Russian Press - Behind the Headlines, June 29

© Alex StefflerRussian Press - Behind the Headlines
Russian Press - Behind the Headlines - Sputnik International
Human Rights Council implicates officials in Magnitsky’s death / Information war between Moscow and Minsk heats up / Lack of foreign investment blamed on Russian business /

Moskovskiye Novosti
Human Rights Council implicates officials in Magnitsky’s death
A new report on the actions of officials who may have directly or indirectly caused the death of Hermitage Capital Management’s lawyer Sergei Magnitsky in prison in 2009 has been released by the Human Rights Council.
The report, to be submitted to President Dmitry Medvedev on July 5, assigns the cause of his death to premeditation and/or the negligence of the doctors, prosecutors, investigators and law enforcement officials.

“The report contains our assessment of the judges’ actions and their decision to keep Magnitsky in custody, and the actions of the investigators and prison management,” explained Lyudmila Alekseyeva, director of the Moscow Helsinki Group. Her words suggest that the working group’s sympathies lie with the late lawyer who, before his arrest, tried to prove certain Interior Ministry officials’ involvement in a five-billion ruble embezzlement case.
“We believe law enforcement’s attempts to conceal the embezzlement were the main reason behind Magnitsky’s arrest,” Alekseyeva said.
The Human Rights Council is also dissatisfied with the official investigation into his death which focused only on the prison medics’ work. It highlights the fact that Interior Ministry officials, who brought charges against Magnitsky and refused him medical assistance, may evade punishment.
Public oversight commission head Valery Borshchev told MN that Interior Ministry investigator Oleg Silchenko, who denied Magnitsky medical care, is sure to be named in the report.

The official investigation has not yet considered the responsibility borne by the prison doctors, Borshchev said. He added that doctor Alexandra Gauss “accepted Magnitsky, put him in a bed in the prison hospital, summoned eight guards who handcuffed the sick lawyer to the bed, and then went into her office. She only returned to the ward after he was already dead.”

The report contradicts her testimony that she called an ambulance which failed to save him. “The ambulance crew was not allowed to see Magnitsky. They had to wait an hour, and when they were finally admitted, all that was left to do was pronounce him dead,” Borshchev said.
The section of the report describing the corrupt actions of the Interior Ministry officials who persecuted Magnitsky still needs to be finalized, said Yelena Panfilova, head of Transparency International in Russia.

The human rights activists’ conclusions must compel the president to recognize the guilt of those responsible for Magnitsky’s death, said Alexei Makarkin, a deputy director for the Center for Political Technologies.
“This calls for a thorough investigation. The agencies whose employees’ are criticized in this report are unlikely to want this investigation to proceed. They are known to cover up for each other,” he said. The president, who is aware of all this, may simply dismiss them rather than expose them. “But if Medvedev really wants to fight the current level of lawlessness, which harms Russia’s investment climate, he must opt for an investigation which would result in a high-profile trial,” Makarkin concluded.
Information war between Moscow and Minsk heats up
Belarus state television has been making pointed comments toward Moscow and personally toward Russian President Dmitry Medvedev. Yury Prokopov, the host of Sunday’s analytical show “In the Spotlight,” suggested possible explanations for Medvedev missing the commemorations in Brest of the 70th anniversary of the start of the Great Patriotic War. The Russian leader, he said, would have been ashamed to look impoverished veterans in the eye. The pro-government analyst also accused Moscow of conducting an anti-Belarusian media campaign, coordinating opposition protests and attempting to grab “tasty morsels of Belarusian property.”

The program was aired at prime time on Sunday. Prokopov offered explanations as to why he thought the Russian president did not fly to Brest on June 22, even though he was invited by Belarusian leader Alexander Lukashenko. “Russia has 400,000 WWII veterans, and half of them live in poverty. Some of them must have visited the Brest Fortress this week. How would Russia’s commander-in-chief have felt if he had had to look one of these veterans in the eye,” Prokopov asked rhetorically. He described the response given by an “unnamed source at the Kremlin” for Medvedev’s absence as “trivial, hypocritical and tongue-in-cheek.”

Lukashenko himself had earlier expressed outrage at Dmitry Medvedev’s absence from Brest on this memorable day. “I invited my Russian colleague to come here, to Brest. This is the westernmost point of our common motherland. This anniversary is a good way to show Russians and Belarusians that we have worked together, that we share a common history and that we will always stand together,” he said.

In response the Kremlin noted that Medvedev visited Brest two years ago and had also invited Lukashenko to Moscow for this year’s commemoration.
The program also criticized Russian business leaders. In Prokopov’s view, “they have been eyeing mouth-watering bits of Belarusian property for years,” in order to buy plants and factories on the cheap with plans for extensive layoffs. He said “President Lukashenko does not want to give up what belongs to the entire Belarusian people for next to nothing” and bitterly resists these attempts to take property unlawfully.
The host also drew conclusions from the fact that “talk of possible privatization began at the same time as Russian social networks, online sites and particularly the Russian media launched an active anti-Belarusian campaign.” Prokopov also implied that Moscow may have been involved in stage-managing recent Belarusian opposition protests under the umbrella slogan “Revolution through social networks,” which were widely covered in the Russian media. 

Lack of foreign investment blamed on Russian business
“Russian businesses are earning a bad reputation by reminding potential investors about the business risks here.” This is the opinion of Vladimir Yakunin, president of Russian Railways. Yakunin believes Russian companies are partly to blame for investors’ negative opinion of the Russian investment climate and expressed his opinion at a Strong Russia forum.

He wrote in his blog on June 10 that foreign consultants Russian companies hire are damaging Russia’s image. When Gazprom bonds were floated, “the foreign investment banks who underwrote the bond issue said in the investment memorandum that Russian courts were corrupt and under-qualified.”

When Russian Railways was placing its $1 billion Eurobonds in March 2010, its memorandum said government agencies may be corrupt, courts dependent, judges incompetent and court decisions disregarded.
“We must fight this widespread practice,” Yakunin wrote in his blog. Companies must change foreign investors’ opinion of Russia while remaining transparent, he continued.

Russian Railways initiated a new practice in March 2011 when floating £350 million worth of Eurobonds. The issue memorandum did not mention possible corruption in the courts and government agencies, and the reference to kick-backs was removed from the section on crime and corruption.
But presidential aide Arkady Dvorkovich believes that “admitting there are problems and acting to resolve them is better than covering them up.”
Poorly described risks could result in lawsuits even without issuer default, when the investor sustains losses because of a plunge in the securities’ value, said Michael Pugh, partner at Hogan Lovells. In accordance with European and U.S. law, all potential risks must be disclosed, even the possibility of terrorist attacks or blackouts.

Pugh said investors must be given any and all information that could influence their decision, and issuers should comply to protect themselves from possible lawsuits.

Yakunin meant that the government and business should work to improve the investment climate without saying repeatedly that business conditions are inadequate in Russia, his adviser Alexander Pirkov said.

The investment climate in Russia is worse than in most industrialized countries but good enough for investors from large emerging economies, said Alexei Golubovich, head of asset management company Arbat Capital. Risks must be disclosed because the format for issue memorandums is the same worldwide and constant reminders of problems could stimulate a solution, Golubovich said.
Many companies think business risks are acceptable in Russia. Germany’s Siemens has worked in Russia for 160 years, assessing country and political risks itself, said Alexei Grigoryev, Siemens Russia’s corporate communications director. The situation is not ideal but the government has been working to improve it, he said.

Siemens President and CEO Peter Loscher is a member of the Foreign Investment Advisory Council which proposes ways to improve the investment climate. Many of its recommendations have been used, for example in Russia’s law on foreign investment, Grigoryev said.
If Renault-Nissan thought Russia’s investment climate was bad, it would not have negotiated an increased stake in AvtoVAZ, said a spokesperson for the alliance.

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