intention to 
appeal the Moscow City Court's decision. 
 
----------------------------- 
Charge of Exceeding Authority 
----------------------------- 
 
4.  (U) Following the conclusion of the Moscow City Court's 
ruling, Investigations Committee representative Vladimir 
Markin announced that an additional criminal charge was being 
brought against Storchak.  Without offering details, Markin 
said that Storchak would be charged under the Criminal Code's 
Article 286, part 1 for exceeding his authority in connection 
with Soviet-era debt relief negotiations with Kuwait. 
According to Markin, prosecutors had already prepared to 
combine this charge with the charges of attempted large scale 
fraud which had been formally presented on November 23. 
(Note: Finance Minister Kudrin signed the Soviet-era debt 
relief agreement with Kuwait's Energy Minister Ahmed Fahad 
al-Ahmad as-Sabah on May 30, 2005.  Under the USD 1.6 billion 
negotiated settlement, which Storchak had led, Russia agreed 
to pay USD 1 billion in cash and the USD 600 million in 
interest accumulated since 1991 on that amount in the form of 
machine-building technology.  End Note.) 
 
------- 
Comment 
------- 
 
5.  (C) Storchak's on-going incarceration continues to fuel 
rumors of rifts within the ruling elite.  The real target of 
the arrest is clearly Kudrin, whom many see as the most 
senior "liberal" left in the government.  Despite his recent 
promotion and close ties to Putin, Kudrin's position appears 
to have been weakened by the Storchak affair.  All the more 
so because, having made it personal, Kudrin has so far failed 
to secure his deputy's release. 
BURNS

Wikileaks

07MOSCOW5525, DEPUTY PRIME MINISTER KUDRIN PERSONALLY VOUCHES

WikiLeaks Link

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Reference ID Created Released Classification Origin
07MOSCOW5525 2007-11-26 15:37 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Moscow

VZCZCXYZ0000
PP RUEHWEB

DE RUEHMO #5525/01 3301537
ZNY CCCCC ZZH
P 261537Z NOV 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5445
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 005525 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/RUS, EEB/IFD 
TREASURY FOR MEYER, TORGERSON 
NSC FOR WARLICK 
 
E.O. 12958: DECL: 11/26/2017 
TAGS: EFIN ECON RS
SUBJECT: DEPUTY PRIME MINISTER KUDRIN PERSONALLY VOUCHES 
FOR DEPUTY FINANCE MINISTER STORCHAK 
 
REF: A. MOSCOW 5459 
 
     B. MOSCOW 5450 
 
Classified By: Ambassador William J. Burns, Reasons 1.4 (b/d). 
 
------- 
Summary 
------- 
 
1.  (C) On November 26, Deputy Prime Minister and Finance 
Minister Aleksey Kudrin put his personal and professional 
reputation on the line in defense of Deputy Finance Minister 
Sergey Storchak who was arrested November 15 on charges of 
preparing to and attempting to commit fraud (reftels). 
Kudrin filed a petition with the court in which he pledged to 
guarantee Storchak's cooperation and appearance for all 
proceedings related to the investigation and court hearings 
on the charges. Storchak remains incarcerated, however. 
Investigative Committee officials had announced the formal 
charges against Storchak and two businessmen on November 23 
but did not release details of the allegations. Speculation 
in the press is that Storchak, General Director of Sodexim 
Ltd. Viktor Zakharov, and Chairman of the Board of 
Inter-regional Investment Bank (IIB) Vadim Volkov are accused 
of colluding to divert more than USD 43 million of budget 
resources.  Finance Ministry officials have said publicly 
that the budget legally allowed funds to be released to 
Sodexim in connection with Soviet-era debt relief for 
Algeria.  End Summary. 
 
----------------------------------- 
Kudrin Launches Defense of Storchak 
----------------------------------- 
 
2.  (C) Advisors close to Deputy Prime Minister and Finance 
Minister Aleksey Kudrin told us that on November 26 Kudrin 
formally filed a petition seeking the release of Deputy 
Finance Minister Sergey Storchak from custody.  Kudrin had 
previously offered public comments in support of Storchak, to 
the point of excluding the possibility that one of his 
deputies could have single-handedly schemed to defraud the 
government in this way. 
 
3. (C) The petition Kudrin filed, however, went well beyond 
words to demonstrate confidence in Storchak, according to Kim 
Istyan, Vice President of UralSib Bank.  Since Kudrin vouched 
for Storchak in writing, providing his personal guarantee 
that Storchak was not a flight risk and would cooperate fully 
with the investigation and all related court proceedings, 
"Kudrin equated Storchak's integrity with his own."  Istyan 
said he was uncertain how successful Kudrin's petition would 
be.  He noted that Federal Narcotics Control Service Director 
Viktor Cherkesov also protested the arrest of one of his 
subordinates, General Aleksandr Bulbov, but was unsuccessful 
in securing Bulbov's release from custody. 
 
---------------------------- 
The Charges and the Theories 
---------------------------- 
 
4.  (C) Investigative Committee officials did not make public 
many details about the charges against Storchak, General 
Director of Sodexim Ltd. Viktor Zakharov, and Chairman of the 
Board of Inter-regional Investment Bank (IIB) Vadim Volkov. 
Public statements have been primarily limited to the 
allegation that the accused organized "an attempt to embezzle 
an especially large volume of government budget funds." 
Defense attorneys for the three men clarified that the 
charges were brought under Articles 30 and 159 of the Russian 
Criminal Code.  Article 30 provides punishment for the 
preparation and/or attempt to commit a crime and Article 159 
covers large-scale fraud and embezzlement (reftels). 
 
5.  (C) The dominant speculation about the substance of the 
charges centers on the complex write-down of Algeria's 
Soviet-era debt relief.  In 1996, Sodexim purchased a portion 
of the Soviet-era debt that Algeria still owed and was paying 
to the recently independent Russian Federation.  Under this 
structure, Sodexim negotiated a series of trade deals whereby 
Algeria's debt was reduced as the country purchased goods and 
services that Sodexim arranged.  In 2006, however, the GOR 
forgave Algeria's remaining debt.  Sodexim appealed to the 
GOR for compensation of the remaining debt, which, according 
to the press, totaled USD 26 million.  The GOR agreed to pay 
Sodexim and the Finance Ministry was in the process of 
arranging the payment at the time Storchak, Zakharov, and 
 
Volkov were arrested.  (Note: Sodexim's primary bank accounts 
were with IIB, hence Volkov's arrest.  End Note.) 
 
6.  (C) Investigative Committee officials have argued that 
the means of compensating Sodexim were illegal and amounted 
to defrauding the government.  Finance Ministry officials 
maintained that the budget did allocate, but had not yet 
disbursed, funds for Sodexim.  Kudrin observed publicly that 
this kind of budget decision must have interagency approval 
and could not have been orchestrated without the government's 
knowledge. 
 
------- 
Comment 
------- 
 
7.  (C) The main theory being promulgated in the press and by 
many observers is that Storchak's arrest is a back-door way &#x00
0A;to challenge Kudrin and put a check on his authority. 
Kudrin's personal affidavit of Storchak's integrity might not 
only be a sign of his faith in his deputy but as a 
counter-attack to this challenge.  By putting his own 
reputation on the line, Kudrin is sending a message that he 
will not be easily undermined.  End Comment. 
BURNS

Wikileaks

07MOSCOW5403, PWC’S TRAVAILS IN RUSSIA WORSEN

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. #07MOSCOW5403.
Reference ID Created Released Classification Origin
07MOSCOW5403 2007-11-15 16:19 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Moscow

VZCZCXYZ0030
PP RUEHWEB

DE RUEHMO #5403/01 3191619
ZNY CCCCC ZZH
P 151619Z NOV 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5261
INFO 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 MOSCOW 005403 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/RUS 
TREASURY FOR TORGERSON 
DOC FOR 4231/IEP/EUR/JBROUGHER 
NSC FOR MCKIBBEN 
 
E.O. 12958: DECL: 11/15/2017 
TAGS: EFIN ECON RS
SUBJECT: PWC'S TRAVAILS IN RUSSIA WORSEN 
 
REF: A. MOSCOW 3441 
 
     B. MOSCOW 5244 
     C. MOSCOW 5083 
     D. AND OTHERS 
 
Classified By: ECON M/C Eric Schultz, Reasons 1.4 (b/d). 
 
------- 
Summary 
------- 
 
1.  (C) During a November 14 meeting with EconMinCouns, 
Managing Director for PricewaterhouseCoopers Russia (PWC) 
Peter Gerendasi offered a bleak assessment of his company's 
current legal difficulties.  Gerendasi was pessimistic about 
the November 26 appeal of PWC's ongoing expatriate salary 
case (Reftel A) and noted that the related criminal 
investigation had been extended yet again, until mid-January. 
 He said the outlook for the next session of the YUKOS appeal 
on November 28 was less clearly negative (Reftel B), but in a 
related development the Finance Ministry had just opened a 
full-scale review of the firm's accounting policies and 
practices, to be completed by December 20, with the firm's 
license at stake.  Despite the company's mounting legal 
travails, Gerendasi maintained that PWC was in Russia for the 
long haul.  End Summary. 
 
---------------------- 
Expatriate Salary Case 
---------------------- 
 
2.  (C) Managing Director for PricewaterhouseCoopers Russia 
(PWC) Peter Gerendasi flatly told EconMinCouns he was not 
optimistic the firm's position would prevail in its November 
26 appeal of its nearly two-year case regarding expatriate 
salary expenses from 2002.  The firm's lawyers expected the 
decision to go against PWC.  The company would continue to 
appeal the decision, if necessary all the way back to the 
Supreme Arbitration Court (Reftel A).  Gerendasi reiterated 
that the case had already cost PWC USD 15 million in back 
taxes.  If the case were ultimately to be decided against PWC 
and the government went after the firm's expatriate salary 
accounting for 2003-2005, it could cost the firm an 
additional USD 45 million or more. 
 
3.  (C) Gerendasi said the related criminal case had also 
taken a turn for the worse.  The Interior Ministry (MVD) 
extended the investigation yet again, until mid-January, 
2008.  The deadline for the MVD's investigation has now run 
out eight separate times.  The investigation, which started 
in February, reached a high point in March when the MVD 
raided PWC's Moscow office and confiscated paper files as 
well as the firm's back-up tapes.  The raid was ruled illegal 
in May, but the Federal Security Service kept the back-up 
tapes, which Gerendasi called "records for the last 15 years 
of PWC's work in this country." 
 
4.  (C) Gerendasi said the company had hoped the criminal 
case would be dropped because the investigation had become 
"less intense" in recent weeks, and MVD officials had told 
Gerendasi they were just "going through the motions." 
Gerendasi said it appeared the criminal investigation had 
devolved into a pressure tactic against the firm. 
 
---------- 
YUKOS Case 
---------- 
 
5.  (C) According to Gerendasi, the outlook for the next 
session of the YUKOS appeal, set for November 28, was less 
clear.  Gerendasi expressed the hope that the Prosecutor 
General's written statement from July that PWC had not 
knowingly facilitated the former oil giant's tax evasion 
would be a deciding factor in PWC's favor.  However, the 
media coverage of the firm's position on its right against 
self-incrimination (Reftel B), which PWC offered as a basis 
for not giving the court access to the personnel files of 
PWC's 150,000 employees worldwide, had not given much cause 
for optimism.  Although the potential financial penalties in 
this case were only on the order of USD 500,000, Gerendasi 
noted that the real threat remained to the firm's auditing 
license. 
 
6.  (C) In that regard, Gerendasi said PWC had received still 
more bad news the week before.  Finance Ministry Director for 
State Financial Control and Auditing Leonid Shneidman had 
called Gerendasi in for a meeting and had subsequently issued 
instructions to two professional accounting organizations, 
the Association of Auditors and the Institute of Professional 
Accountants, to conduct a full-scale review of PWC's auditing 
policies and practices.  The main issues under review would 
be PWC's role as the YUKOS auditor of record and the firm's 
internal controls related to the auditing business. 
 
7.  (C) Gerendasi said Shneidman had noted the genesis of 
this review, due on his desk by December 20, was a request 
from the Federal Tax Service in April to examine PWC's 
business practices.  (Note: At that time, PWC had just lost 
its first instance court case in the YUKOS case.  End Note.) 
Gerendasi said that a positive review would not be much help 
to PWC since neither the court nor the Federal Tax Service 
would be inclined to use it to show leniency.  A negative 

review, however, could result in PWC's audit license being 
revoked. 
 
--------------------- 
Russia Matters to PWC 
--------------------- 
 
8.  (SBU) Despite the rather stark picture Gerendasi painted, 
he said that PWC remained bullish on Russia and intended to 
maintain its operations in-country.  The firm now had 2,000 
employees and an expanding client base.  He expressed 
confidence that PWC would earn a positive evaluation during 
its full-scale review and that, in the long term, the firm's 
position in the expatriate salary and YUKOS cases would 
prevail.  He added that in the interest of facilitating a 
resolution to the firm's short-term difficulties, PWC's 
international leadership would try to meet with senior GOR 
officials in the near future. 
 
------- 
Comment 
------- 
 
9.  (C) Despite Gerendasi's long-term optimism, the political 
and legal concerns that are driving the heightened scrutiny 
of PWC's accounting practices appear to have taken on a life 
of their own, and it appears increasingly unlikely that PWC's 
troubles will go away any time soon or that the firm will 
emerge unscathed. 
BURNS

Wikileaks

07MOSCOW5338, RUSSIA RESOLUTE ON LIMITED ODIHR MISSION

WikiLeaks Link

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Reference ID Created Released Classification Origin
07MOSCOW5338 2007-11-09 03:46 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Moscow

VZCZCXRO2365
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #5338/01 3130346
ZNY CCCCC ZZH
P 090346Z NOV 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5148
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 005338 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: DECL: 11/08/2017 
TAGS: PGOV PREL KDEM OSCE RS
SUBJECT: RUSSIA RESOLUTE ON LIMITED ODIHR MISSION 
 
REF: A) MOSCOW 5119 B) STATE 149638 C) MOSCOW 5180 D) 
 
     STATE 153309 
 
Classified By: A/DCM Alice G. Wells. Reasons 1.4(B/D). 
 
------- 
SUMMARY 
------- 
 
1. (SBU) Russia reacted strongly to USG criticism of Russia's 
decision to limit the number of ODIHR observers to the 
December 2 parliamentary elections.  Official comments and 
news media commentary maintained that the invitation was 
consistent with Russia's OSCE and Copenhagen Declaration 
commitments and the number of observers comparable to that 
which observed elections in the U.S., Poland and France. 
Meantime, European missions separately have received 
bilateral invitations to observe the elections.  Central 
Election Commission (CEC) Chairman Vladimir Churov said an 
invitation to the U.S. is "still under consideration." 
Russia appears resolute in its conditioned invitation to 
ODIHR, and equally resolved to weather any criticism that 
ensues. End Summary. 
 
--------------------------------------------- ---- 
RUSSIA REACTS TO USG COMMENTS ON OBSERVER MISSION 
--------------------------------------------- ---- 
 
2. (U) Following a USG statement issued in response to 
Russia's decision to invite a limited number of short-term 
observers to its December 2 Duma elections, the Russian 
Ministry of Foreign Affairs (MFA) posted a response on its 
Web site.  The MFA called the USG statement "discourteous" 
and said "such statements, having no basis in fact, speak 
only to the allergies in certain circles in the West with 
respect to the sovereign character of the Russian democratic 
system, which is not evolving according to scenarios written 
across the Atlantic."  The statement asserted that "OSCE 
member countries themselves are fully entitled, at their own 
discretion, to fix the number of invited observers, along 
with their length of stay."  The statement accused the U.S. 
of not having election legislation that conformed with OSCE 
requirements and cited the number of observers who 
participated in the OSCE mission to the 2004 and 2006 U.S. 
elections. 
 
3. (U) The MFA statement followed earlier assertions by 
Aleksey Borodavkin, Russia's Permanent Representative to the 
OSCE, that there is a "geographic imbalance in (ODIHR's) 
approach to election observation, aimed as it is at the 
'total' monitoring of election processes exclusively in 
countries 'to the East of Vienna.'"  Borodavkin advocated new 
rules to govern election monitoring in remarks to the OSCE 
Permanent Council.  "We do not consider ourselves bound by 
the far from perfect election monitoring methods that have 
been devised by ODIHR on its own, without our participation 
or consent," Borodavkin said. 
 
4. (U) The Russian media and commentators took up the mantle 
on the issue.  Television station RTR reported that other 
countries have "restricted" the number of observers of their 
elections, and mentioned Poland, France and the United 
States.  Sergey Markov, Director of the Institute of 
Political Studies and member of the Public Chamber, commented 
that "Russia is a civilized country and therefore it is not 
necessary to have a large number of observers." 
 
------------ 
OTHER VOICES 
------------ 
 
5. (U) Dmitriy Oreshkin, who is running for the Duma on the 
list of opposition party Union of Right Forces, said in an 
on-line political magazine: "All this is being done on the 
pretext of a new concept of electoral security, on the excuse 
that this is our own 'unique' system of elections.  In 
reality, it is clear that the authorities and the ruling 
party feel quite comfortable when nobody is watching them, 
when nobody is preventing them from counting votes the way 
they want."  Political scientist Stanislav Belkovksiy 
remarked: "At a certain point a policy was launched of 
enhancing the control of the election process and of the vote 
counting, too, and the logic of achieving maximum control 
prompted the reduction of observers." 
 
6. (C) Ella Pamfilova, Chair of the President's Human Rights 
Council and head of the non-partisan organization "Civic 
Pool," which intended to monitor the elections, announced 
that the effort has been abandoned after Putin decided to 
head the United Russia ticket.  She has now removed herself 
 
MOSCOW 00005338  002 OF 002 
 
 
from anything related to the elections because she 
"personally does not believe in many of the recent 
developments on this front."  She noted that she did not want 
to risk her reputation by lending credibility to a flawed 
process. 
 
---------------------------------------- 
INVITATIONS TO EUROPE; U.S. UNDER REVIEW 
---------------------------------------- 
 
7. (C) Our German, French, and UK colleagues have received 
bilateral invitations from the CEC to have observers 
accredited for the December 2 elections.  The British
and 
Germans decided not to accept the invitation, but both will 
participate in the OSCE mission.  The French intend to have 
two observers accredited. 
 
8. (U) The national daily Kommersant quoted Chairman Churov 
as saying that the election commissions of 12-15 countries 
have been invited to send observers.  An invitation to the 
U.S. is "still under consideration," he said.  Kommersant 
reported that no invitations will be sent to the 
International Foundation for Election Systems, the Republican 
or Democratic parties. 
 
------- 
COMMENT 
------- 
 
9. (C) The GOR has dug in its heels on the issue of 
international observers, consistently using the argument that 
they are compliant with international commitments and citing 
numbers of observers that are comparable to missions to other 
countries.  In playing the numbers game this way, Russia is 
shifting the debate away from the size of the mission needed 
to effectively observe an election taking place in 95,000 
polling stations to ODIHR's justification for treating Russia 
differently than more established democracies.  The GOR gives 
no evidence that it can be persuaded to modify its position, 
and appears prepared to weather the criticism that will ensue 
from its conditional invitation to ODIHR. 
 
BURNS

Wikileaks

07MOSCOW5119, ODIHR WAITS FOR INVITE FROM RUSSIA

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Reference ID Created Released Classification Origin
07MOSCOW5119 2007-10-24 02:27 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Moscow

VZCZCXRO7525
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #5119/01 2970227
ZNY CCCCC ZZH
P 240227Z OCT 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4801
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 005119 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: DECL: 10/22/2017 
TAGS: PGOV PREL KDEM OSCE RS
SUBJECT: ODIHR WAITS FOR INVITE FROM RUSSIA 
 
 
Classified By: Minister-Counselor for Political Affairs Alice G. Wells 
for reasons 1.4 (b/d) 
 
------- 
SUMMARY 
------- 
 
1. (SBU) The wait continues for an invitation to the OSCE's 
Office for Democratic Institutions and Human Rights (ODIHR) 
to monitor Russia's upcoming Duma elections. The Central 
Election Commission (CEC) will not issue the invitation until 
it has completed registering party lists, leaving little 
possibility for ODIHR to conduct an assessment and long-term 
observer mission by December 2. In addition to the delay in 
issuing the invitation, the GOR is likely to attach 
conditions on the mission and the numbers of observers who 
will be allowed to participate, while arguing that it is 
adhering "to the comma" of the Copenhagen Declaration. ODIHR 
efforts to preemptively identify office space have not been 
successful to date. The Ambassador will push for an 
unconditional invitation and GOR adherence to the spirit of 
its OSCE commitments in an October 25 meeting with CEC 
Chairman Churov. End Summary. 
 
---------------------------------- 
GOR in No Rush to Issue Invitation 
---------------------------------- 
 
2. (SBU) In an October 19 meeting, CEC International Affairs 
Director Andrey Davydov confirmed that the earliest ODIHR 
will receive an invitation is early November, which he 
attributed to the CEC's priority of certifying political 
party candidate lists, which must be completed by October 28. 
Davydov suggested that this work had to be completed before 
the invitation could be sent, since the number of candidates 
approved to participate in the election will have bearing on 
the number of international observers. Davydov also said the 
GOR invitation will stipulate a reduced number of monitors 
from past years, although he would not reveal how many. 
 
3. (SBU) Davydov expressed opposition to long-term monitors 
and questioned why "in this day and age" monitors are needed. 
He accused the OSCE of not treating Russia as a "normal 
country," despite a record of "successful elections" in the 
past. The eventual invitation, Davydov suggested, will 
conform with Russian proposals for reforming OSCE-ODIHR 
election monitoring in general, such as increasing the 
proportion of CIS country representatives in observer 
missions and restricting funding to the OSCE unified budget 
that would disallow funding from Western countries. 
 
4. (C) At the same time, MFA Director of the Department of 
European Cooperation Sergey Ryabkov stressed that Russia 
would meet its Copenhagen commitments "to the comma." He 
maintained that the declaration only requires an invitation 
to ODIHR and representatives of participating states to 
monitor elections and makes no mention of assessment teams or 
long-term observers. Ryabkov said the Russian Ambassador to 
the OSCE had asked ODIHR Ambassador Christian Strohal for 
documentation as to why the OSCE feels it needs to send an 
assessment mission to Russia. He mentioned that CEC Chairman 
Vladimir Churov would be traveling to Poland October 20 and 
would meet with Ambassador Strohal. 
 
5. (U) In an article published in Kommersant October 23, 
Davydov reiterated that the election monitor issue will wait 
until candidate lists are registered and argued that there 
were no specific rules stipulating the timing of the 
invitation. Davydov's comments generated some opposition 
political comment. Independent Duma Deputy Vladimir Ryzhkov 
was quoted as saying international observers would be 
invited, but only at the last minute and, therefore, only in 
the final stages of the election. He noted that, in his 
opinion, the Kremlin needed international observers. Boris 
Hadezhdin, of opposition party SPS, claimed the delay was on 
purpose. They are trying to "cut off observers like they have 
cut off opposition parties," while the Communist Party's Ivan 
Melnikov attributed the delay to bureaucracy. 
 
--------------------------- 
Europeans Hear Same Message 
--------------------------- 
 
6. (C) EU Ambassadors, who met with CEC Chairman Churov 
October 16, heard a similar message. As recounted by one 
participating embassy, the Ambassadors were asked why there 
was a need for a large scale observer mission when "Russia 
has graduated from democracy school?" The Ambassadors, too, 
were told that the issue of the invitation would be dealt 
with after the CEC certified the candidate lists. According 
 
MOSCOW 00005119  002 OF 002 
 
 
to a statement posted on the CEC's web site, Russia valued 
openness and transparency in the electoral process and aimed 
to meet its obligations in inviting international election 
observers. Reaction from European missions to the latest 
developments has been universally pessimistic, while some 
missions speculated that the observer mission will only be 
permitted to monitor the elections on election day itself. A 
British diplo
mat told us the issue of observers will be on 
the agenda of the EU-Russia Summit taking place October 26-28 
in Lisbon. 
 
------------ 
Office Space 
------------ 
 
7. (C) With time running short between now and the December 2 
elections, ODIHR has sought to move forward in preparing for 
an observer mission, by looking for office space in Moscow 
and posting a recruitment notice on their web site. Their 
efforts to find office space to accommodate staff and 50 
computers have been unsuccessful, so far. They have asked for 
U.S. and EU embassy advice in securing space. (Note: Absent 
GOR support, which ODIHR has not sought, it could be 
difficult to obtain the commercial space. At a minimum, it 
will be a costly endeavor. We are seeking to put ODIHR in 
contact with U.S.-financed NGOs who may be able to provide 
guidance on obtaining suitable property.) 
 
------- 
Comment 
------- 
 
8. (C) The consistency with which Russian officials are 
conveying their message about international election 
observers is a sign of GOR confidence in its strategy. The 
GOR appears satisfied with their compliance with the letter 
of the Copenhagen Declaration, although the limited observer 
mission they are likely to allow will fall far short of the 
spirit of the OSCE commitment. The Ambassador will continue 
to push for a GOR invitation to ODIHR without conditions in 
his October 25 meeting with CEC Chairman Churov. 
Burns

Wikileaks

07MOSCOW5083, UPDATE ON PWC’S YUKOS, RUSSIAN TAX CASES

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Reference ID Created Released Classification Origin
07MOSCOW5083 2007-10-19 15:37 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Moscow

VZCZCXYZ0003
PP RUEHWEB

DE RUEHMO #5083/01 2921537
ZNY CCCCC ZZH
P 191537Z OCT 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4757
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 005083 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/RUS 
TREASURY FOR TORGERSON 
NSC FOR MCKIBBEN 
 
E.O. 12958: DECL: 10/19/2017 
TAGS: EFIN ECON RS
SUBJECT: UPDATE ON PWC'S YUKOS, RUSSIAN TAX CASES 
 
REF: A. MOSCOW 1210 
 
     B. MOSCOW 466 
 
Classified By: ECON M/C Eric T. Schultz, Reasons 1.4 (b/d). 
 
------- 
Summary 
------- 
 
1.  (C) PricewaterhouseCoopers (PWC) President for 
Central/Eastern Europe and the CIS Mike Kubena (Amcit) and 
Managing Partner of PWC for Russia Peter Gerendasi implied 
that the YUKOS and expatriate salary tax cases against the 
auditor were politically motivated.  Kubena suggested that 
the YUKOS case, which is based on the charge that the auditor 
colluded with the former oil giant to defraud the government, 
may be an effort by the GOR to prove ex post facto that its 
actions against YUKOS had a legitimate basis.  He explained 
that using the legal system would allow the GOR to 
demonstrate that not only did YUKOS evade taxes it used the 
help of an international auditing firm to do so.  He noted, 
moreover, that the Prosecutor General had found in favor of 
PWC in a related YUKOS matter in July.  Gerendasi suggested 
that the case alleging PWC illegally deducted its expatriate 
employees salary expenses in 2002 would show that the former 
YUKOS auditor played fast and loose with the rules.  This 
latter case, for which PWC has already paid the USD 15 
million in back taxes the Federal Tax Service claimed were 
owed, prompted the Interior Ministry to initiate a criminal 
investigation in February.  Gerendasi said that while Russia 
is a growing part of PWC's global business it constituted 
about 1 percent of total revenue and that the persistence of 
the criminal case and additional tax penalties might push the 
auditor to close its operations in Russia.  End Summary. 
 
----------------------------------- 
YUKOS Case: "Politically motivated" 
----------------------------------- 
 
2.  (C) During a meeting October 19 with EconMinCouns, 
PricewaterhouseCoopers (PWC) President for Central/Eastern 
Europe and the CIS Mike Kubena (Amcit, protect) and Managing 
Partner of PWC for Russia Peter Gerendasi summarized the 
status of the two ongoing court cases their company faces. 
The first case centers on a Federal Tax Service (FTS) 
allegation that PWC colluded with YUKOS to defraud the 
Russian government of billions in tax revenue (Ref A).  On 
October 12, an appellate court upheld the FTS position on the 
issue.  The court also ruled that FTS officials should be 
granted access to the personnel files of all PWC employees 
worldwide in an effort to determine the extent of the former 
oil giant's tax evasion schemes.  (Note: This would give tax 
authorities access to approximately 150,000 employees working 
in more than 150 offices around the world.  End Note.) 
 
3.  (C) Kubena speculated that the GOR may be trying to 
justify its dismantling of YUKOS ex post facto by proving in 
the courts that an internationally recognized auditing firm 
aided and abetted the former oil giant's tax evasion.  Kubena 
pointed out, however, that the Prosecutor General's Office 
issued a formal finding in July that YUKOS managers had 
deliberately deceived PWC's auditors.  The Prosecutor 
General's finding also stated that no evidence existed to 
show PWC had colluded with YUKOS to defraud the GOR. 
 
------------------------ 
Tax Case: Smear Campaign 
------------------------ 
 
4.  (C) The second case centers on an allegation that PWC 
illegally deducted approximately USD 15 million in expatriate 
salary expenses in 2002 (Ref B).  After PWC lost the first 
and appellate instances, the Interior Ministry initiated a 
criminal investigation, which has been extended four times, 
according to Gerendasi, while officials "interrogate our 
staff and look for a smoking gun."  The Supreme Arbitration 
Court heard PWC's appeal in July and in a victory for PWC, 
remanded the case to a lower court, having found that the 
Federal Tax Service officials improperly used sample data in 
their determination that PWC had illegally deducted its 
expatriate salary expenses.  However, in September, the 
Federal Arbitration Court that heard the remanded case once 
more upheld the Federal Tax Service's position. 
 
5.  (C) Gerendasi explained that before the SAC heard the 
case, PWC was required by law to pay the amount of back taxes 
due since the auditor lost in the appellate instances.  He 
said that the Federal Tax Service also began an audit of 
PWC's operations in 2003-05 and that the preliminary 
estimates of the taxes due on expatriate salaries from that 
period could be USD 45 million or more.  He suggested that 
tax and law enforcement authorities may be trying to cast PWC 
as reckless in an attempt to underscore that the GOR 
rightfully prosecuted YUKOS senior management.  Gerendasi 
also observed that although Russia forms an "important part 
of PWC's global business," the USD 225 million in business 
amounts to approximately 1 percent of its annual worldwide 
turnover.  He stated that the imposition of additional fines 
might push PWC to end its operations in Russia. 
 
------- 
Comment 
------- 
 
6.  (C) Kubena and Gerendasi made a credible case that PWC's 
legal travails lacked a strong basis in law and accounting 
standards.  For example, the appellate court ruling on the 
YUKOS case appears to lack judicial seriousness.  The judge's 
call for wholesale access to PWC's worldwide personnel files 
fails to incorporate consideration of the legal restrictions 
on access to personal employment information in the various 
jurisdictions where PWC operates.  Regardless of the facts, 
PWC is under serious duress in Russia.  How serious is not 
clear given the conflicting signals sent by the Prosecutor 
General's office and the appellate ruling on YUKOS. 
Moreover, PWC is not without allies.  It has a wide range of 
clients, representing some 60 percent of Russian GDP, for its 
auditing services, including Gazprom and the Central Bank. 
For the moment PWC is considering its options and promised to 
keep us informed of developments. 
Burns

Wikileaks

07MOSCOW3953, ARAP CASE: COURT CONFIRMS COMMITTAL TO PSYCHIATRIC

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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. #07MOSCOW3953.
Reference ID Created Released Classification Origin
07MOSCOW3953 2007-08-13 16:20 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Moscow

VZCZCXYZ0012
OO RUEHWEB

DE RUEHMO #3953/01 2251620
ZNY CCCCC ZZH
O 131620Z AUG 07
FM AMEMBASSY MOSCOW
TO SECSTATE WASHDC IMMEDIATE 2865

C O N F I D E N T I A L MOSCOW 003953 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: DECL: 08/13/2017 
TAGS: PHUM PGOV SOCI RS
SUBJECT: ARAP CASE: COURT CONFIRMS COMMITTAL TO PSYCHIATRIC 
HOSPITAL 
 
REF: A. MOSCOW 3890 
 
     B. MOSCOW 3805 
 
Classified By: Charge d'Affaires Daniel A. Russell.  Reason:  1.4 (d). 
 
------- 
Summary 
------- 
 
1. (C)  Despite testimony of independent psychiatrists from 
Moscow, a local court in Murmansk ruled August 10 in favor of 
continued involuntary committal of United Civic Front 
activist Larissa Arap for up to six months, at the discretion 
of the local psychiatric hospital that committed her in the 
first place.  An Independent Psychiatric Association 
(IPA)-composed commission convened by Human Rights Ombudsman 
Vladimir Lukin (Ref A) examined Arap August 9 and 10, and 
testified to the court in support of Arap's release to home 
care.  IPA President Yuriy Savenko, who led the commission, 
will report his findings to Lukin on August 13.  The Embassy 
is urging Lukin and his staff to request that the Procurator 
General appeal the local court decision as soon as possible. 
End summary. 
 
-------------------------- 
Lukin's Commission Engaged 
-------------------------- 
 
2. (SBU) Independent Psychiatric Association (IPA) President 
Dr. Yuriy Savenko and member Dr. Lyubov Vinogradova met with 
Arap in the Apetity psychiatric hospital in the Murmansk 
region on August 9 and 10.  Vinogradova told us that Arap "is 
not healthy, and needs psychiatric treatment, but not in such 
crude and harsh conditions."  Vinogradova said that Arap was 
in "better condition" than she would have been if she had 
received no treatment at all, but that she would be even 
better at home.  She noted that Arap had lost approximately 
10 kilos (22 lbs.) since being institutionalized in early 
July, as a result of her hunger strikes, but added that Arap 
now understood that additional hunger strikes would not be an 
effective form of protest.  Vinogradova added that Arap's 
current treatment is detrimental because she is being kept 
too far from her family and has not had contact with her own 
doctors. 
 
3. (SBU) The IPA team testified at the August 10 court 
hearing that while Arap needed care, forced treatment at a 
hospital was not necessary, and urged her release to home 
care.  They also testified that the manner in which Arap was 
hospitalized violated Russia's law "On Psychiatric Medical 
Aid." 
 
4. (SBU) Arap testified on her own behalf.  Vinogradova 
commented that Arap was calm and responded to many questions 
by the judge during the seven-hour hearing.  According to 
press accounts, Igor Bulantsev, the hospital's deputy senior 
doctor, testified that Arap had been diagnosed with a serious 
mental disorder and required constant medication.  If 
released to home care, he claimed she would be in danger of 
missing her medication and would again require 
hospitalization. 
 
---------------------------------------- 
To Be Hospitalized for up to Six Months 
---------------------------------------- 
 
5. (SBU) Despite the IPA team's testimony, the court ordered 
Arap to be hospitalized at the hospital's discretion for up 
to six months.  After that time, another court hearing would 
be required to continue her hospitalization.  Vinogradova 
told us that she did not expect the hospital to hold Arap 
that long.  She surmised that the hospital might release Arap 
in as few as three weeks. 
 
6. (C) Lukin's Deputy, Georgiy Kunadze, told us August 13 
that he and Lukin were awaiting a briefing and a written 
report from the IPA team later that day.  While he would not 
comment definitively until they had read the report, Kunadze 
told us that preliminary comments from the team indicated 
that Arap did not need to be hospitalized.  Kunadze added 
that "there is no evidence that her treatment there is 
connected in any way with her political activities (i.e., her 
membership in the UCF), but we can already say that there is 
substance to the criticism of how the medical officials have 
handled the case."  He said that this was part of a larger 
problem, namely that "there is still today the Soviet-era 
practice of using psychiatric treatment to suppress dissent." 
 
 
---------- 
Next Steps 
---------- 
 
 
7. (C) Arap's family has already appealed the July 18 court 
decision that validated the initial doctor's order to commit 
Arap (Ref B), and plans to appeal the August 10 decision. 
Both appeals would be heard at the oblast-level court. 
According to Kunadze Lukin could request that the Procurator 
General appeal the Apetity decision, also at the Murmansk 
Oblast court. 
 
8. (C) Comment: It is a positive step that the Russian Human 
Rights Ombudsman's efforts fielded a team of medical 
professionals to Murmansk, who made their own analyses and 
testified in court in favor of Arap's release. 
Unfortunately, the local court deferred to the local doctors 
who forcibly hospitalized Arap in the first place.  The 
Embassy is urging Lukin and his staff to move quickly on this 
case and to request that the Procurator General appeal the 
local cour
t's decision. 
RUSSELL

Wikileaks