*EPF201 12/21/2004
White House Report, December 21: Russia, Detainees, Turkey
(Bush administration "disappointed" over Russia's auction of oil subsidiary) (670)

YUKOS SALE COULD CHILL INVESTMENT IN RUSSIA

The Bush administration expressed its disappointment over Russia's decision to auction off the main oil production subsidiary of Yukos December 19, and said the action could have a "chilling effect" on foreign investment in Russia, as well as the country's role in the global economy.

"We are disappointed that Russia went ahead with the auction of the Yukos subsidiary," White House Press Secretary Scott McClellan said December 21.

"We had hoped for a solution that would allow for the legitimate enforcement of tax laws but avoid harming investors, especially American investors," he said.

According to press reports, there are concerns that the sale of the main oil subsidy of Yukos is a move designed to help the Russian government gain more control over the country's energy industry.

The Bush administration believes Russia has a responsibility to seek greater integration into the world economy, McClellan said, and to "create an environment governed by the protection of property rights and the rule of law and to restore confidence in its political, legal and judicial institutions."

Russia should "ensure a stable, predictable and transparent environment" for international investors, he said, and the sale of the Yukos subsidy "could have a chilling effect on the foreign investment in Russia and affect its role in the global economy."

The press secretary said President Bush and Russian President Vladimir Putin will meet in Bratislava, Slovakia, February 24, 2005, but he did not confirm that Yukos would be on the agenda of their meeting.

However, McClellan said they would discuss Russian access to U.S. nuclear storage facilities, saying, "The prevention of the proliferation of nuclear material is one of our top security priorities."

Presidents Bush and Putin, he said, can discuss ways of building upon previous cooperation in that area, and he said access to U.S. storage sites will allow Russia "to see how we address some of those issues ... and ways to improve some of that cooperation."

BUSH AUTHORIZATION OF INTERROGATION METHODS DENIED

Press Secretary McClellan denied that President Bush signed an executive order which sanctioned interrogation methods to be used against detainees in the war on terror.

According to press reports, the American Civil Liberties Union released the text of a May 22 e-mail from the FBI which suggested that Bush had approved "inhumane" interrogation methods.

"The e-mail was wrong," McClellan said. "There is no executive order relating to interrogation techniques. When it comes to military detainees and interrogation methods, those are determinations made by the Department of Defense."

McClellan said the Bush administration is aware of allegations of abuse that are being made available to the press. He said the United States is "a nation of laws and a nation of values and we adhere to our laws and values."

"The president expects that any allegations of abuse are taken seriously and fully investigated, and that corrective measures are taken to make sure that abuse does not occur again," he said.

The press secretary said the Defense Department is currently investigating several allegations of abuse. "They take this issue seriously and that's what we expect them to do. We expect them to get to the bottom of it and to take appropriate measures," he said.

BUSH, TURKISH PRIME MINISTER DISCUSS EU ACCESSION, IRAQ

President Bush telephoned Turkish Prime Minister Recep Tayyip Erdogan to express his congratulations over the European Council's December 17 decision to open European Union accession talks with Turkey October 3, 2005.

Press Secretary McClellan said the two leaders "agreed that the EU's decision should help strengthen Turkey's relations with both Europe and the United States."

McClellan also said Bush and Erdogan discussed Iraq, including the need for increased security cooperation between United States, Turkey and Iraq, and the importance of moving forward with Iraqi elections, scheduled for January 30, 2005.

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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