Hovnanian Enterprises Announces 13% Increase in Dollar Value of Net
Contracts and 50% Increase in the Dollar Value of Contract Backlog for
the First Quarter
PRNewswire-FirstCall
Thursday February 3, 2005
RED BANK, N.J., Feb. 3 /PRNewswire-FirstCall/ — Hovnanian Enterprises,
Inc., a leading national homebuilder, announced today preliminary net
contracts and sales backlog for the first quarter and month ended
January 31, 2005. For the first quarter of fiscal 2005, the dollar value
of net contracts, including unconsolidated joint ventures, increased
13.0%, and the number of net contracts increased 0.5%, when compared to
the same period a year ago. The sales value of contract backlog at
January 31, 2005, including unconsolidated joint ventures, increased
50.3% on a year-over-year basis, and the number of homes in contract
backlog increased 19.1%, when compared to the first quarter of fiscal 2004.
For the month of January 2005, the dollar value of net contracts,
including unconsolidated joint ventures, increased 11.3%, while the
number of contracts increased 0.3%, when compared with January 2004. The
Company experienced a decline in the number of net contracts in the West
for the month and the quarter. This decline was primarily due to the
severe wet weather in California in January, which impacted traffic and
sales. The Company also experienced a decline in net contracts in the
Northeast for the month and the quarter, due entirely to a decline in
net contracts in the Company’s on-your- lot operations in Ohio.
The Company delivered 3,266 homes, excluding unconsolidated joint
ventures, an increase of 12.6%, during the 2005 first quarter, compared
with 2,901 homes delivered in last year’s first quarter. The number of
active selling communities company-wide on January 31, 2005 increased to
292 communities from 288 communities at the end of January 2004.
Hovnanian Enterprises, Inc. founded in 1959 by Kevork S. Hovnanian,
Chairman, is headquartered in Red Bank, New Jersey. The Company is one
of the nation’s largest homebuilders with operations in Arizona,
California, Delaware, Florida, Maryland, New Jersey, New York, Michigan,
Minnesota, North Carolina, Ohio, Pennsylvania, South Carolina, Texas,
Virginia and West Virginia. The Company’s homes are marketed and sold
under the trade names K. Hovnanian(R)Homes, Goodman Homes, Matzel &
Mumford, Diamond Homes, Westminster Homes, Forecast Homes, Parkside
Homes, Brighton Homes, Parkwood Builders, Great Western Homes and
Windward Homes. As the developer of K. Hovnanian’s Four Seasons
communities, the Company is also one of the nation’s largest builders of
active adult homes.
Additional information on Hovnanian Enterprises, Inc., including a
summary investment profile and the Company’s 2003 annual report, can be
accessed through the Investor Relations page of the Hovnanian website at
To be added to Hovnanian’s investor e-mail or fax
lists, please send an e-mail to [email protected] or sign up at
Source: Hovnanian Enterprises, Inc.

Stock Focus
Ground-Floor Investing
Forbes.com
02.02.05
By Andy Stone
Back when tech stocks were all the rage, Samuel Lieber had a field day
snapping up real estate stocks that nobody wanted.
Lieber, 48, who runs the $380 million (assets) Alpine U.S. Real Estate
Equity Fund (EUEYX) , bought shares of Washington Homes, a sleepy
builder of single-family houses in the nation’s capital, for $6 per
share in 2000. Less than a year later, Hovnanian Enterprises offered $10
per share for Washington.
Lieber took stock in exchange for his Washington shares, and then went
out and bought more Hovnanian. Smart move: Hovnanian expanded its reach
by purchasing private builders as far away as Texas and California, and
generated annualized-earnings growth of 69% over the last three years.
The stock is now worth $54.
As the largest publicly-traded builders buy up smaller competitors,
Lieber expects Hovnanian to deliver a more modest earnings growth of 15%
over the next couple of years. But Lieber still hasn’t cashed out.
Picks like Hovnanian have helped Lieber’s fund post an annualized return
of 34% over the past five years. Over the same period, the S&P 500 shows
a -1.8% return.
Lieber insists there is no nationwide housing bubble. “In selective
markets, there certainly has been overheating,” he says. Case in point:
Southern California, where heady price appreciation for homes over $2
million has recently lost steam. He feels that wage and population
growth, particularly in coastal areas, in conjunction with
historically-low interest rates, accounts for the appreciation of home
prices over the past few years.
The heyday of skyrocketing valuations has passed, but there’s no need to
worry about a crash, Lieber says. He believes that weak job creation in
major coastal cities will allow housing prices to rise just 3% to 5%
over the next couple of years, down from 10% in 2004.
If there is a sharp downturn in housing, it wouldn’t be great news for
Lieber’s fund. He hopes to avoid some of the pain by selecting companies
that have consistent earnings growth and are poised to expand beyond
their home region.
One example is Gaylord Entertainment, which turned the hotel at the
Grand Old Opry in Nashville into a 2,800-guestroom hotel, with
conference facilities and restaurants. Now trading at $39, Lieber thinks
Gaylord, which has built additional complexes in Orlando and Dallas and
has another one on the way in Washington, D.C., has the potential to
rise as much as 50% in two-to-three years.
“Value” probably isn’t the best word to describe Lieber’s investing
style. He doesn’t look for stocks that are simply cheap, and doesn’t
automatically sell them once fair-market value is reached. Instead, he
holds on long after companies begin to grow again.
Lieber bought La Quinta for $2.50 in 2000, when the company was owned by
Meditrust, an overextended health care real estate investment trust
(REIT). La Quinta, which is stealing market share from older competitors
in the Southwestern U.S., is now worth $9 per share, but Lieber believes
the company’s earnings can increase 26% this year.
“We’re entering an extended period where supply versus demand will favor
hotel stock,” says Lieber. He points out that room occupancy is rising
by 3% per year industrywide, while the number of rooms available is only
growing at 0.4%.
Alpine also invests in REITs. Lieber likes Alexander’s, a New York-based
retailer that closed shop in 1993, leaving behind an entire city block
across the street from Bloomingdale’s department store in Manhattan.
Lieber wasn’t sure exactly what would become of the New York City
property, but he knew that parcels like that don’t come along very
often. He started buying shares in the $40-to-$60 range, purely on the
appeal of such prime real estate.
Alexander’s is now finishing the half-billion dollar, 73-story Beacon
Court building on the site that will house Bloomberg LLP’s new
headquarters as well as 35 floors of luxury condos. The REIT is trading
at $219 per share, giving it a value that is now close to that of its
underlying properties (it has additional retail properties in the New
York area), while other REITs typically trade at a 20% premium to
property value. Alexander’s plans to start paying dividends later this year.
The Alpine family consists of seven mutual funds, including Alpine
International Real Estate Fund with holdings such as Diamond City, a
Japanese developer of commercial real estate, Midland Realty, a property
brokerage in Hong Kong and French resort-outfit Club Mediterranee.
Alpine U.S. Real Estate is a no-load fund with annual expenses of $1.31
for every $100 invested. The average real estate fund surveyed by Forbes
charges $1.61. The accompanying table lists some of Lieber’s current picks.

Texas Court Denies Preliminary Injunction but Accelerates Jury Selection
Date in Patent Infringement Suit Against Seven Networks
Jury Selection Set for June 29, 2005 in Marshall, Texas
PRNewswire
Tuesday February 1, 2005
REDWOOD SHORES, Calif., Feb. 1 /PRNewswire/ — Visto Corporation, the
leading global provider of secure push email, whose platform for mobile
operators supports the broadest set of mobile devices, today announced
that the United States District Court for the Eastern District of Texas,
has denied its motion for a preliminary injunction in Visto’s patent
infringement suit against Seven Networks but has accelerated the date of
jury selection for the trial of this matter. Visto is seeking both
damages and a permanent injunction prohibiting Seven from making, using
or selling its infringing products in the United States. Visto had filed
requests for preliminary and permanent injunctions on September 23, 2003
and on April 28, 2004, claiming that Seven had misappropriated Visto’s
intellectual property. Although Judge John Ward denied Visto’s request
for a preliminary injunction today, on his own motion at the January 25,
2005 hearing, he moved the jury selection date from July 5, 2005 to June
29, 2005.
“The Texas Court’s decision to accelerate the trial date underscores the
fact that there will be a resolution very soon. The arguments made in
court were reinforcing, and by July we will have closure. The noose
around Seven’s neck just got tighter,” said Brian Bogosian, chairman,
president and CEO of Visto Corporation. “With over 21 patents worldwide,
Visto is setting the industry standard with secure synchronization
technologies that deliver performance, reliability and security. By
protecting our intellectual property against unauthorized use by
companies like Seven, with no patents of its own, we hope to foster a
creative environment where true innovation is rewarded.”
Visto asserts that Seven Networks, Inc. is infringing on six of its
patents. These six patents included in the legal action are: US patent
nos. 6,085,192 and 6,023,708, which describe systems and methods for
securely synchronizing multiple copies of a workspace element in a
network, and the use of a global translator to synchronize workspace
elements across a network. U.S. Patent No. 6,131,116, entitled “System
and Method for Globally Accessing Computer Services,” U.S. Patent No.
5,961,590, entitled “System and Method for Synchronizing Electronic Mail
Between a Client Site and a Central Site,” U.S. Patent No. 5,968,131,
entitled “System and Method for Securely Synchronizing Multiple Copies
of a Workspace Element in a Network,” and U.S. Patent No. 6,708,221,
entitled “System and Method for Globally and Securely Accessing Unified
Information in a Computer Network.”
About Visto
Visto is the leading global platform for mobile operators to provide
wireless push email to the broadest set of mobile devices. Visto’s open
solution enables email for the mass market, targeting large enterprises,
small businesses, mobile professionals and consumers. The company’s
Visto Mobile(TM) platform with patented ConstantSync(TM) technology
works in real time with POP3, IMAP, Microsoft Exchange and Lotus Domino
email solutions for personal to enterprise use, providing maximum
control and flexibility for the operator and choice for the customer.
Visto’s customized, brandable solutions are available through mobile
operators worldwide including AT&T Wireless, Bell Mobility, KPN,
Manitoba Telecom Services, Nextel Communications, Inc., Rogers Wireless,
SaskTel Mobility, SmarTone and TELUS Mobility.
Established in 1996 and headquartered in Redwood Shores, California,
with offices in Seattle, London, Rome, Tokyo, Beijing and Tianjin,
China, Visto is backed by Oak Investment Partners, Draper Fisher
Jurvetson, VantagePoint Venture Partners, Meritech Capital Partners,
Rustic Canyon Ventures, Allegis Capital and Blueprint Ventures. For more
information, visit or email [email protected].
NOTE: Visto, the Visto logo, Visto Mobile, ConstantSync, WirelessInbox,
MessageXpress and Transcend Mail are either trademarks or registered
trademarks of Visto Corporation. All third-party trademarks, trade
names, or service marks are the property of their respective owners and
are used only to refer to the goods or services identified by those
third-party marks. Visto’s technology is protected by U.S. Patents
6,085,192; 5,968,131; 6,023,708; 5,961,590; 6,131,116; 6,151,606;
6,233,341; 6,131,096, 6,708,221 and 6,766,454. Other patents pending.
Source: Visto Corporation
From: Baghdasarian

Area Schools Earn High Marks In ‘Schools For A New
Society’ Initiative
TheChattanoogan.com (Chattanooga, Tennessee)
February 4, 2005
Academic improvement in Hamilton County public high schools was
recognized and celebrated Thursday during a day-long visit by Carnegie
Corp. of New York President Vartan Gregorian.
Dr. Gregorian was the featured speaker at a celebration at Red Bank
High School to document the improvement of Hamilton County high
schools following a mid-day speech to the downtown Rotary Club. The
event at Red Bank High, which featured participation from area high
schools, began at 3:30 p.m. As part of his visit on Thursday,
Dr. Gregorian presented a video on the “Schools for a New Society”
reform effort, which included a segment on Hamilton County.
“Three years into the Schools for a New Society initiative, we are
seeing solid results and improvements in student achievement,
attendance, and attitude,” said Dr. Jesse Register, Hamilton County
Schools superintendent. “Hamilton County students know they will
receive personalized instruction and attention from educators and
others who believe in their future. We are proud of the chance to
showcase our achievements for the agency that gave us the financial
opportunity to see these things happen.”
The Hamilton County school system is one of only seven public school
systems nationwide chosen to participate in Schools for a New Society,
a high school reform program funded with an $8 million grant from the
Carnegie Corp. of New York. Awarded in 2001 for a five-year period,
the Carnegie grant funds innovative programs in 16 Hamilton County
high schools with the goal of raising academic achievement. The grant
was awarded to the Public Education Foundation on behalf of the
Hamilton County school system. The Public Education Foundation is
contributing $6 million in matching local funds.
Dr. Gregorian is beginning a tour of the seven school systems funded
by Schools for a New Society grants. Chattanooga was chosen as the
starting point for the tour because of the results the Hamilton County
schools have achieved through the grant, said Dan Challener, president
of the Public Education Foundation.
“Three years ago, Hamilton County competed against more than 20 other
school systems nationwide for these prestigious grants,”
Mr. Challener said. “We were chosen because of the broad-based input
our reform plan received from educators, students, parents, and
business and community leaders. Now, our community has demonstrated to
the Carnegie Corp. why we were a good choice. It is an honor for
Chattanooga to be the site of the first stop on Dr. Gregorian’s tour.”
President of the Carnegie Corp. of New York since 1997, Dr. Gregorian
also served as president of Brown University for eight years. He is a
noted historian, educator, author and humanitarian and has received
numerous honors and awards for his academic and philanthropic
accomplishments.
Dr. Gregorian was joined at the Red Bank High School celebration by
Dr. Register, Mr. Challener and Hamilton County Mayor Claude Ramsey.
Due to the wide diversity of Hamilton County’s high schools, each
school has developed its own unique blueprint for reform through the
Schools for a New Society program. Four basic goals have been
addressed:
Establishing a more challenging and engaging curriculum
Improving teaching through more professional development
Creating a more challenging and relevant curriculum
Allowing more flexibility to meet student needs more effectively
The special needs of ninth-graders adjusting to high school are also
addressed, with each high school developing its own transition plan
for freshmen.
Through the Carnegie grant, most Hamilton County high schools now
include career academies. Examples include a construction academy at
East Ridge High, a health academy at Red Bank High, and an academy of
industry, technology and business systems at Brainerd High. All
academies combine college preparatory courses with a career theme.

Kevorkian Furloughed for Hernia Surgery
Associated Press
Friday, February 4, 2005
DETROIT – Assisted-suicide advocate Jack Kevorkian was released from
prison Thursday so he could undergo bilateral hernia surgery, his
attorney said.
Kevorkian, 76, is serving a 10- to 25-year sentence for second-degree
murder after being convicted of giving a fatal injection of drugs to a
Lou Gehrig’s disease patient in 1998.
Leo Lalonde, a Michigan Department of Corrections spokesman, said
Kevorkian would undergo the surgery at a hospital in Jackson, about 80
miles west of Detroit. Kevorkian is under constant guard in a secure
wing separate from regular patients, Lalonde said.
Mayer Morganroth, Kevorkian’s attorney, didn’t know when the former
pathologist would have the surgery, but said he likely would stay in the
hospital for a few weeks.
Kevorkian was given 10 minutes’ notice early Thursday that he was being
released from the Thumb Correctional Facility in Lapeer, Morganroth said.
“They’ve known he needed the surgery for quite a while,” Morganroth told
the Detroit Free Press. “They did some stress tests to see if his heart
could withstand it. I guess they decided it’s worth the risk.”
Besides the hernia, Kevorkian reportedly has hepatitis C, high blood
pressure, arthritis, a heart murmur, circulatory problems and the
beginning stages of cataracts in his eyes.
“I’m really concerned,” Morganroth said. “His health is quite poor.”
The Michigan Parole Board in December refused to act on Morganroth’s
request to parole Kevorkian, saying the application was essentially the
same as one he submitted for Kevorkian in November 2003. Gov. Jennifer
Granholm’s office denied that earlier request.
Kevorkian has said he assisted in at least 130 deaths, but has promised
in affidavits and requests for pardon or commutation that he would not
assist in a suicide if he is released from prison. He is eligible for
parole in 2007.
;u=/ap/20050204/ap_on_re_us/kevorkian_surgery_1

Kevorkian hospitalized for hernia operation
The Daily Oakland Press (Oakland County, Michigan)
Friday, February 4, 2005
JACKSON – Assisted suicide advocate Jack Kevorkian is expected to
undergo surgery today to repair a bilateral hernia, his lawyer said.
Mayer Morganroth said Kevorkian, 76, was taken to a hospital in Jackson
for treatment Thursday.
“It’s very painful,” Morganroth said. “But it, by itself, should not be
life-threatening. I think he’ll be OK. These types of things get harder
as he gets older, though.”
Kevorkian’s health is failing, Morganroth said, and he doesn’t expect
his client to live more than a year. Kevorkian has suffered from high
blood pressure, hepatitis C, a circulation condition and dental problems
in prison.
Leo LaLonde, spokesman for the Michigan Department of Corrections, said
there is a secure unit at the hospital for prisoners. Kevorkian will be
under constant guard while there and will likely be sent back to prison
shortly after the surgery to recover in the Thumb Correctional
Facility’s clinic.
The state will pay for the treatment, LaLonde said, but can seek
reimbursement from prisoners who have assets. LaLonde would not comment
on how much the surgery will cost or about Kevorkian’s medical
condition, citing federal privacy rules.
Morganroth said Kevorkian has been trying to get Gov. Jennifer Granholm
to pardon him or commute his sentence based on his medical condition,
but that request has been denied. Granholm has granted four medical
commutations since taking office.
The Michigan Parole Board recently denied Kevorkian’s request for
parole. He is eligible again in November, Morganroth said.
Kevorkian is serving a 10- to 25-year prison term for second-degree
murder in the 1998 death of a Waterford Township man, 52-year-old Thomas
Youk.
Kevorkian videotaped the death of Youk, who had Lou Gehrig’s disease.
The CBS news show 60 Minutes broadcast the euthanasia and Oakland County
prosecutors charged Kevorkian. Kevorkian has claimed to have assisted in
more than 130 suicides.

Shocked Georgians Mourn Prime Minister
Associated Press
Friday, February 4, 2005
BY JIM HEINTZ, Associated Press Writer
TBILISI, Georgia – Hundreds of shocked Georgians gathered Friday in the
snow in central Tbilisi to mourn Prime Minister Zurab Zhvania, whose
death has left the struggling former Soviet republic worried for its future.
Zhvania was found dead early Thursday in a friend’s apartment,
apparently the victim of carbon monoxide poisoning from a poorly
installed gas heater. The friend, a regional politician, also died.
The 41-year-old Zhvania was a key figure in attempts to lift the country
out of its post-Soviet economic collapse and political turmoil.
Zhvania was one of the leaders of the 2003 “Rose Revolution” protests
that propelled President Mikhail Saakashvili to power and brought down
his predecessor, Eduard Shevardnadze.
Zhvania earned deep respect and affection and was seen as a moderating
balance to the sometimes-incendiary boldness of Saakashvili, who was
elected president in 2004.
“Soon all of Georgia will feel what Zurab Zhvania meant for them,” said
mourner Ksenia Kuparadze, a 70-year-old pensioner outside the apartment
of Zhvania’s grieving mother, where the body was brought late Thursday.
“After the Rose Revolution, when the country was in complete collapse,
he was able to get us out of economic difficulties. Teachers started
getting paid on time, pensioners got their pensions,” Kuparadze said.
Shevardnadze, whom Zhvania helped force out of office, also praised the
late prime minister’s achievements. “I hope the course chosen by him
will be preserved,” he said.
Parliament speaker Nino Burdzhanadze cut short a foreign trip and
returned to Tbilisi on Friday, calling on the government to “continue to
work in its usual rhythm” despite “a big loss for Georgian politics and
the Georgian state.”
That call, alongside Saakashvili’s statement a day earlier that the
country’s government was in control, appeared to hint at wide anxiety
that Zhvania’s death could undermine the stability that has been tenuous
at best in Georgia since its independence in 1991.
Following the breakup of the Soviet Union, Georgia was riven by two
separatist wars that left large regions de facto independent and
courting ties with Russia. Zhvania was a key figure in trying to
negotiate final agreements on those still-unresolved tensions, which had
been exacerbated by Saakashvili’s provocative pledges to re-exert
control over the regions – South Ossetia and Abkhazia.
Zhvania also pushed for efforts to wipe out the corruption that had
sapped Georgia’s economy and induced widespread mistrust of authority.
One notable move was a restructuring of the country’s police force,
which was infamous for bribe-taking.
“It will be difficult to be president without Zhvania. In my opinion, he
played the role of a careful and kind magistrate,” said Dzhudzhuna
Kartvelishvili, a 43-year-old scholar. “It will be difficult but I think
we will be able to find people who will be that much useful to the country.”
Authorities called Zhvania’s death an accident, another of the many
carbon-monoxide poisonings that have troubled the capital since its
central-heating system went out of service in 1992 and many residents
turned to wood and gas stoves to keep warm.
In a country with a history of political intrigue and violence, many
Georgians wondered whether authorities were telling them the truth.
“There were plenty of people who envied Zurab, many were hoping that a
conflict would break out between him and the president,” said historian
Grigory Dardzhanian.
Parliament member Elena Tevdoradze, who visited Zhvania’s mother, Rima,
on Friday, said the woman asked her, “What do you think, did they kill
my son?”
Georgian lawmaker Alexander Shalamberidze linked Zhvania’s death to a
car bombing that killed three policemen in Gori, the city nearest to
South Ossetia, earlier this week. Shalamberidze pointed the finger at
“outside forces” in remarks clearly aimed at Russia.
Deadly fighting ripped through South Ossetia last summer, after local
separatists took offense at Saakashvili’s vows to bring the province
back under Tbilisi’s control. Zhvania in recent months was pursuing a
negotiated solution.
It was unclear when a new prime minister would be named, but topping the
speculation of likely candidates was Defense Minister Irkaly
Okruashvili, a strong personality like Saakashvili.
Zhvania’s funeral was scheduled for Sunday.
;cid=535&ncid=535&e=15&u=/ap/20050204/ap_on_re_eu/georgia_prime_minister

Aide to dead Georgian PM commits suicide: official
Agence France Presse
02/04/2005
TBILISI, Feb 4 (AFP) – An aide to Georgian prime minister Zurab Zhvania,
who died apparently after breathing toxic fumes leaked by a faulty
heater, committed suicide late Friday, an interior ministry spokesman said.
The aide, 32-year-old Georgi Khelashvili, shot himself with a gun in his
Tbilisi apartment, the spokesman said.
Khelashvili was a member of Zhavania’s staff, working with the pardons
commission, the Mze television channel reported.
It was not yet clear whether Khelashvili’s suicide was linked to
Zhvania`s death.
Zhvania, Georgia’s widely respected prime minister seen as the driving
force behind market-oriented economic reform in the restive Caucasus
republic, died early Thursday.
The 41-year-old prime minister was found by his bodyguards slumped over
a table in an apartment on the outskirts of Tbilisi, and appeared to
have succumbed to inadequately ventilated carbon monoxide fumes from a
heater.
The body of another local Georgian official, Raul Yusupov, was found
dead on the floor in another room in the apartment. There were no signs
of foul play, and officials quickly quashed suspicions that the deaths
could have been anything but accidental.
News of Zhvania`s death sent shock waves through Georgia and President
Mikhail Saakashvili, acting in line with the constitution, dismissed the
entire Zhvania government, though its members were to remain in place on
what is technically an interim basis pending confirmation of a new
government.
Saakashvili announced that he would take over Zhvania`s duties until a
new government was installed. He was expected to name a new prime
minister before February 10
Zhvania was a father of three, who entered political life as an ally of
veteran Georgian president Eduard Shevardnadze but later switched his
allegiance to Saakashvili, becoming himself a leading figure in the 2003
“rose revolution” that ousted Shevardnadze and swept the US-educated
Saakashvili to power.
His appointment last year as prime minister was a power-sharing
arrangement that placed chief responsibility for introducing sweeping
economic reforms in Georgia with the prime minister. Analysts said the
reform process would be slowed as a result of Zhvania`s death.

GEORGIAN GOVERNMENT STRESSES STABILITY AS SEARCH FOR NEW PRIME
MINISTER BEGINS
Eurasia Insight
EurasiaNet.org
2/04/05
By Elizabeth Owen
The search for a replacement for Prime Minister Zurab Zhvania, who died
February 3 of carbon-monoxide poisoning, is underway. Political analysts
in Tbilisi say there is `no obvious candidate’ that can match Zhvania’s
technocratic skills.
President Mikheil Saakashvili is expected to nominate a replacement for
prime minister by February 10. A state funeral for Zhvania will be held
at the newly constructed Holy Trinity Cathedral in Tbilisi on February
6. Saakashvili’s cabinet, meeting in a late-night session February 3,
reportedly considered several prime ministerial candidates, the Civil
Georgia website reported. While most political figures continue to
emphasize the difficulty of replacing the prime minister, some Georgian
media outlets have speculated on the leading contenders. In its February
4 edition, for example, the daily Rezonansi reported that the top
candidates to head the government included Defense Minister Irakli
Okruashvili, State Minister for European Integration Giorgi Baramidze,
State Minister for Economic Reform Issues Kakha Bendukidze and
Parliament Speaker Nino Burjanadze.
Few analysts in Tbilisi appeared to put much faith in such reports. `You
can’t take the stupid speculations of the Georgian media seriously,’
said Levan Ramishvili, director of the Liberty Institute. Ramishvili
also dismissed reports of a potential cabinet split prior to Zhvania’s
death.
Ramishvili is just one of many political analysts in Tbilisi who
emphasize that Georgia lacks a natural successor to Zhvania, who
possessed the most political and administrative experience of any member
of Saakashvili’s reformist administration.
Devi Khechinashvili, president of the Partnership for Social
Initiatives, a public policy think tank, contended that one government
leader who could at least replicate Zhvania’s independence is
Bendukidze, who oversees economic reforms. An influential businessman,
Bendukidze returned last year to his native Georgia after nearly a
decade in Russia. During his tenure in 2004 as economics minister,
Bendukidze’s proved an effective policy planner, but his advocacy of an
aggressive privatization campaign generated considerable controversy.
`He has no network here, he is a guy by himself, he has power by
himself, and he can push things through, but he will have no political
ambitions,’ said Khechinashvili.
Georgian newspaper reports have also focused on Defense Minister
Okruashvili as a leading candidate to replace Zhvania. Though
Khechinashvili agreed that Okruashvili’s close ties to the president
could enhance his chances, he expressed doubt that the 31-year-old
defense minister, often portrayed as the most radical member of the
Saakashvili administration, would accept the post of prime minister if
nominated.
`His [current] position is very powerful, and he is concentrated on a
main priority of this government [modernization of the military
according to North Atlantic Treaty Organization norms]. So what is the
rationale [for him] to deal with social or economic issues right now?’
Khechinashvili said. `It is much easier to upgrade the military than it
is the social sphere or economy.’
Ultimately, how the government navigates the transfer of power to a new
prime minister will prove critical to the reform process, both analysts
said. The most immediate impact of Zhvania’s death will be on the speed
of reforms, Ramishvili said. `We have to revise the division of powers
between the president and the prime minister. The president will have to
take on more strategic and tactical responsibilities to make sure that
the government continues on with reforms,’ Ramishvili said. With Zhvania
gone, the powers of the ruling party could become more concentrated,
added Khechinashvili, but how that will affect the quality of reforms is
unknown.
With the country still in shock over Zhvania’s passing, government
leaders remain intent on projecting an image of stability. Foreign
Minister Salome Zourabichvili announced that she, along with
Saakashvili, who has assumed much of Zhvania’s responsibilities on an
interim basis, would fulfill all of Zhvania’s scheduled appointments in
the coming days, the Russian agency Regnum.ru reported. Top government
ministers, meanwhile, stressed in televised statements that key
political and economic policies would not change.
Authorities also sought to reassure Georgians that Zhvania’s death was
accidental. The US Federal Bureau of Investigation has agreed to help
Georgian investigators, and will perform `biological and chemical tests’
to determine `the exact cause’ of Zhvania’s death, Rustavi-2 television
channel reported February 4.
The circumstances surrounding Zhvania’s death have prompted various
conspiracy theories among Georgians. For example, as news of Zhvania’s
death was still spreading, Alexander Shalamberidze, a member of
parliament, claimed publicly that Russia was behind both the recent
car-bombing in Gori and Zhvania’s death, and that the two events were
linked. Russian diplomats have adamantly denied involvement in the two
incidents. Meanwhile, Georgian Interior Minister Vano Merabishvili and
General Prosecutor Zurab Adeishvili dismissed rumors of foul play.
To downplay speculation about the cause of Zhvania’s death, Merabishvili
and Adeishvili showed Georgian journalists late February 3 a one-minute
video tape with footage from the apartment where Zhvania and his friend,
Raul Usupov, the deputy governor of the Kvemo Kartli region, were found.
Both men were shown stretched out on the floor of Usupov’s apartment
after artificial respiration had been unsuccessfully performed, the
Civil Georgia website reported.
Editor’s Note: Elizabeth Owen is EurasiaNet.org’s regional news
coordinator in Tbilisi.

Iraq Wants Money Back; Annan Promises Action
Reuters
February 4, 2005
By Evelyn Leopold
UNITED NATIONS (Reuters) – Iraq said it wanted its money back from the
scandal-tainted U.N. oil-for-food program Friday as Secretary-General
Kofi Annan vowed to get to the bottom of wrongdoing by U.N. staff.
“Huge sums of money which should have served the needs of the Iraqi
people who were suffering at that time — a lot of these resources were
squandered and misspent,” said Iraq’s U.N. ambassador, Samir Sumaidaie.
Iraq, he said, should at minimum not have to pay for the independent
probe set up by the United Nations from remaining oil-for-food funds.
The inquiry panel has spent $30 million so far, with the approval of the
Security Council.
A key report by Paul Volcker, the former U.S. Federal Reserve chairman
appointed by Annan to probe the $67 billion program, found that the
director of the plan, Benon Sevan, helped steer oil contracts to a
relative of former U.N. Secretary-General Boutros Boutros-Ghali.
The report does not accuse any U.N. officials of getting bribes. But it
says Sevan received $160,000 from an aunt in Cyrus, who has since died
and had few resources.
“We are as determined as everyone to get to the bottom of this. We do
not want this shadow to hang over the U.N.,” Annan said as he arrived at
headquarters.
Annan said U.N. officials would be disciplined and that if criminal acts
were committed, diplomatic immunity would be lifted. He said he was
consulting with lawyers on how to do this, as Sevan, who has denied he
received as much as a penny, has retired and is on $1 a year retainer
Among other questionable deals in the report was one in which another
U.N. official, Joseph Stephanides, colluded with a former British U.N.
ambassador so that Lloyd’s Register Inspection Ltd. could get a
lucrative contract.
The report showed that if the humanitarian program were audited more
thoroughly, it might have uncovered the cheating by Saddam Hussein’s
government. Most of his skimming, which some estimates put as high as $8
billion, was earned by illegal oil sales outside the program, some of
them permitted by the council.
DUBIOUS CHOICES
Investigators questioned Boutros-Ghali for choosing the Banque Nationale
de Paris, now known as BNP-Paribas, to handle the program’s account. He
did so after council members asked him to select a bank but was
criticized for asking Iraq its preference.
He was in office in 1996 when the program was negotiated and the Volcker
report alleged that Stephanides interfered in the awarding of contracts.
But there are no allegations Boutros-Ghali deliberately undermined the
program.
The program began in December 1996 and ended in November 2003, after the
United States overthrew Saddam Hussein. Iraq was allowed to sell oil to
buyers of its choosing and contract for food, medicine and other
necessities to ease hardships caused by U.N. sanctions, imposed in mid-1990.
Volcker said his 240-page report was preliminary and that the final one
would be produced in June. He said he may have another interim report to
deal with the alleged role of Annan’s son, who had worked in West Africa
for Cotecna, another Swiss company that replaced Lloyd’s in 1998 to
inspect goods.
The Iraqi ambassador said the United Nations received $1.14 billion to
administer the program and wanted to see how much actually reached its
destination or was squandered by outside contractors working for the
world body.
“The question arises whether the secretariat is subject to its own
political culture, which tends to subvert the will of the Security
Council,” said Sumaidaie. “This is serious.”
But he avoided blaming the Security Council, which had to approve
contracts and whose key members were deadlocked in dealing with any
improprieties on Iraq.
The U.S. Congress has initiated several investigations as has the U.S.
Attorney’s office.
Sen. Richard G. Lugar, the Republican chairman of the Foreign Relations
Committee, said that “part of the blame for the current imbroglio lies
with the U.N.” but that one had to recognize that council members,
including the United States “must also answer questions as to why they,
too, did not pay greater scrutiny to this program.”
But U.S. Rep. Henry Hyde, an Illinois Republican, said the Volcker
report reinforced evidence of U.N. lapses in overseeing the program and
“even the most rudimentary standards of accountability.”
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