there's a laundry list of companies that have fallen victim to manipulation of the russians and failure to adhere to the rule of law. . [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2008]. . >> the first trial was not enough.

taking ukoka was not enough and is the symbol of the failure to adhere to the rule of law. the charges are of his embezzlement of all the oil of the companies. 300 million metric tons, that he took possession of and for his own use. that's 20% of russia's oil production. where did it go? you think that someone would have noticed over a six year period if that oil of diverted. the trial and the deposition of krugman, when he was here. this is evidence of support of the defense because it's in

russia, and asked the russian court for help to generation evidence and documents and witnesses. the russian prosecution criticizes them, where do you ask help from the court when you have rules on you. when they invoke a rule, the russian government imposes they should have gone to the cower. -- court. it's a catch-22, and kodakowski is a symbol and you see the companies. and ikea with capital from russia at a rate. and even that shell will occupy

in cyclon-4, it's met with surprise. it shouldn't be a surprise for shell to get involve in this because of the profit. but the surprise is the risk they are taking. they have been burned before and are they going to be burned again? we shouldn't see that. and absent the rule of law, we have counter incentives for people to move forward. and to companies and people in russia with the lack of adherence to the rule of law, you now see a spreading problem for the russian judicial system outside the country. and if russia's judicial system is not given reality outside of the country. there is a tremendous problem for people to do business in russia. every case that has involved

kodakowski and russia, they have lost. the u.k. courts, the swiss courts, the dutch courts are rejecting the legitimacy of the russian judicial system. the dutch courts have made findings that they are being politically manipulated. and the arm of the russia government. that will not work for an intergrated business community. we have cases in dutch courts, where they didn't recognize in the system that they were inlegitimate. so you have ukrus that is

operating in a management. and they are resolved. and for the court decision on award the ukras subsidiary, and the dutch courts agreed to take it. and this is complete rejection of the russian court decision, and put aside what it means for the ukras case. and hopefully president obama will go and speak about the rule of law. and kodakowski is the symbol. and i have resolution 322 condemning the rule of law and

kodakoski. with co-sponsors of obama, biden and mccain. so we want to pursue the issue that we raised before. because it's important to your integration and the international community and for business. hopefully they will do that. hopefully the efforts of the groups like the heritage foundation to raise the profile of the rule of law will make this possible. >> thank you sandy. ariol will you say something now? >> i will be happy to say something now. as the panelists in both panels demonstrated, the challenges of the summit, the challenges in the u.s. /russia relations are

tremendous. it's a very, multifacetted and interconnected relationship, that's crucial to the stability and prosperity of the world. but i think that everyone will be well advised at this point, in view of the direction that russia is going, in view of the dynamics of security, politics and economics and rule of law, to lower the expectations. i personally do, i do not have high expectations. i hope i will be surprised for the better. i recognize and confess i am pessimist when it comes to russia. but we should lower expectations. russia today pursues policies of five no's.

no to enlargement, no to u.s. defense in europe, no to the holding of arms, no to security and architecture in europe and no to the dollar of the currency and the global economic environment based on those arrangements. when we are talking about the obama administration trying to hit the reset button and missing the translation, hopefully not missing the button when you hit it. what can do you? they prioritize the strategic arms agreement and why we probably should not accelerate. they reportedly offered the kremlin a deal on missle self-defense in europe on

exchange in iran. and is offering to speedup russia membership in the world trade organization, something that got a rebuttal by the russian cabinet. to summarize, what should the administration do? they should pursue a limited agreement without a timetable and by signing a memorandum that would import and adjust the start to procedures into the moscow treaty on arms control. that's still in force until 2012. we should re-enter a missile defense with moscow. as the iranian threat is likely

to grow in the hard liners with the tehran and seeming to be winning. north korea seems to have the threshold states to push for a speedy nuclear policies. and we do not see a chance of north korea or iran to come under the efficient of moscow. still we should be on record, demanding that russia cooperates against iran and including of military spare parts and military and dualistic technologies, and should push for a severe gasoline imports curve to the

islamic republic. the sanctions so far are inefficient and do not deliver the message to tehran. furthermore we should hold the rights to sovereignty and that includes georgia's integration and azerbaijan and including the areas meddling in georgia or ukraine or inserting a sphere of influence as was said by medvedev is detrimental to european security. we should cooperate on matters

of common interest such as transit of military supplies to afghanistan. russia did play ball on that, i think that remaining u.s. air base has to do with russia trying to demonstrate goodwill on this summit. i already mentioned wto, we should work on appealing the obsolete amendment. and incase of supplemental change of the membership, and should consider the admission of one to three to congress. the business and rule of law are intrinsically connected. without the rule of law and

improvement in regime of russia there will be severe impairment. human rights and freedom are important policies, that the previous administrations, both clinton and bush tried to pursue and were increasingly rebuffed. so one should hope for the best. the world would be a greater place if russia and the u.s. could cooperate on key issues. however if barack obama is rebuffed in moscow the administration should design a plan "b". for u.s. and allied interests in face of adversity. on a technical level, if you will permit me, mr. chairman, to thank our partner in today's

conference,ria and the team in moscow. and draw your attention to two speakers, fritz and one other were contributors to those published in spring. there are other materials available and we appreciate your participation. >> thank you ariel and let's move to question and answer. if you raise your hand, i will give you a mic. stand if you wish, and give us your name if you are a member of the press. one question per person. and please tell us who you are directing the question to. and no commentary as a courtesy to our speakers and others.

i will start over here and go to each section and back and forth. a question over there. >> thank you. it was a very interesting presentation. my question to professor bugajski, my question of russian issues in ukraine. and what makes the professor able to know it's not just a minority. and the second question of the current political situation in ukraine. i have heard statements from organizations in ukraine and expressing the growing

centicism in ukraine? >> russian speaking in ukraine, if you look at demographics of ukraine, it's more divided into three than two. about a third of the population, ukrainians and ukraine speakers as first language. and others are ukrainian and russian speakers, and the other third is russians or non-ukrainians using russia as their first language. and a little different, it was i believe in the 90's about 62% and probably dropped to 55% and that's where the majority is clearly russian. and i am not certain what the

russian government is talking about the composition in ukraine. and it wouldn't surprise me if more russians than ukraine. and that's part of historical and rewriting identities. ukraine up to now has had a pretty good record since independence. i have heard reports of incidents of the more jewish population and west of ukraine where jews lived. and many migrated. and be careful because this anti-ukrainianant lifts and to present those in the west. and not deserving of state hood

or support. so i look at facts than use the labels. >> thank you. question here. >> freelance correspondent. question to mr. bugajski. if there was movement in the west, is this a problem? >> the question, there is no russian delay in joining the oto. that was a surprise and not one

of the scoops, one of the breaking news. several days later the cabinets sent a message, that the russians would not be joining until a time that russia manages to integrate katalksun. and in 2010, and i talked to democrats, and unrealistic and looking at 11, and why russia is not to join. it beats me.

immigration for jews and russians is free. and had happened, millions of people left. why congress still insists despite the treaties of the bush/clinton administrations to keep the amendments on books. while the amendment is lifted every year by the president. probably because certain business interests, particularly chicken exporters decided to tie the amendment to exports of chicken legs. so the amendment has no legs, no human legs, chicken legs.

>> hi, two days ago there was a visit and signing big contract of import-export from natural gas to russia. do you see it as a damage or future implementation of a project or any other project within the house, and energy corridor. and i want to ask a question, when ariel says that obama should mention integrity of ukraine and georgia, why you not say anything about [inaudible] and 20% and want measurement in their speeches and remarks. >> who was the first question directed to?

>> anyone. >> ok, anyone on the panel? you want to talk about gas. >> yeah, it's clear that russia wants to tie the countries into long-term contracts. and that that will pump into the russian pipeline. they want to tie the kaputo into this control. and it's a political weapon whereby many hope in the future will continue to be dependent on russia. and the more economically dependent you are, the more influence you can have over the countries. >> let me add so far in the competition between south stream, a russia dominated pipeline project and nobuko,

russia is lining up support and has an energy champion to push south stream. south stream is also very expensive. on the energy deal, i think this is a strong signal that if turkey continues to come up with all kinds of demands for lifting certain amounts of gas. but i think that's been resolved. but it was a signal to turkey. if i am not mistaken, it's 500 million cubic meters a year. half a billion cubic meters in gas business is not that much. but it's a signal. and russia would love to get this gas. but it's probably trying to bite more than they can chew.

they signed agreements and putting pressure on them to bail out of the agreements to supply gas to europe, with that being down. finally on your question of territorial, first of all, we have seen president medvedev went to moscow to negotiate on karabk and peace. and the question if azerbaijan thinks that moscow is the right venue, it's their decision. our paper here on first bullet, we uphold the right of sovereign states to those states period. it doesn't single out georgia

and ukraine, but clearly azerbaijan is entitled. and you know my track record, i was a supporter of peaceful resolution so that kazaban is a supporter but stays within the borders of azerbaijan. >> the former directors of gas, and i have never found out if this had impact on west/german relations or if that's rather unimportant. and second question, i have research in afghanistan, what

is the current relationship of russia and afghanistan in terms of energy? >> i can address about gas problems and the ex-german prime minister. if you look at it in retrospectively, and how he wound up there. there was a key period between 2003 and 2005, where he was providing cover for president pudin, whether it was shell or v.p. and he wound up at gas prom in a prominent position. and the russian adherence to the rule of law became a big issue in the elections that lead to the election of mrs.

murkol that's critical of russia in the rule of law. it more symbolizes what was happening for a two to 2-1/2 year period. >> second question? >> yeah, i can take a stab. and this system has been trying to create more of a balance between russia and west and china. i think he's weary of russia influence in neighboring companies. one of the reasons i think he didn't want to tie himself too

close to the csto. and there is criticism of janav and that russia brings countries that are ostracized by the west and for that fear, we will help maintain you, we will help to maintain your system without rocking the boat. but if you go too quickly to the west, you don't know what they are up to. i think he's smart enough to realize what the russians are up to, but it's a difficult system to balance. >> back over here. >> hi, anthony king, i am a

student at santa barbara. this question is for mr. cohen, and i apologize if you addressed this, but could you extrapolate on the plan "b," that u.s. and allies take if obama should be buffed. >> first plan "b" is a series of paper and special report and three conferences. but seriously, be prepared to share. and steve will contribute to that too. seriously i think that there are -- there is a debate in town about whether u.s. has any leverage over russia. so for plan "b," we have to undertake an assessment. what is our leverage? bakers spring