Western Russia has been suffering from unrelentingly scorching temperatures since mid-June, with no apparent end in sight. The heat has been so intense that spontaneous wildfires have been springing up over the past month both in large cities and more rural areas.

Aside from the resulting toxic air quality, the fires are responsible for the deaths of at least 48 people and the destruction of about 3,000 homes. The Emergency Situations Ministry has admitted that some of them are “out of control,” and a state of emergency has been declared in seven different regions. Critics blame the ministry and the Russian government overall for failing to properly fund and manage the country’s firefighting forces.

Writing for the Moscow Times, award-winning journalist Yulia Latynina discusses what the Russian government’s handling of the fire crisis says about its current state of development – and why it is totally unacceptable by contemporary standards.

Putin Sang Songs While Russia Burned
By Yulia Latynina
August 4, 2010
The Moscow Times

Since the first wildfires started a month ago, 125,000 hectares of Russia’s forest have been destroyed in 17 regions, and 40 people have died.

Russia’s statistics on casualties from fires have always differed drastically from those in the West. For example, four firefighters died during wildfires in Washington state in 2001. Nine firefighters died in Colorado in 2002. Eleven firefighters died during Spain’s fires of 2005. Only one firefighter has died during this summer’s fires in Russia.

In developed countries, citizens don’t perish in fires. Firefighters perish. In Russia, it is directly the opposite, and there is a very good reason for this. In so many cases, there are no firefighters to put out the fires. Take, for example, the village of Verkhnyaya Vereya in the Nizhny Novgorod region, where all of its 341 houses burned to the ground and seven people died. There was no fire station in the village, and the two firefighting vehicles on watch drove the other way when they were called to duty.

People don’t die this way in Europe or the United States. This is how people die in Zambia and Zimbabwe.

Prime Minister Vladimir Putin visited Verkhnyaya Vereya. While wearing a neatly pressed button-down shirt, he promised to severely punish bureaucrats who did not properly fight the fires. In reality, there is really only one bureaucrat who is responsible for this tragedy — Putin himself. After all, it was Putin who signed the Forest Code in 2007. The code placed the responsibility for defending forestlands on those who had the rights to use them. What an ingenious idea. This means that the Forest Code allows the Khimki forest to be “protected” by those who are now cutting it down.

There were two main groups who lobbied Putin to pass the Forest Code: paper mill owners — one of the biggest being Oleg Deripaska — and real estate developers.

Independent analysts and environmentalists heavily criticized the Forest Code. They predicted several years ago that the code would inevitably result in an increase in wildfires. Even the most loyal United Russia members from heavily forested regions opposed the code, but it was shoved through the State Duma under strong pressure from Putin’s presidential administration.

Although Russia has been burning for a month, the army was ordered to join the firefighting battle only several days ago. Why was the army not called up three weeks ago? Because there is no fundamental system of controlling and managing the country. Putin decides everything in Russia, and he was too busy with other things during the first three weeks of the fires — for example, doing photo ops with bikers in Crimea or singing songs with the 10 spies who recently returned from captivity in U.S. detention centers.

In the modern world, there are no natural disasters but only social ones. For example, the number of victims in an earthquake depends less on its magnitude than on how effectively the state responds to the disaster. The Haiti earthquake is a case in point. And what is true for an earthquake is doubly true for forest fires.

In 2008, there were 200,386 fires in which 15,165 people died in Russia. In the United States for the same time period, there were 1,451,000 fires in which 3,320 people died. Here are the conclusions that can be drawn from these statistics: First, 99 percent of all fires in Russia are not registered. Second, the number of deaths from fires per 1,000 people is 10 times higher in Russia than in the United States.

The confession came during a meeting in Moscow on Wednesday between Deripaska and Spanish law enforcement representatives, who had accused the magnate last October of taking part in a scheme to launder 4 million Euros between 2001 and 2004 in two metals companies with suspected connections to the Russian mafia. At the time, Deripaska denied any such connections, and appealed to the Prosecutor General that he was prepared to answer any questions on the part of the Spanish authorities to clarify the situation.

However, it became clear during the resulting five hour interrogation that this was not exactly the case.

The interrogation began with the Russian tycoon angrily attacking Spanish National Court Judge Fernando Andreu for “undermining his business reputation,” El Pais reported. Before Spanish prosecutor Jose Grinda had time to pose his first question, Deripaska threw an article by a Spanish newspaper on the table in front of him and, raising his voice, asked Andreu in an accusatory tone: “What’s going to happen to my prestige?”

In response, Grinda told his Russian colleague, also present during the interrogation, that they would have to call the meeting off and return to Madrid if Deripaska was intent on continuing in such a rude manner.

Though tempers calmed, wrote El Pais, Deripaska continued to deny his participation in the money laundering scheme.

“His strategy was to portray himself as a victim of extortion by Israeli citizen Michael Cherney, who was later arrested as the of owner of Vera Metallurgica, the Alicante-based company that the Izmailova mafia organization allegedly laundered the funds through,” says the Spanish newspaper, adding that the company has alleged connections with Deripaska’s own Urals Mining and Metallurgical Company. Izmailova is one of the largest organized crime gangs in Russia.

However, Deripaska did admit that he paid a certain amount of money to the mafia gang, but only in order to protect his business – not to launder any money. A source close to the oligarch’s holding company, Basic Element, confirmed to online newspaper Gazeta.ru that Deripaska had indeed given money to Cherney, but also said that in the 1990s there was no other choice if he had wished to protect his business.

The admission mirrors Deripaska’s statement in 2008 concerning his alleged connections with Russian mobster Anton Malevsky. According to the Times, Deripaska “insists that the arrangement with Malevsky was a protection racket that was forced upon him.” Despite this and other allegations by American, British, and Spanish authorities, Deripaska has never been convicted of connections with the mafia. According to legal experts speaking to Gazeta.ru, it’s unlikely that he will face any consequences in this case, either, except in terms of his image. At the same time, El Pais reported that the Russian prosecutor present at the meeting had advised all parties to keep the interrogation a secret, and the paper did not reveal how it got its information.

Oleg Deripaska is considered to be one of the most influential people in Russia today. His vast holdings in the metals, construction, and automobile industries have allowed him to amass a fortune of $10.7 billion, making him the 57th richest man in the world (9th before the global economic crisis). He is widely known to be a close associate of Russian Prime Minister Vladimir Putin, who signed a controversial decree earlier this year to allow Deripaska’s Baikalsk Pulp and Paper Mill to reopen despite gross environmental concerns. Residents in the city of Irkutsk, where the mill is located, have been protesting ever since, and accuse the prime minister of covering up Deripaska’s unethical business practices.

In a press release issued on Monday, ecologists at the Baikal Environmental Wave expressed concern that police officers had been visiting the homes and places of work of members of the organization. Among those officers were agents from the notoriously brutal Center for Extremism Prevention, commonly known as Center “E” and accused by Amnesty International of torturing detainees.

Over the course of “discussion” with ecologists’ relatives, says the statement, officers made disparaging remarks about the Baikal Environmental Wave and co-leader Marina Rikhvanova.

Rikhvanova told Kasparov.ru that the police most likely obtained the ecologists’ home addresses from computers confiscated from the organization at the end of January, supposedly for using unlicensed software.

The ecologists believe that the police visits and confiscations are a direct result of the organization’s protest against the reopening of the infamous Baikalsk Pulp and Paper Mill. In particular, Rikhvanova was critical of a notification from the city sanitation department, which claimed that the mill would clean its sewage before dumping it into Lake Baikal, the world’s largest freshwater lake and a UNESCO World Heritage Site.

“But nobody knows how they’re going to clean it, or if they’re going to clean it at all, because all of the cleaning equipment is kept out under the open sky and, as the mill’s management said earlier, a minimum of three months of above-freezing temperatures are required to start it up,” Rikhvanova explained.

The organization is planning to hold a rally in defense of the lake on March 20.

After decades of protests, the Baikalsk Pulp and Paper Mill was closed in October 2008 due to environmental concerns regarding the mill’s discharge of toxic waste into Lake Baikal: Over the course of 40 years of operation, toxic discharge created dead zone in the lake of more than 12 square miles. Hundreds of tons of waste stored in open-air pits have created more air pollution than almost anywhere else in Russia.

Despite this, Russian Prime Minister Vladimir Putin signed a decree in mid-January to change the environmental laws previously prohibiting waste from being dumped into the lake, thus allowing the mill to resume operations. Approximately two thousand people gathered in protest on February 13, demanding that the mill be closed, that mill owner and oligarch Oleg Deripaska be held accountable, and that Prime Minister Putin resign. Police responded to the protest with greatly excessive measures, calling out armored vehicles and a small tank to flank the demonstrators.

An estimated two thousand people attended a protest in the Siberian city of Irkutsk on Saturday, and another 1200 people attended an unrelated protest in the city of Samara on the same day. Among other demands, both groups had harsh criticism for the prime minister and called for him to immediately step down.

In Irkutsk, residents, workers, and environmental activists gathered to protest the reopening of the controversial Baikalsk Pulp and Paper Mill. After decades of protests, operations at the mill were finally suspended in October 2008 due to environmental concerns regarding the mill’s discharge of toxic waste into Lake Baikal, the world’s largest freshwater lake and a UNESCO World Heritage Site. However, a decree signed by Prime Minister Putin in mid-January allowed the mill to reopen, sparking renewed outrage from citizens and environmental activists internationally.

A coalition of ecological and civic organizations organized Saturday’s protest, and politicians from the local legislative assembly and Moscow showed up to support the effort. Leader Sergei Mitrokhin of the liberal Yabloko Party and co-leader Vladimir Milov of the Solidarity opposition movement were among those present. Activists from the banned National Bolshevik Party also attended the protest, holding a banner reading “People! Baikal! Victory!” – the acronym of which matches with the acronym of their party name in Russian.

Protesters singled out oligarch Oleg Deripaska, who has control over the mill, and Prime Minister Putin, who they accuse of covering up Deripaska’s unethical business practices, as the main targets of their enmity.

Irkutsk city officials had warned prior to the rally that security would be tight. Blaming “the current economic situation of Russia” for an increase in opposition protests, Deputy Internal Minister Mikhail Sukhodolsky promised that “no excuses will be accepted” for failures of the police to curb demonstrations.

Given that, the city dispatched a number of armored military vehicles to flank the demonstration. Photographs published online of the vehicles, one of which resembles a small tank, were decried on Tuesday by the Russian Internal Ministry as “provocational and not corresponding to reality.” In a statement to Kasparov.ru, Solidarity activist Ilya Yashin maintained that “my colleague Vladimir Milov took these photographs, and many people saw these machines.”

The increase in police forces was especially notable because of the comparatively small security presence at a January 30 rally in Kaliningrad, where 12 thousand people gathered to protest rising tariffs and to demand the resignations of the prime minister and local Governor Georgy Boos.

Demonstrators at a counter-protest in Irkutsk organized by the pro-Kremlin United Russia party praised the reopening of the mill, with between a thousand and 1500 participants holding banners with the phrases “Baikalsk Pulp and Paper Mill – our life” and “Thanks to the government for the opportunity to work in Baikalsk.” One placard directed at opponents of the mill read “Suitcase – Station – UNESCO.”

In contrast to their choices during the Kaliningrad rally, the regional branches of the token opposition groups Liberal Democratic Party (LDPR) and A Just Russia sided with the United Russia counter-demonstration. State Duma Deputy and LDPR member Andrei Lugovoy, who is wanted by a British court for suspicion in the murder of Alexander Litvinenko, travelled from Moscow to address the crowd.

The second protest, in Samara, was initially intended to be held “in defense of constitutional rights and freedoms.” In addition, however, protesters turned out to voice their disapproval of numerous governmental practices, including rising housing and utilities tariffs, crumbling infrastructure, and the failed modernization of the local AvtoVAZ automobile manufacturer. Among their concrete demands were the return of direct gubernatorial elections and the resignations of Prime Minister Putin and Samara Governor Vladimir Artyakov, who is also the former head of AvtoVAZ.

A number of civic and labor organizations took part in the rally in Samara, including the All-Russian Strike Committee, which was invited by AvtoVAZ factory workers. According to Committee coordinator Nikolai Nikolaev, several groups of auto workers from the cities of Tolyatti and Syzran were unable to attend the demonstration because police had blocked off the road.

Given the failed modernization of the auto manufacturer, Nikolayev said after the rally, “people discussed the issue of how to live from now on. The AvtoVAZ workers said that the authorities are not dealing with their problems.”

In their own way of dealing with their problems, regional police in Samara are planning to initiate criminal charges against the rally’s organizers. During the demonstration, voters rights activist Aleksandr Lashmankin called for participants to stage a repeat demonstration on March 5 – a statement that “was not covered in the application to hold the rally,” a police representative explained to the Interfax news agency.

During the highly choreographed production, the prime minister told the country not to hold its breath for his departure from politics, expressed interest in running for president again in 2012, accused jailed Yukos CEO Mikhail Khodorkovsky of murder, blamed the United States for preventing Russia’s inception into the World Trade Organization, and expounded upon the subtleties of understanding Stalin, among other things.

The Crisis

Even before Putin began to speak, host Maria Sittel took the floor and exalted the government for its handling of the economic crisis. “We all know perfectly well how the year of the crisis began: millions of Russian citizens feared poverty; tens of thousands expected to be fired; business calculated future losses,” she said. But instead of throwing its citizens to the “mercy of fate,” she continued, the government “laboriously, step by step…scrutinized the affairs of individual companies, made agreements with businesses, and helped our national manufacturers.”

Putin himself turned out to be pleased with his work on the crisis. He assured viewers that “the peak of the crisis has been overcome,” although “turbulent phenomena in the world economy, and consequently also in Russia, do remain.”

Despite a nearly 9 percent fall in GDP, a 13 percent fall in industry, and growing inflation, Putin listed a 0.5 percent growth in agriculture and a rising birth rate as commendable compared to the government response to the economic crisis in 1998.

Putin on Terrorism

In the wake of last week’s bombing of the Nevsky Express luxury train, which authorities are calling a terrorist attack, Putin addressed the problem of terrorism in Russia on the whole. “We’ve done a lot to ‘break the spine’ of terrorism, but the menace has not yet been eliminated.”

“It raises the question,” he said, “can we prevent crimes of this type? Our country is enormous, our territory is large, and there is a lot of infrastructure. Nevertheless, we need to work effectively. We need to be on the advance.”

Putin Saves Pikalevo, Again

Among sites chosen to host camera teams to field questions live to the prime minister was Pikalevo, one of Russia’s so-called “mono-towns” dependent on a sole industry – in this case, aluminum. The majority of the town’s 21,000 residents lost their jobs when all three plants were shut down last winter, and the city shut off all heat and hot water in May. A massive protest erupted when the long-unpaid citizens blocked off a nearby federal highway and demanded Putin’s personal intervention. The Prime Minister responded with an embarrassing public chastisement of Oleg Deripaska, the oligarch owner of the largest of the three plants, and ordered him to negotiate a decision that would reopen the factories.

During the broadcast, a manager of the largest of the plants asked the prime minister whether he would return to the town. The reason that this might be necessary, he said, was that the promised negotiations had not yet been signed.

In response, Putin promised that he would travel to any place in Russia where he was needed. “If the situation demands it, I will go to you again, or to any other place at any different point in the Russian Federation – that is my duty,” That aside, Putin said he currently saw “no such necessity.” He promised, however, that the government had control of the situation and an agreement would soon be written.

Indeed, even before the end of the broadcast, reports came in that the agreement between Pikalevo and the company had been signed.

The United States and the WTO

At one point, host Ernest Matskyavichyus told the audience that many questions had come in regarding Russia’s inception into the WTO. In response, Putin abruptly pounced on the United States, blaming it for not annulling the Jackson-Vanik amendment, a piece of Cold War-era legislation intended to help Soviet dissidents and religious minorities emigrate to America. Russia now criticizes the amendment as anachronistic and harmful for trade relations.

Putin said the amendment is used by “representatives of various lobbies in the United States Congress” for “decisions of rather narrow and selfish sectoral economic problems.”

“Entry into the WTO remains our strategic goal, but we get the impression that, due to motives that we are aware of, several countries – including the United States – are hindering our entry into the WTO,” he concluded rather sharply.

Love for Belarus

One question focused on recent angry remarks that the totalitarian Belarusian President Alexander Lukashenko had aimed at Putin. “You were harshly criticized by Belarusian President Lukashenko. You don’t answer him. Why?” a viewer asked.

“Maybe it’s love?” Putin replied.

The prime minister added that he has very kind, warm feelings for the Belarusian people, and especially for its government. The Russian government, he said, imports nearly all Belarusian agricultural products and has given the country 3.5 billion dollars over the past two years.

Putin Clarifies his Relationship with Tymoshenko

The prime minister’s position on upcoming presidential elections in Ukraine turned out to be less ambiguous than four years ago, when the Kremlin supported Viktor Yanukovych.

“Why do you support Yulia Tymoshenko in the presidential elections in Ukraine?” one viewer asked.

“I do not support Yulia Tymoshenko in the presidential elections in Ukraine,” Putin replied. “I am cooperating with Yulia Vladimirovna Tymoshenko as the prime minister of the Ukrainian government,” stressing his role as a “humble servant” while also misstating his Ukrainian counterpart’s patronymic (which is actually Volodymyrivna).

Recent agreements concerning Russia’s sale to Ukraine of natural gas have raised speculation that the Kremlin would back Tymoshenko in the upcoming Ukrainian elections.

The Police

A recent slew of high-profile incidents has brought a renewed wave of criticism on Russia’s police forces, and one of the key questions in Thursday’s broadcast reflected this concern.

“The police are now out of favor, and every day there are reports of police attacks on citizens…Maybe, [we should] just dissolve them and create a police force from scratch?”

Putin began his response by saying that no police reform would occur in Russia as has occurred in Georgia and Ukraine.

“In Ukraine, our neighbors and friends have already had this experience. They dissolved what we call the GAI, the road services – nothing good came from this. Bribes increased, and there came to be less order on the roads,” elaborating no further on the situation in Georgia.

In general, Putin said, the police should not be excessively slandered. “I consider it unnecessary to smear all police officers with red paint,” he said, but noted that the reaction to police offenses should be “especially critical, fast, and severe.”

Media attention to problems with the police, which have long plagued Russia, was renewed in April when police chief Denis Yevsyukov killed three people and wounded six in a Moscow supermarket while drunk. Novorossiysky Major Aleksei Dymovsky drew unprecedented media attention in November when he posted two YouTube videos of himself discussing corruption that he had seen in the police force.

Khodorkovsky and Murder

For the first time since the 2005 arrest of oligarch and former Yukos CEO Mikhail Khodorkovsky, Putin allowed himself to comment on the controversial case. Khodorkovsky’s trial, in which he was sentenced to eight years in prison for oil embezzlement in the sum of 900 billion rubles (approx. $31 billion), is criticized as highly flawed and politically motivated. Until Thursday, no questions on the subject had been posed during a live broadcast.

“When will Khodorkovsky be released?” a viewer asked via text message.

“This well-known figure is in prison by the sentencing of the court. And the problem is not when he will be released,” Putin stressed, “but so that crimes of this type are never repeated among us,” referring to economic crimes.

The prime minister went on to say that the money resulting from the case went a housing and communal services reform fund that has helped 10 million Russian citizens. “If at some point this money was stolen from the people, it needs to be returned to those same people,” he asserted.

In an unexpected additionally commentary, Putin went on to accuse Khodorkovsky of murder.

Referring to chief Yukos security official Alexey Pichugin, currently serving a life sentence for conspiracy in several murders, Putin remarked that “nobody remembers, unfortunately, that one of the leaders of the security services of the Yukos company is in prison. What, you think that he acted on his own discretion, at his own peril and risk? He had no concrete interests. He is not the main shareholder in the company. It is clear that he acted in the interests and by the instructions of his bosses,” implying that Khodorkovsky had ordered the murders.

Putin for President, Again

Two questions were posed in regards to speculation that Putin might run for a third term as president in 2012.

“Don’t you feel like leaving politics with all its problems and live for yourself, your children, your family, and finally rest?” one viewer asked. “If that’s it, I’ll take your place, just give me a call.”

“Don’t hold your breath,” the prime minister replied.

The second question was from a St. Petersburg student, who directly asked whether Putin was planning to participate in the 2012 presidential elections.

“I’ll think about it,” replied Putin. “There’s plenty of time.”

Approximately an hour after this statement, an Italian reporter asked Russian President Dmitri Medvedev whether it was possible that both he and Putin would run for president in 2012.

“Prime Minister Putin said that he isn’t ruling out this possibility, and I’m also not ruling out this possibility,” replied Medvedev, who was at a press conference in Rome with Italian Prime Minister Silvio Berlusconi.

“We can agree in what way not to elbow each other, and make a rational decision for our country,” he asserted.

Putin and Stalin

At the end of the program, Putin answered a number of questions that he said he had chosen himself. One of these turned out to concern Stalin.

“Do you consider the activities of Stalin on the whole to be positive or negative?” the question asked.

Saying that he understood the “subtlety” of the question, Putin qualified his answer by saying that there were both positive and negative qualities to the dictator’s reign. “One cannot, in my view, make a judgment on the whole,” said Putin. He praised Stalin for successfully changing the country’s focus from agriculture to industry, and said that victory in World War II was Stalin’s achievement.

At the same time, he continued, these positives “were nevertheless reached at an unacceptable price.”

Putin called Stalin’s repressions, which killed an estimated 30 million people, “a fact,” saying that “millions of our fellow citizens suffered from them. Such a means of managing the government to achieve a result is not acceptable.”

“Here, Thank God, There Aren’t Any Elections”

Putin’s most significant slip of the tongue came the prime minister was asked whether his recent appearance in the hip-hop contest “Battle for Respect” was motivated by his falling ratings.

“Ratings have absolutely nothing to do with it. Here, thank God, there aren’t any elections,” he responded.

Elections in Russia are notoriously fraudulent. Regional elections on October 11 delivered sweeping wins for Putin’s leading United Russia party across Russia, continuing the political monopoly it has held since its conception in 2001. Observers noted massive electoral violations, including ballot stuffing and multiple voting with the same absentee ballot, much of which has been statistically documented. Medvedev himself has admitted that the elections were flawed and chastised United Russia for “backwardness.”

Compiled from reports by Gazeta.ru.

A new report from the Russian weekly Finans Magazine counts 101 billionaires (measured in US dollars) who have residence in Russia. A 2002 count by Forbes Magazine, early in Putin’s presidency, put that number at 7. Russia is now second only to the United States for the total number of billionaires.

The increase comes in light of Putin’s frequent public scape-goating of the “oligarchs,” a group that rose to rapid wealth under Boris Yeltsin in the 1990s. While some of the original oligarchs have been exiled or imprisoned, today’s 500 richest Russians are worth some $715 billion, or over half of Russia’s GDP. The latest list of billionaires contains twelve members of parliament, mostly of the pro-Putin United Russia party, and just one woman.

According to Finans, Oleg Deripaska, valued at some $40 billion, is first on the list, having nearly doubled his worth in the past year. Deripaska, 40, who has vast holdings across the metal, automobile and construction industries, is followed by Roman Abramovich, a former partner. Abramovich, 41, is well known for his lavish tastes and ownership of the Chelsea football club, and now holds a fortune of some $23 billion.

Putin himself does not appear on the Finans list, although a recent report from Stanislav Belkovsky, a political analyst, speculated that he has amassed a net worth of some $40bln while in office. Putin, in turn, called the allegation “detritus excavated from someone’s nostril and smeared across bits of paper” (source).

View the complete list of billionaires. (Russian)

If Deripaska becomes the new owner and retains control of Russneft, then this will support the view that the Kremlin does not regard re-nationalization of the oil sector as an end in itself. Rather, it is mainly concerned with ensuring that this strategic industry is run by people who–whether they are state-appointed managers or private entrepreneurs–can be relied upon to do the state’s bidding.

Gutseriyev, it appears, did not behave in a “loyal” manner. In this respect, his story is similar to Khodorkovsky’s. In early 2006, Russneft attempted to buy Yukos Finance’s 49% stake in Slovak state-controlled company Transpetrol, which manages the Slovak section of the Druzhba oil pipeline. Yukos Finance is registered in the Netherlands, making it more difficult for the Russian authorities to acquire it in the way they have done with Yukos assets within Russia. Gutseriyev’s bid for Transpetrol could have been seen as an unwarranted interference in Kremlin plans. . . .

The Russneft affair shows that the authorities will use any available means to remove a strategic asset from an owner perceived as being uncooperative. The Kremlin’s classification of acceptable and unacceptable owners is once again an open question, as is the extent to which the authorities will want to control assets beyond the oil industry.

Following the money flow in and around the Kremlin provides a much more accurate picture of what is happening in the Putin government than their official statements or diplomatic activities. Deripaska and others like him are working to spread their methods abroad. As this Canadian Globe and Mail business report suggests, they are finding more resistance in places with investors who might not be keen to suffer a “Russian discount” on value thanks to “the risk and the odious governance aspects” of doing business with these companies. On Russneft, the report offers:

The “culture” in Moscow these days seems to allow for the existence of two kinds of big companies: those in favour with the Kremlin, and those that get their kneecaps busted. So discovered Russneft’s Mikhail Gutseriyev, who claimed that government authorities harassed him into coughing up his company. (Mr. Deripaska wants to buy it and will, some believe, flip it to a state oil concern). Mr. Gutseriyev recanted his story yesterday, mysteriously, but perhaps understandably. He’s finding out what BP and others already know: In Putin’s Russia, you own what you own until someone powerful decides he wants to make your life hell.