Russia Report: July 2, 2001

EXILED OLIGARCH YEARNS FOR HOME? After installing new teams at the helm of "Nezavisimaya gazeta" and TV-6, media magnate Boris Berezovskii announced plans last month both to return to Russia and to launch a new party. Berezovskii told Ekho Moskvy on 22 June that he will return to Russia "most certainly and quite soon" on the condition that he is "not hauled into prison [directly] from the airport." It wasn't clear from the interview when Berezovskii expects such a guarantee to be provided. Berezovskii explained that he has taken the "difficult decision to struggle for power in Russia, to continue the reforms that have been going on in Russia over the past 10 years." To further this effort, Berezovskii declared his desire to form "an opposition party." According to Berezvoskii, this party will not be led by State Duma deputy and human rights activist Sergei Yushenkov.

Following his decision not to join the newly formed party of Union of Rightist Forces (SPS) at the end of May, Yushenkov announced his plans to form a new movement, Liberal Russia. Yushenkov revealed at the time that Berezovskii has "provided a guarantee that he will not interfere with our party matters. And the experience of those media outlets financed by Berezovskii shows that he keeps similar promises," "Moskovskii komsomolets" reported on 19 June. Yushenkov added that "Berezovskii's money is no dirtier than the money of [Alfa Bank head Petr] Aven or any other figure. And more than that, at this moment, this money is cleaner than the resources connected with the Kremlin oligarchs that finance SPS. Right now Berezovskii's businesses are not criminal and are all fully legal." According to "Ekspert," number 21, Vladimir Golovlev's Taxpayer Party will also be part of the "antipresidential front" being financed by Berezovskii. Golovlev, like Yushenkov, is a member of SPS's Duma faction and both declined to join SPS when the latter transformed itself into a party at its congress on 26 May.

It was unclear from Berezovskii's dig at Yushenkov whether he is reneging on his pledge of financing for Liberal Russia or whether Liberal Russia will be just one project among many for Berezovskii as he searches for a more appropriate vehicle to further his political ambitions. "Moskovskii komsomolets," which has run many critical articles about the media magnate, pointed out that "Yushenkov has acknowledged that so far Berezovskii has not provided a single kopek," and "there is no guarantee that Boris Abramovich seriously plans to fulfill his pledges...As soon as he picks up a new 'toy,' financing for his old projects sharply dries up."

While other Moscow-based media and analysts did not liken Berezovskii to a toddler, most Moscow-based analysts resorted to a psychological rather than political frame of reference to explain Berezovskii's renewed political offensive. For example, State Duma deputy (Liberal Democratic Party of Russia) Aleksei Mitrofanov told "Moskovskii komsomolets" on 18 June that "the fact of the matter is that Berezovskii wants to participate in the political life of the country and remain a significant figure. His life's credo is not to be left out of the first echelon of the Russian political elite." Indem political analyst Yurii Korgunyuk suggested that Berezovskii's recent announcement that he owns half of Sibneft, a reversal of earlier statements that his stake had been reduced to 7 percent, is part of an attempt by Berezovskii to remain in the political spotlight, "The Moscow Times" reported on 28 June. "People whose business affairs are truly going well tend to do the opposite -- stay low and avoid the public eye. It's hard to say whether there is any specific plan he is pursuing. Bluffing only to see whether anything comes out of it would also be very much his style." The bluff seems not to have worked, because Sibneft issued a press release soon after Berezovskii's statement denying that he is a major shareholder.

A few analysts, though, thought that rather than acting out of some irrepressible need to remain in the limelight, Berezovskii might be acting quite rationally -- at least in terms of his strategy matching his goal. In an interview with "Moskovskii komsomolets" on 18 June, deputy (Yabloko) Sergei Mitrokhin suggested that "the political ambitions and economic interests of Boris Abramovich are playing a large role here, of course. Berezovskii is more a businessman of politics than a politician of business. He makes money on his opportunities to influence the powers that be. If earlier he built upon his closeness to power, now it is [built on] his opposition to it..." Political scientist Georgii Satarov concluded that Berezovskii may simply be playing the cards dealt to him in the only way he can. "Open opposition to the Kremlin is the most comfortable position for Berezovskii." He continued, "First of all, in the case of any legal proceedings he will appear to be a political victim. Secondly, [the stance] has its own significance, that is, 'I alone am the opposition, I am not afraid.' And third, Boris Abramovich simply has no choice. If he starts to say that Putin is a good president, and asks him 'Take me back.' Putin can all the same not take him." And such a stance from Putin might mean for Berezovskii a detour to some unpleasant interrogation room on his way from the airport. (Julie A. Corwin)

AS TRETYAKOV GOES, SO GO THE RUSSIAN MEDIA By Laura Belin

Major changes at "Nezavisimaya gazeta" have always reflected deeper trends in Russian journalism, and the recent dismissal of the newspaper's founding editor-in-chief, Vitalii Tretyakov, is no exception. Boris Berezovskii's politically motivated decision to fire Tretyakov illustrates how the Russian media sector has changed in the last 10 years. But the evolution of Tretyakov's own attitudes provides even more compelling evidence of the transformation.

From its inception, "Nezavisimaya gazeta" has been a path-breaking newspaper. Thanks to Tretyakov's vision and initiative, it was one of the first independent publications to be created in 1990 after passage of the landmark Soviet press law. After the collapse of the USSR, "Nezavisimaya gazeta" was one of the first Russian newspapers to run into serious financial problems. That was largely because Tretyakov refused on principle to accept state subsidies, on which many leading Russian newspapers depended. Tretyakov also refused to seek help from sponsors in the business community, which prompted many of his most talented subordinates to quit in late 1992. They formed the core of "Segodnya," the daily Vladimir Gusinskii created in 1993, which was among the first Russian corporate-owned newspapers.

The circulation of "Nezavisimaya gazeta" dropped sharply following the departure of the "Segodnya" journalists. Seeking to cut costs, Tretyakov reduced "Nezavisimaya gazeta" to a four-page format, but financial difficulties forced the newspaper to suspend publication altogether in May 1995. Initially Tretyakov supported a plan to transform the daily into a joint-stock company. During a Moscow press conference on 26 May 1995, he said he was looking for investors "who represent the middle class," explaining that "those in the big league [financially] are too involved with the state and always demand that the newspaper not irritate the state, in any case not irritate certain government officials." Tretyakov added that "the more dependent [commercial structures] are on the state, the less they need such publications as 'Nezavisimaya gazeta.'"

Not surprisingly, given the almost total absence of a Russian middle class in 1995, the investors Tretyakov had in mind failed to materialize. Later that summer, still clinging to his convictions, he suggested that perhaps it would be better to close "Nezavisimaya gazeta" permanently than to sell shares to a large corporate entity. In late August 1995, frustrated members of the newspaper's editorial board voted almost unanimously to remove Tretyakov as editor-in-chief.

Tretyakov may have been willing to let his creation die, but he could not let it live on without him. He struck a deal with Berezovskii and literally forced his way back into the top job at "Nezavisimaya gazeta," accompanied by armed guards and his new investor. Following a major cash infusion from Obedinennyi Bank (part of Berezovskii's LogoVAZ empire), "Nezavisimaya gazeta" resumed publication in September 1995. The bank owned an 80 percent stake in the newspaper, and although the newspaper earned some revenue from newsstand sales, subscriptions, and advertising, Berezovskii-controlled entities paid the bulk of the newspaper's expenses.

Ever since his reluctant embrace of a shareholder "in the big league," Tretyakov has displayed a contradictory attitude about his newspaper's situation. Although he freely admitted that the daily depended on Berezovskii financially, he deeply resented any suggestion that he was carrying water for Russia's leading "oligarch." In one commentary, published on 8 April 1997, Tretyakov blasted "Moskovskie novosti" for casually referring to "Nezavisimaya gazeta" as "LogoVAZ's newspaper." Last month, even as he accused Berezovskii of sacking him for political reasons, Tretyakov went out of his way during several interviews to say that Berezovskii hardly ever interfered in editorial policy. Appearing on NTV's "Geroi dnya" on 6 June, Tretyakov asserted that "there have been hardly more than, say, five occasions during these five and a half years when Berezovskii would ask me to put anything in the paper."

Tretyakov often trumpeted his own authority to determine what the newspaper published, but his protestations rarely, if ever, addressed the reasons why so many Russian observers assumed that Berezovskii called the shots at "Nezavisimaya gazeta." Tretyakov's editorial decisions during the "information wars" of 1997 and 1998, which irreparably harmed his newspaper's reputation, underscored this point. After the privatization of the telecommunications company Svyazinvest did not go Berezovskii's way, "Nezavisimaya gazeta" became a prime weapon against senior government ministers and Berezovskii's business rival, Oneksimbank. Tatyana Koshkareva and Rustam Narzikulov, who headed the newspaper's political and economic departments, respectively, penned dozens of front-page editorials masquerading as news stories. "Nezavisimaya gazeta" even published three pieces under the pseudonym Ulyan Kerzonov, which (Tretyakov later admitted) were written by Berezovskii himself.

Whether or not Berezovskii overtly interfered in the daily's editorial policy, he scarcely needed to assert his power as long as Tretyakov was devoting voluminous, prominent column space to such material. In addition, Berezovskii was reputedly a frequent visitor to the "Nezavisimaya gazeta" editorial offices during the late 1990s -- a practice hardly consistent with the "hands off" approach Tretyakov ascribes to his financier.

Occasionally Tretyakov appeared to acknowledge his newspaper's political slant and struck a defiant tone about it. A case in point was his commentary that ran alongside a "Nezavisimaya gazeta" interview with then First Deputy Prime Minister Anatolii Chubais on 7 March 1998. Tretyakov slammed Chubais, the creator of "oligarchic capitalism," for accusing "Nezavisimaya gazeta" of taking money to promote certain views: "Yes, 'NG' hardly ever criticizes Berezovskii. But you never criticize Yeltsin at all. And you, not we, created this System." Appearing on the NTV program "Itogi" the next day to discuss his exchange of fire with Chubais, Tretyakov asked rhetorically, "Didn't [Chubais] want a market economy in the first place? What's his problem with journalists selling their work?"

Although Chubais and others called "Nezavisimaya gazeta" a "sell-out" newspaper, it was never simply a mouthpiece for Berezovskii. It continued to publish a variety of views and occasionally disagreed with its major shareholder. But on most important topics, the newspaper's coverage paralleled Berezovskii's political stance. Whereas many Russian newspapers observed the taboo on criticizing Moscow Mayor Yurii Luzhkov (Berezovskii's longtime political nemesis), "Nezavisimaya gazeta" was a prominent exception to the rule. "Nezavismaya gazeta" was among the Russian newspapers that promoted Aleksandr Lebed as well as Boris Yeltsin during the 1996 presidential race, when Berezovskii was secretly helping Lebed's campaign. Around the time Berezovskii was pushing for Lebed's dismissal as Security Council secretary in October 1996, "Nezavisimaya gazeta" published implausible stories discrediting Lebed. By the spring of 1998, when Berezovskii was funding Lebed's campaign for governor in Krasnoyarsk Krai, coverage of the former general in "Nezavisimaya gazeta" was once again largely favorable. When Berezovskii was working to secure what he called the "continuity of power" toward the end of Yeltsin's presidency, "Nezavisimaya gazeta" gave glowing coverage to Vladimir Putin and sought to undermine the opposition Fatherland--All Russia alliance during the 1999 parliamentary campaign.

Relations between Berezovskii and Tretyakov soured not because Berezovskii adopted a more heavy-handed approach toward "Nezavisimaya gazeta," but because -- according to Tretyakov -- he and Berezovskii increasingly had political differences during the past year. Several Russian journalists advanced a less charitable interpretation, noting that Tretyakov sought to distance himself from Berezovskii, and "Nezavisimaya gazeta" began to disagree with its main shareholder more frequently, only after the latter "fell from grace." Since Putin's election, Berezovskii has been forced to give up his minority stake in Russian Public Television and has been implicated in criminal investigations. He has assailed Putin and set about funding opposition media and supporting opposition politicians. Meanwhile, "Nezavisimaya gazeta" under Tretyakov has for the most part continued to support the president.

Berezovskii said business considerations lay behind his decision to sack Tretyakov, a claim that few Russian commentators took seriously. Contrary to Berezovskii's explanation, "Kommersant" (in which Berezovskii also has a controlling stake) and "Nezavisimaya gazeta" do not occupy the same niche. The readership of "Kommersant" is largely business-oriented. "Nezavisimaya gazeta" has been required reading for Russia's political and intellectual elite because of its newsworthy interviews, in-depth political analysis, and special supplements on topics including military affairs, regional developments, religion, and literature.

Moreover, "Nezavisimaya gazeta" has never been profitable, and its financial losses did not seem to bother Berezovskii before. As Tretyakov himself noted in comments broadcast on TV-Center on 9 June, Berezovskii said repeatedly over the years that he was willing to put money into loss-making media in exchange for the "political resource" they conferred.

In addition, as Aleksei Pushkov pointed out in the same TV-Center broadcast, Berezovskii did not replace Tretyakov with seasoned business executives. Koshkareva, the new editor-in-chief of "Nezavisimaya gazeta," and Narzikulov, the new general director of the editorial board, are widely considered hired political guns. Not only did they fight Berezovskii's battles while on the staff at "Nezavisimaya gazeta," Berezovskii installed them in senior positions at Russian Public Television in May 1999, when he was reasserting his influence over the Channel 1 network (see Floriana Fossato and Anna Kachkaeva, "Russian Media Empires V," at http://www.rferl.org/nca/special/rumedia5/index.html). Koshkareva and Narzikulov lost those jobs in September 2000, as efforts to force Berezovskii out of Russian Public Television intensified.

It is not surprising that political differences eventually compelled the oligarch and the proud newspaper editor to part ways. However, it is ironic that the end game at "Nezavisimaya gazeta" turned out to be so different from the scenario Tretyakov dreaded when he accepted financial assistance from Berezovskii. In 1995 Tretyakov feared that a wealthy shareholder would demand deference to the state. But when he was finally forced out of "Nezavisimaya gazeta," it was Tretyakov who was reluctant to pick a fight with government and Kremlin officials, and it was the big businessman who wanted to adopt an opposition stance.

Just as Tretyakov's dismissal encapsulates the dependence of most Russian media on owners or sponsors, his near-certain return to newspaper publishing shows that extensive financial resources are still available to those in the media world who generally support Russia's current political leaders. Although the Moscow newspaper market is already oversaturated, Tretyakov claims to have been promised $20 million to establish several new publications. He has declined to name the investors, but "Novaya gazeta" speculated in its 7 June issue that the Alfa group will become Tretyakov's new sponsor. The newspaper noted that in the first episode of the television show he hosts on the state-owned Kultura network, Tretyakov interviewed Alfa Bank founder Petr Aven.

Whichever businessman or corporation contributes the cash, Tretyakov's new publications are very likely to continue the editorial policy he oversaw at "Nezavisimaya gazeta." The Tretyakov who nearly ran his newspaper into the ground because he refused to take money from outsiders is long gone, as are so many of the hopes entertained by Russian journalists in the early 1990s.

Laura Belin, a doctoral student at Oxford, has written about Russian politics and media issues since 1995.

DEPUTIES GIVE GREEN LIGHT TO JUDICIAL REFORM. On 28 June, deputies turned their attention to a number of bills in the presidential administration judicial reform package. They passed in the first reading amendments to the law on the status of judges with a vote of 389 in favor, eight against, and one abstention, according to polit.ru. In fact, all four bills received around 380 votes, according to "Izvestiya" the next day. Those amendments to the law on judges proved to be the most controversial of the package. Under the bill, judges will be required to meet a broad range of requirements. They will have to pass medical tests as well as thorough examinations of their integrity, "Novye izvestiya" reported on 29 June. All federal judges will be appointed for three-year terms initially and, after that, for five years. The mandatory retirement age will be 65, except for judges on the Constitutional Court. Interviewed by Ekho Moskvy the day after the vote, Constitutional Court Chairwoman Tamara Morshchakova provided some sharp criticisms of the bill, calling it a "counterreform measure, which will deprive judges of their independence." Also controversial was the bill amending the law on lawyers, which will give the Justice Ministry the right to deprive a lawyer of his or her license. In addition, lawyers would be required to provide free assistance to many categories of citizens, including pensioners and World War II veterans. The bill amending the law on the Constitutional Court establishes a mechanism for ensuring that the court's decisions are actually implemented, according to "The Moscow Times" on 28 June. Before the second reading of the bills, the presidential administration is willing to "soften" some of the amendments, the website polit.ru concluded on 28 June, citing the statements of the presidential envoy to the Duma, Aleksandr Kotenkov. According to Interfax, Kotenkov agreed that courts rather than the Justice Ministry should have the right to deprive a lawyer of his or her license. JAC

LEGISLATION Law_________________Date Approved____________# of reading

On the order of admitting____28 June_______________3rd
new subjects into Russian
Federation

On the Constitutional Court___28 June_______________1st

On the status of judges______28 June_______________1st

On the judicial system________28 June_______________1st

On lawyers________________28 June_______________1st

POLITICAL CALENDAR 4 July: Duma will discuss the bill on combatting money laundering in its second and third readings.

4 July: State Duma Committee on Legislation recommended that the State Duma hold the first reading of the bill on political extremism.

4 July: Communist Party will organize an all-Russia protest action against the new Labor Code.

5 July: State Duma will consider seven alternative drafts of the new Labor Code.

5 July: State Duma will consider in its second reading a bill to limit the number of governors who can seek a third term (see "RFE/RL Russian Federation Report," 20 June 2001).

9 July: International Olympic Committee begins meetings in Moscow to decide the next IOC president and the venue for the 2008 Games.

9 July: Second Global Conference on Legal and Judicial Reform, co-hosted by World Bank and Russian government, opens in St. Petersburg.

12 July: Fatherland's Central Council and the presidium of Unity's political council will hold a joint session, according to "Vremya MN" on 15 June.

13 July: Canadian Prime Minister Jean Chretien will visit Russia.

14 July: State Duma will meet for the last day of its spring session, according to polit.ru on 28 June.

15-17 July: Chinese leader Jiang Zemin will visit Russia.

20 July: Federation Council will meet for the last day of its last spring session, according to ITAR-TASS on 19 June.

20-22 July: G8 summit will convene in Genoa, Italy.

14 August: Finance Ministry will submit draft 2002 budget to the cabinet of ministers.

September: The public organization Business Russia, or "Delovaya Rossiya," will hold its founding congress in St. Petersburg, according to "Kommersant-Daily" on 24 April.

September: President Putin to visit Finland, according to Foreign Minister Igor Ivanov on 10 May.

September: Security Council will discuss the struggle against drug addiction, according to the presidential envoy to the Urals federal district, Petr Latyshev.

7 September: Russian Public Television (RTR) will hold a shareholders meeting at which a new board of directors will be selected, according to ORT General Director Konstantin Ernst on 29 June.

7 October: State Duma by-elections will be held for the single-mandate districts in Amur and Arkhangelsk oblasts. Two seats were vacated when former State Duma deputy Leonid Korotkov was elected governor of Amur and deputy Aleksandr Piskunov was named an auditor at the Audit Chamber.

13 October: Fatherland will hold a congress to reorganize the movement into a party.

November: Russian NGOs will hold a congress in Moscow, according to Aleksei Leonov, chairman of "Slavyanin," on 12 June.