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Courtiers and convictions: Kozak's proposal

Among courtiers, the courage of conviction is rarely a qualification for the job, although it can help deal with insults, the occupational hazard that comes with paying court to most sovereigns.

By this standard, Dmitry Kozak, deputy head of President Vladimir Putin's administration, is no Vauban Le Prestre, Marshal of France at the beginning of the 18th century. The difference between them I'll come to later. Their similarity is that both tried to pearl jewelry wholesale change the way in which land and the resources beneath it are taxed in a state reduced to poverty by the folly and greed of its leadership.

Vauban was a siege engineer, a military profession that was crucial in the wars of King Louis XIV. Vauban was so good at this, that the king decided to promote him to marshal in 1703. What Vauban didn't reveal until four years later was that, while he had been laying sieges against France's enemies, he had also been conducting secret research into every form of taxation in the country. From this, Vauban produced a book in which he explained how the system had impoverished France's producers, enriched the privileged few, weakened the army and cheated the king and treasury of whatever an uncorrupt and equitable system could still provide. The book then recommended a new, simpler tax regime, based on encouraging higher yields from production in land and industry.

It isn't known for certain that Louis read Vauban's book, but he left no doubt what he thought of it. He told Vauban to his face that he was a lunatic and scoundrel. Historians of the time recorded that lobbying by everyone who derived wealth from the system of tax farming and privileges Louis had created was so intense and the king's reaction so implacable that it led to  Vauban's premature death after a few months. That was in 1707.

At the end of July this year, Kozak made a brief announcement of a proposal as radical and almost as comprehensive as Vauban's.

At present, Russian law provides that subsoil resources belong to freshwater pearl earrings the state, which grants licenses for their exploitation by competitive tenders. The federal and regional governments share control of the licensing system, while they, and local governments, tax the proceeds of mining. Once licensed, the resources extracted – oil, gas, minerals, precious metals, gemstones – are the property of the companies that produce them. As everyone realizes, since the collapse of the Soviet system, Russia's economy and trade have depended inordinately on this type of primary production, while the burden of government revenue collection falls elsewhere. The vast profit of mining and oil and gas extraction is stripped from the country and deposited in safe havens beyond reach.

Kozak's proposal calls for amending Russian legislation so that the resources in land remain the property of the state until sold, with mining and producing companies granted concessions by the state on a cost-plus basis. Plainly, this proposal threatens not the new private and corporate ownership of Russian capital, but the flow of income from that capital that the corporate oligarchs consider their preserve.

The idea didn't come from Kozak. One of the strongest critics of the existing license system for miners and oil and gas producers is Vladimir Litvinenko, Rector of the St. Petersburg Mining Institute. He is an advisor to President Vladimir Putin; he supervised Putin's doctoral thesis on resource policy in Russia. Litvinenko has said in the past that he favors bringing Russian resource policy into closer alignment with South African, Australian, and Canadian standards, and tougher implementation of their use-or-lose requirements. Litvinenko and a group of like-minded academics were behind the proposal Kozak released. They know it isn't more radical than South Africa's new mining legislation. Recently enacted, this orders an unprecedented transfer of assets to the black population of the country in compensation for their exclusion from the benefits of ownership under exclusive white rule.

Notwithstanding this and other foreign precedents, and apparent backing from Putin's circle, Kozak came under an attack no less withering than the one Vauban encountered. The oilmen declared his proposal ridiculous, with no chance of acceptance. The miners said it was unconstitutional. They chorused that, if implemented, the proposal would destroy the Russian stock market. There were even hints that the proposal was nothing more than Kremlin blackmail to extract financial contributions for the upcoming national election campaigns.

Kozak didn't defend the proposal, and the government ministries responsible for natural-resources policy and taxation declined to announce their interest in evaluating, let alone supporting it.

Encouraged by the Kremlin's silence, the Russian business press opened its pages to coral necklace manifestos from a handful of oil and banking executives who visited Kozak and then announced on his behalf that he had changed his mind. Within days Kozak's proposal seemed as dead as Vauban's.

Never in the brief history of modern Russia has such a matter been banished from a court with such swiftness.

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Court rules to keep Yukos shareholder in jail

MOSCOW - Keeping up the pressure on Russia's largest oil producer, Yukos, a Russian court ruled Wednesday that its top shareholder should remain in jail on fraud charges during the investigation.

The decision by the Moscow City Court was closely watched as a landmark in the far-ranging official probe into wheat pearl Yukos, which many analysts believed is politically motivated.

The court rejected lawyers' requests that it free Platon Lebedev, the billionaire chairman of the board of the Menatep group, the holding company that owns 61 percent of Yukos. The July 2 arrest of Lebedev in his hospital bed marked the beginning of prosecutors' onslaught on Yukos.

Prosecutors have charged Lebedev with defrauding the state of US$283 million in the 1994 privatization of the Apatit fertilizer company. His arrest was followed y a 16-hour search at Yukos offices and criminal investigations into its alleged tax evasion and role in several murders of officials and businessmen.

Yukos chief executive Mikhail Khodorkovsky, a 40-year old billionaire who has defied the Kremlin on some key policy issues, has dismissed the accusations against his company and called the probe part of a power struggle inside the Kremlin.

Lebedev is a close partner of Khodorkovsky, whom Forbes magazine rated as Russia's richest man and No. 26 on its list of global billionaires with an estimated US$8 billion.

Menatep's director Oleg Ashurkov told reporters after the verdict that the authorities had "put an unprecedented pressure on the court."

"When lawyers ask judges to force prosecutors to stick to Russia's criminal procedures, and the judges blatantly refuse, then this isn't what I would call a fair hearing," Ashurkov said.

Lebedev's lawyer, Yevgeny Baru, called the prosecutors' reasoning for keeping Lebedev in jail "ridiculous." In particular, they claimed that Lebedev's possession of a passport for foreign travel made him a flight risk, Baru said. Millions of Russians have such passports.

Baru claimed that authorities have failed to silver pearl necklace provide Lebedev with medical assistance in jail. He was in the hospital with hypertension at the time of his arrest.

The probe against Yukos has caused a sharp downfall in Russia's stock market, and Wednesday's verdict sent shares of Yukos and other companies further down.

The nation's business leaders have urged President Vladimir Putin to stop what they have called a campaign of intimidation against business. Putin has issued conflicting signals, saying without naming Yukos that he was against "arm-twisting and jail cells" in dealing with economic crimes, but adding that they must be fought.
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Court rules against oil giant Yukos and one of its employees

MOSCOW - A Moscow court ruled against oil giant Yukos and one of its employees on Wednesday in two cases widely seen as part of a politically motivated campaign against the company, whose chief executive is Russia's richest man.

The Basmanny district court ruled that an hours-long search of Yukos archives in Moscow last month was legal, rejecting the company's claims that law enforcement agents who carried out the operation violated several laws, Russian news agencies and television networks reported.

The same court also ordered a senior Yukos security officer to wholesale pearl jewelry be held until Nov. 19 while the investigation into allegations that he was involved in a 1998 double murder continues, Russia's Interfax news agency reported.

Alexei Pichugin's lawyers had asked that their client be released on bail of 3 million rubles (US$96,775). Pichugin's lawyers also said that lawmaker Aleksei Melnikov and Pavel Maslov, a former general in the Interior Ministry, had agreed to provide guarantees that Pichugin would not flee if released, Interfax said.

In an earlier decision Wednesday, the court declined to consider an appeal filed by Pichugin's lawyers to declare that a decision by the Russian Prosecutor General's office to reject their request for the removal of an investigator from the case was illegal, the ITAR-Tass news agency reported.

The court said the complaint was formulated improperly, ITAR-Tass reported.

A wide-ranging official probe of Yukos began with the July 2 arrest of Platon Lebedev, one of the company's top shareholders, on suspicion of defrauding the state in a 1994 privatization deal and tax evasion. The probe has included the archive search and investigations into what prosecutors say are the killings and attempted killings of officials and businessmen who had conflicts with Yukos.

Yukos chief executive Mikhail Khodorkovsky, who is also the company's largest shareholder, has said he believes infighting in President Vladimir Putin's administration is behind the probe. Many observers claim that the probe is politically motivated and a warning to Khodorkovsky to stay out of politics.

The investigations have made Russian and foreign investors nervous, hurt the country's stock market and stoked fears that controversial privatization deals of the 1990s could be annulled. Some analysts also have voiced concern that the probe could stifle plans to akoya pearl necklace merge Yukos with the Sibneft oil company, a move that would create the world's fourth-largest oil producer.

Russia's minister for anti-monopoly policy, Ilya Yuzhanov, said Wednesday that reports that ministry approval of the merger was imminent were unfounded, the Interfax news agency reported.
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Court orders Gusinsky must remain in jail

MADRID (Reuters) - A Spanish court on Friday ordered Russian media baron Vladimir Gusinsky to remain in jail while he awaits extradition proceedings.
Gusinsky is sought by Moscow on charges of large-scale fraud in a case that has cast attention on the state of press freedom in post-Soviet Russia. He denies the charges, calling them a Kremlin attempt to silence his independent media group Media-Most.
"The court orders...the imprisonment of Gusinsky to be maintained while it studies and adopts a decision on extradition," the ruling said.
Gusinsky's chief defence lawyer said he would appeal against the ruling but said he feared Gusinsky would remain in jail until the High Court rules whether to coin pearl extradite him. Such a decicion could take weeks.
"Until this is resolved, I don't think he will be able to leave," lawyer Domingo Plazas told Reuters. "It's obvious the court has had a change of attitude." Gusinsky, who has a home on the southern coast of Spain, was arrested in December on a Russian warrant but released a few days later after posting bail of one billion pesetas ($5.38 million). He was placed under guard at his luxury home and banned from leaving the country.
The court ordered him back to prison this week to ensure he attended a hearing in Madrid on Thursday, when Gusinsky told the court the case against him was politically motivated.
Prosecutors said the Russian request has met all legal standards and that Gusinsky should be sent to Russia.
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Court battle over Russian regions poll turmoil

MOSCOW - Local elections in Russia descended into turmoil on Monday, with the annulment of a poll in Siberia sparking a court battle while ballot boxes were temporarily impounded in the country's third largest city.

The confusion has exposed serious gaps in the post-Soviet electoral system 15 months ahead of elections to pearl jewelry the State Duma lower house of parliament, and left one of the country's largest regions without a government with winter fast approaching.

President Vladimir Putin trimmed the powers of local leaders and made restoration of central authority a priority when he came to power in 2001, ending eight years of tug-of-war between Moscow and Russia's regions under his predecessor Boris Yeltsin.

Election officials scrambled to deal with confusion surrounding the votes, a gubernatorial contest in Krasnoyarsk and mayoral elections in the Volga city of Nizhny Novgorod.

In Krasnoyarsk, a region stretching from near Mongolia to the Arctic Ocean, the weekend annulment by local election officials of the September 22 poll produced new wrangling over procedures and what to do about flawed legislation.

The man initially declared the winner challenged the annulment in court. His rival, Alexander Uss, head of the local assembly, expressed concerns about pending legal tussles.

"Either those in charge obey laws or governors must be appointed," news reports quoted him as saying. "What you get otherwise is contempt for the people and authority undermined."

In Moscow, national election authorities said local officials had acted improperly in voiding the contest and called for the ruling to be overturned.

Sergei Mironov, speaker of the upper house of parliament, said electoral laws needed improvement: "This is proof that various methods can be used to divert the free will of voters."

Russian election campaigns are often dominated by charges of violations of procedures. Candidates in various contests have been disqualified on the eve of voting.

Putin had avoided endorsing any candidate in Krasnoyarsk, often seen as a bellwether for national trends, after attempts to gemstone necklace promote pro-Kremlin hopefuls elsewhere had backfired.

Groups backing Putin control the Duma, although Communists, the only major party opposing him, command about a quarter of the vote.

In Nizhny Novgorod, a court ordered all ballot boxes sealed at 1 a.m. after Sunday's runoff poll as officials checked alleged irregularities. Television showed cardboard ballot boxes being secured by bailiffs in the city, where mayoral elections were annulled four year ago.

The count resumed after the candidate making the complaint, parliamentarian Vadim Bulavinov, withdrew it. Unofficial tallies later said he had narrowly beaten the incumbent mayor, who said he would challenge the result.
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